In a symbolic committee vote Wednesday, Senator Tim Johnson had the good sense to reject rank Big Oil propaganda and vote against the Keystone XL pipeline... sort of. The Senate Energy Committee approved Senator Mary Landrieu's (D-LA) pro-Keystone XL bill on a 12–10 vote, but Senator Johnson stuck with the nays.

Senator Johnson has been squishy at best on Keystone XL. In May, he said he prefers to let the regular State Department process, along with the current state-level litigation in Nebraska, proceed without Congressional interference. But he did not say Keystone XL is a bad idea. In March 2013 Johnson supported a resolution encouraging construction of the tar sands pipeline.

So with whom shall we replace Johnson's Keystone XL squishiness?

  • Democrat Rick Weiland isn't afraid to tell the truth about Keystone XL. He says TransCanada's pipeline is a "big money con" much more risk than  benefit for South Dakota, with only 35 jobs to compensate for the ongoing risk to our land and water.
  • Republican Mike Rounds, whose dear old dad made enough money lobbying for Big Oil that he's not worried about the ACA cutting his Medicare, keeps pretending that oil from Canada is domestic oil and that oil sold to China will help us buy less oil from evil dictators.
  • Independent Larry Pressler says South Dakota got little from the first Keystone pipeline in East River and that the U.S. will get little from Keystone XL. He'd rather we build a pipeline for Bakken oil.
  • Independent Gordon Howie says we should let big industry, even foreign industry, do whatever they want.

President Obama has left this issue on the table for another election cycle, so the Senate candidates will have a chance to educate voters about the Keystone XL pipeline through November. Or, more accurately, Weiland and Pressler will have the duty to educate voters and refute the Big Oil lies that Rounds and Howie are too happy to spread... and that Senator Johnson hasn't done enough to oppose.

 

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The Senate Energy and Natural Resources Committee holds another show vote tomorrow to boost the Keystone XL pipeline. Big Oil and friends are thus cranking out a little extra Keystone XL baloney.

Prairie Business offers up the American Petroleum Institute's laughable claim that building TransCanada's pipeline across the Great Plains will create 42,100 jobs. This claim is old news, based on fuzzy math that assumes those construction workers spending a month or two in each county along the construction route will create a booming demand for ballet dancers and speech therapists at the man camps.

Alas, Big Labor is on board with Big Oil's Keystone XL snake oil:

[President of AFL-CIO’s building and construction trades department Steve] McGarvey said the project also would bring $3.1 billion in construction contracts, support and materials to his industry.

“I think there comes a time when as a country you circle wagons and get behind what’s gonna be in our best long-term interest,” he said [Katherine Lymn, "American Petroleum Institute: Approve Keystone XL for the Jobs," Prairie Business, 2014.06.17].

Long-term interest? Let's see, when Keystone XL clears the glut at Cushing, closes the price gap between North American and offshore oil, and raises our gasoline prices 20 to 40 cents per gallon, it will shackle our economy with an ongoing drag. Just a 20-cent rise knocks $22 billion out of the economy, swamping the $3.1-billion temporary pipeline infusion McGarvey cites. More expensive gasoline reduces the amount consumers can spend on other goods and services.

A $20 increase in the price of a barrel of oil increases unemployment by 0.1% in one year. One tenth of one percentage point of the current U.S. workforce is about 150,000 jobs. If Keystone XL raised the price of oil on this continent just $6, we'd lose about 50,000 jobs, more than enough to wipe out even the indirect, induced, magic-math jobs the API and other pipeline dreamers want you to think Keystone XL will bring. So even if API were telling the truth, we'd see 42,100 jobs come and go for the few months it takes to build the pipeline, then sandbag ourselves thousands more jobs long-term.

North Dakota Senator John Hoeven and Canadian Ambassador Gary Doer now say TransCanada will get the green light to build Keystone XL by next spring. Even if that happens, we should thank Keystone XL opponents for getting the President to at least delay the pipeline's long-term economic damage for another year.

Related Reading: TransCanada's permit to build Keystone XL in South Dakota expires June 29. When they resubmit their application, we could boost the economy by bringing a thousand Keystone XL opponents to Pierre to testify, protest, and buy sandwiches.

But don't wait for the hearing—protest now! Dakota Rural Action is among the participants in a Day of Unity and Action against Keystone XL on Saturday at the Pte Ospaye Spiritual Camp in Bridger, the Wiconi Un Tipi Camp in Lower Brule, and the Oyate Wahacanka Woecun Camp in Ideal.

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U.C. Berkeley professor emeritus and welder (!) Robert Bea says a bad-weld rate of 0.1% on high-risk projects is cause for concern.

What's TransCanada's bad-weld rate on the Oklahoma-Texas leg of Keystone XL? Over 50%, according to warning letters the Pipeline and Hazardous Materials Safety Administration sent to TransCanada last year:

"From the start of welding, TransCanada experienced a high weld rejection rate," said one letter dated Sept. 26. Over 72 per cent of welds required repairs during one week. In another week, TransCanada stopped welding work after 205 of 425 welds required repair.

Inspections by the safety agency found TransCanada wasn't using approved welding procedures to connect pipes, the letter said. The company had hired welders who weren't qualified to work on the project because TransCanada used improper procedures to test them, the letter said ["U.S. Imposes New Conditions on Keystone XL Pipeline Construction," AP via Times-Colonist, 2014.05.26].

The PHMSA found TransCanada doing generally careless work:

Another letter, dated Sept. 10, said a government inspector witnessed TransCanada officials investigating dents in pipeline that had been laid without first sufficiently clearing rock from trenches or from soil used as backfill. The same letter said coating that protects pipeline from corrosion was damaged by weld splatter because a contractor hadn't followed the company's welding procedures. Eventually, pipeline was excavated in 98 places to make coating repairs [AP, 2014.05.26].

But hey, why be careful? It's not TransCanada's land. A few thousand barrels of oil spilled on some poor farmer's land or into an American aquifer isn't their problem. They've got millions more barrels to tap from their tar sands, Chinese who will happily pay them for it, and those crazy Americans who think government doesn't need to regulate business.

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Kudos to Ken Santema for making the drive out to Ipswich for Monday's District 23 GOP House candidates forum. His summary of the candidates' responses to audience questions is a useful guide for voters in the sparse but sprawling north central district.

Of all the instructive policy statements staked out by the candidates, Mr. Powers chooses to focus on the vague partisan snark issued by Democratic Party apostate Dale Hargens. District 23 voters frankly don't care about that. They want to know which of the five candidates can best represent their views on property taxes, education, and social issues.

Santema notes that all five candidates—Hargens of Miller, Michelle Harrison of Mobridge, Gene Toennies of Cresbard, Larry Nielson of Tulare, and incumbent Rep. Justin Cronin of Gettysburg—appear to view economic development as a priority for government. Hargens said his departure from the Democratic Party came because of a "surge to the left" by our party, but I remain fascinated at supposedly free-market Republicans' ongoing surge toward leftist government intervention in the economy.

On education, all five candidates appear to defer the question of education funding to local control... because legislators would hate to be responsible for advocating the tax increases necessary for schools to end South Dakota's humiliation of teachers with the lowest salaries in the nation.

Santema reports some predictable fuss and feathers about Common Core. But someone phrased the Common Core question perfectly, asking the candidates what they thought would happen if there suddenly were no standards in public education. Harrison, Toennies, and Hargens gave the right answer: teachers would go right on teaching, proving there is no need for top-down standards and political reform movements like Common Core and No Child Left Behind.

On gay marriage, Nielson appears to have offered the greatest offense, saying (in Santema's paraphrase) that gay marriage is "nothing but a topic brought forth to expand benefits...." Yeah, because all you non-heterosexuals aren't looking for equality or justice or respect; you just want your partner's pension, and that's just evil. We should get rid of all those greedy spousal benefits for everybody!

On the hopeful side, Harrison said gay marriage and abortion are morality issues and that (reports Santema) "she doesn’t believe the government has the right to choose these issues for people." Hey, Charlie Hoffman! Can you get your neighbors to recognize the true conservatism in that statement?

Alas, Santema notes that all five candidates said they support the Keystone XL pipeline (Hargens on the false assertion that TransCanada's export of tar sands oil to China will promote our energy independence) and that not one addressed the issue of property rights and eminent domain that ought to raise Republican ire over Keystone XL.

Thank you for that report, Ken!

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I had a long drive yesterday, with plenty of time to think about Joop Bollen, Richard Benda, and their scheme to get rich funneling EB-5 money to TransCanada's Keystone XL pipeline. But it only took me about ten minutes out of the driveway to realize that the EB-5/KXL overreach was an outright violation of Bollen's contract with the state and the whole purpose of the state economic development office.

Recall the terms of Bollen's contract with the Governor's Office of Economic Development (the contract inked while Benda was GOED/DTSD chief, the contract that took Bollen's EB-5 operations private as SDRC, Inc., and out from under more strict state scrutiny):

A. DTSD is an agency and instrumentality of the State of South Dakota empowered and directed to promote economic development in South Dakota and to enter into public-private partnerships for the purpose of promoting economic development in South Dakota.

...D. DTSD desires to contract with SDRC for the pirpose of having SDRC administer the Regional Center and the EB5 Program and to market the EB5 Program for the benefit of South Dakota, all in conformity with applicable statutes and regulations [Department of Tourism and State Development, contract with SDRC, Inc., 2009.12.22].

Bollen and Benda sought to expand SDRC beyond South Dakota's borders in order to solicit EB-5 funds for stretches of the Keystone XL pipeline and pumping stations in Montana and Nebraska. The state contract allowed Bollen to work on EB-5 "within the Regional Center's territory," but the above text, GOED's mission statement, state law, and common sense make clear that South Dakota's state economic development authority is supposed to promote economic development in South Dakota. Let's look at the statute establishing GOED's purpose:

The Governor's Office of Economic Development shall forge a private-public partnership among state government, local communities, higher education, and the private sector to create jobs that create goods and services for use within the state and for export outside the state, which results in the creation of new wealth [SDCL 1-53-3].

Funding Bollen and Benda's EB-5 promotion to lay pipe in Montana and Nebraska would not "create jobs that create goods and services for use within" South Dakota.

Remember also the basic tenet of government promotion of economic development: we spend tax dollars to make things happen that wouldn't happen without government help. TransCanada has said it needs no government assistance to build Keystone XL. TransCanada is an oil company. They are stinking rich. They've planned to fund the pipeline out of cash flow. And they've planned to build Keystone XL through South Dakota all along.

TransCanada didn't need any government incentive or crutch to choose a pipeline route through South Dakota. Bollen and Benda's desire to divert EB-5 money to TransCanada would not have created a single job or cranked out a single dollar of tax revenue that TransCanada didn't already plan to plow into South Dakota. The only unique benefit of connecting EB-5 investment with Keystone XL would have been more money in the pockets of Joop Bollen, Richard Benda, and their friends in the EB-5 money machine.

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And in other crazily connecting Keystone XL news, Bob Mercer suggests we could see President Obama's latest delay on approving TransCanada's tar sands oil pipeline open the door to an oil-train deal that could enrich Mike Rounds's friends.

On very Good Friday, President Obama said he cannot approve Keystone XL until the Nebraska Supreme Court has had a chance to sort out legal questions over legislation establishing the pipeline's route through that state.

If Nebraska is the monkey in the wrench, TransCanada might want to go around Nebraska. That detour could happen, logically, in South Dakota. Bob Mercer says that detour could involve a South Dakota rail line that friends of oil-friendly Mike Rounds are lobbying to rebuild:

Keystone XL Route through South Dakota

Keystone XL Route through South Dakota
(click to enlarge)

TransCanada’s proposed route through South Dakota would cross the old Mitchell – Rapid City railroad right of way that is owned by the state of South Dakota. The rail line is already rebuilt from Mitchell to Chamberlain. The Legislature this year approved $7.2 million to help pay for rehabilitation of the rail line’s bridge over the Missouri River between Chamberlain and Oacoma — this $1.2 million piece was at the request of Gov. Dennis Daugaard — and to help rebuild the line west to the vanished community of Lyman, where Wheat Growers wants to put a fertilizer distribution and grain shipping complex. That second piece with an appropriation of $6 million came at the request of Sen. Mike Vehle, R-Mitchell.

And for what it’s worth, the public-affairs trio whose firm is running the U.S. Senate campaign of former Gov. Mike Rounds — the former governor’s former chief of staff Rob Skjonsberg, former senior aide Jason Glodt and former state Sen. Bob Gray — also are involved in the effort to put together the money to get the line west to Lyman. It all might be a coincidence, but it’s also worth noting that the former governor’s father, Don Rounds, was a long-time lobbyist for the petroleum industry [Bob Mercer, "Will Oil Trains Be Next for South Dakota?" Pure Pierre Politics, 2014.04.19].

I think re-establishing a cross-state railroad is a fine idea... if only we could include a commuter line so I could ride the rails from Sioux Falls to Spearfish and blog all the way while Casey Jones does the driving. But keep an eye out: one way or another, friends of Mike appear determined to cash in on Keystone XL.

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The GOED/EB-5/Benda scandal has connections to Northern Beef Packers, mega-dairies, Hutterites, Hyperion, the Philippines, and Mike Rounds. Now we add Keystone XL.

Jonathan Ellis fills our Easter baskets with the revelation that Rounds pals Joop Bollen and Richard Benda were scheming to connect their money-making EB-5 visa program to TransCanada's tar sands oil pipeline:

Joop Bollen, SDRC’s founder, applied to the United States Citizenship and Immigration Services — which administers the federal EB-5 program — for permission to add TransCanada as a qualifying business under the program, which enables wealthy foreigners to get green cards for investing as little as $500,000 in qualifying projects.

Besides trying to help Trans-Canada, the same application asked to dramatically expand SDRC’s geographic area of coverage. Bollen sought federal permission to expand SDRC to Montana and Nebraska in a bid to provide financing to the Keystone XL pipeline from the Canadian border to Nebraska’s southern border. SDRC’s contract with South Dakota to run the EB-5 program was supposed to be “for the benefit of South Dakota,” according to the contract’s language [Jonathan Ellis, "Documents Link State-Sponsored Company, Keystone XL," that Sioux Falls paper, 2014.04.19].

Bollen applied to include Keystone XL in May 2011. Governor Dennis Daugaard knew nothing about it... which is what we would expect when Mike Rounds let his pals take the EB-5 program private and hide their work from public oversight.

The EB-5–Keystone XL connection makes perfect sense. Recruit Chinese investors to pour money into a pipeline that will bring North American oil to their homeland. Send a 10% commission to Bollen, Benda, and other friends of Rounds and Daugaard, who cheerlead the pipeline and do nothing to block TransCanada's eminent-domain predations on South Dakota landowners.

Ellis reports the cost of Keystone XL in South Dakota alone may be $920 million. That would have allowed Bollen and Benda to recruit up to 1,840 EB-5 investors at $500,000 a pop. Recruiting investors for a huge industrial project that's received oodles of global press and is guaranteed to make money would have been much easier than selling the merits of some local beef plant or a Deadwood casino that no one outside South Dakota has ever heard of. And those investors would have paid Bollen, Benda, and SDRC's lawyers $45,000 each, for a possible take of $82.8 million.

TransCanada, to their credit, said no thanks. As with Hyperion, Bollen and Benda just couldn't strike oil with their visa investment scheme. But the EB-5 story keeps on growing. Stay tuned.

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The South Dakota Corn Growers say that Big Oil has "hijacked" the railroads and is cutting into farmers' ability to ship their harvest and access fertilizer:

Dennis Jones, a farmer near Aberdeen, S.D., and co-founder of the South Dakota Corn Growers, said that rail equipment has been “hijacked by big oil,” and farmers can’t move their corn to either the Pacific Northwest for export or to closer destinations to feed ethanol plants.

“We need to get ag products back on the track and get fertilizer here, and move the mountains of grain that should have been shipped by now,” Jones said [Tom Meersman, "Farmers Seek More Rail Capacity for Grain," Minneapolis Star Tribune, 2014.04.08].

The Corn Growers could propose solutions that would lessen farmers' dependence on the railroads: Invest in organic farming that cuts farmers' dependence on industrial fertilizer. Grow more crops that can make profit locally.

Instead, Big Ag advocates letting Big Oil hijack more of their land:

Jones said the longer-term solution to help farmers is approval of the proposed Keystone XL pipeline so that most North Dakota oil could be transported by pipeline instead of by rail [Meersman, 2014.04.08].

I know some folks who'd probably throw a corncob at your head if you told them letting a foreign company seize South Dakota farmland for an oil pipeline is good for South Dakota agriculture. But big corporate lobbies can make any statement sound plausible.

Meanwhile, the Cheyenne River Sioux Tribe is opening a camp near Bridger in the Cheyenne River Valley to train members of the resistance movement against the Keystone XL pipeline. Perhaps some East River farmers should cross the river, camp out for a few days after planting, and compare perspectives on respect for the land.

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