ULYSSES, Nebraska — One hundred yards west of Dave Rech’s farmhouse, buried 4 feet deep in the rich soil of Butler County, hundreds of thousands of barrels of Canadian crude flow by each day.
When TransCanada placed its 30-inch Keystone pipeline across Rech’s farmland a decade ago, he said he didn’t give it much thought.
There wasn’t much controversy, he said.
But now Rech said he’s not sure he wants his land crossed by a second pipeline, the Keystone XL, which is bigger and has sparked much more controversy.
“I wish it would go away,” he said, “but it’s probably not going to.”
Last week a state agency narrowly approved a route across Nebraska for the new Keystone XL. But it was a curveball to Calgary-based TransCanada, because it wasn’t the pathway favored by the pipeline company.
Instead of celebrating the completion of a nine-year-long odyssey to get regulatory approval from the State of Nebraska, TransCanada officials now have to consider the delays and extra money it will take to adjust their preferred route across the state for what will be a third time.
Landowners like Rech learned Monday and Tuesday that they were suddenly on the proposed path of a 36-inch pipeline that would pump 830,000 barrels of crude a day from tar sand mines in northern Alberta to oil refineries on the Gulf Coast at Port Arthur, Texas.
“Are you kidding me?” responded farmer Gerry Werkmeister, whose land east of Madison appears to be on the new pipeline route.
“We knew it was a possibility, but I always kind of thought it was a remote possibility,” said Ron Schmidt, a Madison County Board member who owns land in the center of the county that also appears to be on the new pipeline path.
A TransCanada spokesman said last week that the company was gearing up to begin contacting landowners along the approved “mainline alternative route” but had not yet begun the process. The World-Herald interviewed a handful of people whose land appeared to be on the route, according to maps submitted by TransCanada. None said they had been contacted by anyone from the company yet.
But many of them said they would welcome the pipeline.
“People were talking about it. It was mostly guys who wanted to buy new pickups if it went across their quarter (section),” said Norm Funk, a Norfolk-area farmer, referring to the right of way payments made by TransCanada.
Funk said he already farms over more than one pipeline without any concerns. Pipelines, he said, are much safer than shipping oil by truck or train.
Schmidt, the County Board member, said Madison County would welcome the increased tax payments generated by the pipeline.
Neighboring Stanton County was paid more than $818,000 by TransCanada last year for taxes on its pipe and a pumping station.
Schmidt added that he’d donate his land to the pipeline company if it meant keeping America out of another war over oil in Iraq or Afghanistan, where two of his sons both served in the military.
“I’d rather see our young people carrying shovels and wearing construction helmets than shouldering guns and driving tanks,” he said.
Rech, meanwhile, has two farms that are affected. His home place near Ulysses as well as another farm in Boyd County, in north-central Nebraska, are both on the route of the Keystone XL.
That Boyd County land, along the Niobrara River, is sandy, fragile and prone to landslides, he said.
The recent 210,000-gallon oil leak from the Keystone pipeline in South Dakota, Rech said, has conjured up visions of “crude oil running down the ditches” here.
Whether the surprise routing decision by the Nebraska Public Service Commission makes it more, or less, likely that the Keystone XL pipeline is ever built was anyone’s guess as of last week.
“I really don’t know,” said Terry Cunha, TransCanada spokesman. “We’re still reviewing the decision and understanding how it may impact cost and scheduling.”
On the old route, the company had obtained right of way agreements with about 90 percent of the landowners. But many of those agreements are now useless.
The new “mainline alternative route” that was approved by the PSC last week is 5 miles longer and shifts eastward across 63 miles of different farmland, to hook up with the north-south path of the Keystone pipeline, which went into operation in 2010. The PSC said that it would be easier for the company to monitor both pipelines if they were close together and that it could respond more quickly to any problems. The alternative route also crosses fewer miles of the migration path of the endangered whooping crane.
Some of the landowners on the path of the existing Keystone pipeline, like Rech, signed agreements to host only one pipeline. So new agreements would have to be negotiated with them, as well as agreements with the estimated 40 landowners on the 63-mile detour of the Keystone XL route.
A new pumping station would be needed along the new route, adding more expense. And more regulatory reviews by state and federal agencies would be required.
Opponents of the pipeline said the additional time, money and hassle caused by the change will surely make it more difficult to move ahead with the Keystone XL, which was already facing uncertainty because of questions about whether it still makes economic sense.
“We’re delighted that there’s further delay of a project that we think shouldn’t be built at all,” said Jim Cavanaugh, legal counsel for the Nebraska chapter of the Sierra Club.
“There’s no way this pipeline is going to be built,” said Jane Kleeb of Bold Nebraska, the main opposition group. She predicted that the extra reviews and negotiations will delay the Keystone XL for at least two years, souring shippers on the project.
By law, TransCanada and opponents have 10 days to ask the PSC to reconsider its order. The parties have a deadline of 30 days in which to file an appeal with the Nebraska Court of Appeals.
Before then, however, the company may have announced its final decision about whether the $8 billion Keystone XL is financially viable.
Doubts have been raised because the world oil market has changed dramatically from when the XL was proposed. And a Washington Times story last week estimated that the delays may cost an additional $1 billion to $2 billion.
Back in 2008, oil was trading for nearly $150 a barrel. Now it’s just above $50 a barrel, which has caused some major oil companies to flee the tar sands region for cheaper, more profitable and more easily accessible sources of oil.
TransCanada extended its “open season” to sign up shippers for long-term contracts to use the pipeline after the initial response was lackluster, according to an industry observer. The company has said it will decide by mid-December whether there are enough customers to financially justify building the Keystone XL.
Jeff Share, the editor of Houston-based Pipeline & Gas Journal of Houston, said the company’s “prestige” might now be on the line after President Donald Trump resurrected the project. TransCanada has invested nearly $2 billion in the XL, buying pipe, doing environmental studies and paying for right of way.
After saying this summer that it was probably 50-50 whether the Keystone XL project would move forward, Share said last week that the odds had improved slightly, because other pipelines have been canceled, leaving the XL as one of the only remaining projects to ship oil from the tar sands regions.
“The political pressure is enormous on them. If they can find any way to make it economically feasible, they’re really obligated to continue forward,” he said.
One of the Nebraska Public Service Commission members who voted against granting a route across the state to TransCanada, Crystal Rhoades of Omaha, said she thought the PSC’s decision last week should make it easier, not harder, for the pipeline to be built.
After all, Rhoades said, the company now has a state-approved route, something it had sought for almost a decade.
“They’ve invested a lot of time and a lot of money, and I think that rerouting, to them, might be a minor inconvenience,” she said.