A bill that would have required South Dakota’s environmental agency to test crude oil spill sites and share that information with the public failed during the 2018 legislative session, marking the latest in a series of defeats of Democrat-sponsored pipeline regulation bills.
Sen. Troy Heinert, D-Mission, put forward Senate Bill 163 in the wake of November’s 210,000-gallon crude oil leak from TransCanada’s Keystone Pipeline – South Dakota’s largest Keystone oil spill to date – three miles southeast of Amherst. SB 163 failed in committee, as did two other 2018 measures seeking to regulate pipelines.
The defeat of the measure illustrates the political clout of the state’s energy industry, which has poured almost $3.8 million in campaign contributions to South Dakota candidates since 2000, according to the National Institute on Money in State Politics. Almost one-third of all energy contributions to South Dakota politicians have been made by the oil and gas industry.
Heinert said the industry is adept at lobbying, but the string of bill defeats can also be attributed to South Dakota Republicans’ supermajorities in both chambers and the current optics of national politics. He said many legislators worry about the perception of opposing an industry that’s so strongly supported by the current presidential administration.
Shortly after the November spill, Heinert and Sen. Jason Frerichs, D-Wilmot, reached out to the South Dakota Department of Environment & Natural Resources (DENR) and found out that TransCanada and its contractors, not DENR, were responsible for testing and sampling at the spill site.
The Senate measure would have required DENR to test any substance spilled, the ground and the closest water source, with its findings released to the public. Heinert said DENR should take on a more active role, as the agency was established to provide protection for the citizens and the natural resources of South Dakota.
“Is it DENR’s job to take TransCanada’s word for it, or is it DENR’s job to say, ‘You know what, we’re going to test this ourselves. And we’re going to release this to the public?’” Heinert asked the Senate Commerce and Energy Committee. “That’s all we’re asking.”
DENR Secretary Stever Pirner testified that South Dakota law requires a pipeline operator to have a response plan for a worst-case discharge, and the company is required to follow the plan. He said pipeline operators hire environmental experts to work on the cleanup, and any additional reporting and sampling would be duplicative and costly.
“All existing laws and rules direct the responsibility for reporting, sampling and cleaning up spills to the responsible party, which is where, we would argue, that should lie,” Pirner told the committee.
Heinert said DENR should not simply be a rubber stamp, and he questioned why the agency doesn’t conduct its own monitoring at cleanup sites.
“DENR is supposed to take care of these issues in the best interest of all of us, not the responsible party,” he said.
Pirner said DENR doesn’t send state environmental scientists to every spill site, but the agency responded to Amherst because of the size of the spill. State scientists took their own samples and compared the data with samples taken by TransCanada to make sure they were in agreement, Pirner added.
Although two Republicans joined Kennedy in their support of SB 163, the committee killed the measure on a 4-3 vote.
Two other 2018 pipeline regulation bills also failed to reach the floors of their chambers.
The House Commerce and Energy Committee killed HB 1223, which sought to create a moratorium on oil pipeline construction, by an 8-4 margin.
The Senate Agriculture and Natural Resources Committee defeated SB 188, which sought to require certain groundwater observation wells in the event of an oil spill, on a 7-2 vote.
In 2017, Democratic lawmakers proposed a bill that sought to impose a 20-percent tariff on any foreign steel used to construct crude oil pipelines and use the proceeds for a state cleanup fund.
Heinert introduced the legislation in the wake of an April 2016 spill of almost 17,000 gallons of crude from the Keystone pipeline onto a family farm near Freeman. Democrats in past years had failed in numerous attempts to tax pipelines, so Heinert thought he’d appeal to both outdoors enthusiasts and workforce advocates by combining protection of state land with the protection of American jobs.
Drew Duncan, TransCanada’s lobbyist, testified that the bill was nothing more than a tax on operations. He said both pipeline companies and the state of South Dakota have proper safeguards and procedures in event of a spill, and TransCanada paid for the entire Freeman leak cleanup and no public funds were used.
The bill failed 6-1 in the Senate Taxation Committee along party lines.
In a separate 2017 bill, the House Commerce and Energy Committee killed a Democrat-sponsored bill that sought to prohibit hydraulic fracturing in the state. HB 1181 failed on a 9-4 margin, drawing two Republican votes.