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Monday, November 2, 2009

Madden Report Misses Distress Among Keystone Pipeline Neighbors

Report Also Finds Going Rate for Land Rights:
$40,000 per Mile

The South Dakota Public Utility Commission begins its hearing today on the Keystone XL pipeline permit. A public input session tomorrow (Tuesday) evening at 6 p.m. will be part of a week-long process in Room 414 of the State Capitol Building in Pierre.

The state appears ready to propagate the illusion that another strip of sovereign Canadian territory across South Dakota is hunky-dory. SD Tar Sands Pipelines highlights a report submitted to the Keystone XL docket by economist Michael Madden on behalf of the state. Dr. Madden assesses the socioeconomic impacts of the Keystone I pipeline TransCanada is currently completing in eastern South Dakota. Somewhat maddeningly, Dr. Madden finds that among farmers he interviewed near the pipeline route he didn't get to have the project on their land, "it was sensed that there was feeling of lack of good fortune on their part." He finds "no major worry road rehabilitation would not be performed by the company" [p. 13].

Dr. Madden evidently avoided speaking to Mike and Sue Sibson—"pipeline shoved up my..." doesn't strike me as an expression of "good fortune." Dr. Madden also apparently didn't catch the KDLT story (now deleted—evidently KDLT can't afford the server space to archive a few kilobytes of text each week) about TransCanada tearing up roads and dragging its feet on repairs in Beadle County. (For more on road concerns, see the Beadle County Commission minutes from July 30.)

But let's back up. Where did that "lack of good fortune" comment come from? Dr. Madden appears to have discovered how much money it took to keep landowners quiet and perhaps make other neighbors wish they could have cashed in on black gold and perpetual environmental disruption. While landowners were bound to secrecy by confidentiality agreements with TransCanada, Dr. Madden appears to have wheedled from at least a few of his interviewees some numbers.

Although exact numbers were not easily acquired from those interviewed, it appears that in the area where these interviews were conducted a typical access easement involved a payment of approximately $40,000 per mile of land. In addition ample mitigation has been arranged for loss ofcrop or grassland production for the interruption in production caused by construction activity and post-construction restoration. No one interviewed indicated that the amounts involved were unfair. In talking to other farm operators who lived near the project, but had no land on the corridor, it was sensed that there was feeling of lack of good fortune on their part [Madden report to PUC, p. 13].

$40,000 per mile. Given a 150-foot construction easement, that's $2,200 per acre. Compare that to $1,863–$2,634 ag land values, depending on the neighborhood.

But here's the real kicker: $40K per mile, across about 220 miles through eastern South Dakota. Total TransCanada would be shelling out to our landowners by Dr. Madden's estimate: $8.8 million... the current price of the amount of oil that will shoot through the Keystone pipeline every four and a half hours.

Looks to me like TransCanada bought its way across our state with payments hardly bigger than rounding error on their final balance sheet.

Why am I not feeling good fortune?

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