Government

Keystone denial affected Bakken pipeline strategy, executive says

Energy Transfer Partners made a point to avoid federal land to speed process

An executive for the parent company building the Dakota Access crude oil pipeline said this week that the company's stra
An executive for the parent company building the Dakota Access crude oil pipeline said this week that the company’s strategy for gaining approval included stressing how labor unions would benefit. Last November, union members (above) rally before a public hearing on the s pipeline before the Iowa Utilities Board at the Boone County Fairground. (Stephen Mally/The Gazette)
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BISMARCK, N.D. — The denial of the Keystone XL pipeline affected how the company building the Dakota Access pipeline executed its strategy, one of its engineering executives said this week at an oil conference.

Joey Mahmoud, senior vice president of engineering for parent company Energy Transfer Partners, said the $3.78 billion interstate pipeline project now in the early stages of construction emphasized using labor unions and avoiding federal lands as the company watched the Keystone XL fail to get built.

Mahmoud said 96 percent of the 1,168-mile, 450,000-barrel-a-day crude oil pipeline’s route from Stanley, N.D., to Patoka, Ill., is set and the project should be completed by the end of the year. But about 50 miles of the route in Iowa are still in limbo and the Army Corps of Engineers still needs to approve river crossings.

“Developing a project of this magnitude in this economy, under this administration, has been very difficult,” said Mahmoud, who spoke Tuesday at the Williston Basin Petroleum Conference.

Mahmoud said “it wasn’t by accident” that Energy Transfer Partners emphasized using unions and the potential creation of as many as 12,000 construction jobs when pitching the pipeline.

Cory Bryson, a business representative for Laborers Local 563 of Bismarck, a division of Laborers’ International Union of North America, grilled burgers and hot dogs for conference attendees near a tent with a sign: “LiUNA Builds Dakota Access!”

Bryson said work across North Dakota has been “holding pretty steady” despite the energy industry’s slowdown. However, he said the Dakota Access pipeline stands to change that.

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“We’re looking for 350 to 450 laborers working on this project for about five to six months,” Bryson said.

Work began this week in North Dakota to prepare areas of the route. Mahmoud said early construction has started in South Dakota and Illinois, as well. In Iowa, the company has requested permission from regulators to start work at its own risk even though it not secured easements to all the properties required or received Army Corps approval.

Energy Transfer spokeswoman Vicky Granado said she was unable to provide the exact locations where construction has begun in North Dakota but said several “spreads” are being worked on along the route.

“Work is going on at multiple spreads at the same time; it’s not like you start at point A and finish at point B,” she said. “That’s how we’re able to meet our construction timeline. It’s a very orchestrated construction project,” she said.

Where possible, the route parallels existing pipelines, power lines and roads. The pipeline is buried a minimum of 3 feet — more if it crosses under roads, rivers, lakes, streams or agricultural fields.

Energy Transfer Partners has all the easements needed for the project in North and South Dakota, but still is awaiting an Army Corps permit for water crossings. Construction has also begun in Illinois, where 99 percent of easements have been obtained, Granado said. About 90 percent of easements are in place in Iowa.

Granado said water crossing approval is expected within a couple months.

Granado said Energy Transfer Partner’s depth of experience and relationship with regulatory agencies has made the company confident enough to start construction before all permits have been granted.

Mahmoud said the company estimates North Dakota alone could see $47.7 million in sales tax influx during construction and the first year of the pipeline’s operation.

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“Post-Keystone era, what we’re trying to do is demonstrate the importance of these projects and how important Keystone would have been — the jobs, the multimillions of dollars,” Mahmoud said.

Keystone XL was a 1,200-mile, 800,000-barrel-a-day pipeline proposed by TransCanada Corp. that would have gone through six states. President Barack Obama denied the pipeline in November after a political fight.

Mahmoud said Energy Transfer Partners intentionally stayed away from federal land where it could in an attempt to help speed up its approval. He said the pipeline crosses only about 5 miles of federal land.

“We went way out of our way to avoid federal land,” he said. “We went out of our way to avoid public land, as well as Native American land, to minimize the impact not only to the public but to the permitting time frame.”

Jessica Holdman of the Bismarck Tribune contributed to this report.

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