High blog praise today for Nebraska rancher Randy Thompson, who is willing to reveal the terms of the ultimatum TransCanada has issued him in its quest to take his land for its Keystone XL pipeline. Thompson tells the Vancouver Sun that the Canadian pipeline company sent him a letter in April saying he had thirty days to accept their final offer before they would "initiate the eminent domain process."
TransCanada's offer: $17,861 for an easement to run the 36-inch pipeline across 74 of his acres. That's about $240 per acre crossed. I welcome the ag producers in my audience to estimate how much value an acre of land has to a rancher or a farmer per year. Then figure out how much value Thompson will lose as TransCanada's backhoes and pipelayers will render those 74 acres unusable for grazing or haying for at least a year.
Thompson figures the offer boils down to one dollar per day over the lifetime of the project. For every day that Thompson allows 900,000 barrels of toxic sludge to course beneath his land, TransCanada buys him a cup of coffee.
Or look at the offer from TransCanada's perspective: at $100 per barrel, with Keystone XL pumping 900,000 barrels of oil per day, $17,861 is the revenue generated by 17.2 seconds of Keystone XL oil. If TransCanada is offering prices to the other several thousand landowners along the proposed Keystone XL route, Keystone will clear the price of those easements with two days' worth of Keystone XL oil... assuming they don't spill any.
Fellow Nebraskan Ernie Fellows says TransCanada has offered him $13,000 to run the Keystone XL under his land. Problem is, he doesn't know exactly how close the pipeline will come to his house, since TransCanada's land agents have never shown him an exact map so he could calculate his risk.
Even if you reject the environmental, energy policy, and property rights arguments that show why the Keystone XL tar sands pipeline is a bad idea, you should be able to fall back on plain economic fairness. TransCanada will make big money on the oil it ships. TransCanada is strong-arming American landowners with threats of eminent domain to accept a pittance far below the value of the service those landowners would provide and the risk those landowners would assume.