Landowners facing urgent choices on Keystone XL

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April 12, 2011 - 7:00pm

The U.S. State department has delayed its decision on whether to approve a permit for TransCanada to build the Keystone XL oil pipeline. But while federal officials take more time to go over environmental issues, landowners along the proposed pipeline route are facing urgent decisions.

About 83% of landowners in Nebraska have signed easement contracts to allow TransCanada to build on their land, according to the oil company. Out of around 470 landowners, that leaves around 90 who have yet to reach agreements. TransCanada says those individuals are now receiving final offers and deadlines. The choices: sign now, try to negotiate a new agreement, or hold out and likely face eminent domain.

Jeri Kuchera of Bassett is one of the holdouts. Her 97-year-old mother owns property along the pipeline route north of Newport near the Niobrara River. The grazing and farm land has been in the family for more than 100 years. Because she holds power of attorney for her mother, it is up to Kuchera to decide whether to sign an agreement with TransCanada. She knows her mother opposes the project.

"She has seen times when the ground just absolutely blew away," Kuchera said. "There's a lot of people that do not understand the extreme difference between the route they have selected here and the route that they used to take the first pipeline through eastern Nebraska. We have area that people have seen the problems of reclamation of ground that has been disturbed. And people see the water table on top of the ground. And we are in just a totally different geological area."

As a member of Landowners for Fairness, an organized group of landowners in Nebraska, Kuchera had the option of signing a contract negotiated on behalf of the group. But she did not sign on, even after receiving a letter from TransCanada that said the offer would be rescinded after April 11. Kuchera says she has not heard from the company and does not plan to respond to any offers to negotiate.

Landowners who hold out from a contract will likely face eminent domain. Nebraska law gives authority to oil and natural gas companies to claim eminent domain on pipeline projects where they are unable to negotiate construction easements with landowners. After negotiating with landowners for more than 2 years, it's necessary for TransCanada to be prepared to employ that authority, according to Keystone spokesman, Jeff Rauh.

"The construction timeframe has been condensed here with the delay in the permitting," Rauh said. "So while in the past we may have had the flexibility to work around a piece of land that we don't have access to, the ability to do that with the condensed time frame is impacted."

Rauh says TransCanada needs to be prepared to move forward if and when the State Department approves the Keystone XL project.

"Especially with a linear project where you have to line up rights along an extended length, this is an important process to be able to ensure that needed projects are able to be built," he said.

It is a process with which Mike Briggs of Seward is very familiar. The first Keystone pipeline, built in 2009, crosses underneath his cattle feedlot south of the city. Then, about a mile farther, it passes perhaps 50 feet from his home where he lives with his wife and 2 daughters. Their home is surrounded by open fields. "If there wasn't a sign there you wouldn't know it's there but it's 50 feet from my house, and it s hot bubbling oil," Briggs said. "You know, and that's not what bothers me. What bothers me is they took my property and I had no say in it. That's what bothers me more than anything."

When Briggs was in Jeri Kuchera's situation, he also did not want the pipeline to go through. So he did not sign a contract, and he ended up in court. TransCanada filed a petition of eminent domain in Seward County. A judge-appointed board decided on a dollar amount for compensation. Briggs thought it was too little, but instead of appealing to District court, he settled out of court.

Briggs says there were two issues. First, he couldn't acquire solid proof from an appraiser to show that his home would be less valuable after the pipeline was built. Second, in court he could only fight for more money. In eminent domain proceedings, none of the other details in an easement come into question. He says his lawyer advised him to negotiate a settlement.

"He said, Mike, he said you can't fight these guys anymore," Briggs said. You know, if we would have gotten an appraisal that said, hey what they were doing was completely and totally unfair, let's go. Let's put the gloves on. Let's go. And I was right there. But we didn't get it. So we just had to cave."

The final settlement came with less money than Briggs wanted but with more conditions for the pipeline. For instance, many easements give TransCanada the ability to return to build another pipeline without negotiating a new contract. Briggs was able to amend his contract to allow one pipeline only.

Whether acquired by eminent domain or by negotiation, easements do not give TransCanada ownership of the land. They give permission to bury the pipeline and come back for maintenance. They also include details on things like restoring the property after construction, and a one-time payment as compensation to the landowner. Attorney Bill Blake says a common mistake made by many landowners is to focus primarily on compensation and not on the remaining details in small type.

"It may be a 5-10 page agreement and sometimes it's rather complex, a lot of legal ease, and they don't bother to read it or don't understand it," Blake said. "Later on they find out that they're stuck with some terms that really don't treat them as well as they ought to be treated and there's nothing they can do about it."

Compensation seems to be far from Jeri Kuchera's concerns. The same is true for her sister, Teri Taylor, another landowner along the pipeline. Taylor and her husband live north of Newport. They own 3 separate pieces of land that would be crossed by the Keystone XL oil pipeline. In all, it would pass through nearly six miles of their property, a mix of Sand Hills and saturated meadows in Keya Peha, Rock, and Holt Counties. Taylor worries about damaging erosion on her ranch brought on by the construction process and about contamination to the groundwater if an oil spill were to occur.

"They always say it will be localized, but who's to say I'm not going to be the localized area," Taylor said. "There's a lot of issues there that are extremely nerve-racking."

Like Kuchera, Taylor has also not yet signed an easement with TransCanada. She says there are still many kitchen table conversations ahead, and one concern is that holding out and facing eminent domain could mean losing the ability to negotiate on more than money.

"What we're trying to do is protect our ranch," she said. "So if there's any way that by willingly entering into an agreement with TransCanada that we have more control over how our ranch is treated and protected then I don't think we have any other option than to do that."



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