IUB grants Dakota Access permit, 'minimum' eminent domain rights

DES MOINES — The Iowa Utilities Board approved a construction permit for the Dakota Access crude oil pipeline with a unanimous 3-0 vote on Thursday, one of the $3.7 billion, 1,168-mile project’s last major regulatory hurdles in the state.

The three-member, governor appointed panel only returned to open session for seven minutes Thursday to deliver its ruling and explain the order. This followed five days of open deliberations in February and at least one day of closed-door discussion Wednesday at the board’s hearing room near the state capitol in Des Moines.

The board has granted Dakota Access, LLC’s pipeline construction permit allowing it to travel through 18 Iowa counties and will require landowners to enter into eminent domain negotiations with the private Texas-based company. This is a defeat for environmentalists and landowners who fought voluntary easements and were against the use of eminent domain for the pipeline’s construction.

Dakota Access — subsidiary of Energy Transfer Partners — has been pushing the project for the last 1.5 years. The pipeline will stretch from the Bakken Oil Fields of North Dakota to a hub in Patoka, Ill. and carry up to 570,000 barrels of crude oil per day through Iowa. ETP plans 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.

IUB Chairperson Geri Huser and members Libby Jacobs and Nick Wagner ruled that the pipeline meets requirements of public convenience and necessity outlined in Iowa Code 479B.9. In a press release distributed Thursday by IUB spokesperson Don Tormey, the board said it felt benefits of the project outweigh public and private costs.

“For the benefit of those in the audience, as we all — individually and collectively — spent thoughtful deliberation time on this matter, I think the order that is before us indicates how we approached the issues,” Jacobs said.

The board member said the issues of safety, economic benefit, environmental factors and landowners’ rights “merited the most significant weight” in their decision. Ultimately, the board deemed transporting the Bakken crude oil via pipeline is safer than its current primary mode of shipping — rail car. Members also argued the 2,000 to 4,000 estimated jobs and other economic benefits associated with the pipeline’s construction and operation would generate at least $787 million for Iowa in the short term, and the project is estimated to generate $27.4 million in new property tax revenue for local governments while the pipeline is in use.

The permit is conditional until Dakota Access meets all stipulations outlined in the IUB’s ruling. The board detailed expanded conditions in its order beyond base requirements dictated in Iowa Code. The board said Dakota Access must:

• Obtain and maintain general liability insurance policy of $25 million. Iowa Code only mandates $250,000 in liability coverage.

• File “unconditional and irrevocable guarantees” from parent companies — including ETP — for remediation of damages from a leak or spill.

• Modify easement forms on properties utilizing eminent domain, removing language that would have allowed above-ground valves and given the company access to all portions of any condemned parcel.

• Continue to offer to purchase voluntary easements — with the same terms, conditions and best prices — from landowners until county compensation commissions assess the damages on each taken property.

• File a revised agricultural mitigation plan to include landowner notifications on construction timelines and separation of all topsoil.

• File a winter construction plan. Dakota Access officials claimed during the 12-day November and December hearings in Boone the project did not need a winter construction plan as the company intends to finish excavation and construction before the winter months.

• File quarterly status reports.

• File a statement accepting the board’s terms and conditions in the permit.

The 174-page order culminates a process which included 18 pubic information meetings since 2014, 12 days of public hearings, more than 3,500 pages of transcripts, 43 intervenors, nearly 70 witnesses’ testimony and five days of public deliberations.

The IUB was the last of the four major public utility commissions to confirm the project. North Dakota, South Dakota and Illinois utility regulators approved segments of the project in late 2015 and in January.

The pipeline company originally hoped to begin construction of the pipeline this spring and complete construction by the end of 2016. The Newton Daily News attempted to contact Dakota Access spokesperson Vicki Granado to ask if a new timeline is in development, but an email was not returned Thursday by presstime.

Within hours of the IUB’s decision, the Iowa Department of Natural Resources also approved a separate construction permit for the DAPL, clearing the way for project contractors to lay piping beneath public lands and waterways in Lyon, Boone and Lee counties.

A public hearing was held in December to gather input from supporters and opponents of excavating in the Big Sioux River Complex Wildlife Management Area and boring under the Big Sioux, Des Moines and Mississippi Rivers.

In a statement Thursday, IDNR Director Chuck Gipp said a $400,000 mitigation plan has been negotiated with Dakota Access to restore and enhance the type of habitat affected by the construction of the pipeline. The pipeline company is financially obligated to implement the plan, and the permit is conditional awaiting authorization from the U.S. Fish and Wildlife Service.

Gipp said the IDNR’s does not see its ruling as unprecedented.

“Iowa has thousands of miles of pipeline underground including many that are under public property. This request and the subsequent permit we would be issuing is not precedent setting,” Gipp said.

Contact Mike Mendenhall at mmendenhall@newtondailynews.com