Iowa Regulators Approve Bakken Pipeline Permit

March 2016, Vol. 243, No. 3

DES MOINES, Iowa (AP) — The last state permit needed for a pipeline that will carry a half-million barrels of crude oil daily from North Dakota to Illinois was approved Thursday by Iowa utilities regulators, who also gave the Texas-based company authority to use eminent domain for land that property owners are unwilling to voluntarily provide.

The Iowa Utilities Board voted unanimously to approve a hazardous pipeline permit for the Dakota Access pipeline, called Bakken pipeline because it will stretch 346 miles from Bakken oil fields in North Dakota to Illinois, crossing through 18 Iowa counties and 1,300 parcels of land.

“Together we weighed all the issues presented by the parties and found the issues of safety, economic benefits, environmental factors and landowners’ rights to merit the most significant weight in reaching our decision,” board member Elizabeth Jacobs said.

The board decided that the pipeline met the requirements of Iowa law, which authorizes approval of a permit only if it “will promote the public convenience and necessity.”

After the vote, about a dozen people in the audience stood one by one and stated, “I am an Iowan and I vote no.” Board members quickly left the room without further comment. Outside of the building, opponents of the pipeline held a rally; at least one woman cried.

An appeal is likely from opponents, including individual landowners and a coalition of environmental and property rights groups who have voiced concerns about pipeline leaks that could harm farmland, rivers and streams. Some farmers also oppose the pipeline, complaining it will decrease land values, disrupt productivity and damage timber areas.

“While the ruling is certainly a setback and disappointing landowners will assess how to move forward on appeal and they are going through that process,” said John Murray, a Storm Lake attorney who represents the Northwest Iowa Landowners Association. “We need to read the entire ruling to fully inform ourselves.”

Lawsuits also are expected to challenge whether the board has the authority to grant eminent domain authority to a company building a pipeline for profit. Such authority is frequently given to publicly owned utilities, but not often to for-profit companies, like Dakota Access, which is owned by publicly traded companies Phillips 66 and Energy Transfer Partners.

Owners of 296 parcels of land have refused to sign easements allowing the pipeline to go through their property. In addition to an overall legal challenge, those people may fight land condemnation proceedings at the county level and appeal their individual cases to district court.

The pipeline has been in the works since 2014, after North Dakota Gov. Jack Dalrymple urged industry and government officials to build more pipelines to keep pace with North Dakota’s rapid oil production and reduce truck and oil train traffic. North Dakota is the nation’s No. 2 oil producer behind Texas.

Energy Transfer Partners, which did not immediately respond to a request for comment on Thursday, had set a completion date for the pipeline late this year. It already has begun stockpiling steel pipe in anticipation of getting the needed permits.

“This is fantastic and certainly a big step in getting Bakken barrels to quality markets and further displacing foreign barrels,” said Ron Ness, president of the North Dakota Petroleum Council, which represents hundreds of companies working in the state’s oil patch.

Iowa’s permit requires Dakota Access to file with the board proof of a $25 million general liability insurance policy that must be in effect for the life of the pipeline, as well as irrevocable guarantees that parent companies will be liable for any leaks or spills. It also must provide the board a timeline of construction and quarterly status reports beginning July 1.

Dakota Access says the construction in Iowa alone will create $1 billion in economic benefit, including creating thousands of jobs.

The project must still receive approval from the Iowa Department of Natural Resources and The U.S. Army Corps of Engineers. Both organizations said they are nearing completion of their reviews.

 

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