Keystone or Philosopher’s Stone

Obviously the Keystone XL Pipeline extension is not the legendary philosopher’s stone that could transform lead into gold. But I wonder whether some believe this myth has become reality in the case of TransCanada’s pipeline project. According to its proponents, it will provide hundreds of thousands of jobs, further America’s independence from foreign oil, free us of future interventions in oil rich Middle Eastern countries, offer a more cost efficient and safer transportation medium than rail, and boost our energy driven economy. Is this nothing more than a figurative transformation of crude oil into liquid gold? Perhaps, but it may not seem so to its opponents, especially after two recent pipeline spills into the Yellowstone River. If you are a farmer or rancher in Nebraska or a member of the Cowboy and Indian Alliance in South Dakota, you may not be thrilled with the prospect of your land or water supply being polluted by a broken pipeline. In addition, proponents of climate change foresee Agamemnon if this pipeline extension is built. It seems environmentalists and business interests are irreversibly at odds on the decision to build this pipeline extension. Moreover, these conflicting positions have roiled the cages of our politicians who have emerged with straw man arguments with which to rip apart their opponents. What are we to make of this conflict? Let me offer another perspective. But first, let’s briefly outline a few facts.

Normally, a pipeline cannot be built without hearings to determine justification for the state to force private lands to be sold for public interests. These hearings are generally established to protect private citizens from being damaged by the state’s use of eminent domain. In Nebraska, this protection was overridden by a state law (LB 1161) in 2012 that gave the Governor the authority to grant the use of eminent domain to TransCanada without hearings or any kind of analysis. (It should be noted that Nebraska’s Department of Environmental Quality has no standards for assessing oil pipeline impacts.) A Nebraskan judge found the Governor’s use of the right of eminent domain to be unconstitutional. This month (January, 2015) a majority of the Nebraskan Supreme Court agreed with the lower court ruling, that is, 4 out of 7 Supreme Court judges were in agreement. However, in Nebraska a super majority of 5 is required to overturn the legislature. So LB 1161 stands and the Governor can force the remaining farmers/ranchers to sell the land needed by TransCanada to complete the Nebraska portion of the pipeline. However, the Nebraskans who are affected by this decision have not given up their fight and plan to reprise their case in the courts. In fact, they are being joined by South Dakotans who are also unwilling to give up their property rights. But now that the Nebraskan Governor can authorize the sale of private property to a foreign company under the right of eminent domain, the same ranchers/farmers will be in a position to claim damages. Recent oil pipeline spills will be brought into court hearings as evidence of the potential risk to fresh water supplies and to surrounding communities as well as of possible unrecoverable damage to private property owners. In other words, the Keystone pipeline will continue to be tied up in the courts for a very long time. Meanwhile, the permit that allowed TransCanada to build the South Dakota portion of Keystone has expired. The Cowboy and Indian Alliance in that state is already celebrating what they believe is the death Nell for this pipeline project. How difficult would it now be for TransCanada to justify eminent domain—to show that America’s need for Canadian oil is a public good that outweighs the property rights of American citizens when that oil is intended for cargo ships destined for foreign ports?

Will TransCanada persists in its attempts to build this Keystone pipeline extension or finally revert to their alternate strategy, a new pipeline extending to Canada’s western shore? If the President or legislative action authorized the border crossing of this pipeline at this time, would that action allow pipeline construction to begin? The answer to my first question is unknown, but clearly the second question can only be answered in the negative. With respect to the pro and con arguments, there are a few facts that we can weigh. Is a pipeline a better option for transporting crude oil in terms of safety and costs? One only needs to review rail transportation fees and recent oil railcar explosions before replying strongly affirmative to this question. Will the pipeline extension provide hundreds of thousands of jobs? Not likely, though it certainly will employ thousands of already employed construction workers and require a relatively small number of permanent jobs to maintain the pipeline after construction. How many additional workers will be hired during the construction phase is open to speculation for it depends on decisions TransCanada will make regarding the pace of construction. The mid-West is already riddled with pipelines; literally thousands of pipeline workers are readily available to sign onto this project. Will this pipeline have any affect at all on American energy use, foreign policy, or economy? Since this heavy Canadian crude was never intended to be refined for American use, its only economic beneficiary is a Canadian oil company. Given crashing oil prices, it is no longer clear whether TransCanada’s capital investment in this project is even worthwhile. And since changing the means of transporting this oil has no relevance to its production or ultimate provisioning to customers, there is no effect on the world oil supply, on climate change, or on Middle Eastern oil producers. The only foreign policy impact that I can visualize concerns whether this oil is shipped out of Texas refineries to Europe or out of Canada’s western province to China. Finally, how relevant is the politicization of the President’s approval of this pipeline extension? In my opinion, the facts reveal an alarming lack of political relevancy. Clearly, the President indicated to the Canadian Prime Minister that he favored the pipeline once it passed legal and regulatory due process. Part of that process was the EPA application of extensive monitoring for pipeline leakage and provision of adequate oil spill clean-up capability. The EPA’s favorable determination was probably the major hurdle for the Administration. But the legal issues still persists in the courts.

Given the facts of the matter, you might be wondering what perspective I might offer. Well, I confess I have a bias here. My mother loss her small business to the state’s application of eminent domain—for a freeway off ramp that was never in fact built. As a result, I find it hard to view the Keystone XL Pipeline issue as anything other than a determination of the lawful and fair application of eminent domain. Some South Dakotans and about 12% of affected Nebraskan farmers/ranchers feel their property rights are being unfairly usurped by the state. Clearly, that is an issue for the judicial system. The Administration has already played its part and can do no more until the matter is adjudicated in the courts. The Nebraskan legislature has done its task. Our Congress has no role at all in the matter.

In conclusion, I would like to see the pipeline built with as much spill protection as technology can offer, BUT only if property owners’ interests are protected. And, frankly, I would like our politics to become relevant once again.

Your comments are always welcome - I value your opinions!

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