Regulations on TransCanada: Enviro-Whackiness, or Just Plain Good Business Sense?

Opposition to the TransCanada Keystone pipeline is not environmental whackiness. Most folks who don't like TransCanada's proposal thus far aren't saying "No pipeline, nowhere, not ever." They're asking that TransCanada and any other pipeline company simply play by the rules we expect fo any other business.

The South Dakota Resources Coalition has circulated a pretty good argument for three sensible conditions on TransCanada's building of the Keystone pipeline:

1. Responsibility for damage: The SDRC says we should require TransCanada to put up a financial guarantee that it will clean up any damages its pipeline causes. That concept is no more radical when Mom tells you to clean up after yourself. It's also no more radical than the bid bonds the county can impose on vendors: if a snowplow company bids a snowplow at $100K, the county can require the company put up a 10% bond. That way, if the company fails to deliver the plow, the county can use the $10K to cover the inconvenience of emergency rental or turning to the second-place (and probably more expensive) bidder.
2. Annual reimbursements for landowners: TransCanada wants to pay landowners for just the inconvenience of lost crops and such during construction. But TransCanada is deriving value, causing inconvenience, and posing an environmental threat to landowners every year of operation (and even after operations end). TransCanada should have to pay rent on the land it uses every year, like any other tenant would. SDRC also notes that in any other rental situation, the landowner dictates the terms of the agreement to the tenant, not the other way around. When's the last time you heard of a renter getting to condemn his apartment so he could make a one-time payment and keep his stuff there indefinitely?
3. "Flow fee" -- Share the wealth: TransCanada will make a lot of money off this pipeline. Anyone else who does business in South Dakota pays into the state coffers. Truckers hauling fuel or anything else through our state pay their share of taxes and fees. TransCanada should pay a per-barrel tax to support the state that will allow it to make its big oil profits.
   

The full text of the SDRC statement is below. As you can see, the proposals they make are not enviro-whackiness, just good business sense for the state of South Dakota.

South Dakota Resources Coalition (SDRC) is asking for your consideration to provide a three-part approach for common sense to the Keystone Pipeline Project. A key word in our name-"Resources"- implies but also demands that we as a state perform as a steward for those precious gifts that we inherit. Part of that stewardship requires that we act as prudent business people when it comes to the future direction of the Keystone pipeline.

Numerous individuals at the recent PUC hearings concerning the permitting of Keystone suggested the need for bonding both for performance and clean up. Any claims for proper performance can only be backed by bonding and insurance not public claims. Granting a permit even under the most stringent requirements will not guarantee proper performance. There must also be incentive and personal responsibility to guarantee proper performance. There is no better incentive than an insurance company insisting that there be no mistakes. Keep in mind, that Trans Canada is multi-national, for profit, company that uses a corporate "veil" to separate its assets and resources from potential liability. No one individual associated with Trans Canada is at risk for losing his/her personal finances. As business people, we need to make sure that performance is not just spoken but also secured with incentive and responsibility. Proper bonding is not a choice. It must be a requirement. With the operation of Keystone, failure is not an option.

Most easements obtained by Keystone only provide monies for crop damage and initial construction during the first year. Easements whether granted freely or by eminent domain need to provide annual reimbursements as long as the pipeline lies within the boundaries of the properties affected. How many landlords allow a tenant to occupy a property rent free by only making a down payment deposit? Further more, how many landlords use a lease written by a tenant as the basis for the rental arrangement? The state of South Dakota urgently needs to develop a proper template for easement contracts that financially secures and rewards the property owner for their cooperation with Keystone not just now but for the entire life span of the pipeline. Again, we as a state of SD need to behave like business people.

Goods and services moving within and through SD provide an "economic blood flow" that helps to build and grow our state. When goods and services are purchased or consumed in our state sales and excise taxes are paid. When transport vehicles or trucks use our interstates/highways systems, they pay a state fuel tax. When crude oil flows through a pipeline buried underground running through SD, there needs to be a "flow fee" paid to the state of SD. We tax most every other for profit activity in this state. When a multi-national for profit company partners with our state to make financial gain, we as a state need to be duly compensated. Once again, we need to act like business people.

SDRC strongly urges the public officials of our state to act as stewards of our resources with the responsibility to be prudent business people. With over 35 years as an advocate for the resources of our state, SDRC has the knowledge and background to sense what is important. Our members come from all ways of life in South Dakota. We as all South Dakotans expect that you demonstrate leadership on these difficult issues concerning Keystone. Proper bonding, adequate annual compensation for landowners, and financial dividends to the state of SD need to be part of the package that Keystone provide as it partners with the people of South Dakota. SDRC appreciates your consideration and serious thought to our proposal.

Sincerely,


SDRC Board of Directors
[forwarded by Charlie Johnson, 2008.01.23]