TransCanada: We Get the Pie, You Do the Dishes

We start our morning with guest commentary on the TransCanada Keystone pipeline from someone who has to live with it in his backyard, Ed Miller of Salem. Note that Miller isn't saying an absolute no to the project; he only asks, like the rest of us, that TransCanada deal with South Dakota honestly and fairly.

Highlights:

1. Don't bank a big tax windfall: expect TransCanada to apply for a refund on 75% of the sales tax generated by construction activities.
2. The benefits go mostly to big business; the costs are borne mostly by landowners. Isn't the free market supposed to distribute costs and benefits more equally.

MINER COUNTY PIONEER / Thursday, December 20, 2007
Letter to the Editor

Letter to the Editor,

In early December, I spent several days in Pierre at the TransCanada Keystone pipeline hearings before the South Dakota Public Utilities Commission. Since the proposed Keystone pipeline could become part of Miner County's future, I have compiled some information that I'd like to pass along to those who could not attend the hearing.

The Keystone pipeline will transport heavy crude oil from Canada to the United States. Crude oil is classified as a hazardous liquid by the US Department of Transportation. Consequently, the Keystone pipeline will be regulated by the Office of Pipeline Safety as a hazardous liquids pipeline.

TransCanada testified that the pipeline will comply with all federal laws and will use modern materials and installation and maintenance practices. However, I am quite disappointed with some of the information provided by TransCanada. For instance, landowners have not been getting the whole truth regarding historical pipeline oil spills and TransCanada's own track record regarding pipeline operations. Consequently, I feel that the company's estimates of future oil spills are questionable at best.

Regarding oil spills, TransCanada's environmental toxicologist Heidi Tillquist submitted pre-filed testimony to the PUC stating that the average pipeline oil spill in the US since 2002 was 12 barrels, or about 500 gallons. Since I worked for a major oil company in Houston for several years (Exxon), I knew that statement was not true. As an intervener in the case, I had the opportunity to question Ms Tillquist under oath at the hearing. Almost immediately upon taking the witness stand, she "corrected" her pre-filed testimony. Subsequently, in response to questions from me, Ms Tillquist admitted that the average pipeline oil spill in the US since 2002 is 287 barrels. That amount is some 2300% higher than what she had stated as part of her pre-filed testimony to the PUC.

Furthermore, TransCanada engineer Meera Kothari stated in her pre-filed testimony that TransCanada had recorded 576 spills or releases on their Corporate Social Responsibility report for the years 2000 through 2005. However, her descriptions of the major and critical spills did not match the actual events that have occurred on some TransCanada pipelines. In response to my questions at the hearing, Ms Kothari conceded that the CSR report totals listed above do not include the significant incidents on TransCanada's natural gas pipelines. Major accidents on those pipelines include seven critical incidents, some of which involved major explosions, fires, etc.

I also have very little confidence in TransCanada's estimates regarding the taxes that the company claims that it will pay into state and local coffers. For instance, TransCanada vice-president Robert Jones testified that the company could receive a 75% refund of the sales tax to be paid on the construction of the pipeline, a refund of $13.5 million. He also testified that the eventual property taxes of the system will be "difficult to state with certainty."

As a landowner involuntarily involved with the Keystone pipeline, I think it is fair to say that TransCanada has had some credibility issues regarding landowner relations. In many respects, I feel that TransCanada has overstated the benefits associated with this facility and has understated the long term risks. While there are some benefits to the construction this pipeline, those benefits will go primarily to organizations and suppliers who don't have to shoulder any of the burdens associated with the facility. On the other hand, landowners and local farmers will incur significant burdens associated with the construction of this facility and with the inevitable oil spills when they do happen.

Over the coming years, TransCanada will receive literally billions of dollars in revenue from this facility. At the very least, the company should treat landowners, farmers and local communities truthfully and fairly.

Sincerely,
Ed Miller
Miner County Landowner
Salem, SD

Thanks to a faithful reader for keeping us posted!