Dakota Access Pipeline plan draws local interest

Farm Forum

BOWDLE — More than 100 people showed up at the Bowdle High School gymnasium on Jan. 21 to learn about a proposed oil pipeline that would slash across 274 miles of land in the state.

The Dakota Access Pipeline would originate in the Bakken oil fields in North Dakota and be laid through 13 South Dakota counties before eventually ending up at a major hub in Patoka, Ill. The $3.8 billion project has been proposed by Energy Transfer Partners, a Texas-based operator that officially applied in December to the state Public Utilities Commission for the right to lay the pipeline.

The meeting was the first of four hosted around the state by the PUC. About 15 people offered comments following an opening statement by Commissioner Chris Nelson and Energy Transfer senior vice president of engineering Joey Mahmoud. He touted the project’s potential economic benefits to the state, including a perceived diminishing of oil transport via rail lines.

If approved, Mahmoud said, the pipeline is slated to go into operation late next year. The line would go over 36 miles of land in both Edmunds and Spink counties while traveling 29 miles through Campbell County, 28 miles through Faulk County and 7 miles through McPherson County.

Though nobody came out in explicit opposition to the line, a number of questions were raised.

“From an economic standpoint, I can certainly accept your arguments,” said Edmunds County landowner Sheila Hanson, who said that the line wouldn’t cross her own land. “But from a landowner perspective, things get personal when it comes within a very short distance of my land.

“We’re wondering about the water table. From what I’ve heard in lots of conversations with fellow landowners and people in the community is lots of concern for the water.”


While saying no pipeline is ever completely immune from leakage — or an “event” — Mahmoud said the company would have a number of safeguards in place. They include around-the-clock monitoring, rapid response to any compromise and “controls” that would isolate a particular section of the line during a potential leakage event near a public water supply.

The pipeline would be buried 36 inches under roads, rivers, streams and lakes, and would go a minimum of 48 inches underground on agricultural land, according to Energy Transfer officials. Mahmoud added that the pipeline would be inspected via flyover every 10 days or so. He said his company currently has no plans to use drones for surveillance.

Eureka cattle rancher and former state Rep. Charlie Hoffman said the pipeline would be a big boost to growers’ pocketbooks because it would free up in-demand rail space for agricultural products to ship to market.

“I’m 110 percent in favor of this pipeline,” Hoffman said. “It is the safest, most efficient way to get crude oil to market. When you look at what our agricultural products from right here do in the world, it’s a homegrown safety net for hundreds of millions of people around the world. In order to be timely in getting to market, those products need rail today to be shipped out.”

Ruling deadline

The Public Utilities Commission is required to make a ruling by Dec. 15, and Nelson said that no decision is likely for months. Energy Transfer — which oversees 71,000 miles of pipeline, mostly in Texas, Oklahoma and Louisiana — projects that the Dakota Access line would move 450,000 barrels of crude oil per day if it’s approved. It would have a maximum capacity of 570,000 barrels a day, he said.

Mahmoud said the amount of oil it would move translates to roughly one-third of the oil produced in the Bakken today. Energy Transfer touts the creation of 4,000 “temporary construction jobs” in South Dakota from the project, though only up to a dozen positions would be needed to operate the line and supporting facilities in the state.

Other questions from attendees centered around the possibility of creating camps to house the thousands of workers needed to build the conduit and how landowners in South Dakota will be paid. Mahmoud said the camps would likely become a reality. Concerning payments, he said one-time easements would be paid from a pot of about $47 million. He added that procuring land via eminent domain would be a last resort.

Eminent domain laws in South Dakota are completely separate from commission oversight, Nelson said.

The process allows private land to be taken if projects are deemed to be in the public interest, though it requires fair compensation.

On the issue of easement payments, Kevin Hoerner of Bowdle might have come the closest of anyone to outright opposition of the pipeline.

“If you’re not the owner of the land and have somebody operating it, are you going to reimburse the operator or the landowner for the crops that you destroy?” Hoerner asked.

Mahmoud said landowners are always paid easements, but additional compensation for potential damages would depend on agreements between landowners and the tenants.

Landowner gathering

A group of several landowners gathered at the Drakes Place convenience store in Bowdle after the meeting to discuss what they had heard. Roy Grismer, who lives on the homestead that his mother, Madonna Bosch, owns in Strasburg, N.D., said he expects the pipeline to eventually become a reality.

The line would cross two sections of land covering about a mile on the homestead and sit below the surface about 300 yards from his yard, Grismer said.

“I think what they’re offering is fair,” Grismer said. “There are so many safeguards in place these days that I don’t think safety is a huge concern. We’ve talked to the easement rep, and I think it’s going to be a case where you just try to get the best deal you can get.”

Grismer said he understands that easement payments are being calculated by the acre and represent a percentage of assessed land values. Mahmoud declined to say what the company is offering for easements.

Because she has relatives who own land that would be affected by the pipeline, Commissioner Kristie Fiegen recused herself from the Dakota Access application process. She has been replaced by state Treasurer Rich Sattgast, who was present at the hearing in Bowdle. An identical PUC public hearing was held in Redfield on Jan. 21.

While the crowd’s collective mood was inquisitive, Edmunds County Commissioner Dennis Hoyle might have best summed up what many landowners and residents were thinking with a statement to Mahmoud and the company he represents.

“I recognize the benefits here, but I also know how I would feel if this was going across my land,” Hoyle said. “I ask very seriously that you take care of the landowners and their concerns. That’s not just a piece of dirt — it’s something they worked for, maybe for generations. Please take care of it.”

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Dakota Access Pipeline

• Cost: $3.78 billion ($820 million in South Dakota).

• Length: 1,134 miles (274 in South Dakota).

• Estimated barrels of oil transported daily: 450,000 to 570,000.

• Size: The path would be 50 feet wide, the pipeline 30 inches in diameter.