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Pipeline fees a possibility under new bill
News Articles | York News Times | | February 22, 2010
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If passed, would affect local entities, landowners
YORK — Natural gas and oil companies with interstate pipelines crossing Nebraska would be required to remit a fee to the state under a bill heard by the Natural Resources Committee this past week.
LB755, introduced by Ewing Sen. Cap Dierks, would hold landowners harmless for unintentional damages to pipelines on their property. Furthermore, pipeline companies would be required to procure insurance policies covering litigation costs for all landowners affected by the pipeline.
The bill also would require pipeline companies to bury pipes at a depth of five feet and restore topsoil in accordance with Natural Resources Conservation Service standards.
Beginning Jan. 1, 2011, large pipelines would be subject to a fee under the bill, calculated at 0.0005 percent of the total value of product transported in the pipeline. Revenues would be distributed in the following manner: 20 percent to the state, 20 percent to counties, 20 percent to school districts and 40 percent to affected landowners.
Stan Dobrovolny of Atkinson testified in support of the bill. He said it would protect landowners involved in the construction of the TransCanada Keystone XL pipeline at a minimal cost of 1.3 cents per 20-gallon tank of gas.
The Keystone XL pipeline, slated for construction in 2011, will run a 2,148-mile oil pipeline from Canada to Texas. Of those total miles, 255 would run through Nebraska in Boone, Fillmore, Garfield, Greeley, Hamilton, Holt, Jefferson, Keya Paha, Merrick, Nance, Rock, Saline, Wheeler and York Counties.
Dobrovolny said protections in Canadian law allow landowners to negotiate better agreements with TransCanada.
“State government has the right and obligation to protect property owners from domestic and foreign companies who take the rights and use of the land for a one-time minuscule payment,” he said.
Cheyenne, Wyo., attorney Frank Falen also testified in support of the bill. Wyoming, Oklahoma and New Mexico have passed laws to limit the authority of pipeline companies to condemn lands. This encourages companies to work with landowners better, he said, adding that other states will follow suit.
There is no state regulatory body in Nebraska that addresses interstate oil pipelines, Falen said, as the Public Service Commission has jurisdiction only over intrastate pipelines.
Dan Kramer of Atkinson testified in support. He said the fee authorized in LB755 would offer just compensation for the placement of the pipeline, as personal property taxes paid by TransCanada will diminish as the pipeline depreciates.
Jim Krause, director of U.S. operations for Keystone Pipelines, testified in opposition. He said the liability protections in the bill would reduce an incentive for landowners to follow proper procedures when digging near pipelines. Further, he said, the 5-foot depth requirement for pipe burial would significantly increase costs of construction and result in greater damage to grounds when trenching.
Robert Jones, vice-president of TransCanada Keystone Pipeline LP, also spoke in opposition, saying the bill’s fee would add $60 million to the annual operating costs of the pipeline. This cost would be excessive, he said, considering that the project already would produce more than $20 million in property tax revenue.
Butch Wallace, project manager for Trow Engineering Consultants, said the bill would afford no protections to Nebraskans. He said the federal Pipeline and Hazardous Material Safety Administration already sets regulations for pipeline safety. The minimum burial depth under normal rural conditions is 38 inches, he said, but Keystone policy mandates 48-inch depths.
The committee took no immediate action on the bill.
Tagged with: keystone xl, transcanada, nebraska, york
