On September 15, Domina Law Group filed the written Closing Argument on
behalf of Nebraska Landowners who oppose the TransCanada Keystone XL Pipeline.
TransCanada spent billions promoting KXL. But, when evidence and witnesses
were tested by rules of law and cross examination, most observers believe
the Pipeline Company was unmasked.
Closing Argument provides the details. We urge you to
Dave Domina and Brian Jorde talk with a group of landowners at the end
of a day in trial before the Public Service Commission in August 2017
at Lincoln NE.
These are excerpts from the filing:
Massive gaps in TransCanada’s evidence confirm its failure to carry
the burden of proof for route approval. The Applicant must prove its case,
or lose, before this Commission.
"Burden of proof" means the obligation of a party to introduce
evidence that persuades the factfinder, to a requisite degree of belief,
that a particular proposition of fact is true.
Jones on Evidence § 3.5 (Westlaw 7th Ed, Dec 2016). The Applicant must prove it meets all legal requirements, or fail.
In Re Applic of Overland Armored Exp., 229 Neb 524 (1988).
The Truth emerged at the August hearing. Finally, the time came for proof,
not talk. “Time's glory is to calm contending kings, to unmask falsehood and bring
truth to light.” Wm Shakespeare,
The Rape of Lucrece, Stz 135.
TransCanada’s three justifications for its Application were disproven. 1) The KXL pipeline will not generate more tax revenues for Nebraska; it
will reduce them – O’Hara, unrebutted; 2) KXL will not create
thousands of permanent jobs, or even hundreds in Nebraska. It will create
eight or nine, but diminish farm income – O’Hara &
KXL admissions; 3) KXL’s “preferred” route is not necessary
because of a “fixed entry point”. KXL misrepresented the South
Dakota situation. (LO235, ¶13 p 23)
When it finally came to evidence, TransCanada had woefully little to offer.
The Applicant must fail because its proof failed. Politics or personal
preferences are not substitutes for proof. Good faith decisions must be
Appeal of Levos, 214 Neb 507 (1983).
Argument (Two Excerpts Only)
A Very Special Concern
One of your members, Commissioners, devoted much of his adult life to the
United States military. He knows best that Preparedness is the Greatest
Deterrent. The pipeline poses a special, under-recognized, national defense
risk. Preparedness takes forward thinking.
Unless the PSC imposes permit restrictions and permit transfer restrictions,
there is no federal mechanism, and none in any other state, to control
the identity of a future purchaser of the pipeline or its operating company.
It could be purchased by anybody with enough money. Anybody…even
a country or group with interests inimical to the United States.
If this is incorrect, the Landowners call upon TransCanada to point to the precise statute (not regulation that can be changed by
the stroke of a pen of a White House occupant at a single moment in political
time) that protects America from a corporate decision by a foreign company
to profit by selling an object that dissects our Nation and could be used
against us by a future enemy owner.
In this country, we do not allow the smallest bank, (12 USC § 1817(j)),
the least significant gun dealer, (26 CFR Pt 478), grain trader or food
exporter, (31 CFR § 538.523), or even a USDA color standard device,
(7 CFR § 51.52), to be sold to a purchaser who does not require prior
approval. Why would we allow this with a major oil pipeline? We have regulations
about pipelines controlled by the Government of South Sudan, (32 CFR §
538.536), but none for those within the United States! Fate has placed
the duty to protect against this risk on the Nebraska PSC. It is up to
you to fix what the Federal Government and States overlooked. There is
no one else to do it.
Again, if we are wrong, we ask TransCanada to cite the law.
Alleged Economic Impacts Regarding Jobs & Taxes Are Exaggerated & False
Jobs & Taxes. These are the Applicant’s two proffered justifications
for approval of its Application. One, and only one, witness was designated,
and testified, on these two topics. That witness was Ernie Goss. Goss’s
collapse on the witness stand disclosed one of the law’s most basic
trial precepts: “Cross-examination is beyond any doubt the greatest
legal engine ever invented to discover the truth….” John
A Treatise on the System of Evidence 2:1697-98 (1904); paraphrased in
Pointer v. Texas, 380 U.S. 400, 404 (1965).
Goss imploded on cross-examination. He unmasked himself with his demeanor,
shallow analysis and unprofessionalism. Later, Goss was
completely debunked by two witnesses. First, Mr. Fuhrer, a TransCanada employee who
contradicted Goss and admitted that permanent employment will increase
from about 34 to about 40-44 person, a net gain of six to ten jobs, not
tens of thousands. Second, temporary jobs numbers, placed above 40,000
by TransCanada were
utterly debunked by UNO economist, Michael O’Hara. (858:12-860:12,V; LO-189
p41) Dr. O’Hara analyzed the jobs numbers and responded to specific
questions. TransCanada did not rebut O’Hara despite keeping Goss
at the hearing to the end to watch O’Hara’s testimony.
Goss indefensibly summarized the impact of Keystone XL construction on
the Preferred Route to be 3,397.2 construction jobs during construction,
371.7 operations jobs, and 727.6 total jobs for the years 2018 thru 2034.
(KXL-1 § 19.0) Goss could not explain his sources, figures or the
calculation spreadsheet he used. Goss put income from operations in Keya
Paha County at $217,000 / yr for 2/10ths of one person. And when this
folly was apparent to all in the hearing venue, he could not see it –
so slapdash was Goss’s work. (311:22-315:4, II)
Dr. Michael O’Hara gave a comprehensive, intensively researched report.
Dr. O’Hara responded to specific questions posed to him. He also
gave the Commission, with pin point precision, the documents he reviewed
and analyzed. (LO-189, p 17-18)
O’Hara’s scope of engagement involved a request for his analysis
of eight specific questions. (LO-189, p 20) The first question sought
on the analysis of the impact of the Proposed Pipeline along the Proposed
Route, on Nebraska property tax revenues over 20 and 50 years, and separately
income tax revenues and separately sales tax revenues. Again siting extensive
professional research sources, and making appropriate adjustments for
the value of adjoining land of 15%, Dr. O’Hara concluded, using
recognized economic methodologies, that “It is easy to forecast
KXL’s property tax obligations owed in each and every county, in
each and every one of the years 2035 through 2069, will total $0.”
Dr. O’Hara was able to conclude, after analysis, the Pipeline and
Route proposed “will produce a significant net decrease in property
taxes over the life of the pipeline.” (LO-189, p 23)
The O’Hara income tax forecast proves the pipeline will produce,
over 20 years, a loss in tax revenues for Nebraska of $4,843,144.00. Over
the first 50 years, the income tax loss will be $14,320,027.00. These
figures include increases in sales and income tax revenues from TransCanada’s
employment and spending, offset by decreases in income and sales tax revenues
from diminished land production, values and sales processes, and consumption
The sales tax in Nebraska will go up because of TransCanada’s existence.
This is because TransCanada will, while the pipeline is here, require
electricity and services to maintain it. But, increased sales tax revenues
will not offset diminished property taxes and income taxes.
Dr. O’Hara’s analysis and conclusions were not rebutted by
Abandonment Should Not Be Allowed To Saddle Future Nebraskans With Liability.
TransCanada plans to abandon its pipeline to waste in Nebraska’s
soil after it is used. (LO-244 p 14-15) This is the only reason KXL wants
a “perpetual” easement for its 20 to 50 year machine. The
Company’s 1st witness, Mr. Palmer, admitted abandonment is “one of the options”,
and that removing the pipe has not been considered. TransCanada was unable
to give you any estimate of costs to remove the pipe, cleanup the mess,
and remediate the land. (Palmer, 131:13-20, I) If the Application is approved
as requested, the dye is cast: future Nebraskans will pay billions to
clean up, after getting virtually nothing for putting up, with the KXL.
No businessperson would make such a deal. Indeed, no responsible parent
would let a child have all the toys, and never learn to clean their room.
Why would you do this for the Applicant? Consider the lesson Stan &
The Bernstein Bears & the Messy Room (Penguin 1983) about the duty to clean up your own mess.
TransCanada’s admitted plan is to abandon its pipeline in Nebraska’s
soil. (LO-244) It admitted this in writing. (LO-244 p 14-15) The company
plans to take its profit and run. Your heirs, Commissioners, will be left
with the clean up bill. They will share it with all who outlive you in
50-70 years. And all those folks, victims of a 2017 decision, will wonder
what in the world was going on in 2017 to create such circumstances! How
much will the clean up cost? TransCanada cannot say and has not thought
about it. (Palmer 131:13-132:6, I) But the cost can be avoided. Readers of
The Bernstein Bears & the Messy Room learn this at an early age.
Leaving this cost of the abandoned line to future Nebraskans dramatically
outweighs any modest short term benefit. The KXL project is a massive
net financial liability to Nebraskans if TransCanada is allowed to take
its profit and run. KXL was unable to identify any Nebraska pipeline or
pipeline easement that permits abandonment of the line in the ground.
(Palmer 130:3-9, I). TransCanada would be the first.
This problem can be solved. Wherever, if anywhere, a route is granted,
TransCanada should be required, as a condition of permission to put KXL
in that it must take KXL out at the company’s expense, clean up
the mess and its easements should then end. It must also maintain proof
with the PSC of financial responsibility to cover this cost.
TransCanada had its chance to put on its
best case before you, Commissioners. What it had is what you got. In a few minutes
with each of its eight witnesses, the curtain was pulled back, and the
“Wizard” behind the noise and impressions was exposed. TransCanada
did not meet the burden of proof. It had virtually no meaningful facts.
Gaps in the evidence left materials elements completely unproven, and
others were unmasked by superficial statements that do not cut the mustard
Required of you, is this: an evidence-based decision on the record before
you. TransCanada failed to prove its tax claims, failed to prove its jobs
numbers, failed to defend its “fixed starting point contention –
which proved to be designed to mislead you.
No jobs – reduced production for farmers. Net taxes lost. No justification
for perpetual rights or easements. No fixed starting point. No evidence!
And, without your thoughtful decision, no protection against a sale by
the Applicant to an enemy owner, and no protection against a huge future
clean up liability.
TransCanada did not earn your vote with proof. The Landowners ask, on behalf
of all well-informed persons, that you deny the Application entirely.
But if you must approve something, make TransCanada closely parallel what
it has now. Also impose the South Dakota conditions (LO-235), plus required
approval for any sale, and a duty to take the pipeline out of the ground,
clean up the mess, and terminate the easements so title to the land is
whole again when TransCanada is gone.