Regulators won’t penalize Bakken pipeline developers for early construction

A Texas oil company violated terms of a hazardous liquid pipeline permit by starting construction early without notifying inspectors, but Iowa regulators will not impose a fine, which could have reached $200,000, according to an order released Tuesday.

The Iowa Utilities Board determined the early construction occurred but was only on property where developer Dakota Access LLC had obtained voluntary easements; had permission of the landowners; and done work that consisted only of staking for the pipeline and clearing trees using hand tools.

'In this situation, the board determines that Dakota Access should not be assessed civil penalties,” the utilities board stated in the order. 'However, Dakota Access is put on notice that any future violations of the board's orders, especially the requirement for notice to county inspectors, may result in action by the board, including civil penalties.”

The Iowa regulatory board, as well as utility regulators in North Dakota, South Dakota and Illinois, have all issued permits for the interstate pipeline, but the Army Corps of Engineers has yet to sign off, which is blocking construction. Iowa granted approval in March and issued the permit in April.

As part of an agricultural mitigation plan agreed to by Dakota Access, the company was to hold any construction activity until after all permissions were in hand. The agency had refuted the accusation, calling the activity 'pre-construction.”

Dakota Access plans to build a $3.8 billion, 1,168-mile, underground pipeline from North Dakota oil fields, though South Dakota and Iowa to a terminal in Illinois. The 30-inch diameter pipe would pass through 18 counties in Iowa. Dakota Access has estimated it is losing $1 million every day the project is delayed.

A building coalition from the four states on the pipeline route, called the Midwest Alliance for Infrastructure Now, wrote the White House last month asking President Barack Obama to expedite the permission process.

The Army Corps of Engineers has said completing a review of possible impacts for endangered species, waterways and cultural resources could take weeks or months. The agency reiterated to the Des Moines Register this week and after the coalition's letter was publicized it won't make a decision until all requirements are complete.

Also addressed in the Iowa Utilities Board order on Tuesday, regulators determined a nationwide permit issued by the Army Corps in 2012 does not satisfy requirements to begin construction on grounds not now under review by the Army Corps. Dakota Access has contended it does.

However, the board said it would consider allowing Dakota Access to begin construction before the federal approvals if a reasonable case can be made there are adverse effects of delay.

'If delaying construction until the verifications are received and filed will have adverse impacts on landowners or parties in possession of land to be crossed by the pipeline, then Dakota Access shall make a filing explaining those adverse impacts in reasonable detail and requesting that it be permitted to commence construction, at its own risk, in areas outside those areas addressed in a pre-construction notice,” the regulators wrote.