IUB deliberations make it clear that there is no legal precedent for the proposal and Board should reject it to protect Iowans

 

Iowa CCI members called on the Iowa Utilities Board to reject the Bakken Pipeline and issued a vote of “no
confidence” in the state agency after four days of public deliberations in Des Moines.
CCI members noted that there is no legal precedent for granting eminent domain for a project like the Bakken Pipeline, and that the Board members Geri Huser, Nicholas Wagner, and Libby Jacobs have neither the experience nor the expertise to make a decision in the best interest of Iowa’s soil, water, and communities.

“IUB staffers have been clear with the Board that there is no legal precedent to shape their decision,” said Ross Grooters, Iowa CCI member of Pleasant Hill. “Unfortunately the Board seems to be searching for reasons to approve the Bakken Pipeline.”

In addition to the lack of legal precedent to inform their decision, Iowa CCI members also noted that the Board members, including recently appointed Board chair Geri Huser, demonstrated incompetence and a lack of mastery of permitting issues throughout the four days of hearings.

“Geri Huser was asking the kind of questions that should make Iowans worried,” said Grooters. “She doesn’t understand the extent of IUB’s authority to make demands of Dakota Access, and is unaware of how IUB’s permitting relates to other state agencies like Iowa DNR and Army Corps of Engineers. If these are the kind of questions being asked this late in the permitting process, it’s clear the Board members aren’t equipped to make this decision.”

The lack of experience and lack of legal precedent both factor into Iowa CCI’s decision to issue a vote of “no confidence” in the Board to make a decision in the best interest of Iowans.

“Based on their performance, it’s clear that IUB is inexperienced and underqualified to handle a proposal of this magnitude,” said Cherie Mortice, Iowa CCI Board President from Des Moines. “It’s time for Iowans to call out this broken, undemocratic process – for that reason we are issuing a vote of “no confidence” in IUB Board Members and their ability to accurately represent the interest of Iowans in their decision.”

This vote comes on the heels of the 2015 vote of “no confidence” in the Board of Regents, another politically appointed board managed by Iowa’s Governor, Terry Branstad. CCI members noticed a general trend of the role of Branstad’s Boards in advancing his political agenda across the state.

“The role of IUB is to protect the interest of Iowans in state utility issues,” said Brenda Brink, CCI member of Huxley, Iowa. “Not rubber stamp corporate interests by doing the Governor’s bidding and further marginalizing the state of democracy in Iowa.”

While the Board is expected to rule on the case in a few weeks, Iowa CCI called on Governor Branstad to meet with Iowans to discuss the proposal and how the permitting process has worked against the best interest of everyday Iowans.

“We asked for a meeting with Governor Branstad on January 21st, and gave his office until February 8th to reply to our request,” said Nathan Malachowski, Iowa CCI member of Des Moines. “We have heard no response from his office other than recommending that we send our requests to IUB. Branstad must stop ignoring Iowans on the Bakken Pipeline.”

Having issued the vote of “no confidence” in IUB, Iowa CCI will continue to target the Governor with these requests.

 

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Iowa Renewable Fuels Association says Bakken Oil Pipeline “Raises Red Flags”

Iowa Citizens for Community Improvement members discover July 17 IRFA memo after filing a public information request with Governor Branstad’s office

IRFA memo says pipeline proposal raises red flags because Big Oil enjoys unfair taxpayer subsidies and could use eminent domain to confiscate valuable Iowa farmland and turn it over to a private, out-of-state, for-profit corporation

To view an original copy of the IRFA memo as provided to the governor’s office, click here

MEMO

TO:                  Iowa elected leaders

FROM: Iowa Renewable Fuels Association

DATE:  July 17, 2014

RE:       Iowa Oil Pipeline Proposal Raises Red Flags

On July 10, 2014, The Des Moines Register reported Texas-based energy company Energy Transfer Partners L.P. is proposing “to build an 1,100 mile underground pipeline to transport a highly volatile type of crude oil from North Dakota’s Bakken oil fields through 17 Iowa counties en route to Illinois.”

Since then, a number of other articles have been written on the topic, and several Iowa leaders have weighed-in indicating they need to learn more about the proposal before taking a position on it.

While IRFA has not taken a position on the oil pipeline proposal, the initial reporting on this issue has raised several red flags that need to be carefully considered in the days, weeks and months ahead.

Much of the print has focused on whether it would be appropriate for the builder—a private, out-of-state energy company—to use eminent domain to acquire easements to construct the pipeline through valuable Iowa farmland.  This is certainly a very important and delicate point to consider.

Another important question to contemplate is whether it is good policy for Iowa to allow a private, out-of-state energy company to exploit the petroleum industry’s significant industry-specific federal policy benefits in order to help provide a marketplace distribution and cost advantage to Bakken crude oil over higher blends of renewable fuels.

In fact, this pipeline proposal highlights two specific ways in which the federal policy deck is stacked in favor of petroleum:

  • Federal pipeline loan guarantee program—As a petroleum pipeline, the Energy Transfer Partners L.P. project would be eligible for a federal pipeline loan guarantee.  A similar ethanol pipeline project would not be eligible for a federal pipeline loan guarantee. Case in point: plans for an 1,800 mile ethanol pipeline from Sioux Falls, SD, to New York Harbor were shelved in 2010 due to the fact that a federal loan guarantee could not be secured for a pipeline that was shipping something other than oil and gas.
  • Master limited partnership eligibility—The Texas-based company proposing to build the pipeline, Energy Transfer Partners L.P., is a master limited partnership (MLP).  According to U.S. Senator Chris Coons (D-DE), author of the Master Limited Partnerships Parity Act, “an MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded on a market like corporate stock.  By statute, MLPs have only been available to investors in energy portfolios for oil, natural gas, coal extraction, and pipeline projects.  These projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly effective at attracting private investment.  Investors in renewable energy projects, however, have been explicitly prevented from forming MLPs, starving a growing portion of America’s domestic energy sector of the capital it needs to build and grow.”

Federal pipeline loan guarantees and master limited partnerships are two ways in which this Iowa oil pipeline proposal would be significantly advantaged over a similar renewable fuel pipeline project.  These advantages, coupled with the oil industry’s century of subsidies, federal petroleum mandate and fuel distribution monopoly, demonstrate definitively that the federal policy playing field is tilted heavily in favor of oil.

IRFA is not opposed to the construction of oil pipelines or other efforts to lower the price of domestic oil.  However, we do object to the use of oil-specific federal policy benefits to provide cost relief and other marketplace advantages exclusively to the petroleum industry, further disadvantaging Iowa’s homegrown renewable fuels.

As you develop your position on this Iowa oil pipeline proposal, IRFA would ask you consider using this unique opportunity to demand equal status for a renewable fuel pipeline in terms of eligibility for federal loan guarantees and MLPs, and to shine additional sunlight on the significant federal policy advantages enjoyed exclusively by the oil industry.  These points need to be front and center as Iowans consider whether to support this Iowa oil pipeline proposal.

If you have any questions regarding this memo, please call the IRFA office at 515-252-6249.  Thank you for your consideration.

Grant Menke

Policy Director

Iowa Renewable Fuels Association

(515) 252-6249

(515) 321-6290 cell

gmenke@iowarfa.org