This is the final story in a four-part collaborative series by StateImpact Oklahoma and Texas on the economic and environmental impact of the Keystone XL pipeline. You can read part one here, part two here and part three here.
Sue Kelso fought TransCanada and won … sort of.
AUDIO BY LOGAN LAYDEN
Kelso doesn’t hate pipelines, just Keystone.
The Kelso family farm sits on 180 acres in southeastern Oklahoma, near the border with Texas. After school, Kelso moved to Dallas, where she met her husband — a man who grew up only miles from her, ironically — had a career and started a family of her own.
After their children grew up, got married and started families, the Kelsos returned to retire at her family’s farm in rural Oklahoma.
“I’ll be sitting right over there in that pasture with a gun. It may be my pellet gun, but I’ll be sitting there.”
-Oklahoma landowner Sue Kelso
“That’s where our heart was,” she says.
They marked out a five-acre plot and built a house. Her sister lives next door in their parents’ old home on the remaining acreage.
The family has a long, cooperative history with oil and natural gas companies. In fact, three pipelines already cross the Kelso farm, including the Gulf Crossing and Midcontinent Express natural gas pipelines, which move gas out of Oklahoma’s Caney/Woodford Shale.
At one point, Chesapeake Energy contracted drilling rights with the family, Kelso says. The mineral rights expired long ago, she says, and all that remains of Chesapeake’s drilling operation is a large rock used to mark a concrete well pad the company poured in the pasture.
Kelso says she and other nearby landowners in the path of the proposed Keystone pipeline were contacted by TransCanada officials, who invited them to an informational meeting in a nearby city.
They were told it was going to be a crude oil pipeline, and Kelso was relieved. She worries about explosion risks from natural gas pipelines. And the first pipeline installed on her family’s farm moved crude oil, she says.
“I thought, ‘Well that’s not so bad,’” Kelso says.
But Keystone XL would transport a different kind of crude from the oil sands of Canada: diluted bitumen. Critics say this type of crude — nicknamed dilbit — is thicker, more acidic and more corrosive than conventional crude, and can hasten weakening of pipelines.
Officials with the Canadian pipeline industry say dilbit has been flowing into the United States for years. A representative for Enbridge Energy — a TransCanada competitor with its own pipeline plan — told StateImpact Texas that there haven’t been any pipeline accidents involving Canadian crude that have been linked to internal corrosion.
“Sometimes landowners, frankly, think they won the lottery.”
TransCanada Spokesman Jim Prescott
But there have been spills.
A 30-inch Enbridge pipeline that ruptured in July 2010 leaked an estimated 819,000 gallons of Canadian crude into a creek feeding the Kalamazoo River, a Lake Michigan tributary. Heavy rains carried the oil 30 miles downstream on the Kalamazoo, the Environmental Protection Agency reports.
TransCanada’s had leaks, too. The existing Keystone Pipeline — Keystone XL is an expansion — from Alberta to Illinois and Oklahoma has had 14 spills since it started operating in 2012, reports StateImpact Texas, citing a report from the U.S. State Department. None of those spills was corrosion-related, the State Department says.
“It got me worried about our water source,” Kelso says.
The Keystone Gulf portion — the 485-mile Cushing-to-Texas section — won’t move Canadian crude until it’s connected to Keystone XL.
Kelso heard about the Kalamazoo River spill and started researching dilbit crude, and the family rejected TransCanada’s first offer for a pipeline easement on the farm.
“They still don’t have it cleaned up,” Kelso says. “They don’t know how to do it.”
The first offer was about $1,200, Kelso says. A Keystone XL project spokesman, Jim Prescott, wouldn’t confirm any numbers. The contract amounts aren’t independently verifiable, and landowners who did settle with TransCanada are bound by nondisclosure agreements.
TransCanada then offered about $3,000, and, later, about $7,000, which the family rejected, Kelso says. The company and the family negotiated back and forth. At one point, Kelso thought they had a deal, but she says TransCanada balked at the family’s request to change some of the contract’s language.
Specifically, the family wanted more money and a provision that guaranteed that the pipeline would only carry what it was originally designated for: crude oil.
If TransCanada ever wanted to use Keystone XL to transport anything else, the family wanted the ability to renegotiate the easement.
“A demand like that was a non-starter,” and raises legal questions about inhibiting interstate commerce, TransCanada spokesman Prescott says. “Not just for this project, but for any pipeline project.”
Next, Kelso says the family received a letter from an attorney for TransCanada, which threatened condemnation if a settlement between the two parties wasn’t reached.
“They never intended to negotiate,” Kelso says. “Their idea was bully, bully, bully, and people would cave in.”
Prescott disputes Kelso’s account. Acquiring easements for pipeline projects is tricky for companies like TransCanada, he says. If the company doesn’t disclose its full intent — to petition for condemnation, if necessary — it’s viewed as trying to trick landowners. And explaining its legal position up front is often perceived as threatening, Prescott says.
“We approach each landowner in good faith,” he says. “Basically, show all our cards right up front.”
Acquiring easements with eminent domain is necessary, if unfortunate, Prescott says. Oftentimes, land is held by a trust and pipeline companies can’t track down the owner. In some cases, landowners want more money than companies think is fair.
“Sometimes landowners, frankly, think they won the lottery,” Prescott says.
‘A Better Option’
Negotiations broke down, and in August 2010, TransCanada filed a petition for condemnation to acquire the pipeline easement through eminent domain.
A year later, in August 2011, TransCanada withdrew its petition, and the case was dismissed that October.
Kelso and her family had won. But it’s mostly a moral victory. The family didn’t get any money, and while TransCanda won’t force its pipeline onto their property, Keystone XL — and Kelso’s concerns about the oil it will one day carry — haven’t gone far.
Yellow ribbon affixed to a barbed-wire fence marks Keystone XL’s new route on her neighbor’s land, Kelso says. It’s only 35 feet from her family’s property line, which is as close as the pipeline easement will allow, she says.
“That does not keep it from being dangerous,” Kelso says.
Prescott wouldn’t give details on TransCanada’s decision to move the pipeline route.
“We looked at other options, we found a better option, we went in that direction,” he says.
Keystone XL is inevitable, and when the trucks come to start laying the pipeline, Kelso says she’ll be there, 35 feet away, watching from her family’s side of the fence.
“I’ll be sitting right over there in that pasture with a gun,” she says, laughing. “It may be my pellet gun, but I’ll be sitting there.”