Did Bakken pipeline construction jump the gun?

Regulators hear complaints, but Dakota Access says it's not in violation

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DES MOINES — State regulators Tuesday discussed imposing penalties on a Texas oil company planning to build an interstate crude oil pipeline for beginning construction early.

Dakota Access LLC received key approvals necessary to construct a $3.8 billion pipeline from North Dakota, through South Dakota and Iowa, to a terminal in Illinois. But it hasn’t yet met certain requirements before the permit is official in Iowa.

Iowa Utility Board staff members said they’ve received letters contending construction already has begun on a substation and tree clearing on the pipeline route. Dakota Access said it has begun only preparations.

“We are readying for the start of construction, but no construction has begun,” Dakota Access spokeswoman Vicki Granado said by email.

The board met to discuss issues raised in filings made after the March 10 permit order, including whether corporate agreements should be kept confidential, whether to conduct a new historical review requested by Iowa Tribe of Kansas and Nebraska, and how to handle delays caused by landowners resistant to the pipeline crossing their property.

The board concluded its meeting Tuesday in closed session. The board plans to hold additional meetings on Thursday and April 4.

Wally Taylor of the Sierra Club said he plans to either file a petition for reconsideration because of early work on the pipeline, essentially asking the board to rescind the permit, or petition for judicial review of the order, which must be made by March 31.

Taylor said he would challenge whether the board has authority to grant the use of eminent domain for the pipeline project.

Under the board’s order approving the hazardous liquid pipeline permit, construction can’t begin until the permit becomes official after conditions are met.

“If the Iowa Utilities Board determines Dakota Access violated the order by beginning construction before the permit was issued, we could levy civil penalties against Dakota Access,” said David Lynch, staff general counsel.

Lynch said an agricultural impact mitigation plan identifies activities such as staking the centerline of the pipeline route and clearing of trees in the construction corridor as construction.

Lynch noted little precedent exists on early construction. The board once made an exception to allow early construction activity in a case for an electric transmission line, he said.

Under state code, the board could levy a fine of $1,000 per day of the violation, up to $200,000.

Dakota Access acknowledged some preparation — not construction — is occurring, but only on sites where voluntary property easements have been granted.

Lynch said staff would investigate what is occurring. Board members at the meeting offered little clue as to how they viewed the matter.

In other issues:

• Staff recommended the board deny Dakota Access’ request to seal documents about a required $25 million insurance plan other than “premiums and identifying information.”

• Board members said they would not weigh in on the Iowa Tribe of Kansas and Nebraska’s request for additional review of cultural and archaeological impacts of the pipeline. Those impacts are already noted in the case record and the review would fall under the purview of the Army Corps of Engineers.

• Dakota Access will need to provide property owners a two-week notice before construction, a 48-hour written notice before construction and at least a 24-hour written notice to inspectors before any trenching or backfilling of a construction area.

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