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Pipeline expected to be a windfall for Montana counties

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OMAHA, Neb. — A Canadian company that wants to build an oil pipeline to the Gulf of Mexico is again threatening landowners with court action if they don't sell TransCanada the rights it needs to build the Keystone XL pipeline.

TransCanada was criticized last summer for mentioning eminent domain in letters to landowners. Company spokesman Terry Cunha said TransCanada has agreements with more than 80 percent of landowners along the six-state route and wants to be ready if the project is approved.

The project is designed to carry oil from Canada across Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. TransCanada also has proposed connecting to the Bakken oil field in Montana and North Dakota.

The U.S. State Department said last month that it would delay its decision on whether the pipeline can be built to conduct an additional environmental review. A presidential permit from the State Department is required because the pipeline would cross the U.S.-Canadian border.

Supporters say the project would be a boon for U.S. jobs and energy production while strengthening a friendly source of oil. Pipeline opponents say the Keystone XL has the potential to be an ecological disaster and could jeopardize the vast stores of underground water in the Plains states.

National Wildlife Federation spokesman Tony Iallonardo says TransCanada shouldn't threaten landowners with court action before the project is approved.

"Without State Department approval, they continue to bully landowners," Iallonardo said.

Last summer, U.S. Sen. Mike Johanns urged TransCanada to be fair in its negotiations with landowners and to abandon using arbitrary deadlines and threats of eminent domain. Johanns said Thursday that he stands by that position.

TransCanada sent out a new set of final offer letters this month to landowners who haven't agreed to easements, and those letters mention that the company will pursue eminent domain if an agreement can't be reached.

TransCanada's Cunha said the company is trying to secure easement agreements with all the landowners now because it wants to quickly begin constructing the pipeline if the State Department grants its approval. The company says eminent domain is its last resort.

"We are working collaboratively with landowners," Cunha said. "If we cannot reach a reasonable agreement with a landowner for this project, which we see in the public good, then the eminent domain process ensures that landowners are appropriately compensated, and that critical infrastructure can be developed."

Landowners who agree to easements with TransCanada will receive payment when they sign the agreement, and Cunha said landowners would keep the money even if the project isn't approved.

The State Department will collect additional public comment beginning this month and conduct another public hearing before issuing a decision on the project sometime before the end of 2011. Previously, more than 20 public comment meetings were held along the pipeline's proposed path.

The proposed path crosses several rivers and the massive underground Ogallala aquifer, which supplies drinking water to about 2 million people in eight states and supports irrigation.

Environmental groups have raised concerns that the pipeline could foul underground and surface water supplies, increase air pollution around refineries and harm wildlife. They also have questioned whether TransCanada has adequately planned for any emergency spill response.

Four major labor unions released a letter Thursday urging regulators to issue a ruling on the Keystone XL project by the end of the year as planned. The letter was signed by representatives of the International Brotherhood of Teamsters, the International Union of Operating Engineers, the Laborers International Union of North America and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry.

TransCanada had originally hoped to win approval for the Keystone XL by the end of 2010.

The Keystone XL project is the second phase of a $13 billion underground pipeline network designed to move 1.5 million barrels of Canadian oil daily to U.S. refineries. Delays in getting approval for the Keystone XL added $1 billion to the total cost, but the company has said more increases aren't expected as long as it secures approval by the end of 2011.

TransCanada won approval three years ago for the first Keystone pipeline, which carries crude oil across Saskatchewan and Manitoba and through North Dakota, South Dakota, Nebraska, Kansas, Missouri and Illinois. That portion began moving crude in June.