ARTICLE

Texas energy company releases more details on pipeline

More discussions to come: utilities officials

Natural gas flares are seen at an oil pump site outside of Williston, North Dakota March 11, 2013.

(REUTERS/SHANNON STAPLETON)
Natural gas flares are seen at an oil pump site outside of Williston, North Dakota March 11, 2013. (REUTERS/SHANNON STAPLETON)

CEDAR RAPIDS — The Texas energy company that hopes to build a crude oil pipeline through Iowa released new information detailing the proposed project’s economic benefits, including a more than $1.35 billion capital investment in the state.

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

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

It 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.

Dakota Access LLC, which is owned by Dallas-based Energy Transfer Partners, said the multistate $3.7 billion project would create between 8,000 and 12,000 construction jobs. It also would generate $129 million annually in property and income taxes and $74 million in sales taxes.

Here in Iowa, the company projects the construction of 343 miles of pipeline through the state would create between 2,000 and 4,000 temporary jobs and 12 to 15 permanent jobs.

The $1.35 billion capital investment would generate $33 million in sales tax during construction and $30 million in property taxes in 2017, the company said.

Dakota Access wants the pipeline to be in use by 2016, but the project is far from a done deal.

It first must get regulatory approval from the Iowa Utilities Board as well as its counterparts in North Dakota, South Dakota and Illinois.

APPROVAL PROCESS

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.

Vicky Granado, a spokeswoman for the proposed pipeline project, said Dakota Access held open houses about the project in Illinois last week and will hold similar events in North Dakota and South Dakota over the next two weeks.

Meetings have not been set for Iowa, she said, but should be shortly.

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. 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, the company said.

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.

Granado said the company is aiming for a December meeting with the state’s utilities board, and Rob Hillesland, a utilities board spokesman, confirmed that he heard talks of a December meeting but nothing has been scheduled.

In addition to the utilities board approval, Dakota Access would have to obtain a number of Department of Natural Resources local-impact permits for air quality, water discharge, stormwater, flood plain and even sovereign lands, if the pipeline runs through state parks or public lakes, said Kevin Baskins, a DNR spokesman.

But Baskins said no permits have been sought as the company likely is holding off until it receives approval from the Iowa Utilities Board.

BUILDING ‘IN SPREADS’

When the project first was proposed in July, those involved with the various permitting processes had doubts the company would meet its target end date. However, Granado said the company is on track for the pipeline to be in use by 2016.

“When you build a pipeline, you build it in spreads,” she said. “You don’t start at point A and build down. You have multiple construction crews working.”

She could not estimate how many construction companies would be hired or how many crews would be working at one time.

The company is pushing for a quick turnaround, Granado said, because there is a serious need to ship crude oil out of North Dakota, and pipelines are a safer way to transport it than rail.

The increase in crude oil production in North Dakota also has created transportation strains, she said, adding there are not enough cars to move grain out of the upper Midwest, and tariffs on grain rail cars have increased.

“We don’t have enough infrastructure to get the crude oil out to the marketplace,” she said.

 

Project counties for Dakota Access Pipeline (DAPL) route, subject to change

For a closer look at the pipeline route through the four states, see this DAPL document. For an even more detailed look at the pipeline route through Iowa counties, including the 3/4-mile wide notification corridor, click here.

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