IUB outlines key issues in crude oil pipeline deliberations

DES MOINES — The Iowa Utilities Board began deliberations Monday which could ultimately decide the fate of the proposed 1,134-mile Dakota Access crude oil pipeline in Iowa. The IUB met for two hours at its hearing room in Des Moines, laying the ground work for deliberations which are scheduled from 1 to 4 p.m. daily through Thursday.

The key requirement the board has to determine, as stated in Iowa Code section 479B.9, is if the pipeline will “promote the pubic convenience and necessity.” But staff outlined global, national and state issues Monday that will factor into their final decision to accept or deny Dakota Access, LLC’s permit to construct the pipeline and use eminent domain.

The pipeline company is hoping to lay 343.43 miles of underground pipe in Iowa, with 33.73 miles in rural areas of Jasper County from Mingo through rural Reasnor.

The IUB will weigh everything from U.S. energy independence and security to local job and tax implications. In December, IUB spokesperson Don Tormey said the three-member panel could reach a decision in February, but Iowa Code does not require the board to do so at the end of this week’s deliberations.

One of the top global issues the board will weigh is the pipeline’s potential contribution to climate change. IUB Chairperson Geri Huser noted this issue might spark an impasse between board members.

“I’m almost wishing climate change was further down the list. I know what I believe, and having witnessed Mr. (Nick) Wagner speaking on different things outside of this. I have my own knowledge and belief on where he probably is on this issue and we will probably never meet,” Huser said. “I’m wondering, with that knowledge, if (staff) can put together language on climate change that shows both sides.”

Oil spill remediation and environmental issues have been a key point of contention for pipeline detractors. Board staff noted that Dakota Access has already indicated it will take out a $25 million insurance policy on the pipeline for environmental and property damage in the case of a spill. This surpasses the $250,000 surety bond required in Iowa Code for hazardous liquid pipelines.

Cedar Rapids attorney Wallace Taylor has filed briefs in the case for the Sierra Club which details the cost of a crude oil spill could far surpass the $25 million mark. Dakota Access argues assets and revenue from itself and parent company Energy Transfer Partners would be made available in spill remediation.

Near the end of Monday’s deliberations, Huser asked staff if the board could require Dakota Access to exceed IUB permitting requirements outlined in Iowa Code section 479B, as well as mandating project quality go beyond federal pipeline safety protocols. Briefs filed in the case by project stakeholders claimed IUB could not exceed what is outlined in the code.

“I think that the board rules set forth minimum filing requirements and minimum procedural requirements that are applicable to a petition to a hazardous liquid pipeline permit,” said David Lynch, IUB’s general counsel. “But I believe if the case, the issues presented to the board and the arguments made by the parties, if those take us into areas that are beyond those rules, the board has the authority to consider those issues. The fact that minimum standards are set forth in the rules, that does not mean that’s what we’re limited to.”

One national issue the board will consider is sale of crude oil to foreign markets. Board staff indicated Monday that parties could ask for additional hearings if the IUB weighs a January change in U.S. policy lifting the export ban on unrefined, domestically produced crude oil into their decision. Prior to the IUB’s November/December hearings in Boone, crude pumped from the Bakken region would have stayed in the U.S. according to federal laws.

IUB member Nick Wagner told board staff Monday he didn’t see the need in holding additional hearings and does not see where the crude is consumed — domestically or shipped abroad — as a key issue in his decision.

“I can tell you, I’m going to circumvent a whole lot of trouble here, hopefully. The fact that you can or can’t export oil, that’s a law, right?” Wagner asked Lynch. “It’s not going to weigh very heavily on my decision.”

The pipeline’s potential impact in Iowa’s economy has been hotly debated over the past 1.5 years, and will be a top state issue considered by the IUB in its deliberations. Lynch indicated that filings by pipeline opponents claim Dakota Access has inflated total economic impact of the project from jobs, property tax benefits and increases to local commerce. Opponents argue by including easement payments into the final impact calculation, it’s adding money that is compensation for lost economic activity not new value. But Lynch said Dakota Access claims Iowa will see roughly $787 million in benefits even after excluding items opponents dispute.

Chad Carter is vice president business representative of International Union Operating Engineers Local 234. He disputes briefs filed with IUB that claim Iowa has a shortage of pipeline labor. Local 234 is anticipating 300 to 400 jobs created by DAPL. The pipeline company’s own estimate ranges from 2,000 to 4,000 temporary jobs in all. In an interview following Monday’s deliberations, Carter said similar pipeline projects need roughly one operator per mile of pipe. He said local 234 has at least 175 pipeliners plus other grades of workers to employ on DAPL.

“I see no problem with filling that manpower need here in Iowa,” he said.

Contact Mike Mendenhall at mmendenhall@newtondailynews.com