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Is This Any Way to Site a Pipeline?

January 6, 2012

A new story from Inside Climate news describes the enormous disparity among regulatory and taxation requirements in states along the proposed Keystone XL route.  Montana, which has a relatively robust environmental permitting process and advocacy groups (including Plains Justice) that have represented route landowners from the outset, can expect $63 million in annual tax revenue from the pipeline’s 283 mile right of way in the state.  Montana also required TransCanada to create an “on ramp” for local oil production as a condition for the grant of common carrier status, which TransCanada must have to be able to exercise the power of eminent domain.

Montana’s Consumer Counsel analyzed potential impacts on electrical rates at small rural electric cooperatives and extracted a commitment from TransCanada to pay for all new electrical infrastructure costs.  Locals may still see rates rise as a result of the pipeline if additional costly generation is needed, but not as much as if they had to shoulder part of the cost of new utility infrastructure.  Montana also responded to landowner input by forcing TransCanada to reroute more than 100 miles of pipeline, over TransCanada’s objections, and required a bond to protect Montanans against potential damages.

This is not to say that Montana’s siting process has been perfect.  Many landowners and locals are still disgruntled about having the pipeline sited against their will, across the priceless Missouri and Yellowstone Rivers, when the Yellowstone was fouled by a pipeline oil spill a few months ago.  But at minimum, Montana has shown the backbone to negotiate a better deal.  In South Dakota, where Plains Justice represented landowners and Dakota Rural Action in the siting process, additional protective conditions were also obtained. Kansas, Oklahoma, and Texas, on the other hand, more or less abdicated their authority to protect citizens and reap tax benefits.  Kansas, most egregiously, chose to give away all its tax revenue to TransCanada.  Why this incentive was deemed necessary is anybody’s guess.  Inside Climate’s table is instructive.

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