On Keystone XL route, states allow different risks, reap different benefits


This article was first published by InsideClimate News.

If the Keystone XL oil pipeline were approved today, residents in the six states along its route would not receive equal treatment from TransCanada, the company that wants to build the project.

The differences are particularly striking when it comes to tax revenue and environmental protection. States with stronger regulations have won protections for their citizens, while other states sometimes focused more on meeting TransCanada's needs.

In Kansas, for example, lawmakers gave TransCanada a 10-year tax exemption, which means the state won't receive any property tax revenue from the pipeline. Meanwhile, each of the other five states—Montana, South Dakota, Nebraska, Oklahoma and Texas—would earn between $14 million and $63 million a year, according to U.S. State Department estimates.

InsideClimate News Keystone XL State Comparison Primer

When it comes to route changes and protection for landowners, residents of Texas, Oklahoma and Kansas have fared the worst, because their states haven't created any regulations to safeguard their interests.

"All the power is in the hands of the pipeline companies," said Chris Wilson, an independent environmental consultant from Texas who opposes the Keystone XL. Landowners along the route "are really screwed…there's no one in the government they can call for help."

The Obama administration put the Keystone XL on hold in November, saying it needed another year to reassess the environmental risks the project could pose. Republican lawmakers, meanwhile, are trying to force the president to make his decision by February 21. The pipeline would move oil from the tar sands of Alberta to the U.S. Gulf Coast.

Because the Keystone XL would cross state boundaries, both federal and state agencies are involved in its regulation. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) handles safety issues, such as pipeline thickness and operating pressure. Individual states are responsible for pipeline siting, the process that determines a pipeline's exact route within state borders.

But only the state of Montana has chosen to exercise that power, leaving citizens who object to the pipeline's path in other states no option but to shell out money for a court battle, or appeal to local officials who often lack the resources and experience to challenge a major corporation.

In Montana, however, the state's Department of Environmental Quality used a decades-old siting act to minimize environmental damage along the route. TransCanada has rerouted more than 100 miles of the Keystone XL in response to agency and landowner concerns. If the pipeline is approved, the company also must post a bond so funds are available to repair construction-related damage.

DEQ staffer Greg Hallsten, who worked on Keystone XL siting, said that although TransCanada sometimes objected to the agency's reroutes, its complaints were overruled.

"We have [siting] authority in the state," he said. "Our authority's never been challenged along those lines."

TransCanada spokesman Terry Cunha said the vast differences in pipeline regulation reflect the political landscape of each state. "We appreciate that each state has their own guidelines," he said. "It's not up to us to modify or create legislation. We're working with the state governments to meet [their] guidelines and get this project approved."

Other states could follow Montana's lead by pressuring their legislators to create pipeline regulation, said Pat Parenteau, a Vermont Law School professor who studies land use and environmental policy. "If there's a popular enough demand," it can be done, he said.

That's what happened in Nebraska, where residents worked for years to persuade their lawmakers to reroute the Keystone XL out of the ecologically sensitive Sandhills. Farmers and ranchers picketed the governor's mansion, traveled to Washington, D.C. and repeatedly called for a special session to draft siting regulations for interstate pipelines. As the momentum grew, TransCanada offered Nebraska a $100 million dollar spill bond for the Sandhills region—a protection it didn't offer any of the other states.

Nebraska Gov. Dave Heineman finally called a special session in November, where bills were passed to move the pipeline out of the Sandhills and to give the Public Service Commission authority to site future oil pipelines (excluding Keystone XL). TransCanada is now working with state environmental officials to establish a new route for its pipeline.

What Nebraskans have done is very significant, said Mary Boyle, a spokeswoman for the nonpartisan watchdog group Common Cause. Legislators won't act unless they feel outside pressure from constituents, she said, so getting those bills passed is "no small accomplishment…Nebraska citizens clearly proved this can be done."

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