Tarnation: Environmentalists, landowners and Valero await decision on the Keystone XL pipeline
Published: January 30, 2013
"People have described this as an 'investment' or a 'partnership' or something like that," says Day. "None of that is true." Valero's first agreement with TransCanada has expired. As it stands, "Valero just says that we're a supporter of the pipeline, that we want that oil."
There have been estimates that Valero might want a lot of that oil, as much as 20 percent of the pipeline's initial capacity once it goes online — something Valero spokesman Day calls pure media conjecture. Brian Youngberg, an energy analyst who covers Valero for the investment firm Edward Jones, predicts Valero could wind up taking even more than that should Keystone XL go online. Valero can buy it up cheap, and sell the diesel it churns out at a premium in the developing world, he says.
"They really don't want that higher quality stuff," Youngberg says, "They want the crappy stuff."
Along with the environmental impact tied to mining the Canadian tar sands, much of the controversy surrounding Keystone XL has centered on the communities and landowners that lie in the pipeline's path.
Diluted bitumen will eventually flow through a 36-inch pipeline buried under a stretch of Mike Bishop's 20 acres in Douglass, Texas, a small town bordering the Angelina River in Nacogdoches County. The 64-year-old ex-Marine says surveyors first showed up on his property in 2008. "I ran those sumbitches off," Bishop scoffs. TransCanada returned with a temporary restraining order, a lawyer, and a sheriff's deputy. The company eventually made what Bishop calls a low-ball compensation offer, which he promptly rejected.
When TransCanada took Bishop to court and won the right to condemn and take some of his land, the parties entered mediation and arrived at a dollar figure Bishop accepted in November. Bishop turned around and sued TransCanada for fraud in December, saying the company's permit application claims it will run conventional crude oil through the pipeline, not tar sands.
"This is not conventional crude oil, clear and simple," he says. "Diluted bitumen is not conventional crude." Bishop also claims that he signed his current contract with TransCanada under duress, being threatened by an eminent domain land grab.
Bishop got a temporary restraining order to stop bulldozers last month, but days later TransCanada countered and the judge lifted it. TransCanada has decided to run the pipeline through Bishop's front yard, uprooting trees and tearing up a large garden about 120 feet from his door. Off-duty sheriff's deputies routinely sit outside pulling guard duty for the company. "It's like a goddamn war zone," Bishop says.
Some 50 miles north sits the town of Reklaw, population 379. It's not just green energy-pushing environmentalists fighting the Keystone XL pipeline, but concerned East Texans like Reklaw Mayor Harlan Crawford.
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