Iowa Will Soon Decide Whether To Allow An Oil Company To Seize Residents’ Land

CREDIT: Shutterstock

The thought of a massive pipeline moving crude oil some 60 inches underneath his farmland troubles Richard Lamb. It isn’t just the risk of an accident or the burden of clashing with the powerful oil industry. It’s the helplessness of facing Iowa’s eminent domain.

“I’ve publicly and loudly said I would never, ever, willingly for any amount of money [allow] that pipeline cross my land,” said Lamb, a 73-year-old Iowa City resident, in an interview with ThinkProgress. “We don’t think it’s the right thing to be doing. We are against fracking, against more fossil fuels, want to do what we can to avoid global warming, and this of course is contrary to all of that.”

That’s why Lamb said he’s declining an offer of about $175,000 from Dakota Access, a subsidiary of Dallas-based Energy Transfer Partners, to gain access to a strip of his land. As it first announced in 2014, the company wants to build a pipeline that would transport oil from North Dakota’s oil-rich Bakken Formation, to a market hub located near Patoka, Illinois.

The project, commonly called the Bakken Pipeline, would cross four states and 50 counties, cutting the Midwest with an almost straight diagonal line. Most of the affected land is farmland, but the project does run through wildlife areas and major waterways like the Mississippi, and the Missouri, the two longest rivers in the country.

But before Dakota Access can build it needs the approval of various state and federal agencies, including the Army Corps of Engineers. The U.S. Fish and Wildlife Service is involved, too, and it’s now working on an environmental assessment of the project. A draft report so far says the Bakken Pipeline avoids “critical habitat.” Meanwhile, the company has sought to buy out landowners along the pipeline’s path. It is widely known that the company has been largely successful in this endeavor, yet in Iowa, as well as in other states, some property owners have pushed back.

“Landowners don’t agree with them and many of them won’t, myself included, [sell] because we don’t want the pipeline,” said Keith Puntenney, an Iowa farmer and attorney, in an interview with ThinkProgress.

Knowing this could happen, the company early on requested the use of eminent domain, arguing that the project will benefit the public in myriad ways. This isn’t unprecedented. Other major projects like the Keystone XL, which President Obama rejected, followed similar measures that put landowners in a tough situation: take the money and hope for the best on the risks, or challenge the industry and potentially the state.

North Dakota, South Dakota and Illinois have already awarded the right-of-way to Dakota Access, leaving Iowa as the pending state to approve this mega-infrastructure project. On Monday, after months of heated public meetings, lengthy court-like proceedings and dismissed lawsuits, the Iowa Utilities Board began the last series of public deliberations slated to end Thursday.

The meeting partly revolved around whether a bond of $250,000 is assurance enough that Dakota Access will be responsible for any accidents. Deliberations are, however, among staff and the board only. All parties have submitted their final arguments, so now it is up to the three appointed board members. Their approval would mean the Bakken Pipeline has the backing of all four states to build and use eminent domain if needed. In Iowa, the board is comprised of former state lawmakers appointed by Republican Governor Terry Branstad. One board member is a Democrat, the remaining two are Republicans.

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CREDIT: Dakota Access

The Bakken Pipeline is one of many oil and gas infrastructure projects proposed across the nation that are raising concerns about the environmental and safety risks pipelines present. It also shows that when pipelines mostly avoid wildlife, and instead affect large swabs of private property, they reignite disputes on the controversial use of eminent domain for private-profit projects.

“The pipeline company has to prove that this pipeline will promote what we call public convenience and necessity,” said Wallace Taylor, an attorney representing the Sierra Club. “That’s not a very well-defined term, but we have argued that that means there must be some benefit to Iowans that outweighs the costs and the risks.”

Critics in Iowa have long maintained eminent domain shouldn’t be allowed for the benefit of an out-of-state corporation, and have even questioned if the utility board has the right to do so, because Dakota Access doesn’t provide services to Iowans. Dakota Access disagrees and says it will provide economic benefits to the public, the states and the region.

Still, the risks are plentiful, environmentalists and landowners say, as the pipeline will be transporting up to 570,000 barrels of crude oil a day under fertile farmland, forests and rivers that could be severely harmed if a spill were to occur. Just in Iowa, the proposed route passes through 75 waterways, including the Mississippi.

“There are several federal and state endangered and threatened fish species in the area, including the pallid sturgeon, and the topeka shiner,” said Douglas Harr, a retired biologist for the Iowa Department of Natural Resources, while testifying before the board last year.

Moreover, the Mississippi River provides water to thousands of Iowans, and an oil leak could close water plants. “One thing we are not capable of is treating for oil,” Bill Cole, general manager with Keokuk Municipal Water Works, told Tri States Public Radio. “Typically an oil like this would float and there is no treatment process to get it to settle and there’s no way to take it out.”

The risk of a spill is also concerning to agricultural land owners, who often lease their land to other farming families, extending the profits – and losses – attached to a piece of property. “Pipelines as a whole have a very bad history of spills,” said Lamb.

U.S. pipelines spilled three times as much crude oil as trains over the period of 2004 to 2012, according to a recent study by the International Energy Agency, even though pipeline incidents happened much less frequently. Last year, the Pipeline and Hazardous Materials Safety Administration reported 314 “significant” incidents causing damages of more than $305 million, and 10 fatalities. In contrast, there were 252 incidents in 2012. Since then the data shows an upward trend.

David Ledig, a national monument manager from the Bureau of Land Management, walks past rocks covered in oil at Refugio State Beach, north of Goleta, Calif. Plains All American Pipeline, the Texas company whose ruptured pipeline created the largest coastal oil spill in California in 25 years, had assured the government that a break in the line was "extremely unlikely" and state-of-the-art monitoring could quickly detect possible leaks and alert operators. Dakota Access, too, maintains it will implement sophisticated safety measures.

Plains All American Pipeline, the Texas company whose ruptured pipeline created last year the largest coastal oil spill in California in 25 years, had assured the government that a break in the line was “extremely unlikely” and state-of-the-art monitoring could quickly detect possible leaks and alert operators. Dakota Access, too, says it will implement sophisticated safety and monitoring measures.

CREDIT: AP Photo/Jae Hong

Dakota Access didn’t reply to questions by press time. However, the company said in documents submitted to the IUB last week that the other three states have reviewed the pipeline and the arguments against it. “Those three expert agencies, looking at the exact same project, in similar Midwestern states, have all approved the project,” documents read.

The company has also said it will use a sophisticated 24-hour monitoring system that can detect small pressure changes, as well as shut off valves that can be remotely activated if a leak happens. In addition, the company will have personnel all along the pipeline for operation and maintenance.

Nonetheless, critics worry because in Iowa, as well as in some other states, Dakota Access wasn’t required to submit environmental impact statements for the project. “Iowa doesn’t have an environmental impact statement law,” said Taylor, adding the Sierra Club believes Dakota Access hasn’t done adequate environmental surveys.

For its part, Dakota Access said in its permits that it developed the route through programs that “analyzed hundreds of permutations” resulting in the shortest route with the least amount of impacts. That impact is minimal, according to the company, as the land will be restored after construction.

But beyond the perceived risks and safety measures, the Iowa Utility Board is assessing the eminent domain request on the socioeconomic merits of the project. Dakota Access says its $3.7 billion investment will benefit local, regional and national labor force.

Business owners, unions and workers in multiple states have rallied behind the project. “I need this pipeline job, we all need work, benefits and job security,” said Pamela Gilliam, with the Members of the Laborers Union International, or LiUNA, to an Illinois television station.

The company says it will create nearly 12,000 jobs — some 4,000 of them in Iowa — $1 billion in materials, millions in taxes, and $195 million in easement payments to landowners. The pipeline will also free-up rail capacity for crops and other commodities.

Otherwise, the company said in documents, some 750 rail cars would be required to depart the tank terminal daily to fulfill its projected production. “The project would represent a 50 to 60 percent increase in the number of trains transporting crude oil out of the state.”

A fireball goes up at the site of an oil train derailment near Casselton, N.D.  Dakota Access says exporting Bakken oil through a pipeline is safer than using trains and will release rail congestion for other commodities.

A fireball goes up at the site of an oil train derailment near Casselton, N.D. Dakota Access says exporting Bakken oil through a pipeline is safer than using trains and will release rail congestion for other commodities.

CREDIT: AP Photo/Bruce Crummy

But awarding eminent domain to private companies may not be as profitable for the public as corporations promise, said Dean Stansel, research associate professor at the Cox School of Business, in an interview with ThinkProgress.

“Proponents of eminent domain for private development tend to overestimate the benefits of their development projects,” Stansel said. “Overly optimistic estimates help those projects get approved. However, since the benefits often fall short of those estimates, the increased government revenues that were predicted also often fall short.”

Stansel, who published a study on the public effects of eminent domain for private use in 2014, explained that since the benefits of a new pipeline are spread across a much larger number of people than typical economic development projects, the local economic benefits of pipeline projects could be much smaller than normal. “As a result, any revenue effects would also be much smaller,” he said.

Critics in Iowa, meanwhile, say economic benefits are just short term measures that don’t outweigh the costs. And even if all goes well, some opponents reached said, landowners are being limited in how they use their land in perpetuity in the benefit of private profit.

“The thing about this is that the farmers don’t like it because it constitutes a lean on the entire farm,” said John Murray, an Iowa attorney who is representing multiple landowners.

For Lamb, the landowner from Iowa City, an eminent domain lean also means he — and his children, who will inherit the property — will likely have to pass on commercial opportunities opening up in the coming years as the city sprawls towards the 300 acres of land his family has owned since the 1870s.

“You cannot put buildings over the top of the pipeline path,” said Lamb, who can’t quite accept that the fate of his property is out of his hands. “I just kind of feel I’ve done all I can think of, but I have this continued anxiety that I should be doing something else,” he said. “I don’t know what that should be, but at this point of course, we are just waiting for the decision to occur.”