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Political gusher: proposed pipeline already paying off for politicians
News Articles | North Platte Bulletin | Ben Schwartz | July 07, 2010
Read the full article on the originating site
It may be even easier for Nebraska’s top politicians to profit from black gold, in that Big Oil will bring it right to them.
The organization Nebraska Watchdog reported June 24 that Senators Mike Johanns and Ben Nelson and Congressman Adrian Smith have received at least $599,350 from special interest groups and individuals with ties to the powerful oil producing and burning industries.
The three politicians represent constituents in the parts of Nebraska that would be affected by the TransCanada XL oil pipeline.
The proposed pipeline would transport synthetic crude derived from tar sands in Canada to refineries near the Gulf Coast.
Citing figures from the Center for Responsive Politics, Watchdog contributor Joe Jordan asserted that Nelson has pocketed an average of more than $40,000 a year in Big Oil related contributions during his decade in the Senate (more than $447,000 total).
Johanns, elected in 2008, has received $83,950 and Smith, in office since 2006, has taken in $68,400.
Watchdog noted that none of the politicians has taken an official stance on the pipeline.
Jordan quoted Johanns as saying, Nebraskans are raising valid questions and I’m digging into it with their concerns in mind
Protecting the aquifer must be a priority.
Smith indicated to the organization that while he reserves the right to gather more facts, he’s intrigued by the economic possibilities.
The statements from the two elected representatives reflect the two main arguments surrounding the pipeline: those in favor touting the financial benefits, those opposed expressing concern about contamination of the Ogallala Aquifer.
Environmental concerns
The worries in Nebraska are mostly of the environmental ilk. TransCanada has petitioned the government to use lighter steel than is required by federal regulations in certain areas. The selected areas are deemed low consequences areas and are secluded from major population centers, according to the National Wildlife Foundation.
NWF is opposed to the pipeline project and tar sands usage in general.
TransCanada also wants to keep the pressure in the pipeline higher than initially proposed.
The pipeline would cross 255 miles of Nebraska and cut directly through the Sandhills, Ogallala Aquifer, and Platte River.
It’s the aquifer that has critics the most in arms. The pipeline will be laid at least four feet below the ground, in close proximity with the water table.
Francis Moul, an environmental historian from Lincoln, wrote on Omaha.com that the XL pipeline project is a terrible scheme.
The pipeline would be buried up to four feet deep, putting it well within the water table of the aquifer and making it harder for spills to be located and treated, he continued. The proposed pipeline would go through some of the world’s most fragile soils, in the Great Plains and especially in the Nebraska Sandhills.
TransCanada has obviously downplayed the likelihood of a mishap. A company spokesperson testified before the Kansas legislature that he could count the number of leaks TransCanada had experienced on one hand, and not use all my fingers.
Monitoring technology would make the likelihood of an environmental disaster negligible, according to another company spokesperson.
TransCanada claims that it monitors its 37,000 miles of pipeline around the clock and can stop a leak quickly in the event of an occurance.
We have a system that continually monitors flow and pressure, said a TransCanada spokesperson. If at any time it detected a drop in pressure, our network can immediately isolate the area and isolate that section of pipeline and stop the leak.
The oil company’s claims seem specious at best in light of two recent occurances.
A Chevron pipeline in Utah burst earlier in June and spilled approximately 33,000 gallons of crude oil into a creek.
Also, a Canadian oil company recently admitted to spilling 1.3 million gallons from 8,500 miles of pipeline in North America in 400 separate incidents between 2003-2008, according to environmental groups.
TransCanada argued that it conducts annual emergency occurrence training that involves field exercises to make sure they are prepared.
Environmentalists are not the only ones concerned about the pipeline, however. Congress is, as well.
50 legislators, all Democrats, sent a letter to Secretary of State Hillary Clinton June 23 that read, Building this pipeline has the potential to undermine America’s clean energy future and international leadership on climate change.
The representatives are concerned about a lack of oversight of the pipeline in light of the oil leak in the Gulf of Mexico.
However, the letter was not signed by politicians from any of the states that will be affected by the pipeline, and TransCanada insisted that the signers did not have all the facts.
The proposed steel, for example, is lighter but stronger, according to a vice president with the company.
Let’s look at your car, for example. In 1960 it weighed three times now than it does today, but today’s cars are much safer, Robert Jones said, according to Yahoo Canada.
TransCanada plans to build the pipeline in phases, according to its website. The vast bulk of the pipeline through Nebraska would be built during phase four, which does not have a start date listed on the site. Phase two will begin later in 2010 if the project receives the green light from the State Department.
Phase two will stretch from Steele City Nebraska to Cushing Oklahoma.
Money concerns
Other recent tussles concerning the pipeline have involved a different kind of green, the same kind that oil companies have delivered to Nelson, Johanns, and Smith.
In March members of the Kansas legislature, upset that TransCanada won’t pay property taxes on the pipeline for ten years after completion, tried to introduce a bill that would exact payments in lieu of taxes.
TransCanada cried foul, saying that the proposal was tantamount to changing the rules in the middle of the game.
The bill died on the vine because the leader of the Kansas House said he would not hear it.
State legislator Vern Swanson said that despite the accelerated depreciation and property tax exemption being granted to the project for ten years, taxes will be collected eventually.
“Now all of a sudden everyone is up in arms about it because we are going to lose some money on it—initially,” Swanson told a Kansas paper. “Keep in mind that the pipeline will be in the ground for a at least a hundred years. We will lose property on that for ten of those years.”
A similar flap erupted in South Dakota.
Earlier in the year, the South Dakota Legislature passed a bill that reduced the tax cuts that had been promised to TransCanada.
The company responded in both cases by threatening to metaphorically take its ball and go somewhere else. TransCanada threatened to exclude both states from the pipeline.
Another blow was dealt to the project when three refineries sued in April to be released from their contracts with the oil company. They argued that the pipeline had become so costly to build that it no longer represented a cheaper alternative than what is offered by competitors.
With oil demand in the United States dropping, the suit said, by the time the pipeline begins pumping in 2013, it will be lucky to run at half capacity.
It comes as no surprise to anyone that companies, oil and otherwise, donate to politicians and the XL pipeline represents another front in the seemingly endless war between the money behind environmental causes and the money behind fossil fuels.
However, Senator Nelson has encouraged constituents to make their feelings on the matter heard by contacting their representatives.
Tagged with: keystone xl, pipeline, secretary of state, north platte nebraska
