Gov. Dave Heineman says he's concerned that a federal decision to reject the Keystone XL pipeline could create legal problems for Nebraska.

Heineman said state agency officials are examining what the U.S. State Department ruling could mean for a Nebraska-based environmental review of the project.

Pipeline developer TransCanada agreed to the review last year, and company officials said they would voluntarily reroute the line following a public outcry over its path through Nebraska's sensitive Sandhills.

Heineman says President Barack Obama should have issued a "conditional yes," to give Nebraska the time to complete its review.

Jim Bunstock, a spokesman for the state Department of Environmental Quality, says agency officials have not determined
how to proceed, and will likely need direction from the Legislature.