The Argus Leaderhas a report on a second TransCanada pipeline that will run through western South Dakota:
No paperwork has been filed for a proposed "Keystone Phase II" oil pipeline through western South Dakota, a state official says, but representatives from TransCanada Corp. have talked with at least some legislators and have plans to meet with local governments.
An official representing TransCanada is scheduled to update Harding County commissioners Tuesday on plans for what would be the company's second oil pipeline through South Dakota.
The report syas that Harding Count already has experience with pipelines:
Harding County is no stranger to the oil business. The county is the biggest producer of oil in South Dakota, and it's also a significant source of natural gas.
"We have pipelines all over the county," Glines said. "It's not a new venture out here."
"There definitely are issues for concern," she added, "but we deal with it on a regular basis."
Larry Nelson, a Harding County rancher and president of the South Dakota Stockgrowers Association, said he already has pipelines on some of his land. He says there are issues with pipelines.
A landowner might get paid for an easement, but it gives a company access to land, and that access can be disruptive to ranching or farming operations. Those access agreements can last decades. In essence, a person could end up being a "bystander on your own property."
Nelson said reaction to the proposal varies from person to person.
"The best thing that could happen is they just went around me," he said. "If it did happen, I'd try to make the best deal I could, but I wouldn't be jumping for joy about it."
During the 2008 legislative session, property rights became secondary to economic development by most Republicans. The agenda of Governor Rounds took precedence over property rights of constituents. Will that be a factor in November?
A proposal that would have put a fee on crude-oil pipelines to pay for cleaning up any leaks was rejected Tuesday by the South Dakota Senate after an opponents said it would amount to over-regulation.
The fee was killed when senators completely changed the bill, taking out the fee and replacing it with language that would require companies to work with the state Department of Environment and Natural Resources to prepare emergency response plans before building oil pipelines.
The rewritten version of the bill also would require a pipeline company to clean up any spill, no matter who caused the problem. It also would set up a task force to review state laws and regulations on underground pipelines for oil, gasoline, natural gas, ethanol and water.
The Senate voted 19-16, mostly along party lines, to send the new version of the bill to the House for further debate. Democrats supported the fee measure, while Republicans backed the rewritten version.
Dave Knudson, Senate Majority Leader who also voted against the Bill in committee said this:
Senate Republican Leader Dave Knudson of Sioux Falls won the Senate's approval to remove the fee and replace it with language regulating how companies devise and use emergency response plans.
Knudson said an oil pipeline would benefit South Dakota's economy, and he is unaware that any other state has imposed a fee such as the one proposed in the original bill. South Dakota needs to balance its encouragement of economic development and its protection of the environment, he said.
"This pipeline is good for America. This pipeline is good for South Dakota. We don't need to over-regulate and overreact," Knudson said.
Our state Senate Republicans argue that running an oil pipeline through the state to refineries in Illinois and Oklahoma is so essential to our economic development that we don't dare tax its hazardous contents;
Assuming we do continue with the Lewis and Clark Water Project, how much of the project will cross over the TransCanada crude oil pipeline? Perhpas we will be drinking the oil. Below is the proposed Lewis and Clark water project:
Current rural water representatives, most vocal has been Kurt Hohn, have huge concerns over contamination risks to East South Dakota water resources. Landowners and others have huge concerns over oil contamination risks in regard to aquifers. And all the Knudson and Governor Rounds want to talk about is "economic development". But is this pipeline in line with South Dakota’s agricultural and wildlife enterprises that rely on quality water resources? And as I have already pointed out, there are existing refineries who can expand to deal with the tar sands crude. Perhaps this is one economic development idea that South Dakota should take a pass on. After all, water and oil does not mix.
The United States' oil dependence on Canada, already America's largest supplier, is about to grow under a plan to build a new pipeline to transport oil from the tar sands of Alberta into the central part of the nation.
Hal Kvisle, TransCanada president, plans to begin construction on the pipeline in the second quarter 2008, with an in-service date set for the fourth quarter 2009.
In 2004, Canada replaced Saudi Arabia as the leading supplier of crude oil to the United States.
According to the Energy Information Administration, the leading suppliers of U.S. oil in Nov. 2007 were: Canada, 2.431 million barrels per day; Saudi Arabia, 1.620 million barrels per day; Mexico, 1.581 million barrels per day; Venezuela, 1.381 million barrels per day; and Nigeria, 1.306 million barrels per day.
According to Canada's Globe and Mail, by 2015 and the completion of the project, Canadian oil exports to the U.S. are expected to increase to three million barrels a day.
Plans also are under way to extend Canadian pipelines down to the Texas Gulf Coast where the Texas refineries used to processing the "heavy" and "sour" oil processed from Mexico and Venezuela are well suited to process the sticky crude produced from Alberta's oil sands.
The Hyperion refinery proposition has been touted as a "green" project and that we have not increased refinery capacity for decades.. This piece provides facts that dispute both positions:
Refinery expansions in Great Lakes states need close scrutiny given the concerns raised at BP's Whiting Refinery last summer, a group of environmentalists said Tuesday.
In a special Chicago-area meeting, Members of the Alliance for the Great Lakes discussed expansions at four refineries located on the Great Lakes that are planning to process crude oil from Canadian tar sands.
The projects are in various development stages, with some companies still conducting feasibility studies and others awaiting final emission permits. Marathon Oil in Detroit, for example, is awaiting its permits for a $1.5 billion expansion, according to Alliance.
The environmental outcry over BP's wastewater discharge permit last year highlighted issues that could exist in other refinery plans, said Lyman Welch, Alliance's water quality program manager. Alliance has submitted concerns to the Michigan Department of Environmental Quality related to Marathon's proposed Detroit refinery expansion.
Marathon has been meeting with local Detroit environmentalists regarding concerns surrounding its permit, Welch said.
"From what I understand, the groups feel they've been making a good-faith effort to explain what they're doing," Welch said. "That kind of feedback form the public is critically important."
And Conoco-Phillips in Roxana, Ill., has faced concerns regarding global warming effects from its $1 billion expansion project, Welch said.
In addition, a proposed expansion of Murphy Oil in Superior, Wis., could eat up acres of vital wetlands, Welch added.
Another site in Elk Point, S.D., would be one of the first new refineries built in the country in decades, Welch said.
He said state and federal regulators need to better ensure refinery permits to protect the environment, especially given the extra resources used to refine Canadian crude.
The Canadian sands are heavier and require a dirtier, costlier process that uses a lot of water, Welch said. Welch estimated that up to four barrels of water are used to make one barrel of the Canadian sand passable through a pipeline.
Extracting the sands also requires a lot of energy, which could result in high greenhouse gas releases, he said.
Yes the proposed Elk Point refinery would be "one of the first new refineries built in the country in decades", existing refineries can also be expanded to increase capacity. And also note the Canadians tar sand crude is heavier, leading to costlier and a dirtier process. This also makes the TransCanada pipeline proposal less than a no brainer.
I got back from Pierre late yesterday after sending three days participating in the legislative process. Senate action on SB 190, which would impose a fee on certain pipelines carrying crude oil, was deferred until Monday with a motion made yesderday by Senator Knudson. Here is a link where you can find your Senator. Please contact your Senator and ask them to support SB190. They are getting huge pressure from lobbyists representing TransCanada and other interests. They are also getting pressure from the Governor’s office to vote against the bill.
Cory Heidelberger has a post that makes this point:
Yesterday's Senate State Affairs Committee vote to send SB 190, the pipeline tax, to the floor wasn't quite the small victory of South Dakota interests over Big Oil that it appeared to be. Sure, it passed 6-3 (the three opposing votes were Kundson, Dempster, and Gray, all urban Republicans). But Senators Nesselhuf and Heidepriem, my fellow Democrats, put forward an amendment to water down the bill. Now, instead of the first $30M in revenue going into a crude oil pipeline compensation fund and any revenues about that going toward a water and environment fund, the tax has been capped at $30M. Once the fund reaches $30M, the state stops collecting the tax, and TransCanada and other pipeline operators get to ship their crude oil through the state for free. The tax doesn't kick in again until something bad happens (spill, explosion, etc.) and the pipeline compensation fund is spent down below $5M.
I consider the amendment to be a good one as I would be against just adding a tax. The spirit of the legislation is to make sure TransCanada, or any other crude oil pipeline, provides funding to take care of any problems that may occur during the operation of the pipeline. I also testified in support of the bill on Monday and Bob Mercer reported this:
Steve Sibson of Mitchell, who said the TransCanada pipeline will cross land owned by some family members, said the funds could be used to eventually "retire the pipeline in a safe manner" when it is no longer needed "a long time down the road".
"This may affect South Dakotans who have yet to be born," Sibson said.
Senator Heidepriem said that point was the most salient point made in the entire committee hearing. This legislation is about protecting property and water resources. It should not be simply about imposing another tax has Heidelberger says here:
As a commenter noted here last night, the pipeline tax is a great revenue opportunity for South Dakota. Not one penny comes out of South Dakotans' pockets, and the oil companies paying it will hardly notice two cents out of each $90 per barrel. We hit our own citizens much harder with utility hook-up fees, business licenses, and local taxes when they start up businesses in state; why are we giving a foreign oil corporation an almost free pass to ship black gold through our state without making them pay for the privilege?
Let's remove the cap from the pipeline tax. TransCanada is using and endangering South Dakota's resources to make its oil profits: South Dakota has every right to claim a piece of the action.
While contacting you Senator, please resist making the "tax the Big Oil companies" argument. SB190 is about protecting property and water resources during the operation of the pipeline(s) and also when it comes time to pay for reclamation costs when the pipeline is no longer needed. TransCanda is using the power of the governemtn to enforce eminent domain on landowners and water providers. We should also expect the power of government be used to protect those properties and water resources from the environmental dangers that crude oil poses.
Thursday I witnessed the testimony on SB 138, a bill that requires TransCanada to provide bonding for any problems with their pipeline. The prime sponsor was Franck Kloucek, and he had a impressive list of proponents there to testify:
Dennis Davis, SD Assn of Rural Water Systems Silvia Christen, Dakota Rural Action Lillian Anderson, self, Langford Kent Moeckly, self, Britton Curt Hohn, Web Rural Water Jim Hendrickson, self, Roslyn
There were only two that testified in opposition:
Dennis Duncan, Trans Canada Dawna Leitzke, SD Petroleum & Propane Marketers Association
And on a straight party line vote, the Republicans sided with TransCanada and the Democrats sided with the South Dakota proponents. Even though the bill died, there are plans to smoke it out, so now is the time to contact your Senator. Unfortunately, the Mitchell Daily Republic is reporting that the Governor is against the Bill:
Rounds does not agree with a bill that would require the TransCanada Corporation to create a superfund to pay for possible leaks on its proposed pipeline through eastern South Dakota.
SB 138 would mandate, for companies wishing to build pipelines across the state, "financial assurance guaranteeing the performance" of the pipes. SB 138 was before the Senate Ag and Natural Resources Committee Thursday, but was deferred to the 36th day.
Round said South Dakota already has financial safeguards in place should a pipeline ever fail and told reporters that "you don’t have to reinvent the wheel." Also, the state already is crisscrossed by oil pipelines, he said.
"For some people, the only answer is ‘please don’t change what we have right now,’ " the governor said, adding that he would rather have Canadian oil moving through the United States than crude from the Mideast or Venezuela.
I think those financial safeguards that the Governor is talking about comes from South Dakota taxpayers [Correction, later I found out that it is the refined product that provide the funds to take care of underground tanks at service stations. I was told that there is only a couple of million currently in the fund.] While I agree with the Governor regarding the merits of the project. We should not let Big Oil trample on property rights before the pipeline project is started, during its operation, and after the pipeline's useful life has ended. Cory Heidelberger has a post on this subject that makes an excellent point:
Why else would our governor have done absolutely nothing to help landowners threatened with eminent domain (and claimed he hadn't been aware he was supposed to do anything)? Why else would the Republicans on the State Senate Agriculture and Natural Resources kill SB 138, which would have required TransCanada and other pipeline companies to put up some guarantee of financial responsibility for any damage caused by a pipeline accident? (Note: Democratic Senator Tim Johnson and Representative Stephanie Herseth-Sandlin think such a requirement is perfectly reasonable.)
A quick glance north will demonstrate that we don't have to bend over backwards to accommodate TransCanada. North Dakota has been asking for some concessions from TransCanada and getting them. ND's Public Service Commission has gotten TransCanada to agree to lay thicker pipe near the Fordville aquifer and Lake Ashtabula. The City of Fargo played hardball with TransCanada and got them to add some safety features to protect the city's water sources. The ND Forest Service got TransCanada to agree to use horizontal drilling, a method that costs five times as much as regular trenching, and adjust the pipeline route to minimize its span across the Pembina Gorge area.
A few environmental regulations and resistance to eminent domain aren't going to stop TransCanada. They've got oil that's worth $90 a barrel now, twice its value five years ago, and will only increase in value as demand increases and supplies dwindle. Like any business, they want to maximize their profit, and their accountants could probably show us that it's worth the gamble for TransCanada to pay lawyers to try getting the land for cheap through eminent domain and to pay lobbyists to tell our legislators that bond requirements are an excessive financial burden. We all do that when we negotiate: we argue for the best deal we can imagine, then settle for a deal that works.
Almost nothing South Dakota can do regulatorily will make TransCanada say, "Ah, forget it, we don't really want to build this pipeline. We'll just leave this oil in the tar sands." We could bring back SB 138 and double the requirements.
I am most disappointed in the lack of concern over property rights by the leadership of the SD GOP. Yes, this is good for economic development, but I thought Senator Lintz was more supportive of the individual property rights of landowners. Like Heidelberger points out, we will not stop this project by simply doing what is right for the landowners of South Dakota (cuurent and future), South Dakotans who drink from the waters that will be in harms way (cuurent and future), and the taxpayers of South Dakota who may be stuck with paying for cleanup of a huge mess (cuurent and future).
In the Argus Leader report regarding TransCanada’s use of eminent domain Todd Epp was quoted:
Sioux Falls lawyer Todd Epp says "I have talked to landowners in the Howard area, and I have had e-mail communication with others. They are pretty unhappy about all this."
He says he would tell such landowners their best bet is to try to stop the project at the PUC level and to persuade state legislators next year to tighten the common carrier rules. But Epp says of Keystone's ability to use eminent domain now, "The bottom line, if it holds itself out to be a pipeline ... I don't know of anything anybody can do about it."
The Argus Leader is now catching up to the TransCanada eminent domain controversy, that has been already covered by the Mitchell Daily Republic and this blog:
The company proposing to pipe crude oil across eastern South Dakota from Canada to Illinois is beginning condemnation proceedings on some property, a rural water system official says.
TransCanada, the company proposing the Keystone Pipeline from Hardisty, Alberta, to Wood River and Patoka, Ill., filed a notice of condemnation on property on which BDM Rural Water System has its own easement, BDM Manager David Wade of Britton said Thursday.
If negotiations with landowners fail to get an easement, right of eminent domain gives TransCanada the ability to take landowners to court. In court, a fair price would be set for the easement or to take the property.
"It's a surprise. I didn't know we (rural water) could get a condemnation against us," Wade said. He said the rural water system received "a sort of complementary filing," because it held an easement on property the oil pipeline wants to cross.
Wade said the legal action means his organization must work with a lawyer to respond to the petition for condemnation filed in Marshall County Circuit Court. He said other landowners have received condemnation notices recently, even though TransCanada hasn't received a permit from the South Dakota Public Utilities Commission for the proposed route through the state.
"It's a foreign company trying to condemn" property, Wade said.
TransCanada is putting the financial interest above respect for landowners as the report answer why TransCanada is using eminent domain before getting a PUC permit:
Whether or not the pipeline company has authority to condemn property for its project, it should try harder to negotiate agreements without legal action, says Curt Hohn, WEB Water Systems general manager and a vocal critic of TransCanada's plan for a South Dakota route.
"It can take a long, long time to negotiate a pipeline route, but if you take the time, you don't leave a sour taste in people's mouths when you're finished," Hohn said in a recent interview. "It isn't easy or quick that way, but you don't make as many enemies."
Keystone intends to be moving crude oil in 2009, said Jeff Rauh, pipeline project spokesman. That means construction must start next year.
Instead of taking the time to negotiate, TransCanda is looking at its corporate bottom line. The financial gain of this pipeline cannot begin until it is installed.
Here is a link to the report in this morning's Mitchell Daily Republic regarding TransCanada, Excerpts:
Lillian Anderson of Langford and Kent Moeckly of Britton were served with legal papers on successive days earlier this month; those papers will b Curt Hohn, general manager for WEB Water Development of Aberdeen, said his company has never had to invoke eminent domain proceedings for water lines.
"We negotiated and worked things out," he said. "There’s an arrogance in TransCanada we’ve never encountered before."
TransCanada unlike area water boards has no local presence.
egin eminent domain condemnation proceedings. They each said they weren’t offered much choice.
Moeckly said he rejected the first offer and then TransCanada returned with a "better easement."
"Then I got served. Their third response was eminent domain. Most people are given a take-it-or-leave-it choice, but the (eminent domain) statute requires negotiation and I haven’t seen that," he said.
Moeckley said the pipeline, which cuts through four quarters of his property, is a major threat to his farming operation.
Anderson said she, too, was given papers on Sept. 6 and was offered a "take this or take nothing" choice.
"That’s not how we negotiate in South Dakota," she said.
Curt Hohn, general manager for WEB Water Development of Aberdeen, said his company has never had to invoke eminent domain proceedings for water lines.
“We negotiated and worked things out,” he said. “There’s an arrogance in TransCanada we’ve never encountered before.”
TransCanada unlike area water boards has no local presence.