Keystone XL —- Landowners Fear Spills

Landowners fear spills from proposed oil pipeline. It isn’t the pipeline that bothers Bret Clanton. It’s the spills he expects to come with it. So the Harding County rancher assumes an air of ranch-country skepticism when he hears assurances about pipeline safety from a Canadian company, TransCanada, seeking to build an oil pipeline across his land. “I just tell them that I’ve lived behind an oil field all my life. There’s going to be a spill,” Clanton said. “It’s just the nature of the beast.” If approved and built, the $7 billion Keystone XL Pipeline will tie in with TransCanada’s already operating Keystone Pipeline, part of which crosses eastern South Dakota, to form a mammoth $13-billion transportation system moving Canadian crude to refineries in southern states. In South Dakota, the Keystone XL line will run for 313 miles across parts of Harding, Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties. And it won’t have to come far into the state to meet Clanton, who ranches on the windswept plains of Harding County a few miles northeast of Buffalo. It’s a sparsely populated land of livestock, lonesome rural highways and the state’s largest oil field – a little patch of North Dakota-like energy development in South Dakota’s far northwest corner. Like others there, Clanton understands the oil game. He knows its value to the people of the United States and, in more localized ways, to the well being of Harding County. Moving a reliable source of energy is in the national interest overall, but it still has clear negative impacts to individuals, he said. “Let me put it this way: I understand the need for safe and dependable energy sources for this country,” he said. “I’m just not sure why it has to be at the expense of the landowners at times.” Like other landowners with property crossed by the pipeline, Clanton will be compensated by TransCanada and be able to use the land much as before. He already has made that deal but can’t discuss it specifically because of a confidentiality agreement. “It was a very difficult moment,” he said of his decision to agree to terms. That sentiment is shared by most farmers and ranchers with land to be affected by the pipeline. Most have concerns. But most have agreed to terms. TransCanada spokesman Shawn Howard, based in the company’s headquarters in Calgary, Alberta, said agreements have been reached with 89.7 percent of landowners accounting for 87.6 percent of the private property along the line in South Dakota. The percentage of acceptance is slightly higher for the entire length of the 1,700-plus-mile proposed XL pipeline route: 92 percent of landowners controlling 90 percent of the line. That is not to say there are no holdouts. There are. And many of them share the passionate feelings of Deloris Iversen, whose land north of Murdo would be crossed by the pipeline. Iversen said she hasn’t agreed to terms with TransCanada, doesn’t intend to anytime soon and continues to oppose the project. “I don’t want it. I don’t like it. I think it’s a horrible thing to go through South Dakota,” she said. “It’ll go through our CRP (Conservation Reserve Program land) and cattle grazing and be right in the middle of our water supplies. And if that line would break, it would be horrendous.” The image of horrendous damage is what most worries many of the line’s opponents. It was less of a factor a few years ago when TransCanada won approval for its Keystone line, which carries up to 435,000 barrels of crude oil a day across eastern South Dakota. But that Keystone line came before the explosion at a BP off-shore drilling platform oil spill that killed 11 workers and poured an estimated 5 million barrels of oil into the Gulf of Mexico last year. The BP fiasco and a smaller, but locally devastating, pipeline rupture that dumped almost 900,000 gallons of oil into the Kalamazoo River in Michigan last summer changed the social landscape on oil and its transport, Howard said. “There’s no question the Gulf of Mexico incident has caused some people to look at this project very differently,” he said. “It’s a very different environment.” It’s different enough that the U.S. State Department decided last week that the Keystone XL Pipeline plan needs additional environmental review, an action sought by environmental groups worried about spills and other problems. Worries about spills were shaped into a bill in the state Legislature this year that would have imposed a 2-cents-per-barrelfee on crude oil transported by certain high-volume pipelines in the state. The fee would have created a fund of up to $30 million to pay landowners compensation to fix damages of more than $10,000 resulting from a pipeline spill or release. The House and Senate versions of the bill each died in their first committee action, however. Bret Clanton was disappointed by those committee votes. So was fellow Harding County rancher David Niemi, who presumes, based on his own experience with oil rigs and lines, that spills will happen with Keystone XL. Niemi is not prone to speak ill of TransCanada. He said the company sent “some good folks, professional people” to negotiate easements with him and others in a group of landowners he represents. “I’m satisfied, and I believe our membership is, too,” he said. Niemi further believes that TransCanada will clean up any spills that occur. He has some experience there, too. He calls the oil companies he deals with in Harding County “pretty good neighbors” who have done adequate clean-up jobs when problems arose. But Niemi contends that landowners are rarely, if ever, compensated for the true damage to their property. And he presumes that would be the case with TransCanada spills. “I’m not going to advocate that a person should be paid all the money in the world, but he should be justly compensated,” Niemi said. “There needs to be some kind of fund or requirement that the surface owner be compensated for crop loss or property value.” Pipeline companies must now pay to cleanup spills but there is no requirement to reimburse landowners for loses. Howard said TransCanada employs a monitoring system on its pipelines that will catch any petroleum release almost immediately and allow the problem to be fixed quickly. The Keystone XL Pipeline will have a sensitive release-detection system with 16,000 data transmitters along the route, sending satellite information every five seconds, he said. “That data is sent immediately to our oil-control center. If there’s even a small drop in pressure, they know about it within seconds,” Howard said. “They can isolate the section of line on both sides and shut a valve within minutes.” Whatever oil is released will be cleaned up fully as the law requires, he said. Those with concerns about the company causing environmental problems and disappearing or falling into bankruptcy don’t have to worry, he said. “As of the end of 2010, we have $46.5 billion in assets,” he said. “It’s a company with a strong financial position, a strong asset base. We’re extremely solid. We’re not going anywhere anytime soon.” The company, which has a U.S. headquarters in Houston, Texas, does hope to go across western South Dakota relatively soon, however, even with the additional environmental review recently announced by the State Department. Beyond landowner concerns and potential spills, critics in the environmental community argue the pipeline is contrary to the push for green-energy solutions and would add to greenhouse-gas problems. Howard argues that it makes sense for friendly nations to do business in energy and reduce dependence on more troubled areas of the world. He also points to economic benefits, including $470 million to the state economy for construction of the pipeline and an estimated $685 million in property taxes during the expected 50-plus-year life of the line. The project already has received authorization from the South Dakota Public Utilities Commission, following field meetings in western South Dakota and a formal three-day hearing in Pierre. Absolute opponents were in the minority, as were absolute proponents. “I would say a lot of people told us they were not opposed to the pipeline but they had concerns,” PUC Chairman Steve Kolbeck said. “They had a lot of ‘buts’ and ‘what ifs’ and those are what we tried to address.” Landowners, local officials and state experts on the environmental and archaeological sites were among those who testified, as did the PUC staff. TransCanada presented its case for the project and Dakota Rural Action presented its case against. Ultimately the PUC decided to permit the project, with about 50 conditions on top of federal conditions. Among the things TransCanada has to do is provide $10 million in bonding for roads that might need repair because of damaged related to the pipeline. There were some road-related problems tied to the first pipeline in eastern South Dakota, mostly criticism that roads weren’t repaired fast enough in conditions complicated by spring thaw, Kolbeck said. There also is a liaison person who helps individuals or groups who have problems with TransCanada, he said. “Basically, the PUC’s role in a broad sense is to make sure rules passed by the Legislature are followed,” Kolbeck said. “We said, ‘yes, you can build – if you do these 50 things.’” That hasn’t answered all opposition or made all landowners agree to easements with TransCanada. If those negotiations fail entirely, the company can fall back on eminent domain proceedings. That’s a legal route that TransCanada prefers to avoid, Howard said. “The industry average for having to use eminent domain is about 10 percent of landowners. TransCanada’s is about 2 percent,” he said. “When we say we use it as a last resort, it truly is a last resort.” It’s also a legal hammer that landowners never forget while they are negotiating, Clanton said. “You reach a point in your negotiations when it becomes obvious you’re not going to go anyfurther,” he said. “And they do have the power of condemnation. I feel that we negotiated as far as we could.” ((24 MAR 2011))











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