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.
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