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PUC input hearing for XL oil pipeline

Questions ... Roy Iverson, a rancher from Murdo, posed one of the many questions during the evening. The audience was very quiet while the responses were given.

The public hearing in the Philip High School gym on Monday, April 27, consisted of over a dozen TransCanada experts, almost that many South Dakota Public Utilities Commission personnel and around 300 audience members.

The PUC must render a decision by March 12, 2010, concerning an application to construct a 36-inch pipeline through nine counties in western South Dakota. The application can be approved, denied or approved with conditions. A pipeline already being constructed in eastern South Dakota was approved with approximately 50 conditions.

As cameras, recorders and a court reporter kept records, South Dakota Public Utilities Commissioner Dustin (Dusty) Johnson opened the meeting. The four main speakers for the proposed TransCanada Keystone XL pipeline project stayed consistent with their advertisements and handouts. Vice President Robert Jones stressed that landowners will be treated fairly and with respect. He said that the meeting would not address land condemnation, which would be a circuit court issue.

The East River Keystone project will involve $5 billion, and the West River XL project will cost $7 billion. If approved, construction of the XL pipeline would take place in 2011 and 2012. In South Dakota, it would involve seven pump stations and six mainline block stations, bringing 700,000 to 900,000 barrels of crude oil through per day. Canada supplies 2.2 million barrels of the 20 million barrels consumed daily in America.

Estimated annual taxes paid into nine counties and 13 school districts would total $10,366,000. Haakon County would receive $360,000 and Haakon School District 27-1 would receive $1,106,000. This estimate is based on current costs of government, projected costs of the pipeline construction and the value of the pipe and pump stations. Taxes would not be valued on the easements.

John Hayes, TransCanada construction project manager, said there would be a 50 foot permanent easement across land, with a temporary 60 foot of additional work space. After construction, the temporary space would revert back to the landowner. Weather permitting, an assembly line of progressive construction should finish with a piece of land within six to eight weeks. "Although construction will disturb your land, we will take great care to reclaim it as it was before," said Hayes. The proposed compensation to acquire easements is a one-time purchase based on acreage and land use. The land would be able to be farmed and ranched afterward.

The TransCanada experts recounted the safety procedures in construction, materials and use of the pipeline. The pipe will have at least four foot of depth of cover, with deeper burial under rivers, which will require 3,000 feet of Horizontal Directional Drilling to avoid unstable slopes. Roads would be done in a similar fashion. "Safety of the public and the workers is our very first priority," said Jim White, one of the legal representatives for TransCanada. "Typically, we use safety fencing near residences so there is not easy access to get into the ditch. Livestock fences are gapped and then closed, everything buttoned up by the end of the day." Leak and spillage detection systems are to be fast and state-of-the-art.

The question and answer period involved Haakon County residents, as well as citizens from Rapid City, Meade County, Draper, Murdo and other areas. Sophia Lambert, Interior, was told that Canadian refineries were already at maximum output, thus the oil should be piped to America's refineries. Though only a dozen pipe mills in the world manufacture pipe to TransCanada specifications, the steel pipe would probably come from a plant on North American soil.

Mark Nelson, a Philip area rancher, was told by Hayes how TransCanada would handle any damage from a spill. The clean up method and reclamation method would be site specific, and determined not by TransCanada, but by the Department of Environment and Natural Resources and other government agencies. White said, "As stated on the document to be taken out to landowners, TransCanada is financially liable for all damage and spills unless they are caused by another party. But, no questions asked, TransCanada is responsible to clean it up."

Veryl Prokop, a director for West River/Lyman Jones Rural Water, was told that TransCanada would reimburse the company, and individuals, for the cost of reburying existing water lines to be below the XL oil line. Discussion brought up that friction inside the oil line would put the oil at 89 to 120 degrees Fahrenheit. Though there should be no impact to crops because of the four foot depth of cover, if there was, TransCanada would reimburse the landowner.

There are an estimated 2,400 landowners for the entire XL line. The easement purchase process has just started, but the East River line had successful easements with all its landowners and TransCanada has had 40,000 landowner dealings in its history.

Bill Evans, Rapid City, was reassured that, according to South Dakota law, any fossils within the pipeline's easement would still belong to the landowner.

Paul Seamans, Draper, was told that the pipeline was expected to last for generations, well over 100 years. It would be needed for that long, because it would connect the world's biggest refining center with the world's second largest oil reserves. If it were ever to reach the end of its useful life, the pipe line's disposal would follow whatever the laws might be then.

Kenny Neville, highway superintendent for Haakon County, was told that the pipe's walls would be slightly thicker for under roads, railroads and rivers. The depth would be bored nine to 12 feet under the road, at least five feet below the bar ditches on the sides.

Ed Heeb, Midland, asked specifically if the tax money would go directly to the concerned counties, or would have to go through the state first. The pipeline taxes would not be figured using the school state aid formula. The Haakon County treasurer would figure tax levies and tax bills. TransCanada tax money will be collected by the nine counties for the benefit of the counties and the 13 school districts. Funds then could be used to support regular county and school functions.

Debbie Hanrahan, Philip, expressed concern of the pipeline crossing the Cheyenne River and its unstable banks. The depth of the pipe would be increased and the horizontal drilling will begin and end at the top of the valley.

Before, during and after construction, the landowners are encouraged to work out specific details one-on-one. TransCanada representatives will try to work out concerns over water lines and other matters prior to construction.

Any questions or statements by citizens may be recorded with the PUC by phoning 800-332-1782 or on the website of www.puc.sd.gov.