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In Keystone XL Pipeline Negotiations, Charges of Bad Faith Tactics

Some U.S. landowners along the Keystone XL route say they are being 'pushed around' and 'intimidated' by TransCanada, an accusation the energy giant denies

By Elizabeth McGowan

Mar 1, 2011
Rural Montana

Conditions touch on topics such as TransCanada's responsibilities and liabilities with regard to eminent domain; pipeline design, safety and construction; mitigation and spill cleanup. For example, it requires TransCanada to obtain all of its state and federal permits before resorting to eminent domain in Montana. As well, the company is required to train local volunteer fire departments in emergency response for all pipeline problems.

"It's kind of early in the process for us," Moore said. "We're hopeful that the DEQ takes into account what we asked them to take into account."

In addition, the council has asked Montana DEQ and the State Department to complete a supplemental environmental impact statement evaluating the impact of TransCanada's decision to allow conventional domestic oil from the state to feed into Keystone XL. Oil from what's called the Bakken Formation, which stretches across Montana, North Dakota and into parts of Saskatchewan, is not oil sands heavy crude.

Legislative Roadblocks at State Level

South Dakota, however, is having a devil of a time advancing legislation that would force a private company to acquire all of its permits before proceeding to the condemnation stage with landowners. Back in August, organizations began crafting a bill modeled after similar legislation in Wyoming and North Dakota.

Then, GOP state Rep. Mike Verchio shocked supporters in early February by dropping his commitment to be the measure's lead sponsor in the South Dakota Legislature. That likely postpones any further legislative action until this summer. Supporters had already lined up a lead sponsor on the Senate side.

"Our primary sponsor inexplicably caved," Stephanie Trask, an organizer with South Dakota-based , said in an interview. "It was our first year of trying to bring up the bill, so we didn't want to make an enemy. But it was a blow."

State legislators also have yet to act on a related bill covering pipeline bonding. This is the fourth year in a row the House has considered a measure that would place a per-barrel fee on oil shipped through the state to create a $30 million mitigation fund to cover damages and reclamation after a pipeline rupture.

Dakota Rural Action organized three specific groups for landowners in three states along the Keystone XL route with the intent of helping them negotiate joint deals with TransCanada that offered the fairest price and soundest liability for property, water and livestock. Those groups are Protect South Dakota Resources, Eastern Montana Landowners and Landowners for Fairness in Nebraska.

"The compensation might not be anything they are too happy about signing," Trask said about an agreement reached with close to 100 South Dakota landowners in December. "But we got a bunch of things negotiated."

Even if the bill Verchio spurned at the last minute had passed with flying colors, she noted, it wouldn't offer relief retroactively to South Dakota landowners on the Keystone XL route.

"They are out of luck," Trask said about the landowners. "TransCanada calls itself a common carrier. And South Dakota's state statute says that's good enough for a company to proceed to eminent domain proceedings if no contract is signed."

Tomorrow: Part III, Why Is TransCanada a 'Common Carrier?'

Part I, Holding Out in Oklahoma

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