12 things to know about proposed Bakken oil pipelineBy William Petroski, November 9, 2015 8:14 p.m. CST
Months of debate over a proposed $3.8 billion crude oil pipeline will come to a head Thursday when the Iowa Utilities Board begins hearings on the controversial project, which has deeply divided Iowans from many walks of life.
Dakota Access LLC., a unit of Dallas-based Energy Transfer Partners, is so confident its pipeline project will be approved that the company has already hired contractors to lay the pipe. In addition, a third-party procurement firm has already delivered huge stacks of metal pipe to Iowa that would be purchased by Dakota Access if state permits are authorized. But foes of the project insist the pipeline approval isn’t a done deal.
The pipeline would run diagonally for 343 miles through 18 Iowa counties while transporting up to 570,000 barrels of light sweet crude oil daily from the Bakken and Three Forks oil production areas of North Dakota.
The pipeline would end at a distribution hub at Patoka, Ill., where the oil could be transferred to railroad tank cars or linked to another pipeline for shipment to refineries in the Gulf Coast area.
The utilities board says 280 people have signed up to testify on Thursday, including 134 in favor of the pipeline, 143 opposed, and three who are neutral.
Here are 12 things to know about the upcoming hearings, which will be held at the Boone County Fairgrounds in Boone:
1. WHO IS PROPOSING THE PIPELINE?
Energy Transfer is considered a leader in the domestic energy sector, and it already owns and operates about 71,000 miles of pipelines throughout the United States.
The company announced plans for the project in June 2014, and it says it has secured long-term binding contracts for oil shipments to support construction of the pipeline. Much of the oil produced since a boom began in North Dakota’s oil region has been hauled to major refining markets by railroad tank cars and trucks, a method that is more costly and hazardous than transportation via pipeline, experts say.
Although slumping prices for crude on the global market has slowed production from North Dakota’s oil fields, Energy Transfer has not retreated on plans for the Bakken pipeline. The company says it hopes to have the pipeline operational by late 2016.
2. .WHERE IS THE PIPELINE ROUTE?
The pipeline would pass from the northwest to the southeast, through 18 Iowa counties: Lyon, Sioux, O’Brien, Cherokee, Buena Vista, Sac, Calhoun, Webster, Boone, Story, Polk, Jasper, Mahaska, Keokuk, Wapello, Jefferson, Van Buren, and Lee.
Dakota Access says that when construction is underway, a 150-foot-wide right of way will be requested, most of which will be used temporarily. When the pipeline is finished, a permanent 50-foot easement will be required. The pipe would be buried in farm fields so that the top of the pipe is at least 48 inches deep, or 2 feet below any drain tiles, whichever is lower, according to state officials.
3. WHO SUPPORTS THE PIPELINE?
Strong support has been voiced by union construction workers who would help build the pipeline, and by Iowa business interests who see the project as contributing to the nation’s energy independence and a robust state economy.
Some farmers say transporting oil by pipeline will help ease congestion on railroads, expediting shipments of Midwest grain at harvest.
James Nelson of Sioux City, who lives about a block from a major BNSF Railway line in northwest Iowa, regularly watches railroad tanker cars carrying North Dakota crude oil pass through his neighborhood. He supports the pipeline project as a safer alternative for transporting oil, pointing to catastrophic accidents that have occurred when Bakken oil trains have derailed elsewhere. He also endorses the use of eminent domain to acquire easements for the pipeline.
“The laws for eminent domain were established for the purpose of preventing a small minority from stopping a project that so clearly minimizes the danger to so many people,” Nelson said in a letter to the Iowa Utilities Board. “That appears to be the case with the Dakota Access Pipeline.”
4. WHO IS AGAINST THE PIPELINE?
Many farmers along the route say they don’t want the pipeline to pass through their land, fearing damage to agricultural drainage lines and reduced crop yields, and they strongly object to eminent domain being authorized to gain easements for the pipeline route.
Environmentalists have joined the fight, expressing worries about pipeline spills and objecting to developing infrastructure to transport fossil fuels, which they believe contribute to climate change. In addition, the Meskwaki Indian tribe opposes the project, expressing concerns the pipeline would harm Native American graves while crossing through ancestral and ceded treaty lands.
Arthur Moeller of Fort Dodge, heir to a Calhoun County farm that has been in his family for 130 years, filed an objection to the pipeline project with the Iowa Utilities Board in in late October.
“Nowhere can we find that they have the assets and/or insurance coverage to adequately protect us now or in the future,” Moeller said. “The spills across the nation that are listed on the Internet show that it can take millions of dollars to clean them up, and in some cases it isn’t even possible… Eminent domain should not be granted to a private company for the benefit of a few at the expense of many.”
5.WHO WILL MAKE THE DECISION?
The Iowa Utilities Board comprises three persons appointed by Republican Gov. Terry Branstad.
They’re all former members of the Iowa House of Representatives and are considered friendly to business: Chairwoman Geri Huser is a Democrat, and board members Libby Jacobs and Nick Wagner are both Republicans.
Branstad has championed construction of the Keystone XL oil pipeline, which was rejected by President Barack Obama’s administration last week. But Branstad has declined to take a stand on the Bakken pipeline, although he endorses eminent domain for pipelines in certain circumstances.
6. WHERE ARE THE HEARINGS AND WHAT’S THE SCHEDULE?
The hearings will be at the Boone County Fairgrounds Community Building in Boone, which board spokesman Don Tormey called the middle point for the project in Iowa.
The Iowa Utilities Board has issued an order for up to 11 days of hearings to begin Thursday, Nov. 12, and to continue through Dec. 2 if necessary. The first day of hearings will be set aside for public comment, while the following days will be used for a trial-like evidentiary proceeding.
7. WHEN WILL A DECISION BE MADE?
The Utilities Board is expected to vote on the pipeline application by year’s end or early January.
State approvals are also pending in North Dakota, South Dakota and Illinois. Unlike the Keystone XL pipeline, approval is not required from Obama or the U.S. State Department. Federal approval was required for Keystone because it would have crossed an international border.
8..HOW CAN I FOLLOW THE HEARINGS IF I CAN’T ATTEND?
They will be carried via video livestream on the Utilities Board’s website: https://iub.iowa.gov/
9. WHAT IS THE ECONOMIC IMPACT?
Energy Transfer says the entire four-state project will cost $3.78 billion, including the Iowa segment’s cost of $1.04 billion.
The company says 2,000 to 4,000 jobs would be provided in Iowa during construction, and Iowa would receive about $50 million in sales and income taxes during construction.
Energy Transfer has promised to hire at least half of the workers on Iowa’s portion from within the state, and it has reached an agreement to hire Iowa union workers. The company says most pipeline jobs would be skilled — welders, mechanics, electricians, pipe fitters and heavy equipment operators. Average annual income for workers would be $57,000. In 2017, the company says the pipeline would generate an estimated $24.7 million in local property taxes in Iowa.
However, Iowa State University economist David Swenson, as well as critics of the pipeline project, contend that projected benefits of the pipeline in Iowa exaggerate its positive impacts on the state’s economy. Swenson testified as a neutral witness last month in a deposition submitted by the Sierra Club, and he noted that the two major contractors recently hired for the Iowa segment are both from out of state.
Once completed, the pipeline would not have any distribution centers in Iowa, and it would employ only 12 to 15 permanent employees in the state, according to the company. That’s prompted pipeline critics to contend the primary beneficiaries of the project would be out-of-state business interests.
10. WHAT ENVIRONMENTAL PROTECTIONS ARE PLANNED?
Energy Transfer says that as the pipeline is constructed, every weld that joins each section of pipe would be inspected both visually and with X-rays to prevent leaks.
Valves would be installed along the pipeline to shut off the flow of oil through pipe sections in an emergency. The pipeline would be inspected and pressure-tested with water at higher than normal operating pressure before it would be placed in service. Special regulation devices would be installed to prevent oil pressure from exceeding safe limits, and an emergency shutdown system would be used to immediately and safety shut down pump stations and isolate pipe sections in an emergency.
The company also promises around-the-clock monitoring and regular inspections and testing, as well as efforts to educate the public about preventing damage. In addition, the company would coordinate with local emergency responders. It would post signs that mark the location of the pipeline and give a phone number to call before digging.
Energy Transfer also pledges to clean up the construction area after the pipeline is installed and to restore the land in compliance with state law.
11 . HOW MUCH LAND HAS BEEN ACQUIRED?
Vicki Granado, a spokeswoman for Dakota Access, says voluntary easement agreements have been signed for 72 percent of the properties along the Iowa section of the route and for 78 percent of the properties along the entire four-state route.
Company officials have estimated they would make $60 million in easement payments to Iowa property owners whose land the pipeline would cross.
If farmers don’t agree to voluntary easements, the Iowa Utilities Board could be asked to authorize the use of eminent domain, which would allow the company to take private land for right of way over a property owner’s objections after paying fair market compensation.
A Cherokee County District Court judge last month used a technicality to dismiss a lawsuit challenging the Iowa Utilities Board’s authority to grant eminent domain for the project. District Judge Carl Petersen said the three landowners who sued needed to first exhaust administrative remedies before they could sue the state agency. The judge did not rule whether Dakota Access is eligible for eminent domain.
12. ARE THERE OTHER REGULATORY HURDLES?
The pipeline project must win approval from regulators in three other states in addition to Iowa.
It also is subject to regulations of the federal Pipeline and Hazardous Materials Safety Administration, and to federal environmental laws that include the Clean Water Act, the Clean Air Act, the Rivers and Harbor Act, the Endangered Species Act and the Historical Preservation Act.
In addition, Dakota Access has promised to comply with the federal Native American Graves Protection and Repatriation Act. Pipeline opponents say that if the Iowa Utilities Board approves the project, they still intend to oppose environmental approvals from the U.S. Army Corps of Engineers and the Iowa Department of Natural Resources.