Thursday, September 03, 2015

Rumor that Obama will nix Keystone has pipeline supporters worried

By Rob Nikolewski

Most Americans are looking forward to enjoying themselves over the upcoming three-day Labor Day weekend.

But Virgil Novotny, a South Dakota rancher and former member of the Tripp County Commission, is worried that reports of President Obama denying the federal permit for the Keystone XL pipeline may come true during the holiday — and that could mean a big loss for the rural county that straddles the Nebraska state line.

“I think it would be an asinine thing to reject this,” Novotny told “It (the pipeline) would be a good thing to use the energy from the Canadian source. They’re our friends.”

But the biggest factor in Novotny’s mind is what the project would mean for Tripp County’s finances.

Revenue projections are as controversial as the pipeline itself, with some estimating the Keystone pipeline would mean up to $1 million a year for the rural county of 6,430 whose median household income is $28,333 — where almost one-fifth live below the poverty line.

“About three-fourths of that would go to our schools and about a quarter-million for our county for roads, bridges and what have you,” said the 75-year-old Novotny, who served on the county commission for 16 years before losing a bid for re-election in a tight race last fall. “The extra tax revenue is a helluva big entry to the tax revenue” in the county.

A review conducted by the U.S. Department of State in January 2014 predicted that first-year property taxes generated by the pipeline’s owners, TransCanada, would amount to about $55.6 million spread over 27 counties along the pipeline’s route through  Montana, South Dakota and Nebraska.

“This impact to local property tax revenue receipts would be substantial for many counties, constituting a property tax revenue benefit of 10 percent or more in 17 of these 27 counties,” the report said.

But that money won’t be coming if President Obama rejects the Keystone deal, which has languished for the last five years among federal agencies while receiving vocal opposition from environmental groups on the state and national levels.

Obama has questioned whether Keystone XL would really boost jobs and whether the project is “not adding to the problem of climate change.”

In recent days, a number of media outlets in the U.S. and Canada have cited sources saying Obama will deny the permit for the pipeline before the Labor Day weekend is out.

The Financial Post of Canada cited a “well-connected source” saying the decision would be made during the holiday “when many are out of town, reducing potential for blowback.”

The publication Oil and Gas Investor referenced remarks from John Kneiss, Washington-based director for Stratas Advisors, part of the Hart Energy company, on Aug. 28 making a similar prediction.

In a statement, TransCanada spokesman Marc Cooper said the company is “well beyond speculating” about a rejection from the Obama White House.

“It will be seven years less a month since we first applied for a permit,” Cooper said. “Every test, every hurdle has been satisfied. If it is judged on its merits it will be approved. If it’s judged on science over symbolism it will be approved.”

Related: The politics of the Keystone XL pipeline

Jane Kleeb, editor and founder of Bold Nebraska and an outspoken critic of the pipeline proposal, is cautiously optimistic about what the president may do in the coming days.

“People have been saying he’ll reject the pipeline, honestly, since February,” Kleeb told “If the president ultimately does reject the pipeline, given his actions and his words on climate change in this past week and how we need to act and protect our homes, we of course would be more than excited.”

“I think (the climate issue is) getting played up way too big,” said Novotny, a cattle rancher who owns land that a segment of the pipeline would cross. Novotney said he accepted an easement agreement with TransCanada “about five, six years ago” but would not disclose its details.

The proposed pipeline would carry crude that Canadian producers call oil sands — environmentalists call it tar sands — as well as lighter oil from the Bakken formation in North Dakota over a 1,1179-mile route, hooking up from Canada in Morgan, Montana and going southeast to Steele City, Nebraska.

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