NEWS

Iowa bills place hurdles for Bakken pipeline, powerline

William Petroski
bpetrosk@dmreg.com
Pumpjacks are seen in an aerial view in 2013 near Watford City, N.D. North Dakota has seen a boom in oil production thanks to new drilling techniques including horizontal drilling and hydraulic fracturing.

Legislation to restrict the use of eminent domain for the proposed Bakken crude oil pipeline and the Rock Island Clean Line wind energy transmission line was advanced Tuesday by Iowa House and Senate subcommittees.

Opponents of the oil pipeline and the high-voltage electricity line, as well as property rights advocates, are strongly supporting the legislation. Both bills would make it more difficult for either project to proceed because they would require the companies to obtain voluntary easements from 75 percent of property owners along the route before eminent domain could be authorized for the remaining parcels.

The Bakken oil pipeline, proposed by a unit of Dallas-based Energy Transfer Partners, would cross 343 miles through Iowa while transporting North Dakota crude oil to Illinois. The Rock Island Clean Line, proposed by a subsidiary of Houston-based Clean Line Energy Partners, would cross about 375 miles through Iowa while carrying electricity generated from wind turbines into Illinois. Neither company is an Iowa utility and neither would serve Iowa customers, which are key factors behind the legislation.

Robert Hogg

The legislation was advanced to the full Senate Government Oversight Committee and Sen. Robert Hogg, D-Cedar Rapids, the panel's chairman, said he hopes for additional discussion soon on the bill. Rep. Bobby Kaufmann, R-Wilton, chairman of the House Government Oversight Committee, spoke passionately in favor of the proposed legislation, which was advanced to his full committee as well.

"To me, it doesn't matter if you are pro- or anti-wind or if you are pro- or anti-oil, this bill is about property rights," Kaufmann said. "It is about whether out-of-state companies that do not have a responsibility to serve Iowans can force themselves upon Iowa farm ground."

State Rep. Bobby Kaufmann, R-Wilton

Eminent domain would allow a company to take private land for right of way over a property owner's objections, after paying fair market compensation. The Iowa Utilities Board has not decided yet whether either project should proceed. The two bills, Senate Study Bill 1276 and House Study Bill 249, were both rewritten Tuesday with major amendments.

Representatives of both Energy Transfer Partners and Clean Line Energy Partners spoke against the legislation Tuesday at a joint House-Senate subcommittee meeting in an Iowa Capitol room jammed with landowners and lobbyists. Besides meeting a threshold for voluntary easements, the legislation says that if a non-utility wants to construct a high-voltage transmission line or a crude oil pipeline, that it should be recommended in a report by the Iowa Economic Development Authority. In addition, the bills would allow the Iowa Utilities Board to order the companies to pay lawyers' fees for landowners along the route if they required financial aid.

Jeff Boeyink, representing Energy Transfer Partners, said the company opposes retroactive legislation that would specifically target its pipeline project, which would cost nearly $4 billion and provide thousands of construction jobs. Such legislation would be unfair and would send a bad message to companies looking at locating in Iowa if the rules can be changed while the approval process for a project is underway, he said.

At far left, LaVerne Johnson, who owns land near Pilot Mound in Boone County, speaks to a joint meeting of House and Senate subcommittees at the Iowa Capitol on April 28, 2015. The panels were considering bills to restrict the use of eminent domain for certain pipeline and electric transmission line projects.

Paula Dierenfeld, representing Clean Line Energy Partners, said her company currently has obtained voluntary easements from about 15 to 20 percent of property owners and has a goal of obtaining "well in excess of 90 percent" voluntary easements. But she questioned the proposed requirement to obtain 75 percent voluntary sign-ups before eminent domain can be requested. She said a company could spend millions of dollars on obtaining easements without even knowing whether a project could move forward. She asked whether any businesses would support that idea.

Richie Schmidt, a spokesman for Laborers International Union of North America in Des Moines, also spoke against the bill, saying the pipeline would provide a more environmentally safe way to transport oil than railroad tank cars, while the electric transmission line would support renewable energy. He also said the construction jobs provided by both projects are badly needed by Iowa workers, adding, "These kind of jobs sustain careers."

Opponents of both projects said many Iowa landowners don't want to voluntarily give up their property rights. Several speakers complained that land agents from Energy Transfer Partners have been unscrupulous in using high-pressure tactics in efforts to secure easements for the pipeline project.

Boeyink said Energy Transfer Partners won't tolerate land agents who act unethically, adding that some agents have been fired for acting improperly. "We will deal with that swiftly and directly," he said.

IOWA POLL: Iowans back energy projects, but oppose eminent domain

John Murray, a lawyer from Storm Lake whose mother owns land in Buena Vista County in the path of the proposed pipeline, said many landowners are concerned about the pipeline project. He said he met with officials of Dakota Access and Energy Transfer Partners, which are privately held firms, and they gave him a blunt message:

"I was told at that time that this pipeline was going to happen. It was an assertion of inevitability. There was nothing I could do about it," Murray said.

Wally Taylor of Cedar Rapids, a lawyer for the Iowa chapter of the Sierra Club, said his organization is worried about an "extreme risk to property and the environment" if the pipeline project proceeds. There is no doubt that oil spills will occur and it will be many years before the land can be farmed again, he added.

RELATED: Bakken pipeline OK requested, setting up showdown in Iowa

It's also clear that if Bakken crude oil is transported through Iowa, it will be shipped from Illinois onto the world petroleum market via the Gulf of Mexico, Taylor said. "This is all about private property. It isn't about benefiting Iowa or the nation," he said. Similarly, the Rock Island Clean Line would not provide a way for Iowans to connect to the line or to obtain energy from the transmission facility, he added.

Lawyer Jim Carney of Des Moines, representing The Preservation of Rural Iowa Alliance, an organization of property owners along the proposed Rock Island Clean Line route, said he endorsed the House and Senate legislation.

"You would have a high voltage, direct-current transmission line running from one end of this state to another and not serving one Iowan. Does that serve a public use or a public purpose? We believe very strongly it does not," Carney said.

The Des Moines Register's Iowa Poll surveyed adult Iowans in February and found a majority of Iowans support plans for the crude oil pipeline in Iowa and the wind electricity transmission line project, but they overwhelmingly oppose the use of eminent domain for both projects. Fifty-seven percent backed the pipeline and 64 percent supported the high-voltage transmission line, but 74 percent opposed authorizing eminent domain for the projects.