The Keystone XL pipeline has brought into sharp relief some of the most pressing economic, political and social issues facing the continent. As a U.S. review on a presidential permit for the project nears its conclusion, reporter Nathan VanderKlippe hopped in a car and drove the pipeline’s route to sketch the people and places that stand in its way. This is the first part of a week-long series.
Part two: Skeptical artists, multiplying bison and American believers
Part three: 'Praise God! Let the oil flow'
Part four: 'Great white father... we do not want this pipeline'
Part five: Nebraska pipeline fighter: 'I wouldn't take $5-million'
Part six: Keystone builder's view: 'We take great pride in our work'
View a map of Nathan's journey
Explore more on our Keystone XL pipeline page.
On Feb. 4, 2013, a U.S. congressman sent out a press release with some startling numbers.
On that day, 1,600 days had elapsed from TransCanada Corp.’s initial application for a presidential permit for the Keystone XL pipeline. That was, according to Fred Upton, the Michigan Representative who chairs the energy and commerce committee, longer than the U.S. involvement in the Second World War, between Pearl Harbour and the Japanese surrender. It was longer than the 491 days it took to build the Pentagon and longer than the 1,121-day Lewis and Clark expedition that drew some of the first maps of the American West in the early 1800s.
For Canada, for the U.S., for opponents of the oil sands and supporters of economic expansion, for pro-pipeline premiers and anti-pipeline ranchers, nothing about Keystone XL has been short.
And nowhere is that length more apparent than in the places the 36-inch-wide pipeline intends to traverse. The Keystone XL route is a 3,134-kilometre line through the centre of the continent, across a landscape of ranches and farms; pronghorns and a few remaining bison; verdant fields atop aquifers and tumbleweed-strewn dry lands. From Hardisty, the Alberta oil nexus not far from the oil sands, to the enormous refining complex on the Gulf Coast, it’s a long way down.
That distance is often truncated to two places: the ebullient suits crowded in Calgary office towers, and the fanatic opponents arrested around the White House.
What’s often left unheard is the great middle: the hundreds and thousands of people and places around the line on TransCanada’s maps that, by mere coincidence, also traces the middle of North America. These are the endless vistas of cattle and antelope usually dismissed as “flyover country.” But this is historic country, bisected by the paths of Lewis and Clark, the Mormon settlers, the Oregon Trail, the Pony Express and the early gold miners.
Now, TransCanada is working to carve its own path.
I wanted to see it for myself.
So I rented a car, and pointed it southeast. Over the course of a week, I roughly followed the route of Keystone XL, speaking with landowners, municipal officials, activists, artists, even a preacher. I’ve spent years writing about Keystone XL, and have twice travelled to Nebraska to cover the fury that met TransCanada there. But this was a chance to sketch a far more nuanced portrait of the debate as it unfolds across a remarkable geography.
I didn’t know that large numbers of Alberta and Saskatchewan landowners had teamed up to negotiate terms for TransCanada to cross their land – and won far more money than they were initially offered. I didn’t know that a South Dakota school district had waged a five-year battle to get a pump station on its land. I didn’t know that some First Nations have already taken blockade training to prepare for civil disobedience if pipeline construction begins. I didn’t know how badly TransCanada has angered dozens, if not hundreds, of landowners along the length of the route. I also didn’t know that even some of those ardently opposed expect the pipeline to ultimately get approved. I didn’t know how much care workers take in the seemingly simple process of laying steel pipe in a trench.
Over this week, through several updates on ReportonBusiness.com, I’d like to introduce you to those people and some of their stories. A road trip is, by practical necessity, reductive. I spoke with a few people. I sped past many more without stopping. But I was the beneficiary of tremendous generosity. Pipeline employees worked weekends to guide me through key points in the project. Ranchers fed me meals, handed me home-baked brownies and cinnamon buns, and even offered me a bed to sleep in.
They are the people of the middle, the denizens of the long way down. I enjoyed meeting them. I hope you will, too.
(Watch for Nathan's posts on our Keystone XL page.)
'JUST A PIPELINE'
If it’s built, Keystone XL will start in a valley 200 kilometres southeast of Edmonton. But in many ways, its real starting point lies in downtown Calgary, in the third floor offices of TransCanada Corp. This is where you can find Russ Girling, the TransCanada chief executive officer whose role has made him, in many ways, Chief Keystone XL Salesman.
I first interviewed Mr. Girling on the last day of June, 2010, the day before he took over the reins of TransCanada. He was slightly disappointed to be speaking with me. That very day, outgoing CEO Hal Kvisle was turning the ceremonial valve to mark the beginning of exports through the first Keystone pipeline, which connected oil sands crude with refineries in the U.S. Midwest. (Keystone XL will bring crude to the Gulf Coast.)
“It’s a huge day for the company, and unfortunately I can’t be there,” Mr. Girling said at the time. TransCanada had always been a natural gas company. Its founding pipeline began moving Alberta gas to Ontario in the 1950s. Oil was “a new business for TransCanada, and it’s a very, very large business for TransCanada.” Keystone, he said, “links the biggest free source of crude oil in the world” – as in, non-OPEC crude – “to one of the most important markets in the world. And we have a very, very friendly and amicable relationship with the U.S.”
To be a part of that, he said at the time, “is pretty darn exciting.”
It’s doubtful anyone could have predicted just how exciting it would get for Mr. Girling. Before becoming CEO, much of his experience as a public figure had been before regulatory boards. There, pipeline executives and lawyers perform a joint strategic dance to get projects approved. The discussion can be highly technical, and constrained by legal interjections.
The court of public opinion has no such constraints, and Mr. Girling appeared slightly ill-at-ease – if not quite nervous – in our first meeting in 2010.
If anything has changed at TransCanada over the past three years, it’s Mr. Girling’s comfort in front of a tape recorder – and, these days, lights and cameras. His speech is less cautious, and more peppered with spicy come-backs to his opponents. I recently returned to that third-floor office to hear him dismiss arguments from his critics as “nonsense” and “ridiculous.”
“I can’t do anything to stop those folks who worry that this pipeline is going to mean the end of Earth,” he says. “Or those that say if you build this pipeline, it’s game over for the planet.”
No, he says. Keystone XL “will actually make things safer,” lower costs, make a more efficient energy industry.
But Mr. Girling acknowledges that for TransCanada and other pipeline builders, “our world has changed.” When we first spoke in 2010, oil was still roaring into the Gulf of Mexico from BP PLC’s Macondo well. Workers were struggling to clean up the mess in the Kalamazoo River from a ruptured Enbridge Inc. pipeline. A few months later, eight people died in a natural gas pipeline explosion in San Bruno, Calif.
Those disasters “happened in rapid succession and were catastrophic. I think it caused everybody to wake up and say, ‘what’s happening here?’ ” Mr. Girling says. The challenge is to undo the damage. “We have to gain public confidence,” he says.
It has been a fraught battle. Keystone XL has “become this iconic symbol of everything that’s wrong with the energy business,” he says. But, he argues, the 1,897 kilometres that remain to be built, from Alberta to Steele City, Neb., will pass through a continent already criss-crossed with millions of kilometres of other pipelines. “We’re not reinventing the wheel here,” he says.
Keystone XL is “just a pipeline.”
Except it has become far more than that.
Keystone XL has been called “the most famous pipeline in the history of the world, even without being built yet” – although that’s not exactly true. Keystone XL is actually three distinct portions and much of it is, in fact, already built. The middle stretch, from Steele City, Neb. to Cushing, Okla., has pumped oil since February of 2011. The bottom section, from Cushing to Port Arthur, Tex., is being placed in the ground right now. Even the top leg, the most contentious segment that crosses the Canadian border and travels to Nebraska, is no figment of the imagination. Its pipes already lie piled on the ground in several spots across the northern states, just waiting to be welded together and lowered into the earth.
Keystone XL is already very real in the political context, too, disrupting an oil sands industry that fears business will slow if it isn’t built, and foisting change upon Alberta. Premier Alison Redford has travelled to Washington, D.C., on lobbying trips four times in the past 18 months alone. Canadian policy – including the possibility of substantial new levels of oil sands carbon taxation – is under hurried revision, following suggestions from the U.S. ambassador that the White House would look favourably on such moves.
Still, for Mr. Girling and TransCanada, none of those factors have altered the selling point they have tried, with the backing of the highest levels of Canadian government, repeatedly to make to U.S. lawmakers and regulators.
“Our message hasn’t changed one bit in any of those forums. It’s the same message,” Mr. Girling says. “We should get on and build this pipeline.”
'THE BEGINNING OF KEYSTONE XL'
It’s early morning on Earth Day. A chill wind tousles the prairie grasses outside Hardisty, Alta. The horizon is crowded with massive oil tanks. Each can hold 300,000 barrels of oil – 48-million litres, or enough to fill 19 Olympic-sized swimming pools.
Inside the fence that marks TransCanada Corp.’s property here, three tanks gleam in white. This is the launching point for the vast amounts of oil TransCanada is already pumping from the oil sands to the U.S. through its initial Keystone project, a thick white-coated pipe that curves gracefully into the gravel amid a forest of manifolds and meters and 5,500-horsepower electric pumps.
To anyone else, there might be some irony in an Earth Day tour around the Hardisty oil storage area, the centrepoint of a spiderweb of pipelines moving Canadian energy to market. Not to Vince Hrabec, the man who runs TransCanada’s operations here. “We’re building pipelines a whole lot safer today than has ever been done before,” he says.
He pilots a pickup up a hill, looking for a view of what may one day be Canada’s energy future.
“There’s a nice vantage point up here,” he says, steering toward a grassy bluff. Below, there is a postcard view of a construction site. Three more tanks are rising from the ground. This is the spot where crude may one day enter a pipeline connecting this place with the U.S. Gulf Coast.
“This will be the beginning of Keystone XL,” he says.
He points in the direction of the proposed pipeline’s route south. “It’s pretty straightforward isn’t it? There’s nothing complicated about operating a pipeline,” he says.
“How about building a pipeline?” I ask, tongue slightly in cheek.
“That can get complicated,” he allows. “It just takes time.”
More complicated and time-consuming still, as TransCanada has discovered: getting permission to build a pipeline. But Mr. Hrabec is an optimist. He speaks of the time when construction will begin on Keystone XL. There is no if for him.
Nearby Hardisty, a small town whose businesses have struggled to survive, has a conflicted relationship with the energy industry, and the massive storage tanks that have brought huge amounts of oil to this place, but little work. The Keystone terminal, for example, supports just 11 full-time jobs – and many live outside the local town.
Mr. Hrabec is one of them. He commutes more than 100 kilometres to get here. It’s a long drive, but he has an unusually personal relationship with the Keystone system. He is operations foreman for the first Keystone pipeline, which connects the oil sands, through Hardisty, with the U.S. Midwest. While that pipeline was under construction, he served as its startup manager, a job that saw him oversee the movement of its very first barrels of oil. Opening a pipeline is a lengthy operation: It took nine million barrels just to fill Keystone, and three months to get the first shipment from Alberta to Wood River, Ill.
“I actually travelled the whole line. I was at every pump station,” Mr. Hrabec says. “My accountability was to make sure that when construction was complete, all the facilities were tested and functioning as per design.”
He has been in the commissioning business for two decades, starting up power plants, natural gas facilities and compressor stations. But nothing compared to Keystone, a massive, high-profile project, and a vital export outlet for Canadian crude.
“It’s the pinnacle of my career,” Mr. Hrabec says.
But like many in Alberta, he is personally “on both sides of the fence here.” His grandparents immigrated to Canada from Ukraine in the early 1900s, and he grew up on the family farm near Holden, Alta., doing the things farm kids do: “Raising cattle. Milking cows. Feeding chickens. Feeding pigs.” He still helps out around the farm when he has time. Sometimes, family dinner conversation turns to the merits of the energy industry.
Some in the area are firmly opposed to oil and gas development. The Hrabecs tend to think differently. Several natural gas pipelines already run in their land, and Mr. Hrabec’s father just signed to allow a large electrical transmission line through as well.
“At the end of the day, my father, who is a primary owner of the property, he believes we’re going in the right direction with respect to the economic benefits of moving our commodities out of the province of Alberta,” Mr. Hrabec says. “He has some really good discussions with his fellow farmers, because there are a lot who aren’t for that type of development. But he’s always been expressing that we have to move forward. We have to allow the economic benefits of putting infrastructure in for future growth.”
Does Mr. Hrabec feel the same way?
“I do,” he says.
And, he says, part of him hopes he will one day get a chance to nurse the first barrels through Keystone XL as well.
THE WEST KEYSTONE XL PROPOSES TO CROSS
Daryl Swenson’s great-grandfather could not walk when he crossed the North Dakota border into Canada a century ago. He had come north after being told by doctors to seek a dryer climate for health ailments that left him crippled. Mr. Swenson’s grandfather, a teenager at the time, had to load and unload his father from a covered wagon as they made their way to a homesteading site just north of the mighty South Saskatchewan River in eastern Alberta.
Their land was situated 10 kilometres from the nearest spring. At night, they let their horses wander there to drink. In the morning, Mr. Swenson’s grandfather had to walk the long distance to retrieve them. The covered wagon was home for their first winter on the cold, bald prairie, waiting until they had secured enough lumber – floated down the river – to build a shack. They stoked fires with dried buffalo manure for heat.
Within a year, Mr. Swenson’s great-grandfather was back on his feet, and the family was establishing its presence in Alberta, on land that decades later lies on the route south for the Keystone XL pipeline. Two good crop years brought in enough money to build a barn and a house. But it was still a time of hardship – something Mr. Swenson calls to mind every once in a while as he tills the same land with his GPS-guided tractor.
“When I’m farming now I’m sitting with my arms crossed with the automatic guidance system, thinking how my grandpa used to walk behind a team of horses,” he says.
This is how, in a hundred dozen different ways, the west was settled. This is the west Keystone XL proposes to cross. For its first 1,000 kilometres, the pipeline passes town after town that is either preparing to celebrate, or has recently finished celebrating its centennial. Many of those who came 100 years ago stayed. There are people today who can still show land titles that bear two inscriptions: the federal government, and their family.
Of course, many have left. When Mr. Swenson was 20, enough 18- to 30-year-olds lived within 15 kilometres to form two ball teams. Today, the same radius might contain five people in that age bracket. Houses stand empty on property bought by out-of-town farmers who drive in with enormous equipment to tend ever-bigger ranches. The local school closed down several years ago.
“She’s getting pretty remote rural,” Mr. Swenson says.
But those who have persisted have remained through one of the worst chapters in western history – a past that has forged deep ties to the places Keystone XL may one day traverse.
“People out here are very determined and they’ve got that strong connection to the land,” says Jordon Christianson, who grew up on a ranch near Oyen, Alta.
In the mid-1800s, John Palliser, a Fellow of the Royal Geographical Society in Britain, conducted a mapping trip across what is now Western Canada. The expedition is perhaps most famous for its demarcation of what is now known as “Palliser’s Triangle,” a pie-shaped wedge of land across Alberta, Saskatchewan and Manitoba that, Palliser declared, constituted the northern headlands of the Great American Desert. If you wanted to cut that triangle in half, you would build the Keystone XL pipeline, which runs directly through the heart of a region still shaped by what happened when Palliser’s cautions about the land’s productivity were made real during the Dust Bowl periods of the 1930s.
Even eight decades later, the landscape still bears the imprint of that time, when farmers, starved of crops and starved of money, found themselves unable to pay taxes. Municipalities, starved of revenues, went broke, too – some 25 or 30 of them, and the parched land reverted to provincial control, says Mr. Christianson, who serves as the director of property administration for the Special Areas Board. The SAB was set up in 1938 to administer that provincial land. Today, it holds unique powers over two million hectares of land – including province-like regulatory authority over infrastructure that crosses it.
In Alberta, that dual history of settlement and drought remains a fundamental backdrop for TransCanada as it seeks to build Keystone XL. Mr. Swenson and Mr. Christianson are, in some ways, similar. They have both negotiated with TransCanada, Mr. Christianson for SAB, Mr. Swenson for himself and a group of farmers and ranchers who came together to jointly work out terms with the company.
Like many in Alberta, they also have long histories with oil and gas. On Mr. Swenson’s land, a natural gas drilling frenzy brought a crop of wells in the past decade. Mr. Christianson’s brother works as an operator in the oil patch. And like many here, they already know what it’s like to deal with a big new oil pipeline. The first Keystone pipeline, which runs from Alberta to the U.S. Midwest, crosses through Special Areas and Mr. Swenson’s land.
It has proven a mixed blessing.
For Special Areas, TransCanada’s care in building the pipeline was remarkable. The company “had rare plant surveys done,” Mr. Christianson says, and identified numerous species at risk, including plants like tiny cryptanthe and slender mouse-ear cress, whose 2004 population numbered just 1,575 in Alberta.
To avoid damaging those plants, TransCanada amended its route in places, narrowed its right-of-way in others and, in some areas, used horizontal drilling to bore a hole for the pipeline, leaving the surface undisturbed. “They did a lot of mitigation for some of these plants,” Mr. Christianson says. “It’s impressive.” Local residents even found an unexpected benefit in some places where TransCanada peeled back the prairie to install its pipe, he says. “After Keystone went through, they had these sites on the pipeline where these plants started springing up. They took advantage of that disturbance.”
Mr. Swenson, too, has had good experiences with the energy industry. His cattle graze next to a gas well, and usually, he says, companies are “pretty good.”
But dealing with TransCanada has not been easy. To negotiate with the company, some 60 per cent of the farmers and ranchers along the Keystone route between Hardisty, Alta., and Burstall, Sask., banded together to form the Alberta Association of Pipeline Landowners, or AAPL.
“The initial offering of money to the landowners was paltry. It was next to nothing. So everybody decided to get together,” he says.
Mr. Swenson was one of five people who sat at the table to draft access terms. On many of the items they sought, they lost. Under current practice, pipeline companies pay a single upfront payment for a permanent easement – but landowners are liable for the buried pipe once it is abandoned. AAPL sought annual payments, and sought changes to abandonment liability. They failed.
“They don’t want to address any abandonment issues. They don’t want to pay any yearly compensation,” Mr. Swenson says. And with the power of eminent domain on TransCanada’s side, landholders only had so much leverage.
The one area they did win: money. Contracts bar discussion of specifics, but Mr. Swenson got roughly 10 times more than TransCanada initially offered, terms that were settled for both Keystone and Keystone XL. And he has been happy with how the company has treated him on the initial Keystone route. Heavy machinery compacted the soil atop the pipeline, stifling the ability of crops to grow. Plants grow “quite a bit shorter, and it doesn’t produce as much. It turns yellow quicker,” he says. Yields are 15 to 20 per cent less on the right of way. TransCanada has paid compensation, and sent back equipment to help fertilize the land and bring it back to its full capacity.
“They assured me they would fix it. And they’re working at it,” Mr. Swenson says. The company has also seen substantial success in reseeding grasslands, he says.
And the problems he’s had haven’t soured him on the idea of Keystone XL. “I would support it,” he says. “I think Canada needs the oil to be going out of here.” He bears little lingering resentment to TransCanada.
“I don’t think of them as evil. They’re there to make the most profit for their shareholders, and it doesn’t matter if they can get away with paying as little as possible to everybody else,” he says. “But I’ve got no animosity towards them. They’ve treated me well.”
(Watch for more posts from Nathan VanderKlippe throughout the week on our Keystone XL page.)
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