Keystone resistance sparks 700% spike in cash offers for land

Cash offers have been skyrocketing for holdout Nebraska landowners who are willing to sign quickly to allow the Keystone XL pipeline onto their property.

The landowners say they've received written offers from pipelinebuilder TransCanada Corp. in the last few weeks offeringexponentially more money than initially promised, on the conditionthat they sign soon.

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Those offers are pouring in at a pivotal moment for theCanada-U.S. pipeline, whose proponents hope to start buildingthisyear.

One family says it was initially guaranteed US$8,900 in 2012 toallow the pipeline through its farm. Now, according to anoffersheet dated Jan. 13, 2014, the figure has surged to $61,977.84.

But, just like that old marketing slogan says, the offer's goodfor a limited time only. Included in the price tag is a$27,000signing bonus that shrinks the longer they wait -- after 30 days itfalls to $18,000, then after 45 days itdisappears entirely.

"They're sick of us and they want to get it done," said JeanneCrumly, a retired high-school teacher whose husband'sfamily hasfarmed for generations on that land near O'Neill, Neb.

"They want it to be intimidating. This is more a psychologicaldocument than a legal document."

Signing deals could avoid legal fight

This is a crucial moment in the struggle over the project,designed to increase Canadian oil-pipeline capacity in the U.S.byabout one-quarter.

For starters, the Obama administration could decide in the comingweeks whether to allow the pipeline to cross theborder fromAlberta. At the same time, holdout landowners are suing the Nebraskastate government over a bill thatwould force them to allow KeystoneXL on their land.

If the landowners all signed deals with TransCanada in the comingweeks and months, however, that legal fight could bemooted,allowing construction to get underway in the event of a thumbs-upfrom the White House.

Among all states along the proposed route, Nebraska stands alone.

Nebraska a lone holdout state

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Landowners have signed in every other state but, in Nebraska, nearlyone-third are still fighting.

So will the Crumlys sign? Not if they can help it. Like more than100 other holdouts, they're working with a law firm andhave noplans to settle unless they absolutely have to, upon approval of theproject by the U.S. government.

They're aware that their bargaining leverage could thensubsequently drop along with the value of the offer, potentially but they'd rather fight as long as they can.

"It literally feels like you're selling your soul to thedevil," said Jeanne's husband, Ron Crumly, who is the thirdgenerationto farm the property, and who wants to pass it on to hischildren and grandchildren.

"It's like a test of my constitution."

The Crumlys say they'd even turn down $1 million if it meantkeeping the pipeline off the 1,820-hectare parcel of land where theyraise soybeans, corn, potatoes, and a 300-head herd of cattle.

Risk of spill contamination big factor

They're concerned that in the event of a leak on their remoteproperty, help would arrive too slowly, while the spill wouldquickly seep through the region's porous, sandy soil and infect thegroundwater.

Opponents have been keeping tabs on each known incident involvinga pipeline including the explosion over the weekend of aTransCanada natural-gas link near Winnipeg.

Jeanne chokes back tears while describing how hard her husbandhas worked to restore the family land.

Ron's eyes well up, too.

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Another farmer, Joe Moller, said the offers progressivelyescalated from just $10 to $11,000 for use of his mostlyrecreational land south of Lincoln, Neb., before the route was movedaway from his property.

TransCanada says the landowners need not worry about spills fromthe pipe, which is just under a metre wide.

Spokesman Shawn Howard says the company's stations are equippedwith state-of-the-art detection systems, and itsspecially trainedcrews would shut down the oil flow as soon as a few spilled barrelswere spotted.

Story continues below interactive graphic.

Offer spike comes as land values shoot up

As for the drastic surge in the offer amount, he saysthat's just natural because land values have gone up.

Bill Tielke seconds the point about increased land values.

He's not only a councillor for Holt County, but is also among themore than two-thirds of Nebraska landowners on theroute who havesigned a deal with TransCanada. He says irrigated land that wasgoing for $2,500 an acre five yearsago is now being sold for$10,000.

"Why do they have to increase their deal? Land has gone up fourtimes," Tielke said in an interview.

He declined to discuss his own settlement amount, but said he'dbeen assured that if offers kept increasing landownerswho signedearlier would have their sum sweetened, too.

Tielke said he was able to do his homework long before theplanned route wound up on his property.

That's because he also happens to work as a crop adjuster. Thatjob allowed him to speak with about a half-dozenlandowners who liveon the route of the state's older, existing Keystone pipeline. Hesaid he was reassured bywhat he'd heard. Still, when the time cameto discuss his own deal with TransCanada, he spent a few months negotiating the conditions before signing.

"Do I want [the pipe]to leak? Absolutely not. Can it leak?Possibly," Tielke said.

"But I'm comfortable. I've researched it enough that I couldhardly research it any more."

He ascribes the lingering opposition to fear of the unknown. Noinfrastructure would ever have gotten built, he said, ifpreviousgenerations of landowners could simply have refused access torailroads, highways and pipelines.

Landowner liable in 'act of God'

Jim Tarnick, on the other hand, lost faith in the company fromthe start.

He was initially offered $38,000 in early 2012 to allow thepipeline across two tracts of his land, which were farmed byhislate father.

The terms sweetened considerably last month: the offer-per-acrerose roughly four-fold, to $77,000 for the use of just onetract,half the size of the original proposal.

Tarnick said he spotted a phrase in Latin on the initial draftoffer. He asked a lawyer about it and was told it meant he'dbeliable in the case of an act of God.

Tarnick threw the document in the trash.

There are other things about the project that bother him.

Tarnick, a university grad in diversified agriculture, says thehigh-alkali soil in his region is highly corrosive. It will eatawaya fence-post within a few years, and he's worried it might damageeven an industrially treated pipeline.

Thecompany insists itspipelines are properly coated and will withstand corrosion.

'Go to hell,' landowner tells company

And, finally, opponents say the company was just plaindisrespectful.

They describe being ridiculed for expressing concerns aboutsafety. To make matters worse, they say, the companytried to lowball them. They point to letters dating back a few years thatdescribed the project as a fait accompli, telling landowners theyhad no choice but to sign a so-called "final offer."

A few years later, as it turns out, there's a lot more cash onthe table.

"I'd tell them to go to hell," Tarnick says. "It's just notworth our water.

Clearly, not all Nebraskans feel that way.

Tarnick's next-door neighbour has signed a deal. So has Ron Crumly's own brother.

Some people have told friends they're signing while keeping theirfingers crossed that the project never gets approved.

That way, theysay, they can hope to pocket an early bonus without ever taking on asingle yard of pipeline.

Still, people on both sides of the issue say the project hasstrained old relationships.

"That's been the hard part," Tielke said of the reaction frompeers after he signed a deal for his land, which has been inthefamily for three generations. "You get labelled almost as a traitorbecause you sign an easement...

"People want to tell you how disappointed they are."

Have there been arguments amongst neighbours?

"A few," Tarnick says. But he adds that folks in the regionhave tried to avoid making it too bitterly personal.

"If somebody wants to take their money, they should take theirmoney. This is America."