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Thursday, November 13, 2008

Keystone Pipeline Surviving Low Oil Prices, Will Survive Reasonable Tax

The South Dakota Legislature went to great efforts to kill or water down any efforts to regulate or tax the TransCanada Keystone pipeline during the 2008 session. I argued vigorously that nothing our legislature might do to impose some responsibility and, bluntly, make some money on the pipeline would not stop Big Oil from building the pipeline. But the Republicans (and a few Dems, dang 'em) thought that taking even two cents per barrel would create a business-crushing burden on TransCanada.

Well, now we find that taking away $80 per barrel won't stop TransCanada:

Gas prices dropped another nickel in Sioux Falls Wednesday as the price for a barrel of oil fell to 56 dollars. While the falling oil prices are good news for drivers, its not so good news for oil producers in Canada. Canadian crude is more costly to produce than regular oil, so when the price goes down so do profits.

...But, Robert Jones with TransCanada's Keystone pipeline says the price is not going to impact the hundreds of miles of pipeline being put in the ground right now.

Jones says, "The shippers have signed binding contracts and no matter what the price of oil is, the consumer demand in the United States, the refineries, still need the oil" [Ben Dunsmoor, "Oil Slow Down Will Not Stop Transcanada," KELOLand.com, 2008.11.12].

2009 is a whole new Legislative session. We have another chance to impose a pipeline tax that would make Big Oil pay a reasonable fee for the great benefits it will enjoy for the use of our land.

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