March 4, 2012 Sunday
Iowa;Midlands;Nebraska;Sunrise Edition

Paul Hammel, WORLD-HERALD BUREAU

LINCOLN - How serious is TransCanada, Inc., about building its Keystone XL pipeline?

If money for lobbying Nebraska state senators is any indication, very. With a capital "V."

During the fourth quarter of 2011, when the Nebraska Legislature held a special session on the pipeline, TransCanada reported $529,099 in lobbying and legal expenses.

That spending works out to about $10,800 for each of the 49 senators during those three months - or nearly as much as a lawmaker's annual $12,000 salary.

TransCanada's spending was 12 times more than the total reported by all anti-pipeline organizations, according to recently released state reports.

The reports include fees paid to lobbyists, expenses including entertainment and gifts, and legal bills in some cases. Those costs represent only part of total spending in recent years, including advertising expenses, on both sides of the pipeline debate.

A TransCanada official said the company's lobbying effort on behalf of its $7 billion crude-oil pipeline project was justified. He said Nebraska had become the front line of a national battle over increased use of Canadian tar-sand oil.

"There were six bills that were specifically focused on our project," said TransCanada spokesman Shawn Howard. "We have to make sure we have the right number of people providing input to our project team and to legislators."

Howard said the $529,099 total included a lot of expenses not normally reported as "lobbying" costs, such as $359,526 for "miscellaneous expenses." Most of that amount went to two legal firms, including one of the world's largest, Sidley Austin, which helped prepare briefs on the proposed legislation.

TransCanada had as many as seven Lincoln-based lobbyists working the issue at a cost of about $68,000. But the report also included expenses of engineers and executives who compiled reports. The company spent almost $95,000 in travel and lodging expenses, mostly for officials from TransCanada's home base in Calgary.

"We won't apologize for hiring the right people and getting the expertise we need," Howard said. "As everyone knows, lawyers aren't cheap. At times, in projects like this, you have people working around the clock."

Overall, companies and organizations spent $14.2 million last year to lobby the Nebraska Legislature. It isn't clear that TransCanada's spending - which totaled nearly $590,000 for the full year - set a record for a single group, but it amazed retired Nebraska lobbyists Paul O'Hara and Larry Ruth.

"That's a lot of money," O'Hara said.

The TransCanada spending in 2011, for example, is four times as much as the $146,000 in lobbying costs reported last year by the influential Nebraska State Education Association.

O'Hara recalled high lobbying expenses during the bank-versus-bank fights over allowing multi-bank holding companies in the early 1980s.

But Ruth said TransCanada's spending is higher.

"It's by far the most I've ever heard of from a single principal," Ruth said.

One legislator who pushed for a new pipeline route around the Sand Hills, Sen. Ken Haar of Malcolm, was temporarily speechless by the company's spending.

"That's incredible," Haar said after a moment. "I would say that for TransCanada, money would seem to be no object."

The lobby reports do not include spending on advertisements, mailings and robo-calls.

Also, several groups that were heavily invested in the issue didn't report lobbying expenses. That includes pro-pipeline groups like Americans for Prosperity and Nebraskans for Jobs and Energy Independence, and some national environmental groups who came to Nebraska to testify against the pipeline, including the New York-based Natural Resources Defense Council.

The report comes as another round in the Keystone XL debate is about to begin at the State Capitol.

The Legislature's Natural Resources Committee is expected to meet sometime this week to decide whether to advance to the full Legislature a bill that would restart the state review of a proposed new pipeline route around Nebraska's groundwater-rich Sand Hills.

Gov. Dave Heineman has been among the pipeline supporters who are urging passage of Legislative Bill 1161, saying it will help speed federal approval of the 1,700-mile-long, 36-inch pipeline. The bill's sponsor, Papillion Sen. Jim Smith, has said it only makes sense to follow through on the work that's already been done.

But the leading anti-pipeline groups are opposing LB 1161, saying that the Legislature, during the special session, passed a second, more comprehensive law that should pertain to any pipelines proposed after Jan. 1. That, they said, fits Keystone XL, since its initial federal application was rejected by the Obama administration in January and the company has yet to file for a new federal permit.

Jane Kleeb, of the environmental advocacy group BOLD Nebraska, said Nebraska citizens should be encouraged that TransCanada's lobbying didn't stop the Legislature from passing new regulations.

"Citizen power is pretty darned impressive," Kleeb said.

BOLD Nebraska reported spending $11,500 on lobbying during the last three months of 2011. The organization also paid $4,500 to hire Omaha's Domina Law Group to prepare an opinion on the state's power to enact pipeline legislation.

The Nebraska chapter of the Sierra Club was the other major group opposing the pipeline. It reported spending $25,557 on lobbying activities. Ken Winston of the Sierra Club said the organization also paid $12,000 in legal expenses.

The two groups, as well as TransCanada, said they conferred with the Nebraska Accountability and Disclosure Commission about what they needed to report on their lobbying forms. Winston and Kleeb said they did not feel, based on the discussion, that they needed to report legal work as "lobbying." Howard, of TransCanada, said his company decided to go "above and beyond" what was required, and report every expense.

Howard complained that national groups have poured "millions" into the issue to push an anti-oil agenda that had nothing to do with Nebraskans' concerns about the Sand Hills and underlying Ogallala Aquifer.

"It's easier to target a single pipeline than it is to shut down an entire industry," he said. "And that's what they're after."

But Kleeb and Winston said that TransCanada's lobbying and legal expenses were just a drop in the bucket compared to what the company spent on advertising and lobbying county officials, which doesn't have to be reported to the state.

Howard declined to disclose TransCanada's spending on those costs.

Kleeb speculated that TransCanada may have spent "over $5 million" in Nebraska.

Meanwhile, she estimated that her group and the Sierra Club had $400,000 in total spending over the past two years, including ads, office expenses, salaries and signs.

KEYSTONE XL LOBBYING COSTS

Spending by various groups during the fourth quarter of 2011, when the Nebraska Legislature held a special session on the pipeline

Pro-pipeline groups

TransCanada, Inc.

$529,099

Nebraska Chamber of Commerce and Industry

$15,307

American Petroleum Institute

$3,030

Nebraska Assoc. of Petroleum Marketers & Convenience Stores

$2,500

Laborers Local 1140

$2,000

AFL-CIO

$697

Southern Public Power

$200

Anti-pipeline groups

Nebraska Chapter of the Sierra Club

$25,557

BOLD Nebraska

$11,500

Nebraska Farmers Union

$935

Nebraska Wildlife Federation

$179

SOURCE: Clerk of the Legislature MATT HANEY/THE WORLD-HERALD

Contact the writer:

402-473-9584, paul.hammel@owh.com

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