Next Steps on Keystone XL at the SD PUC

The South Dakota statehouse, home of the South Dakota Public Utilities Commission

The next step in the Keystone XL pipeline proceedings at the South Dakota Public Utilities Commission will be the filing of briefs. Parties can also submit proposed findings of fact and conclusions of law.

The deadline is January 20, 2010. After that, replies to what others have filed are due February 2.

The Commissioners have to make their decision whether to approve the pipeline by March 20, 2010.

Getting Caught Between Fighting Giants

Attempt to restore topsoil in very wet conditions in Marshall County, SD

A new article explains the battle for market dominance between TransCanada and Enbridge, two Canadian pipeline companies.

According to the article, the Keystone and Keystone XL pipelines are part of TransCanada’s plan to take dominance in the oil-moving market from Enbridge.

Missing from the article: the human and environmental costs of this fighting between two oil-industry giants.

One example: the South Dakota farmers who have struggled to protect the fertility of their land as it has been excavated for the Keystone pipeline. Kent Moeckly, for instance, had trouble when a pipeline contractor attempted to restore his topsoil over the top of the newly buried pipeline. The contractor tried to do the restoration during very wet conditions, which can harm topsoil by compacting it.

Photo courtesy of Kent Moeckly, who owns land about 12 miles SW of Britton, South Dakota

Keystone Pipeline Tax Controversy Continues

Keystone pipeline under construction near Yankton, SD

The Arkansas City Traveler reports that the Cowley County (Kansas) economic development partnership has passed a resolution “condemning a proposed property tax exemption” for the Keystone pipeline. The paper also reports that “several other entities are poised to do the same this week.”

In November, the Cowley County Administrator told the Cowley County Commissioners that the county will lose between $400,000 and $1 million in property taxes from the exemption. (See page two of the link.)

Canadian Pipeline Co. Says Keystone XL Pipeline Not Needed

Cross section of Keystone XL pipe

Enbridge, a Canadian pipeline company, says TransCanada’s Keystone XL pipeline is not needed and will result in too much pipeline capacity being built.

Enbridge is building its own tar sands oil pipeline to the U.S., the controversial Alberta Clipper. This week, the company also said that it doesn’t think the closing of a U.S. oil refinery will decrease how much oil is piped to the Midwest from Canada.

While it’s tempting to think that pipeline overcapacity would mean cheaper gasoline prices, overcapacity is actually more likely to raise the cost of gas. That’s because both TransCanada and Enbridge will have costs for debt service on their new pipelines, costs that will be passed on to consumers. Even if only one pipeline is needed, as Enbridge alleges, consumers will still be stuck with paying debt service for both pipelines.

Has the Keystone Pipeline Stopped Being Controversial?

A Keystone pipeline landowner displays photos of Keystone pipeline construction damage during a Keystone XL public hearing

From the department of unfortunate timing:

On the same day the Mitchell Daily Republic says the Keystone pipeline has stopped being controversial, there’s news coverage of a racial discrimination lawsuit brought by a Keystone pipeline worker against the Keystone pipeline contractor for whom he worked. (The two links here are republished and do not have the same date, but both stories were originally published on the same day.)

Given that the Keystone pipeline was promoted in South Dakota as providing local employment, one of the interesting things about the lawsuit story is that the worker is from Illinois and the contractor is based in Pennsylvania.

Gasoline Demand Dropping

Not even the holidays are convincing people to buy as much gasoline as the oil industry would like.

Since gasoline sales are declining and an oil refinery will close due to lack of demand for its product, why are South Dakota landowners still facing the threat of eminent domain for new crude oil pipelines?

According to the Wall Street Journal:

The situation is unlikely to change any time soon, experts and industry executives say, in part because the increasing use of biofuels and more-fuel-efficient cars will cut into gasoline sales.

Are the Oil Companies Safeguarding Your Investment?

Interior of Indian-made pipe used in the Keystone pipeline

A new report analyzes the potential risk of companies that extract oil from the Alberta tar sands (a.k.a. “oil sands”).

Why did Northwest & Ethical Investments L.P, National Union of Public and General Employees, and Ceres bother? In their own words:

As more companies enter the oil sands, and the contribution of oil sands to company reserves increases, more investors are becoming exposed to these risks, and the level of their exposure is increasing.

Tar sands oil is scheduled to begin moving through the Keystone pipeline early next year. Counties along the Keystone pipeline route in South Dakota may be interested in South Dakota Public Utilities Commissioner Steve Kolbeck’s assertion that only one county has had “much trouble.”

Who Pays for the Keystone XL Pipeline?

Goings on in Nebraska raise questions about who will pay the costs of TransCanada’s Keystone XL pipeline.

The Nebraska Public Power District (NPPD) recently approved rate increases for its customers. According to the Columbus Telegram, the increase will include costs for capital projects. One of those projects is electrical improvements needed for the Keystone XL pipeline: “Of the $348.2 million capital budget, approximately $45 million will be paid for by TransCanada as part of its Keystone XL Pipeline project.”

OK. But will TransCanada’s $45 million or so pay the full costs of the project?

Almost certainly not. A NPPD flier about the project estimated that NPPD’s system needed $49 million in upgrades for the Keystone XL pipeline.

That’s $4 million more than TransCanada will apparently pay NPPD for the upgrades. So unless someone figured out how to do the upgrades for $4 million less than NPPD estimated previously, TransCanada is not the only one that is going to be paying for them. The flier itself hints at this by saying TransCanada will pay “a majority of the costs.”

So it appears NPPD ratepayers will be paying $4 million or so for TransCanada’s Keystone XL pipeline. The flier says there will be benefits for NPPD’s wholesale customers, but the Columbus Telegram article says residential customers are getting a rate increase too.

Is the State Putting the (Energy) Cart before the (Taxpayer) Horse?

Looking at photos of damaged farmland

An editorial at the Aberdeen American News asks whether South Dakota law may need to be changed so that state approval processes for projects like the Keystone XL pipeline happen after federal processes. The paper’s concern is that if the state goes first, what happens to that effort and expense if the project dies during the federal process?

Project applicants are supposed to pay fees that cover the state’s expenses, so if South Dakota is losing money on cancelled projects, the problem could have more to do with how much the applicants are being charged rather than the order of approval processes. Given the state’s generosity with tax refunds for new construction projects, it would be good to know whether the cancelled energy projects the editorial mourns were charged the state’s full costs of approving them.

In addition, the editorial raises a point that Plains Justice has repeatedly made during the Keystone XL proceedings at the South Dakota Public Utilities Commission. The Commissioners may approve the Keystone XL pipeline before the federal environmental report is completed.

A new reason why that would be unfortunate: when the PUC approves the Keystone XL pipeline, it will presumably seek to place conditions on it, as the PUC did for the first Keystone pipeline. The federal environmental report will have information in it that could be very helpful to the commissioners as they set those conditions.

Photo: Stephanie Trask and Luke Temple of Dakota Rural Action show photos of farmland and roads damaged by Keystone pipeline construction to TransCanada executive Robert Jones.

Expert Says Dinosaur Fossils along Path of Keystone XL Need Protection

What will the South Dakota Public Utilities Commissioners do to protect valuable dinosaur fossils along the path of the Keystone XL pipeline?

This video is courtesy of Dakota Rural Action.