Proposed pipeline could mean big money for Iowa

CEDAR RAPIDS - A proposed crude oil pipeline that would slice through Iowa could bring big economic benefits, according to a new study out Wednesday by a West Des Moines consulting group.

Strategic Economics Group prepared an economic and fiscal impact study, outlining the possible regional impact the proposed pipeline would have on the economy as well as state-by-state breakdowns for Dakota Access LLC, which is owned by Dallas-based Energy Transfer Partners.

The 1,100-mile-long pipeline would stretch from the Bakken supply area in North Dakota to Pakota, Ill., cutting diagonally across Iowa and 17 of its counties.

The $3.8 billion-pipeline would have the capacity to move 450,000 barrels a day to several markets, including those in the Midwest and East Coast, as well as the Gulf Coast through a second pipeline.

The 343 miles of pipeline that would go through Iowa would cost more than $1.04 billion - with $628.4 million circulating through the Iowa economy, the study said.

Other economic benefits include:

' The pipeline will create an estimated $386.8 million in additional indirect growth in production and sales, adding more than a billion dollars to the Iowa economy.

' The pipeline will create 7,623 jobs during the two-year construction period

' After construction, the Iowa portion of the pipeline will generate 25 permanent jobs, $1.7 million in additional income and $3.7 million in production and sales each year.

The state and local governments would see a jump in activity, Strategic Economics said, explaining that the increased economic activity during construction would produce $33.1 million for the state government, plus $2.2 million for local governments in additional taxes.

The state would also see an additional $14.6 million in individual income taxes.

Come 2016, when Dakota Access plans to have the pipeline in operation, Iowa and affected city governments would see annual tax increases of about $190,000 and income tax increases of about $85,000, the study found.

Additionally, the pipeline would generate $27.4 million in new property taxes for local governments during its first year of operation.

The pipeline could also pack a hard punch on the four-state region that it would run through, Which includes, North Dakota, South Dakota, Iowa and Illinois.

According to the study, construction would boost employment by about 33,000 jobs. About 39 percent of the jobs will be construction jobs while engineering and architectural services will make up about 6 percent.

The bump in employment would generate a $1.9 billion increase in labor income and a nearly $5 billion increase in production and sales.

Once the pipeline is completed, the yearly impact of the operations and maintenance activities would add 160 ongoing jobs to the regional economy, the study found. These jobs would generate $11 million in labor income and more than $23 million in new production and sales each year.

But before construction can begin, the pipeline still has many hurdles to clear.

The company said it plans to file for the necessary permits in Iowa at the start of 2015 after filing for permits in North Dakota, South Dakota and Illinois by the end of this year.

To put a pipeline on private property, Dakota Access must obtain the necessary rights from the landowner through voluntary easement or eminent domain as well as provide a land-restoration plan, showing how restoration laws will be met.

The company estimates that it will make $189 million in direct payments to landowners in easement payments. In October, Dakota Access said it is in the process of developing a specific agriculture-crossing plan, which will need to be approved by the applicable state agencies and presented to landowners for comment.

It also will have to hold informational meetings for the public in each of the 17 Iowa counties the pipeline could affect before a petition and review process can begin, according to the Iowa Utilities Board.