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


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


August 5, 2014

As lifetime family farmers and rural property owners, we strongly urge Iowa land owners in the path of the proposed Bakken oil pipeline to refuse signing agreements with Transfer Energy Partners or Dakota Energy, LLC giving them access to your property for land assessments and surveys.

This project has not yet been approved by Governor Branstad or the Iowa Utilities Board and there is no reason to grant survey requests while there are still crops in the field.  Survey equipment could cause soil compaction and crop damage.  The consent forms provided by the big oil corporation do not explicitly guarantee adequate compensation for any crop or soil damage caused during land surveys.

We recommend that land owners who do approve the company’s survey request consider demanding revisions to the consent forms to limit the scope and timing of surveying and allow for fair compensation to damaged crops or soil.

Informational meetings held by the big oil corporation may be held in late September, potentially during peak harvest season.  This may make it difficult for some impacted property owners to attend the meetings.  A 30-day notice is required to be posted before the meetings can begin.  After the meetings are completed, the company may apply for a permit petition.

Public hearings and a formal input process will start after a permit petition is filed.  If the project is approved by Governor Branstad and the Iowa Utilities Board, land owners who do not agree to sell permanent 50-foot easements and allow for a 150-foot right-a-way for construction on their land could have their property confiscated under eminent domain laws.  Construction could also compact soil, interfere with planting and harvest, and may cause additional damage to crops and drainage tiles.

We are very skeptical that this project could ever be in the public interest, as it does not appear that it will create permanent jobs and poses a significant risk to Iowa’s air, soil, and water quality.

For more information, please contact Iowa Citizens for Community Improvement at 515.282.0484 or


Larry Ginter, Rhodes

Keith and Marian Kuper, Ackley

Jim and Barb Kalbach, Dexter

George Naylor and Patti Edwardson, Churdan

Jeff and Misti Craig, Panora

Curt Burger and Brenda Brink, Huxley

Mike and Ginny Meyer, Lone Tree

Lori Nelson, Bayard

Elizabeth Partridge Blessington, Breda

Rosemary Partridge, Breda

Lynn Gallagher, Solon

Suzan Erem, West Branch

Governor Branstad Met In Private With TX-Based Big Oil Corporation On July 22


While Branstad publicly claims he hasn’t made up his mind yet, his administration appears to be working behind closed doors to grease the wheels for Transfer Energy Partners and Dakota Energy, LLC to build a Bakken oil pipeline across the state that could threaten everyday Iowan’s water quality and property rights


Governor Terry Branstad held a private meeting with Greg Brazaitis, chief compliance officer with Texas-based Transfer Energy Partners on Tuesday, July 22, to discuss a proposed Iowa Bakken Oil Pipeline, his administration confirmed yesterday.

“Governor Branstad says he hasn’t made up his mind about the bakken oil pipeline yet, but his fingerprints are all over this project,” said Ross Grooters, an Iowa Citizens for Community Improvement member from Pleasant Hill.

“Branstad’s already met privately with Big Oil once, his utilities board met with them again behind closed doors a week later, and it appears his board staff even recommended a corporate PR firm to help them navigate the permitting process, a corporate PR firm whose leadership just so happens to include Branstad’s former chief of staff and other former campaign workers.”

Yesterday, Iowa CCI members broke the news that Susan Fenton, LS2Group’s Director of Government Affairs, who worked for four years as a legislative liason for Iowa Secretary of Agriculture Bill Northey, joined Energy Transfer Partners, the Iowa Utilities Board, the Attorney General’s office, and the Iowa Department of Natural Resources on July 29 for an “informal meeting” on the proposed bakken oil pipeline “to discuss the informational meeting and permit petition processes and requirements,” meeting notes show.

Fenton has also worked for Iowa House Republicans, including the speaker of the house and majority leader, as well as on re-election campaigns for Iowa Governor Terry Branstad and Senator Chuck Grassley.

Email records also indicate that the Iowa Utilities Board may have actually referred LS2Group to Transfer Energy Partners for assistance navigating the state’s permitting process.  On July 11, Stephen Veatch, Senior Director of Certificates and Tariffs at Transfer Energy Partners, sent an email to Don Stursma, Manager, Safety and Engineering Section at the Iowa Utilities Board, which reads, “Don – can you provide me the firms that are familiar with the IUB permitting process that you would recommend?”

“What the Iowa Utilities Board calls an informal meeting we would call a classic case of the revolving door greasing the wheels,” said Ross Grooters, an Iowa CCI member from Pleasant Hill.  “State agencies should be working to serve the public interest, not bending over backwards to help Big Oil.”

LS2Group is a corporate gun-for-hire whose senior leadership team includes vice president Jeff Boeyink, former chief of staff for Governor Branstad.  Last April, LS2Group was contracted by the American Petroleum Institute and an API front group called the Iowa Energy Forum to bring General James Jones to Drake University campus to promote the Keystone XL pipeline.  LS2Group also worked for Tim Pawlenty’s campaign during the 2012 Iowa Caucus season.

The proposed Iowa Bakken oil pipeline, if built, would transport crude, hydrofracked bakken oil from North Dakota through Iowa and eventually down into the Gulf of Mexico.  Transfer Energy Partners, a Texas-based Fortune 500 company, says they can transport as much as 420,000 barrels per day, but that the project will probably average about 320,000 barrels of crude per day.

In July, the corporation sent letters to property owners along their preferred route cutting through 17 Iowa counties asking permission to survey land.  The next step will be informational hearings in those counties, preceded by a 30-day notice, after which the Texas-based corporation may formally file a pipeline permit with the state, kicking off a public input process.  Transfer Energy Partners told the Iowa Utilities Board they hope to formally apply for a permit by the fourth quarter of this year.  The corporation cannot negotiate easements with landholders until after the 17 informational meetings are held.

According to Iowa Code 479B.8, to grant a permit the Iowa Utilities Board must determine that “the proposed services will promote the public convenience and necessity” and may impose “terms, conditions, and restrictions as to location and route.”

Iowa Utilities Board members are appointed by the Iowa governor, and the agency is part of the state’s executive branch.  Iowa CCI members this week launched a petition and Facebook page calling on Governor Branstad to use his administration’s authority under Iowa Code 479B.8 to stop the pipeline from being built.

The petition reads:  “Governor Branstad, the Iowa Bakken Oil Pipeline will be a climate disaster.  Building it could harm Iowa’s water quality, contribute to catastrophic climate change, and threaten the property rights of everyday Iowans across the state.  You must find that this pipeline is not in the public interest and reject it.”

Governor Branstad’s office was briefed on the issue in early July.  Ben Hammes, Branstad’s Director of Boards and Commissions, sent an email in early July to the Iowa Utilities Board asking for information on the proposal.

Iowa CCI members have been contacted by some property owners along the proposed oil pipeline route and copies of the letters sent to them by Dakota Access, LLC, a subsidiary of Transfer Energy Partners, is included in the attached document cache.

Iowa CCI is a statewide, grassroots people’s action group that uses community organizing to win public policy that puts communities before corporations and people before profits, politics, and polluters.   

Governor Branstad, the Iowa Bakken Oil Pipeline will be a climate disaster.  Building it could harm Iowa’s water quality, contribute to catastrophic climate change, and threaten the property rights of everyday Iowans across the state.  You must find that this pipeline is not in the public interest and reject it.


A Fortune 500 oil corporation down in Texas just announced plans to build a dangerous oil pipeline through 17 Iowa counties in order to transport crude, dirty, explosive Bakken oil being hydrofracked in North Dakota down through Iowa and Illinois and on to the Gulf of Mexico.  The proposed route would closely track the Des Moines River watershed across the length of the state, one of the biggest rivers in Iowa that hundreds of thousands of Iowans depend on for clean drinking water.

If this pipeline is built, it could seriously harm Iowa’s already impaired water quality, threaten the property rights of thousands of everyday Iowans, and contribute to the catastrophic climate change that has been causing floods and droughts across Iowa for years now and which, if left unchecked, could eventually destroy all life on this planet as we know it.

Click here to sign the petition now!

Iowa already has enough problems dealing with corporate ag and factory farm manure pollution.  The last thing we need is Big Oil pumping 320,000 gallons of dirty Bakken oil through Iowa every single day.  Because it’s only a matter of time before pipelines break.  It’s happened already in Arkansas, Michigan, Montana, and North Dakota.  We don’t need more oil spills coming to Iowa and further polluting the drinking and recreational water of millions of everyday Iowans.

This project also threatens the property rights of thousands of family farmers and rural Iowans.  The only way Big Oil can build this pipeline is by stealing Iowans property through eminent domain, and that’s just not right.

This plan was hatched in secret, and the first Iowans even knew of the proposal was when the Texas oil corporation, Transfer Energy Partners, sent letters to thousands of property owners asking for permission to come survey their land.

The good news is, we still have time to stop this.  Transfer Energy Partners and their subsidiary corporations haven’t applied for a permit yet, and there will be weeks of public comment where we can stand up and speak out for what’s right.

That’s why now is the time to start organizing, and the first step begins with signing this petition calling on Governor Branstad to put communities before corporations and people before profits, politics, and pollutersWe need to send a strong message now that everyday Iowans do not want this project in our state.

Strength lies in unity, hope lies in resistance.