Bakken pipeline

Bakken pipeline

Bakken pipeline preliminary route
Location
Country United States
General direction Southeastward
From Stanley, North Dakota
Passes through South Dakota, Iowa and Illinois
To Patoka, Illinois
General information
Type Crude oil
Owner Energy Transfer Partners, L.P (ETP)
Partners Phillips 66
Operator Dakota Access, LLC (an ETP subsidiary)
Expected 2016
Technical information
Length 1,134 mi (1,825 km)
Diameter 30 in (762 mm)

The Bakken Pipeline is a 1,134 mile long underground oil pipeline project for crude oil from the Bakken oil fields in Northwest North Dakota, through South Dakota, Iowa and to end in Patoka, Illinois, which Dakota Access, LLC, a subsidiary of the Dallas, Texas corporation Energy Transfer Partners, L.P. has been planning. The project became public in July 2014, and informational hearings for landowners in the four states took place between August 2014 and January 2015. Dakota Access submitted their plan to the Iowa Utilities Board (IUB) on 29 October 2014 applied for a permit in January 2015 and the IUB granted the permit including the use of eminent domain in March 2016 after some public controversy, the last of the 4 state regulators to do so.

Dakota Access has calculated the pipeline to cost $3.7 billion, with $189 million to pay landowners. As of March 2016 it had secured voluntary easements on 82 percent of Iowa land.

Project description

The pipeline would run from the Northwestern North Dakota Bakken formation and Three Forks hydrofracturing sites starting in Stanley, North Dakota in a Southeastward direction to end in Patoka, Illinois.[1] From there it could connect with a pipeline to the Gulf Coast for storage or for refinement and export, or reach East coast markets by rail. Energy Transfer owns a natural gas pipeline from Patoka south to storage terminals it owns through Sunoco Logistics Partners and terminals by Houston-based Phillips 66 in Nederland, Texas, which is retrofitted to crude oil.[1]

Dakota Access, LLC plans a permanent 50 foot easement and an up to 150 foot construction right of way for the pipeline. It has said the 30-inch diameter pipeline would be at least 48 inches underground from the top of the pipe or 2 feet below any drain tiles.[2] As of 2014 it projected that the pipe will carry in excess of 450,000 barrels per day of hydrofracked crude oil "based on contractual commitments to date".[1] The company estimates the pipeline to cost $3.7 billion and to create 40 permanent jobs, besides 8,200-12,000 temporary jobs. As of December 2014 informational meetings for landowners had been held in all counties of Iowa to explain right of way issues. The company was working on applications for a “hazardous liquid pipeline permit” with the four respective state agencies regulating utilities.[3] unlike town meetings no record of the statements or objections is taken.[4] To petition for the pipeline permit Dakota Access LLC must wait until at least 30 days after the informational meetings.

Purpose

Dakota Access spokespersons have argued the pipeline is needed to improve the overall safety to the public, helps the US to attain energy independence and is a more reliable transport to refineries, allowing rail constraints to ease

In January 2014, after rail derailments, the US Department of Transportation’s PHMSA had issued a safety alert, that Bakken crude should be handled carefully, because it may be more flammable than other grades.[5]

Ownership structure

Dakota Access, LLC is a fully owned subsidiary of Energy Transfer Partners LP (ETP), a Master limited partnership based in Dallas, Texas. Morningstar described ETP as a "steady source of income over the long haul", because of the Master limited partnership mandate for big dividends, avoiding the "double taxation" of dividends.[6]

In June 2014 Energy Transfer's board of directors approved of the Bakken pipeline. In October 2014 Houston-based Phillips 66 became a joint venture partner owning a 25 percent stake. Phillips co-owns the 'Energy Transfer' crude oil pipeline from Patoka to storage terminals in Nederland, Texas. It co-owns the storage terminals with Philadelphia-based Sunoco Logistics Partners.[1] Sunoco is a fully owned subsidiary of Energy Transfer Partners since 2012.[7]

North Dakota portion

The project would consist of 143 miles of oil gathering pipelines and 200 miles of larger transmission pipeline. It would start with a terminal in the Stanley area, and run west with 5 more terminals in Ramberg Station, Epping, Trenton, Watford City and Johnsons Corner before becoming a transmission line going through Williston, the Watford City area, south of Bismarck crossing the Missouri River again north of Cannon Ball.[8] Dakota Access held open house meetings to inform North Dakota landowners in October 2014.[3] Dakota Access intended to apply with the North Dakota Public Service Commission which As of 3 December 2014 had no such case on file.[9] As of February 2016 all state regulators but Iowa had approved the pipeline.[10] As of February 2016 all state regulators but Iowa had approved the pipeline.[10] As of March 2016 it had secured voluntary easements on 97 percent of North Dakota land, the highest proportion of all 4 affected states.[11]

South Dakota portion

The pipeline would route through Campbell, McPherson, Edmunds, Faulk and Spink counties.[12] The South Dakota Public Utilities Commission first learned about the project from landowners three to four weeks before being contacted by company officials in August, which the PUC chairman called "unusual”.[12] Dakota LLC held informational meetings for landowners in October 2014[3] and as of February 2016 it had approved the pipeline.[10] As of February 2016 all state regulators but Iowa had approved the pipeline.[10] As of March 2016 Dakota Access had secured voluntary easements on 93 percent of South Dakota land.[11]

Iowa portion

As of December 2014 Bakken shale oil is transported through nine Iowa counties only via three freight trains per week. The pipeline would pass about 343-miles diagonally through the following 18 Iowa counties of the state Lyon, Sioux, O'Brien, Cherokee, Buena Vista Sac, Calhoun, Webster, Boone, Story (which will have a pumping station), Polk, Jasper, Mahaska Keokuk, Wapello, Jefferson, Van Buren, and Lee.

Energy Transfer expects the project to create between 12 to 15 permanent jobs and 2,000 and 4,000 temporary jobs. The $1.35 billion capital investment would generate $33 million in Iowa sales tax during construction and $30 million in property tax in 2017.[3] Energy Transfer requested the analysis, which was prepared by "Strategic Economics Group" in West Des Moines, per the Des Moines Register.[13] The Group proclaims "Our research is data-driven, client-specific" on its website.[14] Dave Swenson, an Iowa State University research scientist in the department of economics, has said "the analysis overstates pipeline jobs and economic effects".[15]

Besides the Iowa Utilities Board, the pipeline will need to be approved by the Iowa Department of Natural Resources[16] to obtain local-impact permits for air quality, water discharge, stormwater, flood plain and sovereign lands, as the pipeline runs through state parks or public lakes.[3] The Army Corps of Engineers will need to issue a permit, because the pipeline routes through watersheds, and the Corps is not expected to block the project.[17]

Timeline

Iowa newspapers first picked up the topic in July 2014.[16][18]

On 29 July 2014, according to Dakota Access, it had met with the Iowa Utilities Board (IUB) for a first meeting. Dakota Access then wrote landowners in the path of the pipeline, requesting visits to survey or taking soil samples in preparation for voluntary easement or face condemnation of land under eminent domain. The Iowa attorney general's chief deputy said that if the IUB approves, Dakota Access will have the right to use eminent domain to gain access through a government agency.[18]

In October 2014 Iowa Governor Terry Branstad "rejected pleas from a coalition of Iowa community and environmental activists who asked him to block plans".[4]

On 29 October 2014 Dakota Access LLC submitted the project to the Iowa Utilities Board (IUB).[19]

Since 1 December 2014, informational meetings in each of the affected counties have been taking place,[20] where an official from the IUB, one from PMHSA and one from Dakota Access have presented information.[21] Three-hundred-and-fifty people showed up for the informational meeting in Fort Madison, Iowa.[22] More than 300 people attended Sioux Center's information meeting.[23] About 200 people attended in Oskaloosa, Iowa.[24] Opposition to the pipeline was voiced and many questions had no answers at the meeting in Storm Lake, Iowa.[25]

In January 2015, Dakota Access filed its pipeline application with the IUB.[26] and in February 2015, it was planning to file applications with the Iowa Department of Natural Resources for sovereign land and floodplain permits.[27]

In April 2015, Iowa Senate Study Bill 1276 and House Study Bill 249 advanced with both Senator Robert Hogg, D-Cedar Rapids and State Representative Bobby Kaufmann, R-Wilton in support; it required Energy Transfer's subsidiary Dakota Access "to obtain voluntary easements from 75 percent of property owners along the route before eminent domain could be authorized."[28]

In May 2015, a private landowner along the path of the pipeline accused a contractor trying to negotiate land rights for the pipeline by offering the services of a teenage prostitute in return for the landowner's cooperation.[29]

On November 12, 2015, the Iowa Utility Board heard public testimony with more than 275 people signed up opposing the pipeline. There were 10 days scheduled for hearings by Dakota Access. [30]

In February 2016, the IUB had not made a decision after 4 days of hearings .[10] Nick Wagner (politician), one of the 3 members of the Iowa Utilities Board and a former Republican state legislator was asked to recuse himself for a conflict of interest, but refused to do so.[31] On March 10, 2016, the Iowa Utility Board approved the Bakken Pipeline, on a vote of 3-0.[32] under the following conditions: "liability insurance of at least $25 million; guarantees that the parent companies of Dakota Access will pay for damages created by a pipeline leak or spill; a revised agricultural impact mitigation plan; a timeline for construction notices; modified condemnation easement forms; and a statement accepting the terms and condition's of the board's order."[33] One day later Dakota Access stated it had secured voluntary easements on 82 percent of the 1,295 affected Iowa land parcels.[11]

On March 17, Dakota Access filed motions with the IUB requesting expedited and confidential treatment to begin construction immediately. It said it met the conditions and that its liability insurance policies were trade secrets under Iowa law and "would serve no public purpose".[33]

Ties to Governor Branstad

In 2013, Iowa Governor Terry Branstad held a campaign fundraiser in Houston and he has subsequently said that he was unaware of Energy Transfer Partners proposal.[16]

A former Branstad re-election campaign staffer, Susan Fenton, who is now the director of government affairs with Des Moines public relations firm LS2, is handling public relations for Energy Transfer and met with IUB officials in July 2014.[1]

In September 2014, Des Moines lobbyist and Republican Party (United States) campaign consultant Craig Schoenfeld joined an Energy Transfer representative at a meeting with Story County, Iowa Supervisor Paul Toot and County Engineer Darren Moon.[1]

Illinois portion

Open House meetings for landowners took place in October 2014.[3] A webinar for Brown and Hancock County, Illinois took place in February 2015. Per filings before the Illinois Commerce Commission (ICC), Dakota Access still has no definite route. It made easements with only nine of 908 Illinois landowners, and it requested ICC grant it eminent domain, according to the Illinois Farm Bureau attorney.[34] As of 3 December 2014 no documents had been filed with the Illinois Commerce Commission.[35] and as of February 2016 it had approved the pipeline.[10] As of February 2016 all state regulators but Iowa had approved the pipeline.[10] As of March 2016 Dakota Access had secured voluntary easements on 92 percent of Illinois land.[11]

Concerns

Farmers are concerned about the disturbance of the land, tiling, soil erosion and soil quality.[23] Iowa fields contain a lot of drain tiles, which can be damaged. Even though Dakota Access LLC "would pay farmers for any damaged tiles buried 4 to 4.5 feet deep, any replacement tiles would not work as efficiently as the original tiles".[36] "And what guarantees or recourse they have if there are any issues". Farmers are concerned about leaks in the pipeline caused by destabilization, creating an environmental disaster.[36]

Landowners across the state are also deeply concerned about the implications of allowing the state to condemn privately owned land, particularly agricultural land, on behalf of a company that has not demonstrated any substantial public benefit to the residents of Iowa. [37]

According to a Des Moines Register poll, seventy-four percent of Iowans are opposed to the use of eminent domain condemnation on behalf of a private corporation. [38]

Conservation groups worry about safety, and the impacts on air, water, wildlife and farming, because "pipelines break".[18] The Iowa Environmental Council has stated it is "concerned whether the state has enough protections — from state government oversight to ensuring the company has enough money in reserve to address any harm caused by a spill".[15] Iowa state laws require pipeline owners to have only a $250,000 reserve fund. The Iowa chapter of the Sierra Club is "worried about the rights of landowners [...] concerned about [their] Dakota Access LLCs economic projections and whether there are really any benefits to Iowa."[15] Iowa Citizens for Community Improvement (ICCI) has called the pipeline "all risk and no reward" and the $ 250,000 surety bond "fiscally irresponsible". It has suggested raising it to at least $1 billion, indexed to inflation, would only match Alaska's precautions of protection.[39] A $1 billion surety bond is sensible in terms of the cost of cleaning up the Mayflower Spill of the Pegasus pipeline in 2013 as well, costs for the cleanup of which have reached $60 million for a spill of between 130,000 and 200,000 gallons of crude. The Bakken pipeline is projected to be capable of carrying 1 million gallons of crude an hour; any leak that is not stopped within the hour could quickly result in hundreds of millions of dollars in property and irrevocable environmental damage.

The Science & Environmental Health Network rejects the pipeline on the following grounds: "The commonwealth is the basis of the Iowa economy.[...] Approving the pipeline would be a violation of Iowa’s fiduciary and public trust responsibilities to the people of Iowa, because it harms the commons.[...] It is the citizen’s obligation to withdraw its consent from government actions that threaten the commonwealth and future generations.[...] Eminent domain is the unique power of government to move private property into the commons where it serves as a public good. It should not be used to privilege a private corporation that will destroy the commons.[...] When the pipeline leaks, Iowa will be left with the costs of cleanup. This is a violation of the Iowa St. Constitution which says: Credit not to be loaned. SECTION 1. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, or corporation; and the state shall never assume, or become responsible for, the debts or liabilities of any individual, association, or corporation, unless incurred in time of war for the benefit of the state."[40]

Others have stated their concern for global climate change and "to stop the addiction on fossil fuels because our biosphere cannot take it anymore.”[41] Unclear has remained, what specifically happens when the pipeline inevitably leaks, how residents would know of a leak, why the company asks for a permanent easement of farmland when oil rights can only be obtained for 25 years at a time, who the majority shareholders of Dakota Access are and where Energy Transfer's guarantee of liability for newly established Dakota Access, LLC is, if it is only required to have a $250,000 bond in case of damages.[25]

KCRG-TV reported that former Iowa law maker Ed Fallon started a 32 day hike in Keokuk on March 2, 2015 along the length of the Bakken pipeline to protest and rally support.[42]

The Meskwaki tribe opposes the Bakken pipeline through Iowa for numerous reasons; tribal chairwoman Judith Bender "...said in her letter to the Iowa Utilities Board that she is concerned that the Bakken pipeline could be used as a replacement if the Keystone XL pipeline is not built."[43]

See also

References

  1. 1 2 3 4 5 6 Gavin Aronsen (28 October 2014). "Energy Transfer, Phillips 66 partner on Iowa pipeline". Ames Tribune.
  2. ↑ William Petroski (25 August 2014). "Should farmers make way for the Bakken pipeline?". Press Citizen. Retrieved 4 December 2014.
  3. 1 2 3 4 5 6 Chelsea Keenan (1 October 2014). "Texas energy company releases more details on pipeline". Cedar Rapids Gazette (SourceMedia, Investcorp). Retrieved 4 December 2014.
  4. 1 2 William Petroski (October 14, 2014). "Branstad won't stop Bakken oil pipeline through Iowa". Des Moines Register. Retrieved 1 December 2014.
  5. ↑ PMHSA (2 January 2014). "Preliminary Guidance from OPERATION CLASSIFICATION" (Safety Alert). Pipeline and Hazardous Materials Safety Administration. Retrieved 2 December 2014.
  6. ↑ Jeff Reeves (19 November 2014). "3 stocks that are thriving as Keystone XL fails and oil plummets". MarketWatch (Morningstar, Inc). Retrieved 6 December 2014.
  7. ↑ Swetha Gopinath and Michael Erman Energy Transfer Partners to buy Sunoco for $5.35 billion Reuters, 30 April 2012, retrieved 12 December 2015
  8. ↑ Mike Nowatzki (30 August 2014). "'Stealth' North Dakota Bakken oil pipeline project faces fight". Pioneer Press. Retrieved 4 December 2014.
  9. ↑ "Case search". North Dakota Public Service Commission. The State of North Dakota. Retrieved 4 December 2014.
  10. 1 2 3 4 5 6 7 William Petroski, Iowa board struggles with pipeline decision Des Moines Register, February 12, 2016.
  11. 1 2 3 4 William Petroski Bakken pipeline secures 82 percent of Iowa land parcels Des Moines Register, 11 March 2016
  12. 1 2 Connie Sieh Groop (15 September 2014). "Bakken pipeline would cross northeastern South Dakota to get to Illinois". Aberdeen News (Schurz Communications). Retrieved 4 December 2014.
  13. ↑ Donnelle Eller (12 November 2014). "Pipeline could bring $1.1 billion to Iowa". Des Moines Register. Retrieved 6 December 2014.
  14. ↑ economicsgroup.com (n.d.). "We are economic and planning consultants". Strategic Economics Group, Inc. Retrieved 6 December 2014.
  15. 1 2 3 Douanne Eller (4 December 2014). "Unlikely allies join to fight pipeline project". Retrieved 4 December 2014.
  16. 1 2 3 William Petroski (14 July 2014). "Branstad undecided on Iowa oil pipeline plans". Des Moines Register.
  17. ↑ B.A. Morelli. Corps of Engineers unlikely to block Bakken pipeline through Iowa. The Gazette, March 11, 2016
  18. 1 2 3 William Petroski (10 July 2014). "Oil pipeline across Iowa proposed". Des Moines Register (Gannett Company). Retrieved 4 December 2014.
  19. ↑ Iowa Utilities Board (n.d.). "Docket Summary for Docket HLP-2014-0001". Retrieved 1 December 2014.
  20. ↑ Rod Boshart (1 December 2014). "Iowa Iowa oil pipeline meetings start today". The Gazette, Cedar Rapids.
  21. ↑ Joyce Russell (2 December 2014). "Landowners Question Bakken Pipeline". Iowa Public Radio (NPR.org). Retrieved 3 December 2014.
  22. ↑ Associated Press (1 December 2014). "Concerns voiced at oil pipeline meeting in S.E. Iowa".
  23. 1 2 Rachael Krause (1 December 2014). "Hundreds Pack Inside Sioux Center Meeting On Proposed Dakota Access Pipeline Project". SiouxLandMatters.com (Nexstar Broadcasting, Inc.). Retrieved 4 December 2014.
  24. ↑ Mark Tauscheck (3 December 2014). "Iowans pack meeting on new oil pipeline". KCCI-TV. (Des Moines Hearst Television Inc.). Retrieved 4 December 2014.
  25. 1 2 Megan Naylor (5 December 2014). "Oil pipeline plan meets with BV resistance". The Daily Reporter (Northwest Iowa Publishing). Retrieved 6 December 2014.
  26. ↑ William Petroski (20 January 2015). "Bakken pipeline OK requested; setting up Iowa showdown". Des Moines Register. Retrieved 10 February 2015.
  27. ↑ Jon LloydProposed Bakken pipeline construction requires at least two DNR permits Boone News Republican (GateHouse Media, Inc.), 7 February, 2015
  28. ↑ William Petroski (28 April 2015). "Iowa bills place hurdles for Bakken pipeline, powerline". Des Moines Regicter. Retrieved 1 May 2015.
  29. ↑ O. Kay Henderson (11 May 2015). "Southeast Iowa landowner accuses pipeline agent of improper offer". RadioIowa. Retrieved 11 May 2015.
  30. ↑ Amy Mayer. Public Voices Support And Oppose Bakken Pipeline Across Iowa Iowa Public Radio,November 12, 2015
  31. ↑ William Petroski Iowa regulator won't step down from pipeline case Des Moines Register, February 18, 2016
  32. ↑ Kim St. Onge IUB announces decision on oil pipeline KCCI, March 9, 2016
  33. 1 2 William Petroski, Bakken pipeline firm seeks expedited construction permit Des Moines Register, March 17, 2016
  34. ↑ "Two county Farm Bureaus to host crude oil pipeline webinar". Illinois Farm Bureau. Feb 6, 2015. Retrieved 3 March 2015.
  35. ↑ "Search". Illinois Commerce Commission. Retrieved 4 December 2014.
  36. 1 2 Jon Lloyd (15 November 2014). "Pipeline meeting to take place next month in Boone". Boone News Republican (Stephens Media LLC). Retrieved 4 December 2014.
  37. ↑ Petroski, William (February 9, 2016). "Reporter". Des Moines Register.
  38. ↑ "Iowa Poll: Iowans back energy projects, but oppose eminent domain". www.desmoinesregister.com. Retrieved March 2, 2015.
  39. ↑ Nathan Malachowski (17 January 2015). "Branstad bullying Legislature over pipeline". Des Moines Register. Retrieved 10 February 2015.
  40. ↑ Carolyn Raffensperger (5 December 2014). "A Legal and Political Analysis of the Proposed Bakken Oil Pipeline in Iowa". SEHN. Retrieved 2 February 2015.
  41. ↑ Jeff Hunt (3 December 2014). "Pipeline's first step". The Daily Gate City, Keokuk, Iowa,. Retrieved 4 December 2014.
  42. ↑ Larry Burkum (6 March 2015). "Former Iowa lawmaker walking to protest proposed pipeline". KCRG-TV9 (ABC News). Retrieved 8 April 2015.
  43. ↑ William Petroski (March 16, 2015). "Meskwaki tribe opposes Bakken oil pipeline through Iowa". USA Today. Retrieved 8 April 2015.
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