Expert: Bakken Pipeline would boost energy security
5:50 p.m.: The Iowa Utilities Board adjourned for the day after completing cross-examination of Caruso and conducting a brief, closed session to hear confidential testimony from Rahbar-Daniels of Energy Transfer Partners regarding privileged business information. Caruso finished his testimony with remarks that included an observation that Iowa is a large per-capita consumer of gasoline and other petroleum products and that the pipeline would provide a more economic method of transporting crude oil versus railroads, which should provide a lower cost to consumers, although he couldn't provide a specific figure when pressed.
3:20 p.m.: Guy Caruso, who was administrator of the U.S. Energy Information Administration from July 2002 to September 2008, testified that the Bakken pipeline would improve U.S. energy security. "The critical importance of this is to add infrastructure, which adds to the supply system of the United States. It is all part of one big picture. The main point is that it adds flexibility and options to this system," he said.
2 p.m.: Damon Rahbar-Daniels was still testifying. He was asked repeatedly about the proposed oil pipeline's impact on global climate change because it would contribute to the use of fossil fuels. "I am not a scientist … Evaluating all of that is not something I am comfortable myself doing, but I am aware of what you are talking about.”
11:20 a.m.: The first witness called Monday was Damon Rahbar-Daniel, vice president of commercial development for Energy Transfer Partners. He spoke on behalf of Dakota Access LLC, which is seeking state permission to construct the Bakken pipeline. He said that despite slumping oil prices, the pipeline is still needed and that North Dakota's oil fields remain the second-largest source of oil production in the United States.
Under cross examination by Wallace Taylor, a lawyer from Cedar Rapids who represents the Iowa Chapter of the Sierra Club, Rahbar-Daniels said the pipeline could initially carry 450,000 barrels of crude oil daily. Without disclosing names of any companies, Rahbar-Daniels said Dakota Access has “nine effective shipping agreements" that continue to be in place to transport crude oil on the pipeline, which will primarily replace the shipment of crude oil on railroad tank cars.
Rahbar-Daniels acknowledged that the number of oil drilling rigs has dropped in the Bakken region in a low-price environment, but he said he strongly disagreed with the idea that the area "as being in absolute decline." It's still the case that the region is producing 1.1 million barrels of oil daily, he said.
He also said that while Occidental Petroleum is pulling out of the Bakken region and selling its assets, it will be replaced by another company that believes it can make money producing oil there. "It is not as though the acreage is not intended to be developed. It is just as is typical in the industry, parties move in and out of the acreage … and if parties feel they have a better opportunity to develop the resources, they will do so," he said.
Rahbar-Daniels also suggested the Bakken region is poised for another boom when oil prices eventually rebound, explaining that investors are still interested. “When you look at the overall context of what is happening in North Dakota, I think it is a positive story … It is not a negative story about what is happening,” Rahbar-Daniels said.
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Earlier story:
BOONE, Ia. — A trial-like proceeding was convened here Monday morning by the Iowa Utilities Board on plans by a Texas company to construct the proposed Bakken crude oil pipeline through 18 Iowa counties.
The session began with procedural motions after Chairwoman Geri Huser, a former Democrat state legislator, brought the meeting to order. The other two board members, Nick Wagner and Libby Jacobs, are both former Republican state legislators.
The so-called “evidentiary” hearing is expected to last about 10 days. It will begin with parties supporting the issuance of a state permit for the 343-mile pipeline project through Iowa. They will be followed by the board’s staff witnesses, and then witnesses for parties opposed to a permit. In addition, the state Office of Consumer Advocate has requested to have witnesses present.
After witnesses comment on general issues regarding the pipeline, the board says it will hear from affected landowners who have intervened in the proceeding about any concerns they may have that are specific to their property.
The pipeline is proposed by Dakota Access LLC, a unit of Dallas-based Energy Transfer Partners. The facility would transport up to 570,000 barrels of light sweet crude oil daily from North Dakota’s oil fields through South Dakota and Iowa to a distribution hub at Patoka, Ill. Requests for state approval are pending in the other states.
The process that began Monday at the Boone County Fairgrounds Community Building follows a day-long public hearing here on Thursday that drew about 450 people.
Supporters of the project say it will help the nation's push for energy independence, help Iowa maintain a robust state economy and provide a safer method of transporting light sweet crude oil to refineries than railroad tank cars or trucks. They point out that Iowa already has thousands of miles of buried pipelines carrying gasoline, natural gas and other products
Many farmers along the route say they don’t want the pipeline to pass through their land, fearing damage to agricultural drainage lines and reduced crop yields, and they strongly object to eminent domain being authorized to gain easements. Environmentalists worry about pipeline spills and object to developing infrastructure to transport fossil fuels, which they believe contribute to climate change.
The three-member state board is expected to announce its decision whether to permit the pipeline project to proceed in either December or early January. Energy Transfer has already hired contractors for the project and says it hopes to have the pipeline built by late 2016.
Information about live video streaming of the public hearing is available on the Iowa Utilities Board website at https://iub.iowa.gov/live-video-pipeline-hearing
