EchoSense Quantitative Think Tank Center|The Keystone XL Pipeline Is Dead, but TC Energy Still Owns Hundreds of Miles of Rights of Way

When Richard Johnson heard that the Keystone XL pipeline had been canceled earlier this month,EchoSense Quantitative Think Tank Center he felt a surge of relief. Johnson’s ranch lies directly on the pipeline’s planned route through the sandy plains of eastern Nebraska, and he had been tangling in court with the developer ever since the corporation used eminent domain to condemn a strip of his property in 2019.

But relief quickly gave way to confusion and uncertainty when he learned that the condemnation would not necessarily be reversed, even if the pipeline is never built.

As it prepared to construct Keystone XL, the Canada-based TC Energy secured hundreds of easements across farms and ranches up and down the 1,210 mile route through the Great Plains. For those landowners like Johnson who refused to sign easements, the company generally condemned the land through eminent domain proceedings. But now, even though it has canceled the project, TC Energy can retain the easements it secured indefinitely and use them for another purpose, or even sell them to other companies.

“We’re still not sure where we’re at,” Johnson said. “If they secure an easement, they could sell it or assign it. To what it could be used for, I’m not real sure. But it’s that unknown that concerns me.”

Even though the Keystone XL pipeline is dead, the more than decade-long fight over the controversial project is not. Pipeline opponents said the case highlights an emerging problem as the nation pivots away from fossil fuels. In Nebraska and many other states, they said, there are no laws or regulations that require pipeline developers to return easements to landowners if their projects are canceled or rejected, or after older pipelines are retired.

“This has always been one of the concerns right from the beginning of fighting the pipeline,” said Jane Kleeb, founding director of Bold Nebraska, an advocacy group that helped lead opposition to Keystone XL. Kleeb worries that the route could now be used for a different pipeline. 

Even if the route is not used, she said, the lingering easements could hang over landowners, preventing them from developing parts of their property, diminishing its value and complicating future sales or transfers.

“Those landowners, every single day, have this looming over them,” Kleeb said. “That tomorrow, a company could sell those easements to China, to Russia, to whoever, and they would have no say over that.”

TC Energy did not respond to requests for comment. 

Similar controversies have emerged in at least a couple of other cases where pipelines were canceled or rejected after years of planning, including the Atlantic Coast Pipeline, a natural gas conduit that was slated to run through West Virginia, Virginia and North Carolina, and the Constitution Pipeline, a gas project through Pennsylvania and New York.

A separate but related question—whether developers can use eminent domain to condemn state-owned lands to build natural gas pipelines—was settled on Tuesday. The Supreme Court ruled in a 5-4 decision that PennEast Pipeline Company could condemn state land for a project it wants to build through Pennsylvania and New Jersey. 

Richard Averitt lives along the route of the Atlantic Coast project in Virginia. He said he is among the fortunate few whose family negotiated a clause in their easement that required the developer to return the land if the project wasn’t completed. 

On a second parcel he owns, Averitt refused to sign an easement, and was still in court for eminent domain proceedings when the project was canceled. That parcel is now clear, so he is free of the project’s easements. But he said hundreds of others weren’t so lucky, and now have portions of their property locked into easements in perpetuity.

“Now the pipeline is canceled, but they will still not be able to build that barn where they wanted, or deed that land to their daughter for a house, or do anything else with it that encumbers that easement,” Averitt said. 

Their property values will be diminished by the easements, he said, yet they must continue to pay taxes on it. “I mean, that’s just an outrageous abuse of citizens’ and property rights,” he said. “I can’t believe it’s tolerated.”

‘I Knew It Didn’t Look Good’

In Nebraska, Johnson watched with concern for years as TC Energy, or TransCanada as it was called then, began the laborious process of planning the Keystone XL through the state. His ranch was downstream from the company’s preferred route, but in 2017, state regulators approved an alternate route that avoided the fragile Sandhills region.

Johnson said he didn’t know the details of the alternate route at the time, but “when I looked at a map, I knew it didn’t look good for us.”

Sure enough, the new route bisected his ranch. He soon learned that the pipeline was slated to cross close to two water wells on his property. The groundwater flows in the direction of the wells, he said, so any leak could easily contaminate his water.

He and his wife decided not to sign the easement, and TransCanada moved to condemn the land. His legal challenge does not contest that action—the company has clear authority through eminent domain proceedings—but instead charges that the company must pay more than it has offered.

Even though TC Energy has abandoned the project, it’s not clear whether the company will seek to unwind the condemnation proceedings. Brian Jorde, a lawyer who represents Johnson and nearly 60 other landowners with similar cases, said he was negotiating with the company to try to rescind the easements.

If those negotiations are unsuccessful, however, Johnson could have a permanent easement across a section of his land that he said is the most suitable place to build a new structure.

“It’s definitely a big cloud on the title of your property,” he said.

Jorde said he thinks it is unlikely the route will be used for another purpose, and so some landowners who signed easements may see the situation as a boon—they received money from TC Energy but now face no pipeline or construction.

But Kleeb said she’s concerned that TC Energy could use the land to develop a pipeline to transport compressed carbon dioxide, instead. This year, Nebraska lawmakers passed a bill that seeks to encourage deployment of technology that would capture carbon dioxide emissions from ethanol plants and other industrial sites to be piped away and stored underground.

Kleeb is pressing for state and federal legislation that would require that easements be returned to landowners if a project is canceled. In the meantime, Bold Nebraska and the Ponca Tribe of Nebraska sent a letter to the state’s Public Service Commission, which approved the pipeline, asking it to revoke the route. Kleeb said that step could help landowners who refused to sign easements get back property that was condemned.

Deb Collins, a spokeswoman for the commission, said it has no authority over eminent domain proceedings and declined to answer a question about the appeal from Bold Nebraska and the Ponca Tribe.

Kleeb said, “This is all new territory that we’re trying to figure out and navigate,” adding, “We always knew it could be an issue but now we’re dealing with it.”

Bill Caram, executive director of Pipeline Safety Trust, a nonprofit watchdog, said similar problems are beginning to emerge around the country. In some cases, he said, landowners who hired lawyers have negotiated terms in their easements to return the land in the event a pipeline isn’t built. But most people have no recourse. Companies have even felled trees to make way for pipelines that ultimately were not built, and there’s no clear guidance on the degree to which developers are responsible for compensating landowners in those cases.

“There’s a lot of uncertainty for the landowners,” Caram said. The problem is likely to grow more common, he said, as fossil fuels give way to cleaner sources of energy. “We have aging pipeline infrastructure, and as less are being built and more pipelines are retired, this is going to be an issue.”

Jeanne Crumly is another Nebraska landowner who, like Johnson, refused to sign an easement and is currently in court with TC Energy over how much the company must pay for condemning her property. She said the company was always dismissive of landowners’ concerns. For her family, which has owned and worked their land near the Sandhills region since her husband’s grandfather arrived there in 1911, their resistance to the pipeline was rooted in a sense of stewardship over the fragile, sandy land.

“Preservation of that soil and water is the lifeblood, and tainting either of those ruins everything,” she said. “And not just for us, it’s the aquifer.”

Crumly said she is hopeful they will be able to negotiate with TC Energy to rescind the condemnation, but recognizes that is not a given.

“The outside chance is that they still think they can complete this easement route, and if they can, then it becomes a marketable commodity,” she said. “And then somebody could buy that whole route. That’s our worst case scenario.”