Pipeline Opponents Ask Iowa Board to Consider New US Oil Exports

February 2016, Vol. 243, No. 2

DES MOINES, Iowa (AP) — Opponents of a proposed pipeline project in Iowa want the state utilities board to take additional evidence that crude oil produced in the United States is now being shipped overseas, which would bolster their argument that North Dakota oil to be shipped through the so-called Bakken pipeline may have no benefits for Iowa.

It’s been more than two months since the Iowa Utilities Board ended hearings and gathering documents on the project, which would stretch diagonally across 1,300 parcels of land and 18 counties in Iowa at a cost of $1 billion.

Board members began deliberations last week on whether to grant a hazardous liquid pipeline permit to Dakota Access, a Texas-based company owned by major petroleum industry players, and whether the company can use eminent domain to force owners of 296 parcels of land to allow the pipeline to be buried on their property.

At issue is a 2006 law that prohibits private development of agriculture land without the owner’s consent — unless the developer is a utility. The board must decide whether Dakota Access meets the definition of a utility, such as an electricity or telephone provider. Opponents say it isn’t because it provides no service directly to Iowa residents.

Pipeline opponents claim it is not because there is no assurance the project will provide even an indirect service to Iowa residents, much less be a “public convenience and necessity” as required by law.

But Dakota Access has said the consumers will benefit by helping to reduce U.S. reliance on imported oil, stabilizing prices and improving national security. The company said the project creates jobs and provides an economic benefit to local communities during construction. It also contends that moving oil via pipeline is safer than rail or truck transportation.

At the time of the hearings, which ended in December, a 40-year ban on the export of domestically produced crude oil was in place. But Congress approved a bill that repealed the long-standing ban on Dec. 18, and two weeks later, ConocoPhillips sent a cargo ship loaded with Texas crude oil to Italy. Another ship left in early January to deliver light crude to Europe.

Des Moines attorney William Hanigan, who represents landowners opposing the pipeline, said the board was informed during hearings that the type of light crude oil to be transported by the pipeline had no foreign marketplace and would remain in the country for domestic use.

“This understanding is incorrect,” he said in a motion filed Thursday for a reopened record to consider the new information.

Dakota Access’ attorney filed a document Monday resisting such a reopening.

“The application before the board is for new, safe, efficient shipping of domestic oil from the Bakken to a hub at Patoka, IL where shippers want to move oil,” Bret Dublinske said. “What happens after that point does not impact whether this project promotes the public convenience and necessity.”

Iowa is the only state yet to approve the permit for the $3.78 billion Bakken pipeline, which will carry about 500,000 bpd from North Dakota to Illinois, crossing through Iowa and South Dakota. The project also must receive approval from the U.S. Army Corp of Engineers because the pipeline will be tunneled underneath the Mississippi River.

The board has scheduled another deliberation meeting for Friday, and a board spokesman says the board can rule on the motion to reopen the record at any time.

Written by David Pitt, Associated Press

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