Iowa farmers wary of proposed crude oil pipeline

DES MOINES, Iowa — Construction of an 1,100-mile crude oil pipeline slicing diagonally through 17 Iowa counties would generate millions of dollars for the state's economy, but it's creating worries among farmers asked to provide easements on their land.

Energy Transfer Partners of Dallas has proposed building the 30-inch-diameter pipeline, which would initially carry 320,000 barrels of crude oil daily — with a capability for 420,000 barrels. The oil would be transported from North Dakota's Bakken oil fields, where production has been booming, to Patoka, Ill., about 75 miles east of St. Louis, Mo., while passing through South Dakota and Iowa.

Thousands of Iowa farmers have already been contacted by the company about the pipeline project, and some say they are either strongly in opposition or are reserving judgment until they learn more details. One of the biggest concerns is potential damage to drainage tiles, although Iowa law requires the company to repair any damage. The tiles carry excess water from fields.

Randy Sieren of rural Fremont in southeast Iowa, who raises corn and soybeans on several farms along the pipeline route, said he strongly opposes the pipeline project. He has a thick envelope from the pipeline company seeking permission for surveys, but he's not planning to sign anything.

"We have spent a heck of a lot of money pattern-tiling this ground with a strip of tile every 40 feet," Sieren said. "When they go through it, they'll rip up all those tile lines. There is no way of fixing them the right way."

Rich Larson, who farms rented land in Boone County along the pipeline route, said he doesn't want to stop the pipeline project and he recognizes that the American economy needs oil. But he also wants to make sure any damage to tile systems is fixed.

"You could have a tile main that is trying to occupy the same space as the pipeline, and that could compromise it," Larson said. "It might ruin it."

Craig Hill of Milo, president of the Iowa Farm Bureau, said he understands the initial objections to the pipeline project because it will affect land that farmers have worked hard to acquire. But he said he also understands that the nation needs a domestic supply of energy to replace reliance on Middle Eastern oil.

In addition, he noted that most of the Bakken crude oil is now being transported in railroad tank cars, which has made it more difficult for Midwest farmers to transport their grain via railroad.

"The Iowa Farm Bureau wants to make sure that landowners are heard, their rights are protected, and that land is preserved throughout this process," Hill said in a statement. "Landowners need reliable, credible information on which to make the decisions they will be facing as a result of this recent announcement. It's important that landowners visit with their attorney before signing any agreement."

Company promises to repair damage

Vicki Granado, an Energy Transfer Partners spokeswoman, said the company, which owns thousands of miles of pipelines, is fully committed to repairing any problems with drainage tiles that stem from the construction work.

"Anything that we touch, we are responsible for replacing it, fixing it, installing it," Granado said. "We will pay for it and get it done, and done right. That is all part of the plan."

The proposed pipeline will be buried so that the top of the pipe is at least 2 feet deep or 2 feet below any drain tiles, whichever is lower, according to state officials. The permanent easement will be 50 feet wide, but the temporary construction corridor will be 100 to 150 feet wide.

The pipeline's economic benefit to Iowa in the first year alone is estimated at $61 million in tax payments, Granado said. This does not include the job creation, purchases of goods and services by the temporary workforce during construction, or the purchases the company will make from local suppliers for project materials, she said. Property taxes in the second year and beyond are estimated at $31 million annually.

The cost of the pipeline project is estimated at $4.8 billion to $5 billion. Company officials say about 8,000 temporary construction workers will be employed along the entire route. They didn't have a breakdown for Iowa workers.

Land values rise to record levels

The pipeline has been proposed at a time when land prices have soared to record levels. A report by Farm Credit Services of America in July said the average value of Iowa farmland is now $10,172 an acre, based on sales in April, May and June.

Company officials say they will conduct public meetings to discuss the pipeline project in each of the 17 Iowa counties, starting Sept. 23, and they expect to formally submit their plans soon to the Iowa Utilities Board. If the board approves, the pipeline company could use eminent domain to acquire easements if Iowa farmers balk at giving consent, state officials say. The pipeline is scheduled to begin transporting Bakken crude oil by late 2016.

Phil Verleger, a Colorado energy consultant, said outside of taxes generated by the pipeline, he doesn't see a lot of long-term economic benefits to Iowa from the project. The pipeline would have no Iowa terminals. The construction project also would require lots of welders, which would drive up costs for other Iowa companies needing those workers, he said.