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Oklahoma landowners challenge TransCanada's Keystone pipeline Add to ...

TransCanada is facing new battles in its $12-billion project to build an oil sands pipeline to the U.S. Gulf Coast, as landowners in Oklahoma challenge its right to expropriate land for its right of way.

Oklahoma resident Sue Kelso and her siblings have filed a motion in district court to block TransCanada's plan to exercise eminent domain in order to build across their property. Ms. Kelso, 69, lives on a farm where she grew up near the Texas border in southern Oklahoma.

"My objection is that a foreign company has no right to condemn our property, come in and take what they want, where it does not benefit us or our neighbours," Ms. Kelso said in an interview Monday. "It only benefits them and their investors. It is for their gain - it is not helping me at all."

Ms. Kelso said TransCanada had offered compensation for its right-of-way, but the family is not interested, and worries about safety issues of a major pipeline passing less than a kilometre from the main house on the 73-hectare (180 acres) property.

The Oklahoma court fight is just one front in a multi-pronged battle that the Calgary-based company is facing in its effort to build a 500,000-barrel-per-day pipeline connecting Alberta's oil sands producers with the Texas coastal area, the U.S.'s largest refinery hub.

The U.S. State Department, which must grant permits for such international projects, is reviewing TransCanada's Keystone XL proposal, and has signaled it may impose further delays for a supplemental environmental assessment. The State Department has been pressured to delay by the Environment Protection Agency, scores of members of Congress and environmental activists.

TransCanada is also facing opposition to the Keystone XL project in Nebraska, where the pipeline will cross over the Ogallala aquifer, a vast but shallow source of drinking water for eight states.

U.S. Senator Mike Johanns has urged the State Department to conduct a more thorough review of alternative routes for the pipeline, and last week Secretary of State Hillary Clinton responded in a letter that suggested her department may opt for further study rather than granting the permit.

Annette Dubas, a Nebraska state senator, has introduced legislation that would force the company to submit to a lengthy state review of the project, including public hearings.

TransCanada spokesman Terry Cunha said the company believes a review of the pipeline falls under the federal government's jurisdiction in the U.S., and remains hopeful that the State Department will issue the necessary permits.

Harlan Hentges, a lawyer who represents Oklahoma's Ms. Kelso, said private sector companies can only resort to expropriation under eminent domain when there is a clear public benefit to the project. TransCanada's planned Keystone XL pipeline will ship 500,000 barrels of oil sands crude daily to refineries in Texas, and Mr. Hentges said it offers no benefit to the people of Oklahoma, or other states it will traverse.

"The pipeline is to carry to [oil]sands oil from Canada to the Gulf of Mexico," Mr. Hentges said. "It's not to transport anything for anybody in Montana, Nebraska, Oklahoma … so it just doesn't fall under the description of public use under the Oklahoma or United States constitutions."

TransCanada's Mr. Cunha said the company has expropriated land for pipeline routes before in the United States, but does so as a last resort. He said the industry resorts to seizing land through eminent domain in 10 per cent of cases, while TransCanada has used the practice in just 2 per cent of its negotiations with landowners.

"Our commitment is to treat landowners with respect and in good faith, to address their, work with them and come up with the best possible solution," Mr. Cunha said.

"We do everything reasonable to avoid using eminent domain. In acquiring easements from landowners, we offer the full market value of the property, in exchange for which we receive limited rights to construct and operate a pipeline below ground."

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  • TransCanada Corp
  • Updated March 19 4:00 PM EDT. Delayed by at least 15 minutes.

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