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Vol. 20, No. 23 Week of June 07, 2015
Providing coverage of Bakken oil and gas

Building support

Energy Transfer strives for landowner cooperation for Dakota Access

Maxine Herr

For Petroleum News Bakken

North Dakota’s largest proposed oil pipeline project is striving for easements ― a factor that could affect the state Public Service Commission’s decision whether to grant a siting permit.

Energy Transfer Partners’ $3.8 million Dakota Access Pipeline would transport approximately 450,000 barrels of oil per day from Stanley to Patoka, Illinois, crossing South Dakota and Iowa with capacity as high as 570,000 bpd. That capacity represents about half of the Bakken’s current daily production.

The 1,134-mile, 30-inch diameter pipeline has full capacity customer commitments and is still aiming for 100 percent of landowner easements. As of May 28 when the first of three public hearings for the siting permit was held in Mandan, Energy Transfer only had 56 percent of easement approvals. While the PSC does not require a certain percentage, Commissioner Julie Fedorchak would like to see greater support from landowners.

“I told the company that 56 percent is not enough,” Fedorchak told Petroleum News Bakken. “We need a stronger showing of easement acquisition before I feel comfortable providing a permit.”

However, if Energy Transfer is unable to gain more cooperation from landowners, it could file for eminent domain in district court. The company said it plans to work very hard to resolve concerns with landowners in the next couple of months to obtain the necessary easements. The PSC will take about six to eight weeks after all public hearings are completed before rendering a decision, Fedorchak said, but if the permit is approved she does not want the company to use it to put pressure on landowners.

“They could say they already have authority with the permit, and I don’t like them using that,” Fedorchak said. “It puts the landowners in a situation I’m not comfortable doing when its 44 percent of them that haven’t signed up yet.”

Improving their image

Energy Transfer has come under some scrutiny as landowners along the proposed pipeline route allege the company did not treat them fairly and some even felt threatened and “bullied,” according to the case file.

“There were land agents early on that ruffled a lot of feathers,” Fedorchak said.

But Energy Transfer changed its land agents and Fedorchak said several landowners testified that they were more comfortable with the new agents.

“The company did make an effort,” she said. “Realizing they were down a bad path, they started a complaint line. It was my sense that they’re really serious about making sure their land agents are treating people fairly.”

Energy Transfer did not return a call for comment about the pipeline project, but its website says anyone with concerns is encouraged to call the company’s hotline at 844-708-2639.

A seat at the table

Several landowners filed for intervener status at the hearings which was granted by an administrative law judge since the parties proved they had an interest in the case that wasn’t being represented by anyone else. The attorney representing the landowners was allowed to ask questions of witnesses and call the group’s own witnesses.

“It adds some more structure to the process and gives them a seat at the table,” Fedorchak said. “That’s a pretty effective way for them to make sure their concerns are heard and they get more information back as well.”

Fedorchak said public comments at the hearing were mostly from those in favor of the project. The greatest concerns were centered around reclamation and decommissioning of the line when it is no longer in use. The hearing provided the PSC with an opportunity to inform landowners about the regulatory process, noting that transmission lines are more highly regulated than gathering pipelines. Poor reclamation of gathering pipelines has commonly created landowner easement fatigue. In contrast, transmission pipeline companies are legally obligated to reclamation standards.

“There are a lot more protections in place for landowners and the company is accountable to us for the operation,” Fedorchak said. “And ultimately … they know if things get really bad we could pull their permit to operate and they’d have to shut it down.”

Two more hearings

The Dakota Access project would allow North Dakota crude to reach major refining markets more directly and reduce rail and truck transportation. The proposed route travels through 50 counties in four states. If approved, the pipeline is slated to be in service by the fourth quarter of 2016. Two more hearings are scheduled, one in Killdeer on June 15 and another in Williston on June 26 to focus on issues pertinent to those areas.

“My general opinion is we need pipeline infrastructure and good export capacity for all this oil that’s being produced in North Dakota,” Fedorchak said, “so we want to do this process and do what we’re required to do by law which is to site projects to have minimal impact on the environment and people.”



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