Keystone XL hearing promises mix of legal and personal concerns

Jeanne Crumly points to where the Keystone XL pipeline would cross her farm near Page, Nebraska. (Photo by Fred Knapp, NET News)
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August 4, 2017 - 6:45am

The upcoming – and potentially decisive -- Nebraska Public Service Commission hearing on the proposed Keystone XL oil sands pipeline promises to be a powerful mix of legal -- and personal – concerns.

Nebraska law says the Public Service Commission should approve an application to build a pipeline if it’s “in the public interest.” Pipeline company TransCanada has been making that case since 2008, when it first applied to build the Keystone XL to ship oil sands from Alberta, Canada to refineries on the Gulf Coast. But Brian Jorde, a lawyer for 97 Nebraska landowners who don’t want the pipe to go through their property, raises a “threshold question” about what’s in the public interest.

“This project is not needed. The demand for this type of tar sands is not necessary; TransCanada does not have commitments for shippers to ship product from Alberta through the pipeline through Nebraska down to Houston for export on the world market,” Jorde said, adding, “If there is not a demonstrable need for this infrastructure then there cannot be any route that would serve the public interest.”

Pipeline opponents point to evidence like a June 30th article in the Wall Street Journal headlined “Glut Kills Appetite for Keystone.” But TransCanada spokesman Matt John disputes the argument.

“The demand is certainly there, and that hasn’t changed much. The U.S. Gulf Coast continues to import millions of barrels of oil coming from offshore -- oil very similar to the product that will be shipped through Keystone, which is oil sands as well as U.S. crude oil,” John said.

TransCanada executive Paul Miller said July 28 the company will decide whether or not to proceed with the pipeline sometime around November, after the Nebraska decision and after an "open season" for new customers to sign up.

Whether or not the Public Service Commission even considers arguments like the economic need for the pipeline may be disputed. The commission has hired retired Lancaster County District Judge Karen Flowers to act as hearing officer and rule on procedural and evidentiary matters. Flowers will not give an opinion about whether the commission should grant or deny TransCanada’s application to build the pipeline.

For information from the PSC on the pipeline application and hearing, click here.

Pipeline opponents’ lawyer Dave Domina says the ideal outcome would be for the Public Service Commission to reject the proposed pipeline. Failing that, he wants the PSC to impose conditions on TransCanada: make the easements last for the life of the pipe, not forever; require TransCanada to assume liability and remove the pipe after they’re done using it.

And Domina said there should be one more condition: requiring TransCanada to share its revenue “by treating what it takes from our property owners as a rental contract, and not an easement, and paying for it on an annual basis, just like wind developers do.”

Domina said a wind turbine can bring a landowner $10,000 a year. He contrasts that with an estimate based on what he says TransCanada was offering landowners when it started buying easements back in 2010. TransCanada’s offer would have resulted in $55,000 in one-time payments, compared to $5.5 million per year under his rental idea.

TransCanada spokesman Matt John defended the company’s payment system.

“The approach to compensation that we’re taking is fairly standard across the industry. And all landowners will receive a fair and equitable compensation for the easement granted,” John said.

One landowner along the proposed route, Jeanne Crumly, farms with her husband near Page, Nebraska. Crumly said they turned down TransCanada’s offer of $8,900 for an easement to put the pipe through their property.

“I said to the land agent that was talking with us ‘What would possibly compel us to sign this document forever for $8,900 – you can’t buy a tractor tire” for that, Crumly said. “And she looked at me …and said,  ‘Well, that’s the going price of land.’ And I said, ‘We’re not selling land.’"

Crumly says TransCanada began eminent domain proceedings against them. But faced with challenges to a law giving the Nebraska governor approval authority over the route, the company announced in September, 2015 it was suspending its use of eminent domain while it sought PSC approval for the route.

For every landowner like Crumly who objects to the route, there are others like Robert Johnston, who sold TransCanada an easement to cross a parcel of his farm near Royal.

Johnston said the project will benefit Nebraska, and recalls that when he saw a land agent, he asked the man about getting the pipeline to cross his property.

“I remember one time he was north of Orchard and I come by and said, ‘Van, see that land over there about a mile? That’s some of our property. Can we take it that way?’” Johnston said.

Johnston doesn’t say how much TransCanada paid for the easement, but he says he invested the money back into the property, updating his irrigation equipment.

TransCanada says it has easements from over 90 percent of landowners on the entire route. Brian Jorde says landowners who object own about 60 miles of the 275-mile route in Nebraska.

While the PSC may be the last regulatory hurdle the pipeline has to clear, the battle may not end there. Pipeline opponents’ attorney Dave Domina said that may depend on how broadly or narrowly the PSC interprets its powers when it comes to approving the route.

“At this hearing, one of the important things the PSC will be asked is ‘What does this statute empower you to do?’ And if it concludes that its power is restricted to a very myopic view of the word ‘route,’ then we have an issue to present to the Supreme Court,” Domina said.

In other words, the PSC decision, shaped by the rulings of Judge Flowers on procedures and evidence, may simply set the stage for an appeal that will ultimately be decided by the Nebraska Supreme Court.



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