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TransCanada Still Paying Just a Third of Property Tax It Promised on Keystone Pipeline

TransCanada scored points before the Public Utilities Commission yesterday, getting the commissioners to exclude climate change from the July 27–August 4 hearings on repermitting the Keystone XL tar sands oil pipeline. The PUC excluded climate change from the 2010 permit hearings and will again this year because, as Commissioner Gary Hanson says, climate change isn’t a South Dakota issue.

A South Dakota issue most definitely included in the 2010 permit hearings is the increase in property taxes TransCanada promises our local governments (see Finding of Fact 108, p. 22). TransCanada is promising South Dakota $23 million in new tax revenue from its Keystone XL pipeline and pumping stations. Rural Action points out that TransCanada tends to inflate its tax promises by 200%:

…For the five years from 2009 to 2013 TransCanada paid a total of $14,123,000 in local property taxes, averaging $2,825,000 a year to counties along the Keystone I route. But prior to building, TransCanada claimed that these counties would get at least $9 million a year ­ and amount they’ve barely surpassed paying out over the course of five.

…“Shame on you TransCanada,” says landowner Paul Seamans. “Didn’t your mother ever teach you to always tell the truth?” [Dakota Rural Action, press release, 2015.05.26]

This massive discrepancy between promise and payment continues a pattern established from the beginning with the original Keystone pipeline in East River. Seamans calculates the discrepancy will be even greater for Keystone XL in West River.

TransCanada proponents can argue that even a fraction of $23 million is better than missing out completely on tar sands money (which may not flow our way anyway, thanks to Premier Notley and the NDP’s ascension in Alberta). But $5 million to $7 million weighs a lot less than $23 million against the costs South Dakotans will pay in lost property rights, lost agricultural productivity, and environmental risks well beyond that climate change stuff that the PUC says doesn’t affect South Dakota.

Related: AP’s James McPherson reports that Tesoro needs two and a half more years to clean up a September 2013 oil pipeline spill in North Dakota. A six-inch pipe ruptured, perhaps due to lightning, and spilled 20,000+ barrels of oil across 7.3 acres of wheat field, one of the largest onshore spills in the U.S. Tesoro originally said it would cost $4 million to clean up the spill; their last estimate before their clammed up said the cleanup would cost $20 million. Overestimate benefits, underestimate costs… what is it about oil companies and math?


  1. jerry 2015-05-27 10:05

    Gary Hanson is one of many reasons why it is very important to expect more from our teachers. This guy should have never been allowed to graduate anything higher than the third grade. I say this even though I insult most third graders.

  2. Paul Seamans 2015-05-28 07:18

    One reason that TransCanada gets away with spreading these untruths is that everyone wants so hard to believe that they will get something for nothing, in this case the something is a little extra tax revenue. It seems odd that TransCanada will make these claims for the Keystone XL when the figures for the Keystone 1 are available and show that they are not telling the truth. It should be pointed out that it is only the counties along the route that will share in any tax revenue, no one else in the state will see any of this money. Are you willing to risk your drinking water so a few sparsely populated counties, it crosses five counties and catches the tips of four others, receive a little extra tax money?

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