(Cross-posted at Minnesota Monitor)

As the proposed MinnCan pipeline continues to proceed through the required state and federal permitting process, opposition is mounting around two primary issues - property rights and environmental concerns. Two weeks ago, the Public Utilities Commission, despite vocal opposition from the public, granted a Certificate of Need. For property owners, farmers, and environmentalists, time is running out.

The Pipeline

In northern Alberta, Canada lies over 12,000 square-miles of a mixture of a hardened crude oil called bitumen, sand, and water. These oil sands are so massive that the most economically recoverable alone, ten percent of a total 175,000 billion barrels of crude, have made Canada second in the world, only to Saudi Arabia, in terms of proven oil reserves. China and India have both signed billion dollar export agreements, but Minnesota has its very own straw.

In the late 18th century, First Nation residents alerted Europeans traders to the region, but extraction of crude from the most favorable parts of the oils sands only began in the 1960’s. With cheap and easily accessible oil readily available in the Middle East and elsewhere, operations at the oil sands remained limited to a small scale, until recently.

Record oil prices, combined with advancing technologies, have made tapping into this vast resource much more profitable, and the oils companies have expanded their operations exponentially. Thus was created the need for the MinnCan pipeline.

MinnCan is a 24 inch pipeline running 295 miles from Clearbrook, Minnesota to Flint Hill Resources’ Pine Bend Refinery in Rosemount, Minnesota. The line is an addition to the existing Minnesota Pipeline. The new line will share the original route for 119 miles, but diverge for the next 176 miles while circling the Twin Cities to the east and south.

MinnCan project manager Todd McKinney has stated that roads and residential development since the first lines were installed in 1954 make the new route necessary. A report in the Paynesville Press from September of 2006 detailed the land under which the pipeline would cross.

Of the 295-mile route, according to the permit, 211 miles (72 percent) is agricultural land; 46 miles (16 percent) are forest; 34 miles (12 percent) are wetlands; two miles are open lands; and one mile is developed land.

It crosses private land for 93 percent of its route.On ag lands, the pipeline would be covered by 4.5 feet of soil, requiring a trench at least 6.5 feet deep. In other areas, the pipeline only needs to be 3.0 feet deep, requiring a trench only 5.0 feet deep.

The pipeline would cross 64 perennial streams and 119 intermittent streams (including the Sauk River between St. Martin and Richmond and the Crow River by Forest City) and would run through 14 watersheds (including the North Fork of the Crow River watershed and the Sauk River watershed).

According to Minnesota Public Interest Research Group (MPIRG), the pipeline would also cross 23 organic farms and one Vietnam Veterans memorial.

Both the Minnesota Pipeline Company, which would own and operate the pipeline, and Flint Hills Resources are subsidiaries of Koch Industries of Wichita, Kansas. Koch is the world’s largest privately owned company, after having recently passed Minnesota based Cargill, and does $80 billion of business per year.

The Environment

Koch also holds a more dubious record, in receiving the largest federal environmental fine ever assessed in Minnesota, for the Flint Hill Resources’ Pine Bend Refinery. From the Environmental Protection Agency press release:

Koch admitted that it negligently discharged aviation fuel into a wetland and an adjoining waterway. In addition, the establishment of the system to recover the fuel destroyed a portion of the surrounding ecosystem and wildlife habitat. In a separate offense, Koch dumped a million gallons of wastewater with high ammonia content on the ground between November 1996 and March 1997 and also increased its flow of wastewater into the Mississippi River on weekends when Koch did not monitor its discharges. These actions allowed Koch to circumvent the weekly monitoring and reporting requirements of its wastewater discharge permit. Even though Koch was aware of the problem, it did not develop a comprehensive plan to recover between 200,000 - 600,000 gallons of released fuel until June 1997.

Despite the environmental recklessness that was sited by the EPA, a break in the Minnesota Pipeline near Little Falls in June of 2006 proved that there is reason to have concern about the integrity of the pipelines as well.

Original estimate from Koch was that 70,000 gallons of crude oil was released from an underground portion of the line. Days later, it was found to be 134,400 gallons.

According to a report by Barr Engineering, 4.7 acres of wetland and 5.69 acres of upland were impacted by the spill. Walt Haas, Minnesota Pollution Control Agency project manager, indicated the clean-up will include the seeding of 8.03 acres of wetland and 7.06 acres of upland with native vegetation. Restoration is expected to be a years-long process.

Days later, at a community meeting, the Morrison County Record quoted Little Fall’s Congressman, Representative Jim Oberstar, as saying, “this comes at a time when we are currently working on drafting a new pipeline reauthorization bill. The other was passed in 1987.” Reporter, Joyce Moran, suggested that “the Representative threw out ideas of what might be included in the new bill,” including “increasing the number of safety inspections, and having automatic shut off valves.”

Oberstar is the new chair of the House Transportation and Infrastructure committee, which oversees the nation’s vast pipeline system. As of yet, no such legislation has been moved to the House floor.

The Property Owners

The most vocal opposition, early on, came from the property owners. Many have accused Koch of playing hardball, pitting neighbor against neighbor, offering unfair compensation, and threatening to seize the land through eminent domain.

Scott Anderson was a 40 year-old cabinet maker when he began to lose his sight. He has spent the last ten years laboring, to turn his home near Farmington into a sound investment, before losing his vision. He put his home on the market last year, hoping to sell for $500,000, before the pipeline was rerouted onto his property.

The Anderson’s realtor estimates the property value loss in excess of $125,000, and the pipeline offered him $3,625 in easement compensation, a major blow to Scott and his family. For Anderson, it isn’t just about the money, but he doesn’t believe they have been treated fairly.

“My kids were 3 and 4 years old when they helped plant the rows of Spruce trees that will be removed, our “true” value is much higher than anything that could be offered.

The bottom line to our property value loss, what are they leaving us with to sell?”

Anderson stated that he also has an agreement with his neighbor, to “tell us themselves if they sign, because the land agents have told us before that they’ve already signed.”

Sara Lemagie reported in Star Tribune about another vocal opponent of the MinnCan pipeline.

Joyce Osborn owns 195 acres near Elko that she farmed for a few years in the 1960s. The land was never great for farming because it’s too hilly, she said, but it’s “my insurance policy for my old age.” Two years ago, a developer offered her $70,000 an acre for 30 acres. MinnCan, she said, valued her land at $20,000 an acre when it approached her about securing an easement.

At the time of publication, MinnCan spokeswoman Patty Dunn had not yet responded to an offer to respond to the environmental and property concerns.

Recent Events

So far, the pipeline’s progress has gone relatively unimpeded, though that may change as MPIRG prepares to mount a challenge before the Army Corps of Engineers to deny required approval, as recently reported in Pulse.

Scott Anderson is hoping to see some action taken at the state legislature. He and other homeowners are supporting a “Buy The Farm - Pipeline Act.”

Based on an existing “Buy The Farm” bill, originally applied to transmission lines, Anderson states the legislation “gave property owners the option to require developers of high-voltage transmission lines to purchase their entire property rather than just an easement. The new law would simply extend this option to land owners that are affected by large crude oil pipelines.”

Koch Industries hopes to begin construction of the pipeline later this year, with crude flowing by early 2008.

This entry was posted on Friday, March 2nd, 2007 at 8:14 am and is filed under MinnCan. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.