Leaving Scars: TransCanada Took Their Land for the Keystone XL Pipeline
Laura and David Holland have spent a fortune fighting the Keystone XL Pipeline.
John Fulbright; source image via Getty Images
The scars don’t show anymore, but David Holland, 74, can still trace the exact pathway where TransCanada workers came in 2013 and peeled away the earth to plant the vein of the southern leg of the Keystone XL pipeline through his pastures just outside Beaumont.
Holland, a retired Houston tax attorney, paces back and forth staring at the small TransCanada sign posted neatly by the fence of the Coastal Bermuda grass hay field that lay fallow for two years while the layers of grass grew back in. His face grows ruddy, and he speaks quickly in broken-off sentences.
His wife, Laura Holland, watches him carefully, trying to monitor what he says, but he’s intent and impossible to distract. He needs to tell what happened, how the Calgary-based company took his land and how, even now, TransCanada still hasn’t signed a contract or paid the Hollands a penny for it. “They stole it. There’s no other word for it. And the government let them do it,” he says, fingering the gun he keeps holstered under his right arm.
It’s the same story that hundreds of landowners along the Keystone XL Pipeline route have lived since the 1,700-mile-long expansion project was first proposed in 2008.
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“It needs to be said, what’s happened to us. We’ve been fighting this all this time. People act like the whole thing is over, but it’s not for us,” Laura Holland says. “It can’t be. We don’t have anybody else to fight this and we can’t turn back now. We have to keep going.”
TransCanada workers finished the 485-mile-long southern section, running from Cushing, Oklahoma, to Port Arthur, Texas, in 2013, but the planned 1,200-mile-long northern section has been delayed for years. Once the Keystone XL, the fourth phase of the Keystone Pipeline System, is complete, it will tote up to 830,000 barrels a day of diluted bitumen from Alberta, Canada, to Texas Gulf Coast refineries.
Supporters have long touted the project as a way to tap into the Canadian tar sands, the third-largest proven oil reserves in the world, and wean the United States from relying on oil from volatile countries in South America and the Middle East. On its website, TransCanada describes the Keystone XL as “a key component of a much needed refocus on U.S. infrastructure investment while also producing thousands of well-paying jobs and substantial economic benefit to local communities and the U.S. GDP.”
TransCanada spokesman Matthew John goes further. “Refiners in the Gulf Coast are still importing millions of barrels of oil a day from countries where production is declining or is unstable,” John states. “The Keystone System will help transport more Canadian and U.S. oil to refineries in the U.S., which enhances energy security.”
But critics say TransCanada officials have talked up the possibility of economic growth and energy security to take the land, dismissing environmental concerns and acting aggressively even though after nearly a decade of effort, the pipeline system has yet to be completed. The Calgary-based energy company has used eminent domain — the right of government or a government representative, including a common carrier pipeline, to take private property for public use — freely in Texas in particular, where the laws lean heavily in favor of the pipeline companies, even though the federal government, which is required to sign off on any project that crosses national borders, had delayed making any decision.
In fact, in 2015 it looked as if the Keystone XL extension project was never going to be finished. After protests from environmentalists, landowners and indigenous peoples, President Barack Obama halted construction on the project, explaining that it would carry tar sands crude oil, which produces a large amount of greenhouse gases because of the energy-intensive extraction process it requires. “America’s now a global leader when it comes to taking serious action to fight climate change,” Obama said in November 2015. “And frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face — not acting.”
But all of that changed when President Donald Trump took office. Only days after his inauguration in January, Trump revived the Keystone XL with the stroke of a pen. In late March after a brisk review, the U.S. State Department approved the pipeline project. Flanked by Energy Secretary Rick Perry on one side and TransCanada CEO Russ Girling on the other, Trump announced the approval.
There are still significant barriers to the project’s completion. Nebraska’s Public Service Commission has yet to sign off on the pipeline route through that state. “We have beat TransCanada twice before, we’ve stopped the pipeline before, and we will do it again,” Jane Kleeb, founder of Bold Nebraska, a key group that has opposed the Keystone XL, says. “There is nothing about this pipeline that is in the public interest.”
But forget the ethical questions about the environment and the rights of landowners, and the reported pipeline leaks. The pipeline also simply may not be economically viable at this point.
That’s mainly because tar sands oil is remarkably expensive to produce. The economics for that kind of oil worked in the early years when TransCanada was trying to build the Keystone. Oil prices were above $100 a barrel and most observers thought they would stay there. Shale oil has a lower carbon footprint, which energy companies grudgingly have begun to care about, an attitude certainly better for public relations. But in 2014, just as TransCanada finally got all the pieces in a row and the southern leg of the pipeline started running from Cushing, Oklahoma, to the Texas coast, oil went from above $100 a barrel to below $50, where it has hovered ever since. Suddenly, the economics of the Keystone XL were not looking as good.
TransCanada insists the company has “every intention” of constructing the final phase of the project. But even though tar sands oil has been flowing through the pipeline from Oklahoma to Texas, there is no money in the pockets of people like the Hollands. Instead, they are still fighting TransCanada in court, years after they were forced to give up their land.
Oil has been inextricably linked to Texas ever since Spindletop exploded into existence in Beaumont in 1901. The first big Spindletop gusher came in just across the way from Holland’s farm. His great-grandparents could see the geyser of light, sweet crude soaring into the sky from their front porch.
Over the following century, Texas became criss-crossed with more than 200,000 miles of pipelines, an enormous web designed to tote oil from the oil fields to the refineries that were springing up on the Gulf Coast. In Texas, the decks were stacked from the beginning against those who wanted to oppose the Keystone XL because of TransCanada’s wealth. “A bunch of us fought,” Holland says now. “TransCanada sued more than 100 landowners in Texas alone.”
In 2005 TransCanada proposed the original Keystone pipeline system, which would ship both synthetic crude oil and diluted bitumen from Alberta to refineries in Illinois and Texas. Most of this system was built with little fanfare or media attention. But in 2008, the company proposed a fourth leg of the project, an even bigger pipeline that would transport up to 830,000 barrels per day directly from Alberta to Steele City, Nebraska, then to Port Arthur. Since the Keystone XL would cross the U.S.-Canada border, the U.S. State Department first had to approve it. This required an environmental impact assessment and a national interest assessment. TransCanada submitted its permit application and didn’t expect there would be any problems.
In 2010 a TransCanada landman approached Holland about getting the right-of-way through his 3,800-acre cattle and rice farm just outside Beaumont for the southern leg of the pipeline running Canadian tar sands oil. At that point the Keystone XL was controversial, but Holland had been dealing with pipeline companies for decades and this was just another deal to be negotiated, one of the dozens of pipeline right-of-way agreements he has done over the years since he and his brother inherited the place, which has been in the family since just after the Civil War.
Holland thought TransCanada would negotiate — he didn’t like the terms that would let the company run numerous pipelines through the land and felt that what TransCanada was offering, about $400,000, was below market value — but when he rejected the offer, he was quickly served with a lawsuit.
(TransCanada spokesman John maintains the company has good relationships with most landowners. “We’re very proud of the relationships we’ve built with more than 60,000 landowners across our North American pipeline network over the last 65 years,” John states.)
Pipelines are almost always a hot-button issue because they cross any number of jurisdictions and people along the way are affected. Some are happy because they’re getting payments for land use, but others just don’t want them on their land or don’t want to worry about water issues and the environment, Bill Arnold, a professor of energy management at Rice University, says. “With the Keystone XL it’s the scale of it. That’s what made it get so much attention,” Arnold says.
By 2010 crude oil prices were on the rise and companies started strip-mining Canada’s boreal forests to get at bitumen, a sticky black tar-like substance used to make synthetic oil. It’s an expensive process, but producers didn’t blink as long as oil prices stayed high.
Julia Trigg Crawford fought having the Keystone XL Pipeline on her land all the way to the Texas Supreme Court.
For Julia Trigg Crawford, it was fear of what the bitumen could do to her family’s 600-acre farm on the edge of the Red River just outside of Direct, Texas, that prompted her concerns.
In 2010 Crawford had just taken over management of the farm when the TransCanada landmen approached her. They were courteous and offered money, about $7,000, to cross her family’s land with the pipeline. This was nothing unusual. Dozens of land men had approached the family about running a pipeline through the place since her grandfather bought it in 1948, and the family had always managed to talk the companies into finding a way around their property. “Allowing a company to cross your land means you give up certain rights to the property. We never wanted to do that,” she says now.
She was leery of TransCanada’s offer because the company planned to claim a 50-foot-wide, quarter-mile-long right-of-way that would run the 36-inch-wide pipeline through hay pastures used to feed the family’s red Limousin cattle and underneath Bois D’Arc Creek, the farm’s main irrigation source. After learning that Keystone I, the first section of the pipeline to be completed, had more than a dozen leaks in its first year alone, Crawford was even more dubious about signing.
Then about a year later Crawford got a “final offer” from Keystone, TransCanada’s American subsidiary, for about $21,000. The alternative was condemnation proceedings. (Texas allows pipeline companies that qualify as common carriers — i.e., that move products for more than a single company — to use the power of eminent domain to seize and condemn land if unable to reach a voluntary agreement. TransCanada registered as a common carrier by checking a box on a two-page application with the Texas Railroad Commission, the entity that regulates drilling and pipelines in the state.)
Crawford and her siblings pored over TransCanada’s lease offer and came up with a deal they felt they could sign. But when they submitted their offer to TransCanada, there was no response. Months later a state district judge in Lamar County condemned the property. Then a three-person panel of local landowners reviewed the case and estimated how much the land TransCanada had taken was worth. TransCanada deposited a check for about $10,000 in the Lamar County Courthouse.
Crawford’s only legal option was to refuse to acknowledge the condemnation proceedings and appeal the judge’s decision. But when Crawford asked state and national environmental groups for help organizing a legal fight, everyone told her no, she says. The process of dealing with condemnation cases in Texas is heavily weighted against the landowner. One environmentalist explained that a study had been done examining eminent domain laws in various states and ranking which ones were written loosely enough that there was enough of a chance of winning to make it worthwhile for a national environmental organization to get involved. Texas was ranked last.
Still, Crawford decided to try her luck in court. “I had no idea what I was getting into,” she says. “If it were to happen today, I know so much more. I also know the odds and how to pick the fights. I know the insurmountability of it all now. I had no idea when I was starting out.”
Along the way, she became famous. As her story became national and then international news, people started sending her donations to help her pay the legal bills. She got letters from plumbers in New York with $15 donations and women in Taiwan, old school friends making huge donations and complete strangers sending quarters. “I started to feel it was my responsibility to keep going with this. I started seeing the bigger picture,” she says.
In 2012 President Obama had delayed making a final decision on the Keystone, but he approved and fast-tracked the southern portion of the Keystone pipeline. Obama’s decision streamlined the process even further. It was already difficult to fight in the courts in Texas, but this move made it nearly impossible.
Crawford appealed her case to the Texas Supreme Court, but the court refused to take it up.
At the same time, oil producers began unlocking shale plays using slant drilling and hydraulic fracturing in Texas and across the United States. The influx of light, sweet crude oil altered the entire structure of the oil industry. Like the tar sands, shale plays were initially pricy to drill. But when oil prices began to plummet in late 2014, shale producers proved able to cut costs and adjust how much oil was coming out of the shale formations. Tar sands producers couldn’t do the same.
The timing was off for tar sands. “It’s a nice match from a technology point of view, because the Texas refinery system has spent the last 25 years upgrading to handle increasingly ugly kinds of oil because light crude, the kind that Texas had produced for decades, was largely disappearing before the shale plays started producing,” Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston’s Bauer College of Business, says. “The problem with mining tar sands is it takes a high price of oil to justify the cost of producing it. You have to spend a lot of money up front. Once you’ve done that, you get a regular supply of oil for a long period of time, but that’s not how the oil market works. The price goes up and down all the time.”
The economic benefits are not as clear-cut as TransCanada has presented them to be. While TransCanada has claimed the Keystone XL would bring more than 100,000 jobs, a U.S. State Department report, issued in 2014, found the economic gains from the pipeline project would only be about 3,000 temporary construction jobs and fewer than 50 permanent positions. The report also found that most of the bitumen that activists were trying to prevent from being used was already making its way to Gulf Coast refineries by truck or rail anyway.
“Since the Keystone XL was first proposed, companies have found other ways,” Ed Hirs, an energy economics professor at the University of Houston, says. “Some expanded their own pipeline systems dramatically, and we’re also getting a larger amount of crude shipped in by rail. The idea of what it originally was supposed to be was picked up by other people. At this point finishing the Keystone XL will just be an expansion of capacity.”
In the past year energy companies have sold off more than $25 billion in Canadian tar sands holdings. But Hirs maintains completing the Keystone XL still makes sense because the market will change. “Nobody wants them right now,” Hirs says. “The question is, will somebody want them in the future. I’m betting they will.”
A TransCanada land man appeared on the doorstep of Eleanor Fairchild’s ranch outside of Winnsboro, Texas, in 2012 just days after her husband’s funeral, wanting to lease her cow pastures for the Keystone XL. When she didn’t agree to sign, she says, they immediately threatened her with a lawsuit. “Most of the people they went after couldn’t fight. They owned little pieces of property and only got a small amount of money and there was no way they could go against TransCanada, but I could,” she says. “I knew I wouldn’t like myself if I didn’t do something.”
Fairchild got in touch with the environmental activists who started showing up in Texas shortly after Crawford’s story went national. When the company went through eminent domain and started ripping into her land and cutting down the trees on her property in October 2012, she was ready for them.
The actress Daryl Hannah came out to the ranch. She and Fairchild hit it off, and the pair sat by the pool smoking cigarettes and talking while they waited for the right moment to intercede in the construction.
They crept through the woods on the property to get to the construction site. Then, all at once, they darted out into the open. Hannah loped across the dirt, a straw hat dangling from her neck, blond hair wild, waving her arms with a dancer-like grace at the construction worker operating a backhoe. Fairchild, then 78, trotted out after Hannah.
A police officer asked Fairchild to move, saying he didn’t want to arrest her, and she politely refused. He gently put cuffs on her and eased her into the back of a patrol car, along with Hannah. Because of Hannah’s presence and arrest, the incident became national news. Afterward, TransCanada dubbed Fairchild an “ecoterrorist” and filed a lawsuit against her. She fought the lawsuit at the same time she was negotiating an agreement.
In 2014 Fairchild negotiated a deal with TransCanada, settling on a confidential dollar amount; TransCanada dropped the lawsuit and issued a written apology for calling her an “ecoterrorist.”
She pulls out the apology letter from TransCanada’s lawyers and looks it over, amused. “It didn’t come from the very top guy like I wanted,” she says. “But I got it. And I didn’t sign a gag order and I made sure they would have to listen to me. I was arrested and that embarrassed them, and they didn’t want to go to court against me because they knew that Daryl Hannah would show up and bring in the press. I think that’s why they made the deal.”
The day Obama finally issued a decision on the Keystone XL Pipeline, in 2015, rejecting the company’s permit application, Crawford heard the news while she was driving to Austin to testify for a hearing at the Texas Legislature. She pulled over and texted her daughter and just sat there laughing for a moment. Then she maneuvered her car back on the road and kept driving. At that point, at least something had come out of the years of effort.
Even after the Texas Supreme Court refused to hear Crawford’s case, she stayed involved in protesting other sections of the pipeline, both in Texas and in other states. She says her work as an environmental activist has come with drawbacks as well. At first people in Direct viewed her with suspicion and it was hard to make friends. (“I was never afraid or anything. I just felt people watching me.”) It was lonely for a while, Crawford admits.
As the fight dragged on, Crawford’s father raised his own concerns. He said he wasn’t feeling well, that the stress from the case was making him sick and he wanted to drop it. Crawford and her siblings talked him into continuing, but it created tension in the family that has taken years to subside. There were other costs as well. “For those years it was waking up at night worried about what would happen if I failed, of knowing I had to keep trying. It was losing 30 pounds, losing relationships,” she says. “It was all-consuming.”
Although the pipeline is already running under a three-acre section of her land, Crawford contends the Keystone XL may still not be completed. “President Trump beating his chest about this is premature, because it is not a done deal. The northern leg hasn’t been approved yet,” Crawford says. “We failed in Texas because while we had passion and commitment, we didn’t have money or organizing skills, and it’s those things that get you attention and a seat at the table. They’ve got that in Nebraska.”
Eleanor Fairchild is still pushing TransCanada to repair sinkholes on her property.
Fairchild stands at the edge of the newest sinkhole, the third to open up on her property since TransCanada put in the pipeline. TransCanada put the pipeline, which runs a mile across her land, in on top of a sandy hill where Gulf Oil had once laid one in 1917 — remnants of that pipe jut out of the land like old dinosaur bones because Fairchild’s geologist husband insisted removing them would make the hillside unstable.
TransCanada officials dismissed these concerns, Fairchild says, and put in the line and planted it over with grass and trees. But the trees died and the Coastal Bermuda grass they planted never took root. Fairchild stopped running cattle on the pasture — now it’s being used to grow hay, but the tenants have had to replant the grass. And not only have huge sinkholes have opened up on the property since the Keystone line went in; aquifers — the land has various aquifers running through it — have leaked out of the hill and into the creek below, eroding the creek bed further. She takes a grim delight in making the company fix it repeatedly.
There have also been problems with the pipe itself on both the northern and souther segments of the system. Keystone I had more than 30 leaks in 2010, its first year in operation, including a pipeline rupture in North Dakota that released a geyser of oil into the sky before dumping more than 21,000 gallons of oil onto the land.
In 2015 the Pipeline and Hazardous Materials Safety Administration found that sections of the Keystone I Pipeline had corroded 95 percent, which left them paper-thin in some spots, one-third the thickness of a dime. TransCanada sought to reassure people by highlighting the Keystone system’s “fail-safe mechanism” and sensors meant to ensure that leaks are detected as soon as possible, but in April 2016, it wasn’t until a South Dakota land owner discovered oil on his property that the company realized more than 16,000 gallons had trickled out of the pipeline.
On the southern leg of the pipeline, there were issues with pipe that was dented, poorly welded and in danger of spilling. TransCanada had to repair more than 100 defects on the Gulf Coast Pipeline Extension before it even started running, according to a 2013 report from the nonprofit environmentalist group Public Citizen.
(TransCanada contends the repairs showed the company was being vigilant.) PHMSA officials required TransCanada to hire third-party monitors and adopt a quality management program “built to the highest standards by both Keystone personnel and its many contractors,” according to the 2014 U.S. State Department environmental impact statement.
After Obama canceled the Keystone XL, people began to push back against other pipeline companies, with the Standing Rock protests over the Dakota Access Pipeline in North Dakota and the Trans-Pecos Pipeline protests in West Texas. Frankie Orona, executive director of the Society of Native Nations, the group that organized the Trans-Pecos protest, watched how the Standing Rock protesters seemed to persuade Obama to block the Dakota Access Pipeline, and that made him hopeful that his own group might get some traction. “It felt good for a short period of time. We were being heard and we were being taken seriously,” Orona says.
However, once Trump approved both the Keystone XL and the Dakota Access Pipeline, the protests slowed down. Orona was holding a meeting at the Two Rivers Camp, the protest camp they’d set up in West Texas, when he got the news. “It was brutal. I knew then it would be hard to keep going,” he says.
People who had planned to join the Trans-Pecos protest informed Orona they could no longer make it because they had to go back to opposing the Keystone, he says. “It pulled people in different directions and our numbers dwindled. Of course the movement died down. The Trans-Pecos pipe got put in the ground,” Orona says.
Trans-Pecos ended quietly in April when the group camping there realized most of that pipeline had been completed. The last of the protesters were asking for PayPal donations to give them enough gas money to get home.
Before all this, Holland had scored what was hailed as a major victory for landowner rights in Texas when the Texas Supreme Court sided with him in a case against Denbury Resources Inc., a company that wanted him to accept only 60 percent of the going rate for right-of-way to build a carbon dioxide pipeline on his land.
But ultimately, after that case had bounced through the state court system twice, the Texas Supreme Court sided with the company in January. The Gulf Coast Pipeline, the southern section of the Keystone XL, has been moving tar sands oil through Texas since 2014, but for Holland and others who have been locked in a struggle against it down here, the fight is still ongoing. At this point, it’s a battle Holland can’t afford to lose. “I had to do it. It was the right thing, but now I’ve wagered everything against it. I can’t quit,” he says.
Holland is still appealing lawsuits from Denbury and TransCanada in Jefferson County Court over condemnation proceedings, and has yet to see any money paid out for the use of his land. Between the two cases, he’s spent more than $1.5 million in legal fees.
Holland is liquidating his own assets — they include the beach property he inherited from his grandparents, Illinois farm land he got from his mother, a house in Houston, a small place in France, and land in Mexico — to give him the money to keep fighting. “I’m land-rich and cash-poor,” he says. “TransCanada is a huge company and they have lots of money and lots of lawyers. I have money too, but it’s taken so much to fight them on this. But I had to. It’s more than just a piece of dirt with some signs on it. It’s my history.”
The strain has taken a toll on him emotionally as well. “It’s been hard,” Laura Holland says. “He’s never lost anything before and he doesn’t know how to handle that. I mean, he’s had setbacks in life, but he’s never lost in court. It’s taken so much out of him. This is not the man I married. I love him, but he’s changed so much.”
Holland can barely contain himself when he talks about the lawsuits and the pipeline companies. “It’s insane. I’m selling land in order to continue this fight to keep it and to protect the rights of landowners like me,” he says. “But they act like this fight is over. It’s not.”