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Special Status May Make Keystone Pipeline Impervious to Lawsuits

TransCanada has qualified as a 'common carrier' in the states along Keystone XL, a designation that has stumped some attorneys, advocates and observers

By Elizabeth McGowan

Mar 2, 2011
Welcome to South Dakota highway sign

Editor's Note: In this three-part series, SolveClimate News examines how landowners along the six-state route for TransCanada's controversial Keystone XL pipeline are dealing with potential property condemnation. Part III: Why Is TransCanada a 'Common Carrier?'

WASHINGTON—Though eminent domain statutes vary in each state, TransCanada seems to have made itself legally impenetrable in the half dozen states along the Keystone XL pipeline route by claiming "common carrier" status.

In a nutshell, that designation means the provider is under the obligation to treat each customer account equally. But parsing out how the Canadian company qualified as a common carrier has stumped some attorneys, advocates and observers.  

They find it odd that South Dakota's three-member granted TransCanada's Keystone XL common carrier status when the state has no oil to ship onto the pipeline. If that's the case, they ask then how can the characterization be tested?

"In South Dakota, if you can prove that TransCanada is not a common carrier, then you would have a case," Stephanie Trask, an organizer with South Dakota-based , explained in an interview with SolveClimate News.

Otherwise, she said, that status gives TransCanada the authority to condemn property, and the courts would likely determine the value of the land.

Oil interests in Montana and Oklahoma have played the common carrier card to their advantage by forcing TransCanada to add on-ramps in those states so domestically harvested oil can be shipped along the Keystone XL.

Harlan Hentges, the attorney representing two generations of an Oklahoma family in a condemnation legal challenge an Oklahoma, is positive that pipeline connections in two out of six states do not transform TransCanada into a common carrier.

"A common carrier hauls anybody anywhere for a flat rate and is built to serve the public of the United States," he emphasized. "And that public use is defined by the state and U.S. constitutions.

"I don't think there's any question that the purpose of this pipeline is to carry Canadian bitumen to the Gulf Coast," Hentges continued. "That is not a common carrier. Keystone XL is like a private car going from Canada to the Gulf Coast, not a bus that goes from Wichita to Dallas."

Messing with Texas

In Texas, it was the state's that granted TransCanada common carrier status. Most landowners along the route in eastern Texas, assuming Keystone XL would be hauling conventional oil, were content to take the buyout offer.

But that was before one curious property owner David Daniel did a bit of research about oil sands mines in Alberta. The carpenter-cum-activist planted protest signs in his yard, plus one in his truck that included his cell phone number.

His efforts gave birth to and galvanized efforts between landowner holdouts and local advocacy groups. That solidarity has generated a protest song about stopping tar sands from being shipped into this country and a letter to President Obama and Secretary of State Hillary Clinton urging them to inform property owners about the potential health, environmental and safety risks of Keystone XL.

TransCanada spokesman Terry Cunha said his company has challenged many of the allegations Daniel and other members of the advocacy group have made about the safety of the actual Keystone XL steel pipeline, the type of oil it will be pumping and how TransCanada is handling the easement process. 

"We are simply seeking an easement for a critical American oil pipeline to meet American energy needs," Cunha said. "To date, we have been pleased to enter into agreements with approximately 80 percent of Texas landowners along our proposed pipeline route."

The only reason TransCanada

The only reason TransCanada has reached easement agreements with 98.99% of the landowners is by using the threat of eminent domain. No one in their right mind would agree that a one time payment in perpetuity with no inflation factor is fair. Also in the easement agreements TransCanada asks for the right to put one or more pipelines in the same easement with no additional compensation. In Nebraska TransCanada hired the company Universa Field Services. The land agents from Universal broke Nebraska law—they did not hold Nebraska real estate licenses. Cease and desist orders were issued against representatives and the UFS president. Now it is up to landowners to determine the validity of signed agreements. TransCanada representative denied taking responsibility saying, ” That is not the way we do business. The company we hired did that.” And Transcanada did this using the threat of eminent domain without the Presidential Permit.

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