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UPDATED: Iowa approves Bakken oil pipeline

DES MOINES, Iowa -- Almost as quickly as state regulators on Thursday unanimously approved a permit for a $3.8 billion, 30-inch diameter interstate pipeline, opponents announced plans to appeal the decision to district court, saying "this is not ...

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Landowners and protestors of at the Iowa Utilities Board in Des Moines on Thurs. Mar. 10, 2016. (Rebecca F. Miller/The Gazette)


DES MOINES, Iowa - Almost as quickly as state regulators on Thursday unanimously approved a permit for a $3.8 billion, 30-inch diameter interstate pipeline, opponents announced plans to appeal the decision to district court, saying “this is not over.”

The decision was highly watched because it pits private-property rights and environmental concerns against domestic energy security, job creation and economic benefits.

The approval also gave a private company - Dakota Access, a subsidiary of Texas-based Energy Transfer Partners - the power to use eminent domain to involuntarily take private farmland in the name of a for-profit endeavor.


“I am really disappointed they didn’t stand up for landowner rights in this state,” said Pam Alexander, a landowner from Mahaska County. “I think it is going to be detrimental for this whole state, our land, our water if this thing leaks. I have no confidence in Dakota Access being able to build this and take care of this pipeline.”

The Iowa Utilities Board  voted 3-0 to adopt a 175-page order granting the hazardous liquid pipeline permit to Dakota Access, and the power to use eminent domain - with some terms and conditions - to condemn land needed for the route. Landowners still would be paid at market rate for the easements to put in the pipeline.

The pipeline would cut diagonally 346 miles through 18 Iowa counties, as it carries up to 570,000 barrels per day of light sweet crude oil 1,168 miles from the Bakken region of North Dakota, through South Dakota and Iowa to a distribution hub in Illinois. The oil then would be shipped to refineries on the Gulf Coast for domestic use, the company said.

“We find that, subject to the terms and conditions that are set forth in the order, that the proposed pipeline will promote the public convenience and necessity,” board member Nick Wagner said just before the vote.

Iowa was the last major hurdle for the pipeline. Boards in South Dakota, North Dakota and Illinois approved the pipeline in December and January.

After the IUB, the Iowa Department of Natural Resources also granted permit approval on Thursday for state waterway crossings, including the Mississippi River in Lee County, noting Dakota Access will pay for a $400,000 mitigation plan to address natural resource effects.

“We have thoroughly reviewed this application and do not find any long-term negative impact to the environment or natural resources,” DNR Director Chuck Gipp said.

The DNR permit will be conditional until authorization comes from the U.S. Fish and Wildlife Service.


The Army Corps of Engineers also must grant certain permissions related to waterway crossings and endangered species. The agency did not return messages seeking comment on Thursday.

‘Public benefits’

Wally Taylor, a Sierra Club lawyer, said the Sierra Club and other landowner groups plan to file an appeal within 30 days. Challenges will come on the board’s determination that the pipeline serves the public good and that Dakota Access can have the authority to exercise eminent domain, he said.

“They are relying a lot on what Dakota Access says they will do, but there is no proof they will do it,” he said. “There is no substantiation, no documentation no handle the board has if Dakota Access doesn’t follow through.”

In October 2015, a district court judge dismissed an earlier lawsuit filed by landowners challenging the pipeline. The judge ruled Iowa law spells out the IUB’s authority to grant eminent domain, and the landowners must first follow the board’s procedures for hearing challenges before asking for court action.

The IUB spoke publicly for about seven minutes and quickly voted after meeting behind closed doors with staff for a day and half to review the order. The board offered minimal explanation of its decision or the scope of the eminent domain terms.

Board member Libby Jacobs said the most significant weight was given to “issues of safety, economic benefits, environmental factors and landowners rights.”

“We weighed the public benefits of the proposed hazardous liquid pipeline project against the private and public costs and other detriments as established by the evidence on the record,” she said.


Board members took no questions from the media or public. In closing the meeting, Board Chairwoman Geri Huser asked if any additional business was to come before the board, but board members got up and left as opponents in the crowd began speaking out.

“I am an Iowan and I vote no. We will stop this pipeline,” one woman shouted, among a series of similar comments.

‘Very pleased’

The order and an IUB news release provided after the meeting detailed more background on the thinking of the board as well as the restrictions of eminent domain. The news release noted the board would not answer questions due to the possibility of a rehearing, which can be requested by any party within 20 days, and a judicial review.

The board was most swayed by safety advantages of oil transportation by pipeline over alternatives such as rail, as well as the job creation and economic benefits of a project during that construction that will bring $787 million to Iowa. Labor unions, which strongly backed the project, estimated 4,000 construction jobs would be created in Iowa.

“We are very pleased,” said Chad Carter, vice president of the International Union of Operating Engineers. “It’s going to be good for our members here in Iowa. It’s going to be good for farmers that need the product. There isn’t one piece of equipment we operate that doesn’t use a fossil fuel.”

Carter estimated the project will mean 300 or 400 jobs for his union alone - Local No. 234 - in Iowa. Carter said he hoped work would begin in May, if other orders and legal challenges wrapped up quickly.

Dakota Access initially had hoped to have the pipeline operational by the end of this year.

The positive attributes outweighed the negative factors, including environmental risks and intrusion on private landowners, according to the board.

However, the concerns helped shape the conditions spelled out in the order, which included that Dakota Access:

- Maintain at least $25 million in general liability insurance

- Guarantee its parent company would remediate damages from a leak or spill

-Continue to work toward voluntary easements until the county compensation commissions review the condemnation plan

- Revise the Agricultural Impact Mitigation Plan to include landowner notifications and separation of topsoil.

Dakota Access has secured 80 percent of the Iowa land needed through voluntary easements. It has yet to strike a deal for another 296 parcels, which would be subject to involuntary eminent domain proceedings by compensation commission in each of the 18 counties.

Dakota Access must file a statement accepting the terms and conditions before the permit is issued. Dakota Access didn’t return several messages seeking comment.

Gov. Terry Branstad - who did say if he had land on the route he would not stand in its way - said he respected the board’s decision.

“Gov. Branstad and Lt. Gov. (Kim) Reynolds appreciate the thorough, thoughtful and transparent process conducted by the Iowa Utilities Board in reaching a decision,” according to a statement from the governor’s office. “The Iowa Utilities Board allowed many different stakeholders to voice their opinions on the Bakken pipeline and the Governor and Lt. Governor respect the decision made.”

Landowners and protestors of the Dakota Access Pipeline project stand and voice their opinions as members of the Iowa Utilities Board exit the room at the IUB in Des Moines on Thurs. Mar. 10, 2016. (Rebecca F. Miller/The Gazette)

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