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Company eyes Iowa pipeline

BY QUENTIN MISIAG | JULY 23, 2014 5:00 AM

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Officials from a Texas energy conglomerate believe 5,000 to 8,000 new jobs could be created across America’s Heartland — if a massive, multistate oil pipeline transporting light, sweet crude through Iowa, becomes reality.

In a Tuesday interview with The Daily Iowan, a company official with Dallas-based Energy Transfer Partners L.P., the firm behind the ambitious project, said Iowa would reap the majority of the new construction jobs created should the 1,100-mile underground stretch be built.

The company, which has established refinery posts throughout Texas, California, Louisiana, and along the East Coast, believes that by bisecting diagonally through Iowa, the United States could dramatically cut down on its use of foreign oil by more quickly capturing and consuming North Dakota’s Bakken oil.

While not diving into cost specifics or outlining ways the company intends to serve as a prudent protector of the environment during the pipeline’s construction, company spokeswoman Vicki Granado said officials are optimistic about opening the route to service in the fourth quarter of 2016.

“This light sweet crude is used for gasoline and kerosene that we all use every day,” Granado said. “If we can use a domestic source of it instead of a foreign source, I think that’s what a lot of people are looking toward.”

Although geologists first uncovered oil in sparsely populated North Dakota in 1951, drilling did not ramp up until recent year-by-year gas price hikes and the invention of new technology made more economic sense.

The Bakken oil fields in the state’s far northwest quadrant have ushered in a new wave of economic prosperity over the last several years, as developers rush to break ground on temporary housing, restaurants, and retail outlets for field workers.

Between April 2010 and 2013, the nation’s third-least populous state added 50,802 new residents, according to U.S. census data.

Because the Bakken pipeline, which would run from North Dakota and South Dakota before making its way from Lyon County in the northwest portion of Iowa to Story County in the middle before finishing in Lee County in the southeastern sector, it is unclear as to what environmental or economic repercussions would be.

The route, which would dig 3 feet on average into the Iowa soil, must still gain approval from the Iowa Department of Natural Resources and the Iowa Utilities Board. Similar action must be approved in North Dakota, South Dakota, and Illinois before it can align with existing pipelines in Tennessee, Mississippi, Louisiana, and Texas.

That little is still known of the proposed project has brought some groups to questions its viability and safety.

David Goodner, a member of Iowa Citizens for Community Improvement, said “catastrophic” climate change would result with the muddying of Iowa’s waterways and widespread pollution.

“There’s no way on God’s green earth that this project would be beneficial to Iowa,” Goodner said. “We don’t want 320,000 gallons of toxic crude oil pumping throughout the state … on a daily basis.”

While out-of-the-state executives mull over the project’s details, Goodner said the group’s 3,000 members, who represent all 99 counties, are soliciting feedback from landowners — many of whom are farmers — whose properties lay in the proposed path. He has also been in correspondence with the Iowa Utilities Board to garner some clarity on the approval process, he said.

Rob Hillesland, the information specialist  for the Iowa Utilities Board, said the regulatory process of requesting a permit from the board, pursuant to Iowa Code chapter 479B, for construction and operation of Energy Transfer Partners’s proposed line had not begun as of Tuesday evening.

“The board will begin receiving statements in support or objections to the project when a case is initiated and an official record is opened with the board,” Hillesland wrote in an email.

Tina Hoffman, the communications director for the Iowa Economic Development Authority, said Energy Transfer Partners has not been on any development-board agendas, but she declined to comment on whether officials from the Economic Development Authority have spoken with the energy company.

Despite shelling out hundreds of millions of dollars in state tax breaks in recent years, from a $100 million in tax breaks for a new Lee County fertilizer plant to a Facebook data center, Hoffman said state funding will not be funneled into this proposed venture.

“That is the kind of project that would not be eligible for any funding,” she said, noting that only certain industries are eligible for state resources.

Kevin Baskins, a spokesman for the Iowa Department of Natural Resources, said if officials receive a specific pipeline proposal, department heads would consider the various permits associated with the pipeline structure. The agency will then analyze the potential environmental effects and impartially determine the appropriate permits and conditions.

Energy Transfers Partners’ Granado said the company plans to purchase land easements from property owners both temporarily and long-term.

The easements, which would forbid property owners in the route of the pipeline from constructing structures such as houses or barns on that portion of the property, would allow the company to steer clear of eminent-domain concerns that have plagued some national development projects.

Crops would still be able to be planted around the proposed pipeline, however, she said.

The average size of a land easement would be around 50 feet, and the landowner would receive compensation for giving up land rights, she said.

During his weekly news briefing on July 14, Gov. Terry Branstad said he was first notified of the pipeline project from news reports, and he expects negotiations and action to take considerable time.

“I have not taken a position on it; I just want to learn more about it, and I want to make sure that the procedures are appropriately followed,” Branstad said. “This is, as I understand it, a proposal that’s in a very beginning stage.”

Noting that transporting oil by pipeline is safer and more economical, Branstad said there is a lot to be learned about this particular plan and whether it will be feasible.


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