Few Protections from Eminent Domain

Despite the new regulations in Nebraska, landowners there, like landowners in all the Keystone XL states, have felt helpless when TransCanada used eminent domain to take their land.

All six states have given the company the power of eminent domain. While the eminent domain laws vary from state to state, they generally allow projects built for a "public" good—including railroads, transmission lines and highways—to use private land after paying landowners a fair price that's determined by the courts. But the laws aren't specific about what "public" means, and pipeline opponents say Keystone XL shouldn't be allowed to use eminent domain because it's not serving the United States public.

Harlan Hentges, an attorney who represented an Oklahoma family that challenged the taking of their land, says TransCanada is a foreign company transporting foreign goods (crude oil) across the U.S. for export. "To me it's an outrage from beginning to end," he said.

Montana is the only state that offers its residents some protection from eminent domain.

Its siting act requires that pipelines be built on public land whenever it's economically feasible. As a result, 77 percent of the pipeline's route through Montana falls on private land, while that number rises to more than 92 percent in the other five states. In Texas, the entire pipeline is routed through private land.

Montana also doesn't allow companies to take landowners to court until the DEQ gives a project a final stamp of approval, known as a Certificate of Compliance. In early December, the DEQ's Hallsten told InsideClimate News that the agency didn't plan to issue the certificate to TransCanada unless the federal government approved the pipeline. But Gov. Brian Schweitzer overruled the agency on Dec. 15 when he announced that TransCanada had met the siting act's requirements and that the DEQ would issue the certificate within a few weeks.

Sue Kelso, the Oklahoma landowner who hired Hentges to challenge TransCanada's use of eminent domain on her family farm, said she feels abandoned by her state officials.

But the Oklahoma Corporation Commission—the agency in charge of pipeline regulation—has little control over interstate pipelines. Commission spokesman Matt Skinner said the agency's role is limited to remediation after oil spills.

Kelso's troubles began when a TransCanada land agent offered her $3,000 for a permanent easement on her property. Kelso said the agent claimed the pipeline would carry regular crude oil, but she soon found that Keystone XL would transport the tar sands oil known as diluted bitumen, or dilbit. Unlike conventional crude, the exact chemical composition of dilbit remains a trade secret. There's little research on dilbit and no peer-reviewed studies on how it affects pipeline corrosion.

Kelso's concerns escalated after an Enbridge pipeline spilled dilbit into Michigan's Kalamazoo River in July 2010. The Environmental Protection Agency doesn't expect the cleanup of that spill to be completed until the end of 2012.

"I live in fear that this pipeline will go through and ruin all the water," Kelso said.

When Kelso refused to sign TransCanada's contract, she said the land agent threatened to use eminent domain. "She told me [to] either take what they offered or they'd condemn our property and take it anyway." That's when Kelso hired Hentges.

In August, TransCanada voluntarily rerouted the pipeline around Kelso's property. Hentges believes the company wanted to avoid going to court, where the case might set a precedent and open the floodgates to eminent domain challenges in other Keystone XL states.

In Texas, property rights activist Debra Medina is lobbying legislators to clarify the state's eminent domain law. State law grants the operators of common carrier pipelines—defined as "to or for the public for hire"—the power of eminent domain, but it's unclear if the word "public" refers to Texans or the public at large, Medina said. She asked the Railroad Commission and the Texas attorney general's office for clarification but never received an answer.

Everyone knows that Texans value property ownership, she said. "And yet, in our law, we've given eminent domain authority to private businesses and nobody's making sure the businesses who exercise that power meet the necessary criteria."