Oil pipeline owners grilled in Sioux Falls

Almost 400 people packed the Ramkota Convention Center on Thursday night to grill the owners of a proposed oil pipeline on safety, landowner compensation, possible environmental damage and the values embedded in the South Dakota State song.

The scheduled three-hour hearing before the Public Utilities Commission stretched into four as commissioners took public comment on the Dakota Access Pipeline, a 1,134 mile-project that would move North Dakota crude oil through the Midwest to Illinois.

Most of the commenters were skeptical, and dozens urged the Commission to reject the construction permit. At least a half dozen referenced an oil spill last week in Montana that contaminated the water supply of Glendive, Mont.

Landowner Peggy Hoogenstraat asked commissioners to think about the "great state of the land" referenced in the state song, "Hail, South Dakota."

"We're worried about our land," said Hoogenstraat, who was worried about oil spills and permanent damage to cropland. "We want to keep it beautiful."

Joy Hohn, another vocal opponent, asked landowners to reject easement offers from Energy Transfer Partners, the Texas-based corporation pushing the project.

"We are asking you to be our voice and stop the Dakota Access Pipeline," Hohn said.

A smaller group voiced support for the project, citing a promised economic boost and the value of pipelines in pushing the country toward independence from foreign oil.

Joe Chastain, a Minnesotan who represents union workers in South Dakota, thanked the representatives from Dakota Access for building a path for North Dakota oil that would free up space in the rail cars currently used to move the state's fuel to refineries.

"This crude is being consumed by millions of people across the United States," Chastain said.

Joey Mahmound, an Energy Transfer Partners senior vice president of engineering, presented the project's details at the start of the hearing and spent much of the night answering sometimes sharp-elbowed questions about it.

The South Dakota portion of the pipeline — 274 miles at a cost of $820 million — would create up to 4,000 temporary jobs and add 12 to 15 permanent jobs in the state, he said.

Almost all of the 30-inch diameter pipeline would be underground, at varying depths based on location. Valves, all of which would be remotely monitored for pressure changes and many of which could be shut off remotely to stop a spill, would be located on either side of waterways and spread a few miles apart.

Spills would be caught by the remote monitors, who watch the pressure gauges 24 hours a day, seven days a week, and valves could be stopped within minutes. The pipeline involved in the Montana spill was built before such failsafes were standard.

The company estimates it would offer $47 million in one-time easement payments and compensation for the loss of land use to the property owners along the proposed route. Taxes during construction would amount to $35.6 million for the state and $2.9 million for local governments, he said.

Several landowners, however, said they were unimpressed by the payments and the tax returns. Many of them told the PUC they think they deserve royalties for the oil moving over their property, as opposed to one-time payments.

"It appears to me that this large, out-of-state company hasn't even tried to come to terms with landowners," farmer Matthew Anderson said.

Three property owners expressed concern about the pipeline's reroute south of Sioux Falls. It originally had been set to cross Interstate 29 near the planned 85th Street interchange, but it was moved.

It wasn't moved far enough, Shelly Johnson said.

"It's still pretty close," to residential development areas.

Commissioner Gary Hanson, a one-time mayor of Sioux Falls, pressed Mahmoud on the point, noting that residential development has been strong far south of Sioux Falls.

Mahmoud told Hanson that the company moved the pipeline into a rural area as far south as it could based on what he called "reasonable" projections for development.

"As a commissioner, I have a great deal of difficultly with that answer," Hanson said.

Commissioner Chris Nelson began the hearing, which followed three others Wednesday and Thursday from Spink to Minnehaha counties, by telling the audience that the commission could approve the construction permit, deny it or approve it with conditions.

At the end of the marathon session, he thanked the remaining citizens, saying that their comments would help guide the commission's own questioning.

"We have had some phenomenal questions tonight," Nelson said. "You have been very helpful."