8/17/2007

Farmers prepare for fight over old pipeline: Peoria IL Journal Star, 7/29/07

McLean County families want right to say 'no' to giving up land

By Matt Buedel

The old Kelley house - the one that saw generations of the McLean County farm family grow up and grow old, that didn't have running water until 1953 - is gone, replaced in 1970 by the brick two-story built right behind it.

About a half mile down county road East 1600 North but "right across the street," as the owner puts it, the Kings' original farmhouse, too, has disappeared. When their home was demolished by a tornado in 1982, the nearest neighbor of the Kelleys rebuilt their homestead as a tidy brick ranch.

Both homes on the eastern flank of Normal, just beyond the burgeoning subdivisions off Fort Jesse Road, stand in stark contrast to the encroaching development not simply because they overlook vast crop fields, but because the land on which they sit is relatively ancient. They are centennial farms, belonging to the Kings since the 1860s and the Kelleys since 1882.

And now, as those families see it, the properties and their way of life face a dire threat: a crude oil pipeline that would pump petroleum from the oil sands of Alberta, Canada - potentially the second-largest oil reserve in the world - and promises to alleviate U.S. dependence on Middle East energy supplies.The company proposing the line, Enbridge, already operates a vast network of pipelines stretching from Fort McMurray in Canada through Minnesota, Wisconsin, Michigan, Indiana, Illinois, Missouri, Kansas and Oklahoma.

The line through McLean County - about 130 land owners have property that the proposed pipeline route intersects - would be part of the company's "southern access program," an expansion from Superior, Wis., to Patoka.

Construction on the first stage, from Superior to Delavan, Wis., is under way. The second stage, from Delavan, Wis., to Flanagan, near Pontiac in Livingston County, has regulatory approval and is scheduled to start work next year.

Enbridge hopes work on the final segment, from Flanagan to Patoka, can begin at the same time, delivering crude extracted from sand and tar deposits in the Canadian wilderness to the Patoka hub for further distribution beginning in 2009.

"(The pipeline) diversifies the oil portfolio for the refiners," says Enbridge spokesman Joe Martucci. "If you look at the Midwest refiners, traditionally they have been reliant on domestic sources. . . . Those sources are diminishing. They have to look elsewhere for their oil supplies."

And that's fine with the Kings and the Kelleys, as long as they don't look to the land they've tended for their entire lives as the source. The Kelleys are spearheading a plan to fight Enbridge over eminent domain authority in front of the Illinois Commerce Commission, the only way they imagine they can keep Enbridge out of their soil.

"Being against eminent domain - that sounds like we'll sell out for a price, but we don't want (the pipeline) at all," Patty Kelley says. "We want to save the farm we have so much invested in since 1882."

Rosemary King concludes more succinctly: "I don't really want it. It will hurt the land."

Enbridge specifically wants a 60-foot easement where the 36-inch pipeline will traverse properties, with temporary 90- to 100-foot easements on either side of the main strip during construction.

The company will compensate land owners for crop loss while construction is in progress, and farmers can plant over the pipeline once it is operational. It will pump about 400,000 barrels of crude per day initially but can be doubled in daily capacity with more pumps on the route, if demand for the product in Patoka increases.

Enbridge currently is negotiating with the Illinois Department of Agriculture to devise an impact mitigation agreement that spells out the measures it must take before, during and after construction to ensure the viability of cropland.

It addresses specific issues like soil compaction due to construction, reimbursement to farmers for future crop disruption because of pipeline repairs and ground remediation in case of an oil spill. The agreement also spells out the steps Enbridge will take to repair field tile - typically clay pipes that use gravity to drain excess water from farm fields - if they are damaged by pipeline construction.

The Kelleys and Kings are skeptical of those claims after working with the drainage systems over the decades, knowing how hard it is to perfect them and how susceptible they are to disruption. The watershed also feeds Money Creek and, eventually, the Twin Cities' water supply, which they fear could be contaminated in the event of a major oil leak.

Enbridge's Martucci says those fears are overblown and that the pipeline would be designed within all the regulatory agencies' parameters, including a pipeline alignment that would limit potential impact on individual and community water supplies.

"The chances of any leak are very remote," he says. "In the unlikely event there is a leak, Enbridge has systems in place to contain it and, if necessary, to clean it and remediate it."

But those environmental concerns, despite the land owners' objections and Enbridge's assurances, will have less influence on the Illinois Commerce Commission's decision on whether to grant Enbridge eminent domain authority than the demonstrated public necessity of the pipeline.

Enbridge plans to file its petition for a pipeline certificate, a step preceding the request for eminent domain power, by month's end or the beginning of August, according to Martucci.

But he also says that the company will only use eminent domain as a last resort to completing easement acquisitions. Still, the company has not initiated any negotiations with property owners in McLean County, and Martucci doesn't know when that process will begin.

Martucci says that globally tight crude oil production, rising demand for petroleum products and the political instability in the world's dominant oil supply regions all are factors that back up the necessity of the pipeline for the common good and the right to eminent domain.

"I think if you have a more diversified and stable supply force, it would, over time, help (gas) prices on a downward trend," he says. "It benefits the public because the public uses the goods" derived from the oil.

Ten years ago, under different economic and political conditions, however, that argument failed when Lakehead, Enbridge's former name and the title under which some of its pipelines still operate, tried to obtain eminent domain in McHenry County for a pipeline to Chicago.

In 1996, Mark McCormick of Woodstock and his neighbors received notification that Lakehead had petitioned the ICC for eminent domain 10 days before the public hearing when they could contest the matter. He and his wife scrambled to find anything they could to delay the proceedings and further prepare.

"They had been studying this for years and tried to slam dunk us with 10 days' notice," McCormick says.

They cobbled together any information they could find about Lakehead's leaks and were granted a continuance - and time to build their case.

"Contrary to what they say, they have a lot of spills," McCormick says. "The land owner is incurring substantial risk."

Like other regulatory public hearings, those before the ICC aren't based on property owners' opposition to a project but on expert testimony from both sides proving public need. Lakehead's assertion was that the 24-inch pipeline to Chicago would reduce gas prices in the area.

The McCormicks and others who opposed the pipeline had a secret weapon in their fight. One of the land owners was Merton Miller, professor emeritus of the University of Chicago Graduate School of Business and a Nobel laureate in economics.

"We had the biggest gun - that's what saved us," McCormick says. "He was the case."

Gas prices, Miller calculated and testified to at the hearing, would not be affected by Lakehead's pipeline. The oil company's lawyers didn't cross examine. They lost the bid for eminent domain.

A year later, Lakehead built the pipeline anyway. But they had to negotiate with land owners, who had the right to decline a deal. Some refused. Some got rich, sold their property and moved.

"Here in McHenry County, the pipeline is very crooked to go around the people who wouldn't sell," says McCormick. "I doubt if Enbridge has a public need case now, but I won't say that they don't."

When it really comes down to it, folks like the Kelleys and the Kings just want the right to say "no" to Enbridge, to keep all the rights to the land on which they live to themselves.

The 80-acre King farm and 160-acre Kelley farm have been the family livelihoods for five generations. Both own farms elsewhere in the county, and both say that even if the pipeline was proposed for the properties they don't inhabit, they'd still oppose it.

Their successes and failures are tied to the land, to the uncontrollable forces that rule it. And they don't want another degree of unpredictability introduced, a pipeline they fear could temporarily change the land's yields or, in a worst-case scenario, cripple its fertility.

As the land has passed from generation to generation, yields have increased. Technology has made farming more productive and efficient and opened up new markets for their crops - the ethanol boom alone has been responsible for historically high corn prices.

Those trends seem likely to continue, and the Kings and Kelleys want to pass it on without the uncertainty of what a massive underground oil pipeline could bring another hundred years from now.

Patty Kelley's son-in-law and daughter, Scott and Margaret Clement, have taken over the heavy lifting at the Kelley farm, in addition to looking after their own nearby property. Margaret looks at her children, 7-year-old Sam and 1-year-old Sophia, when speculating about the future.

"There's been a lot of sleepless nights over someone coming in and saying they can do whatever they want with this ground," she says. "We want the next generation to have incentive to farm."


Peoria IL Journal Star: http://www.pjstar.com