TransCanada Plans More Pipelines Than Keystone

This article from a friend in Britton deserves some extra attention, especially for those of you who think TransCanada is going to run just one pipeline through South Dakota. TransCanada CEO Hal Kvisle told investors at a conference in Whistler, BC (think really fancy ski resort) that building an even bigger "bullet" pipeline all the way to Gulf Coast refiniries is already on the drawing board:

The other option to send growing volumes of oil sands crude to more distant refineries is to take a page from Keystone's design and reconfigure more of its underused natural gas pipelines for part of the route, TransCanada CEO Hal Kvisle said.

"But if the demand for transportation materializes more quickly we would look at building a direct line," Kvisle told investors at a conference in Whistler, British Columbia.

"Either way, the discussions are well advanced and this is one of the future projects that we will be bring forward here in the months ahead," he said in his Webcast speech [no author cited, "TransCanada Plots Next Big Oil Line to Gulf Coast," Reuters.com, 2008.02.21].

Download CEO Kvisle's presentation and watch the Webcast for yourself.

As they have advocated their Keystone project, TransCanada has told landowners that the pipeline will only affect the productivity of the land for one season, when the pipeline is dug and laid. After that, barring the need for maintenance, farmers will supposedly be able to plant crops or hay or run cattle right over the pipeline, as if it weren't even there. That's why TransCanada says a one-time payment should be sufficient for the easements they are requesting from landowners.

So suppose you're farming in Miner County, and you're dealing with TransCanada. They offer you a one-time payment this year to let them build the Keystone pipeline and have access to the pipeline corridor for 99 years. Best-case scenario, the plow through this year with their crews and equipment, taking that 110-foot corridor (50 feet permanent for the corridor, another 60 for workspace, about 13 acres across one section) out of production for the season. Farmers, I'll let you tell me the productive value of a strip of land that size. The pipeline goes in, you go out in the fall or the spring to level the dirt and clear out the TransCanada crews' Slurpee cups and Tim Horton's boxes. TransCanada knows that torn up strip of land won't get back to full production for at least a year or two, so they also offer compensation for lost crops: 100% the year they dig, 75% the next year, and 25% the year after that.

So Year 4 comes, and you're thinking, "Hot dang, time to get that land back to full production." Before you get to your tractor, you see the bulldozers and pipeline trucks pulling into your field. "Good day, neighbor!" the TransCanada crew calls. "We're here to put in the next pipeline! Thanks for the easement!" You signed your land rights away back in 2008, so you have no more compensation coming. If TransCanada builds just one more pipeline, you're out at least six years of production on that land, and you get only two year's worth of compensation.

If that's how these easements work, maybe you can understand why some landowners over by Howard, up in Britton, and elsewhere have been hesitant to sign the deals offered by TransCanada. CEO Kvisle's comments only confirm what our smart landowners could see all along: TransCanada has a lot more planned than just one pipeline. They could be a permanent disruptive presence in our farm fields, and the landowners want their interests protected, not just this year, but throughout their business relationship with TransCanada. Our corporate neighbor, however, wants to use eminent domain to force our landowners to accept payment for just two year's worth of crops in return for 99 years' worth of land rights and productive value.

That deal makes business sense for only one party... and that party doesn't live in South Dakota.
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This Reuters article also reminds us of the size of this particular gorilla South Dakota might get in bed with: Keystone pipeline project cost: $5.2 billion. South Dakota state budget FY 2009: $3.6 billion. Perspective: If South Dakota could impose a 1% tax on the construction project alone -- or a 10% tax on the one-tenth of the project that will cross South Dakota -- we'd rake in $52 million dollars, enough to cover $5000 raises for every K-12 teacher in the state and restore funding for expanding the Classroom Connections laptop program.)