Fight over pipeline weighs value of oil and water

News
Sep 30, 2011
by DTN

Standing outside waiting for a U.S. State Department hearing on the Keystone XL pipeline, rancher Todd Cone described the water around his area in north-central Nebraska.

“It’s the most pristine stuff there is,” Cone said. “No nitrates, no arsenic, no nothing in it.”

Cone and neighboring ranchers drove to Lincoln, NE, for a public hearing on the Keystone XL pipeline, which has become one of the most politically-charged energy infrastructure projects in the country.

The Obama administration’s State Department has to approve the permit for the pipeline, which would pump about 800,000 barrels of oil from the Canadian tar sands down through Plains states to refineries in Oklahoma and Texas.

The State Department has held hearings in each state, and even scheduled two for Nebraska, which has been the center of opposition.

“The biggest thing we are concerned about is the land and water contamination,” Cone said.

The Keystone XL fight pits oil vs. water, jobs vs. environment, energy independence vs. carbon emissions. And in Nebraska, it pits economic interests versus the state’s long history of preaching what the Ogallala Aquifer means to the livelihood of the state.

“People have always said there will be wars over water. Maybe this is where it starts,” Cone said.

Bruce Boettcher’s fourthgeneration ranch with about 300 cows comes within about a quarter mile of where the pipeline will run. The water table from the aquifer is just a few feet from ground surface in a lot of places, he said. Boettcher doesn’t like that the pipeline’s operating company, TransCanada, got easements from landowners before getting the needed State Department permit.

“We are as at much a risk as they are if there is a spill,” Boettcher said of the land that got easements. “You don’t put a toxic pipeline through your water system.”

The State Department determined in an environmental impact statement last month that the current route through the Ogallala Aquifer was the safest environmental route and would disrupt fewer landowners and cross fewer waterways than other proposed alternatives.

Still, the fight has led to extended protests at the White House. Nebraska’s senators and governor have asked Keystone to change the pipeline route or have the State Department deny the permit outright. Earlier this month, the Dalai Lama weighed in on the side of opponents as well.

The hearing in Lincoln drew several hundred people. Ranchers and landowners were largely aligned with environmentalists and community activists opposed to the pipeline. A block of union members, many of whom were from neighboring states, were there to support business and economic development groups backing the pipeline.

The State Department has more hearings scheduled before a final one Oct. 7 in Washington, D.C. Secretary of State Hillary Clinton is expected to make a decision before the end of the year.

The company, backers and opponents have released competing studies showing varying levels of potential risk, and the quality of backstops and shut-off systems.

Joe Kiely, vice president of the Ports to Plains Alliance, cited letters from 65 different local officials along the route who supported the pipeline.

Mike Friend, a former state senator and now president of the Nebraska Chapter for Americans for Prosperity, said Nebraska would see a lot of opportunity from the pipeline, not to mention the benefit of more oil flowing to the U.S. from a neighboring ally.

“Make no mistake, this is a once-in-a-generation opportunity to ensure energy security for generations of Americans and strengthen ties with one of America’s closest allies,” Friend said.

TransCanada and other pipeline supporters have been buying local television and newspaper ads such as one in Omaha’s newspaper that said, “Who are the Americans who will benefit from Canadian Oil Sands with the development of 600,000 American jobs by 2035?” The Nebraska Farm Bureau has not taken a position on the pipeline or its location. The Nebraska Farmers’ Union (NFU) opposes the pipeline. Graham Christensen from NFU said the U.S. would simply become a shipping facility for other countries to ultimately get the fuel shipped through the Gulf Coast. That was a heavy emphasis referenced by several opponents who spoke that afternoon.

“We’re taking all of the risk here,” Christensen said. “There is not a national benefit here.”

Jane Kleeb, executive director of the activist group BoldNebraska, said she expects, regardless of the decision made by the Obama administration on the pipeline, the charged nature ensures litigation would follow.

“I think they are already starting to mobilize on both sides at the state and the federal level,” Kleeb said.

The fight over the pipeline has become a fight of ideology, “environmental extremist and free-market forces,” said John McCollister, executive director of the Platte Institute for Economic Research in Omaha.

McCollister, in his testimony, said critics of the pipeline are ignoring the environmental findings of the State Department and the economic benefits, particularly construction jobs for the $7 billion project.

“To be clear, many critics of the TransCanada and the XL pipeline are not opposed to where the pipeline goes through, they are actually opposed to any further development of any Canadian crude oil as a future energy source,” McCollister said. — Chris Clayton, DTN

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