Bill would revoke eminent domain for pipelines

Oil and gas companies could no longer exercise eminent domain in Nebraska under a bill heard by the Judiciary Committee March 11.

LB473, introduced by Omaha Sen. Ernie Chambers, would repeal two provisions of the Major Oil Pipeline Siting Act: the right of eminent domain granted to oil and gas companies and the requirement that they seek approval of the governor when siting a major oil pipeline.

As defined by the act, a major oil pipeline has an inside diameter larger than 6 inches, does not include in-field and gathering lines and is constructed to transport petroleum, petroleum components, products, waste or crude oil.

The act, approved by the Legislature during a 2011 special session, was designed to provide a regulatory framework for siting oil pipelines in the state. It was amended in 2012 to give the governor authority to approve major oil pipeline routes.

Concern over the state’s pipeline regulations was prompted by TransCanada’s proposed Keystone XL pipeline, which would carry crude oil from Canada to Gulf Coast oil refineries. The pipeline’s original route would have traversed the Ogallala Aquifer and Nebraska Sandhills.

Chambers said his bill is designed to undo legislation “tailored to fit the wishes of a foreign-owned, for-profit company.” Even when used for public benefit, eminent domain is one of the most intrusive governmental activities, he said, and the Legislature should ensure Nebraska landowners are protected from corporate intimidation.

“This bill is a shot across the bow of TransCanada and any other corporation that thinks the voice of this Legislature will be silenced,” Chambers said.

David Domina, an attorney representing landowners opposed to the Keystone XL pipeline, testified in support of the bill. The state should help landowners set equitable terms when a private company secures land using eminent domain, Domina said. Rental rates, equipment removal and cleanup policies should be critical factors in negotiations, he said.

“When you grant that power, you can limit it,” Domina said. “If the power of eminent domain is used carefully, it can make land more valuable, not less.”

Art Tanderup, a Neligh farmer whose land is on the pipeline route, also spoke in favor of the bill. His rights as a property owner and the value of his land are being cast aside in favor of greed, he said.

“No Nebraskan should be asked to take a tremendous risk for the sake of corporate profit,” Tanderup said. “If we destroy the Ogallala Aquifer, this state will become a desert.”

Bonny Kilmurry, a Holt County landowner on the pipeline path, testified in favor of the bill, saying the limited lifespan of the pipeline would present a huge financial and environmental burden to her heirs. Because of current law, she said, TransCanada does not have to agree to equitable compensation or consider pipeline removal when it is no longer in use.

“A private corporation has no reason to negotiate fair terms when can they can invoke eminent domain,” she said.

Jeanne Crumly, a landowner from Page whose land is on the pipeline route, agreed. Her family has had numerous successful experiences negotiating land use for roads and utilities, she said in her support of the bill. TransCanada, on the other hand, has ignored her concerns, she said, and threatened to take her land without compensation.

“We understand [eminent domain] for public use. What we don’t understand is the taking of land for corporate profit,” Crumly said. “When [land use] is for a foreign company, the commitment to the community is lost.”

Andrew Craig, TransCanada land manager of Keystone projects, testified in opposition to the bill, saying his company has reached agreements with 460 of 470 Nebraska landowners on the proposed route. Although LB473 may not impact the Keystone XL project, he said, it would be a roadblock for future pipelines.

“Bills like this will make it increasingly difficult for companies like mine to build pipelines,” Craig said. “We view eminent domain as the absolute last resort.”

Seward farmer Douglas Zimmerman, whose property a Keystone pipeline now crosses, also spoke in opposition to the bill. After a successful negotiation with the company, he said, his property was left in better condition than before the project began.

“We had nothing but good results working with Keystone and TransCanada,” Zimmerman said.

Willis Luedke, who was chairman of the Saline County board of commissioners during the construction of the first Keystone pipeline in 2010, testified in opposition to the bill. Landowners were pleased with how they were treated, he said, and the project has generated $3.1 million in property taxes for the county.

The Keystone XL project is estimated to generate $580,000 in property taxes for Saline County in its first year of operation, he said, which would help the Legislature accomplish its goal of lowering taxes for Nebraskans.

“That is property tax relief,” Luedke said.

The committee took no immediate action on the bill.