Pipelines Reversed

OMAHA (DTN) -- The Trump administration signed an executive order Tuesday to support the Keystone XL pipeline that was shelved by a series of legal challenges and rejection of a presidential permit from the previous administration.

Environmental groups, farmers and ranchers fought TransCanada for years to stop the building of a 2,000-mile pipeline that would carry 830,000 barrels of bitumen oil per day from Alberta, Canada, to the Gulf of Mexico. Their concern was the pipeline would pass through sensitive habitats across the Nebraska Sandhills and they feared any pipeline breaches could harm the environment. Also, TransCanada planned to use eminent domain with about 2% of landowners to acquire the land needed to build the pipeline, upsetting those who were potentially affected.

In addition, a second executive order moves forward the Dakota Access pipeline that has faced extensive protest and opposition from Native American and environmental groups. The Dakota Access pipeline would run from North Dakota to Illinois. Dakota Access requires a permit from the U.S. Army Corps of Engineers, while the Keystone XL needs a presidential permit.

TransCanada said it would reapply for a permit for Keystone.

"We are currently preparing the application and intend to do so," the company said in a statement to DTN.

"KXL creates thousands of well-paying construction jobs and would generate tens of millions of dollars in annual property taxes to counties along the route as well as more than $3 billion to the U.S. GDP (gross domestic product). With best-in-class technology and construction techniques that protect waterways and other sensitive environmental resources, KXL represents the safest, most environmentally sound way to connect the American economy to an abundant energy resource."

Meanwhile, TransCanada is still continuing with a complaint filed against the United States in June 2016, claiming the more than seven-year delay before rejecting the Keystone XL pipeline route through South Dakota and Nebraska was in violation of the North American Free Trade Agreement. The company is seeking through a NAFTA tribunal $15 billion in damages as a result of lost revenues.

FARMER REACTION VARIES

Art Tanderup farms 160 acres just north of Neligh, Nebraska, that would have been in the pathway of the Keystone pipeline. Tanderup said he refused to sign an easement with pipeline developer TransCanada and his farm became a rallying point for people opposed to the project.

"As a farmer and landowner on the rejected Keystone XL route, I was extremely disappointed to hear that the Trump administration is pursuing it again," he told DTN in an email.

Tanderup raises corn, soybeans and rye on his eastern Sandhills farm sitting atop the Ogallala Aquifer. He said several years ago his operation launched no-till farming and planting cover crops to prevent erosion on his land where the aquifer sits close to the surface.

"Needless to say, there is a massive amount of clean water in a very porous environment," he said. "Placing a 36-inch tar sands pipeline through this fragile environment provides numerous risks ... For farmers, taking land for private gain through eminent domain is a big issue. How can a foreign corporation take American farmland for their corporate benefit? ... We will continue to work to prevent the construction of KXL."

Mark Rohrich, a sunflower farmer from south-central North Dakota, lives within 30 miles of the Dakota Access pipeline route. In a Twitter exchange with DTN, Rohrich said the ongoing protests and delay in the project have hurt his state.

"My biggest joy is the move for the Dakota Access to completion," he said.

"This has been a burden on our state and needs a completion that will no doubt help North Dakota in moving its oil. I am also glad that we will get the Keystone back on track to move both Canadian and U.S. oil and help with energy independence."

Rohrich said the Dakota Access route would run within 30 miles west of his property, so his land is unaffected.

"I am satisfied with these newer pipeline safety measures which are no doubt better than they ever have been," he said.

"It is more about the economic windfall for our state in boosting oil production on wells that are already there. And extra revenue for our state carries into keeping ag research funded as well as infrastructure. We live across the state from what was the oil boom, but I know there were people who resided in our town that did travel to work there."

EXECUTIVE ORDERS

The Obama administration rejected the Keystone XL permit although the U.S. State Department study gave the project a green light. Regarding Trump's executive order, a number of media outlets reported Tuesday the Keystone project would be subject to renegotiated terms.

Trump also signed an executive order Tuesday directing pipelines to be built using American steel.

"We are -- and I am -- very insistent that if we're going to build pipelines in the United States, the pipe should be made in the United States ... unless there is difficulty with that because companies are going to have to sort of gear up," Trump said during the signing. "Much pipeline is bought from other countries. From now on we're going to start making pipeline in the United States."

Jane Kleeb, president of Bold Alliance, an environmental activist group that fought against Keystone XL for years, said Trump should instead stand up for property owners.

"Nebraska farmers and ranchers need a president standing up for property rights and our clean water to produce American food," she said in a statement to DTN.

"Foreign tar sands pipelines headed to the export market have no place in the Heartland. There is no application for Keystone XL and there never has been an approved route in Nebraska. The president should focus on American energy independence rather than taking land away from farmers using eminent domain for private gain."

American Petroleum Institute President and Chief Executive Officer Jack Gerard lauded Trump's actions.

"We are pleased to see the new direction being taken by this administration to recognize the importance of our nation's energy infrastructure by restoring the rule of law in the permitting process that's critical to pipelines and other infrastructure projects," Gerard said in a statement.

"Critical energy infrastructure projects like the Keystone XL and the Dakota Access pipelines will help deliver energy to American consumers and businesses safely and efficiently."

NEWS WELCOMED

House Energy and Commerce committee Chairman Rep. Greg Walden, R-Oregon, House Subcommittee on Energy Chairman Rep. Fred Upton, R-Mich., and House Subcommittee on Environment Chairman Rep. John Shimkus, R-Ill., offered the following statement:

"We welcome today's news and we're looking forward to working with a president and an administration that value American energy affordability, jobs, security, and new infrastructure development," they said. "It is time for the federal government to stop picking winners and losers in the energy sector."

National Association of Manufacturers President and Chief Executive Officer Jay Timmons said in a statement the pipelines are good for the economy.

"President Trump has wasted no time in boosting our manufacturing economy," he said. "As I discussed with President Trump in his office last June, building the Keystone XL and Dakota Access pipelines is simply the right thing to do -- for working families, for energy security, for job creation and for our future. That is why broad coalitions of businesses and labor groups alike have supported construction."

CONTINUING TO FIGHT PIPELINES

Oil Change International, an anti-oil advocacy group, proclaimed in a statement Tuesday the pipelines would not be built.

"Both the Keystone XL and Dakota Access pipelines will never be completed, no matter what President Trump and his oil-soaked cabinet try to do," said David Turnbull, campaigns director.

"Trump's first days in office saw massive opposition, marking the beginning of four years of resistance to his dangerous policies. We stopped Keystone XL and Dakota Access before and we'll do it again. These are fights Trump and his bullies won't win."

The Progressive Change Campaign Committee said the order would harm landowners.

"Big oil and billionaires are running the White House," the group said in a statement.

"By pushing the Keystone XL and Dakota Access pipelines, Trump is siding with corporations and Wall Street over working families, ranchers and indigenous communities. This is a disaster for ordinary Americans and a disaster for the environment."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(ES/AG)

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