NEWS

Oil pipeline across Iowa proposed

William Petroski
bpetrosk@dmreg.com

A Texas energy company is hoping to build an 1,100-mile underground pipeline to transport a highly volatile type of crude oil from North Dakota's Bakken oil fields through 17 Iowa counties en route to Illinois.

The project still faces regulatory hurdles from the Iowa Utilities Board and the Iowa Department of Natural Resources, and from regulatory agencies in other states. But some Iowa environmental groups said Wednesday they were unaware of the proposal and were quick to voice concerns.

The pipeline would carry at least 320,000 barrels of crude daily, slicing diagonally across the heart of the state, from Lyon County in northwest Iowa through Polk County in central Iowa and Lee County to the southeast.

Oil production has been booming in North Dakota, now exceeding 1 million barrels per day through the use of hydraulic fracturing and horizontal drilling technologies. Most of the oil is being shipped to refineries by railroads, but at least three new pipelines have been proposed in an effort to improve safety and reduce costs.

"As a country, we are trying to become energy-independent and look at how we can domestically produce natural gas and crude oil so we are not using foreign supplies. This pipeline route is certainly working toward that energy independence," said Vicki Granado, a spokeswoman for Energy Transfer Partners L.P., the Dallas-based company proposing the project.

The company's board of directors has already approved plans for the 30-inch diameter pipeline, which is scheduled to begin operations by the end of 2016.

The pipeline would end in Patoka, Ill., about 65 miles east of St. Louis., where Energy Transfer Partners said there would be access to multiple markets via railroad connections to the Midwest and East Coast and an existing natural gas pipeline that would be converted to transport crude to the Texas Gulf Coast, officials said.

At this point, Energy Transfer Partners has not filed petitions with the Iowa Utilities Board for regulatory review, although company officials have asked to meet with board members to review state requirements, said board spokesman Rob Hillesland.

Iowa DNR spokesman Kevin Baskins said the pipeline would not require a DNR operational permit, but it would need environmental permits associated with the construction work.

Company officials said the route being considered is located, where possible, along existing pipeline corridors in an effort to minimize the environmental impact.

But environmental groups say they were caught off guard by the plans and will be working to learn more details about the project. State officials released information earlier this week that revealed the volatile Bakken crude is already being transported by two freight railroads through nine Iowa counties, raising fears about possible train accidents.

"I think there will be concerns about the impacts of the pipeline on current land use; about the impacts on air, water, and on wildlife and on farming," said Ralph Rosenberg, executive director of the Iowa Environmental Council, an alliance of organizations and individuals working to protect the environment.

Neila Seaman, director of the Iowa chapter of the Sierra Club, said, "We would not support the pipeline going through any protected areas or near aquifers or things like that." The Sierra Club is a critic of the proposed Keystone XL pipeline, which would transport crude oil from Canada into the United States. "It is a pipeline, and pipelines break," Seaman said.

Energy Transfer Partners owns and operates about 35,000 miles of pipelines. The company said in a statement it has already received commitments from shippers to carry the crude and has begun ordering steel and negotiating construction contracts for the project.

The pipeline is expected to create construction jobs and provide economic benefits for Iowa communities, Granado said, although she didn't have specifics. Public meetings will be held in communities along the proposed pipeline route to discuss the project, probably later this summer or early fall, she added.

Letters began arriving this week from Dakota Access LLC, an Energy Transfer Partners subsidiary, informing farmers and other landowners along the route of the pipeline plans. The letter includes a form seeking permission to survey their property. It says that when the construction is underway, a 150-foot-wide right of way will be requested, part of which will be used temporarily during construction. When the pipeline is finished, a permanent 50-foot easement will be required.

Eric Tabor, chief deputy for the Iowa attorney general's office, said he would advise Iowa property owners to consult an attorney if they have been contacted about the pipeline. "Before you sign anything or agree to an easement, you ought to know your legal rights," he added.

However, if the pipeline route is approved by state officials, Tabor said the company will have the right to use eminent domain to gain access to the property. That process allows a government entity or its agent to expropriate private property for public use, with payment of compensation.

State officials say the amount that landowners might receive in compensation for easements and damages would vary from one property to another and would be determined by fair market value.

State law provides standards for restoring farmland when a pipeline is built, including details such as repairing broken drainage tiles.

NORTH DAKOTA HOLDS 'PIPELINE SUMMIT"

GOVERNOR SPONSORED:

The explosive growth of crude oil production in North Dakota's Bakken region prompted Gov. Jack Dalrymple last month to hold the state's second annual "Pipeline Summit" to push for the construction of more oil and gas pipelines to bring products to markets.

PIPELINE BENEFITS: North Dakota is the nation's No. 2 oil producer, behind Texas, but about 70 percent is being transported by railroad tank cars. Dalrymple said more pipelines will reduce truck traffic, reduce natural gas flaring and create more markets for the state's oil and natural gas.

MEETING INDUSTRY NEEDS: "Increasing North Dakota's pipeline capacity, both gathering lines within North Dakota and larger, interstate pipelines, is critical to meeting the needs of an energy industry that continues to produce greater supplies of high-quality oil and natural gas," Dalrymple said in a statement.

TWO OTHER PIPELINES: North Dakota regulators in June approved plans for an Enbridge Inc. pipeline to transport nearly 225,000 barrels of crude oil daily from Tioga, N.D., to Superior, Wis. In addition, Enterprise Products Partners has proposed a 340,000-barrel-a-day pipeline that would extend 1,200 miles from the Bakken oil fields to a crude oil storage and distribution hub at Cushing, Okla.

By the numbers

1,100: The length of the pipeline in miles.

17: The number of Iowa counties the pipeline would cross on its way to Illinois.

320,000: The minimum number of barrels of crude oil the pipeline would transport daily.

1 million+: The number of barrels of crude oil produced daily in North Dakota.