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By Valerie Volcovici
Neligh, NEBRASKA, April 19 When President Donald
Trump handed TransCanada Pipeline Co. a permit for its Keystone
XL pipeline last month, he said the company could now build the
long-delayed and divisive project "with efficiency and with
But Trump and the firm will have to get through Nebraska
farmer Art Tanderup first, along with about 90 other landowners
in the path of the pipeline.
They are mostly farmers and ranchers, making a last stand
against the pipeline - the fate of which now rests with an
obscure state regulatory board, the Nebraska Public Service
The group is fine-tuning an economic argument it hopes will
resonate better in this politically conservative state than the
environmental concerns that dominated the successful push to
block Keystone under former President Barack Obama.
Backed by conservation groups, the Nebraska opponents plan
to cast the project as a threat to prime farming and grazing
lands - vital to Nebraska's economy - and a foreign company's
attempt to seize American private property.
They contend the pipeline will provide mainly temporary jobs
that will vanish once construction ends, and limited tax
revenues that will decline over time.
They face a considerable challenge. Supporters of the
pipeline as economic development include Republican Governor,
Pete Ricketts, most of the state’s senators, its labor unions
and chamber of commerce.
"It’s depressing to start again after Obama rejected the
pipeline two years ago, but we need keep our coalition energized
and strong," said Tanderup, who grows rye, corn and soybeans on
his 160-acre property.
Now Tanderup and others are gearing up for another round of
battle - on a decidedly more local stage, but with potentially
international impact on energy firms and consumers.
The latest Keystone XL showdown underscores the increasingly
well-organized and diverse resistance to pipelines nationwide,
which now stretches well beyond the environmental movement.
Last year, North Dakota's Standing Rock Sioux, a Native
American tribe, galvanized national opposition to the Energy
Transfer Partners Dakota Access Pipeline. Another ETP pipeline
in Louisiana has drawn protests from flood protection advocates
and commercial fishermen.
The Keystone XL pipeline would cut through Tanderup's family
farm, near the two-story farmhouse built in the 1920s by his
wife Helen's grandfather.
The Tanderups have plastered the walls with aerial photos of
three "#NoKXL" crop art installations they staged from 2014 to
2016. Faded signs around the farm still advertise the concert
Willie Nelson and Neil Young played here in 2014 to raise money
for the protests.
The stakes for the energy industry are high as the Keystone
XL combatants focus on Nebraska, especially for Canadian
producers that have struggled for decades to move more of that
nation's landlocked oil reserves to market. Keystone offers a
path to get heavy crude from the Canada oil sands to refiners on
the U.S. Gulf Coast equipped to handle it.
TransCanada has route approval in all of the U.S. states the
line will cross except Nebraska, where the company says it has
been unable to negotiate easements with landowners on about 9
percent of the 300-mile crossing.
So the dispute now falls to Nebraska's five-member utility
commission, an elected board with independent authority over
TransCanada’s proposed route.
The commission has scheduled a public hearing in May, along
with a week of testimony by pipeline supporters and opponents in
August. Members face a deadline set by state law to take a vote
"TENS OF THOUSANDS" OF JOBS
TransCanada has said on its website that the pipeline would
create "tens of thousands" of jobs and tens of millions in tax
dollars for the three states it would cross - Montana, South
Dakota and Nebraska.
TransCanada declined to comment in response to Reuters
inquiries seeking a more precise number and description of the
jobs, including the proportion of them that are temporary - for
construction - versus permanent.
Trump has been more specific, saying the project would
create 28,000 U.S. jobs. But a 2014 State Department study
predicted just 3,900 construction jobs and 35 permanent jobs.
Asked about the discrepancy, White House spokeswoman Kelly
Love did not explain where Trump came up with his 28,000 figure,
but pointed out that the State Department study also estimates
that the pipeline would indirectly create thousands of
The study indicates those jobs would be temporary, including
some 16,100 at firms with contracts for goods and services
during construction, and another 26,000, depending on how
workers from the original jobs spend their wages.
TransCanada estimates that state taxes on the pipeline and
pumping stations would total $55.6 million across the three
states during the first year.
The firm will pay property taxes on the pumping stations
along the route, but not the land. It would pay a different -
and lower - "personal property" tax on the pipeline itself, said
Brian Jorde, a partner in the Omaha-based law firm Domina Law
Group, which represents the opposition.
The personal property taxes, he said, would decline over a
seven-year period and eventually disappear.
TRUMP: 'I'll CALL NEBRASKA'
The Nebraska utilities commission faces tremendous political
pressure from well beyond the state it regulates.
"The commissioners know it is game time, and everybody is
looking," said Jane Kleeb, Nebraska's Democratic party chair and
head of the conservation group Bold Alliance, which is
coordinating resistance from the landowners, Native American
tribes and environmental groups.
The alliance plans to target the commissioners and their
electoral districts with town halls, letter-writing campaigns,
During the televised ceremony where Trump awarded the
federal permit for the pipeline, he promised to weigh in on the
"Nebraska? I'll call Nebraska," he said after TransCanada
Chief Executive Russell Girling said the company faced
Love, the White House spokeswoman, said she did not know if
Trump had called Nebraska officials.
The commission members - one Democrat and four Republicans -
have ties to a wide range of conflicting interests in the
debate, making it difficult to predict their decision.
According to state filings, one of the commissioners,
Democrat Crystal Rhoades, is a member of the Sierra Club - an
environmental group opposing the pipeline.
Another, Republican Rod Johnson, has a long history of
campaign donations from oil and gas firms.
The others are Republicans with ties to the farming and
ranching sectors - including one member that raises cattle in an
area near where the pipeline would cross.
All five members declined requests for comment.
PREPPING THE WITNESSES
TransCanada has been trying since 2008 to build the
1,100-mile line - from Hardisty, Alberta to Steele City,
Nebraska, where it would connect to a network feeding the
Midwest and Gulf Coast refining regions. The firm had its
federal permit application rejected in 2015 by the Obama
Opponents want the pipeline, if not rejected outright, to be
re-routed well away from Nebraska's Sandhills region, named for
its sandy soil, which overlies one of the largest freshwater
aquifers in the United States.
The Ogallala aquifer supplies large-scale crop irrigation
and cattle-watering operations.
“It all comes down to water,” said Terry Steskal, whose
family farm lies in the pipeline's path.
Steskal dug his boot into the ground on his property,
kicking up sand to demonstrate his biggest concern about the
pipeline. If the pipeline leaks, oil can easily seep through the
region's porous soil into the water, which lies near the
TransCanada spokesman Terry Cunha said the company has a
good environmental record with its existing Keystone pipeline
network in Nebraska, which runs east of the proposed Keystone
The company, however, has reported at least two big pipeline
spills in other states since 2011, including some 400 barrels of
oil spilled in South Dakota last year.
The Domina Law Group is helping the opposition by preparing
the landowners, including the Tanderups and Steskals, for the
August hearings, much as they would prepare witnesses for trial.
If the route is approved, Jorde said the firm plans to file
legal challenges, potentially challenging TransCanada's right to
use eminent domain law to seize property.
Eminent domain allows for the government to expropriate
private land in the public interest. But Jorde said he thinks
TransCanada would struggle to meet that threshold in Nebraska.
"Some temporary jobs and some taxes is not enough to win the
public interest argument," he said.
(Additional reporting by Ethan Lou in Calgary; Editing by
Richard Valdmanis and Brian Thevenot)