IUB Rejects Dakota Access Confidentiality Claims, Warns of Possible Construction Fines

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A photo of the Dakota Access-connected pumping station construction site in Story County. Photo: Linda Murken via IUB filing

In an order issued Thursday (embedded below), the Iowa Utilities Board largely rejected an argument made by Dakota Access LLC that insurance information about its recently approved crude oil pipeline project should remain confidential in order to protect trade secrets from competitors.

The order also responded to emails the board received from Ames League of Women Voters member Linda Murken and Montrose resident Elaine Tweedy Foley (the sister of Hughie Tweedy, the landowner who secretly recorded a surveyor contracted by Dakota Access offering him prostitutes for access to his property) questioning whether the pipeline company had started construction on the project before receiving final approval to do so. (The emails are also embedded in the document below.) If construction had indeed begun, the IUB warned Dakota Access, the company could face six-figure fines.

When the IUB approved Dakota Access’ petition for a hazardous liquid pipeline permit last month, it made the 3-0 vote contingent upon a list of conditions that the company would first have to meet. In response, Dakota Access requested that the process be fast-tracked to “avoid economic waste,” which the board denied. Since then, the company has been claiming that the delay is costing it $1.3 million a day.

As part of its permit compliance filings, Dakota Access also requested that the details of a general liability insurance policy of at least $25 million it is required to obtain be kept confidential. The company argued that the policy would “reflect internal and intercorporate arrangements, financial terms and conditions, and competitive operational knowledge that Dakota Access and its parent entities consider proprietary and sensitive business information,” and that it “believes that the general release of this information would substantially injure its economic and business interests.” In its Thursday order, the IUB noted that the company also argued that the compliance filing regarding the insurance policy “represents a report to a governmental agency which, if released, would give advantage to competitors and serve no public purpose and is therefore entitled to confidential treatment under [Iowa Code].”

The IUB wasn’t convinced. Citing in its Thursday order a document filed by the Northwest Iowa Landowners Association (PDF) challenging the confidentiality claims, the board concluded that, “as NILA has described them, the insurance policies appear to be standard insurance industry forms. Dakota Access has not explained how the forms have independent economic value, actual or potential, from not being generally known to or readily accessible to some other person who would be able to obtain economic value from its disclosure or use.” Additionally, according to the board, Dakota Access had offered no evidence of how competitors could take advantage of such information. Only policy premiums and identifying information, the board ruled, could remain confidential.

Meanwhile, Dakota Access has apparently been moving ahead with construction anyway. As Murken documented in her email to the IUB, work appears to be underway on an electrical substation for a pumping station outside Cambridge in rural Story County, on a property that Dakota Access transferred last November to Marshalltown-based Consumers Energy Cooperative. Dakota Access still owns an adjacent parcel. When the Ames Tribune‘s Austin Harrington investigated the construction site, he was unable to get direct answers from either Consumers Energy or Dakota Access. (On March 22, he also reported, the county Board of Supervisors denied a request made by Des Moines-based Central Iowa Power Cooperative, a partner on the substation project, for road improvements near the site.)

Dakota Access spokeswoman Vicki Granado did seemingly suggest to the Tribune that Dakota Access didn’t consider the substation construction to qualify as part of the pipeline’s construction, saying that the company was “readying for the start of pipeline construction, but no construction has begun.” However, IUB rules state that pipeline construction is defined as “a substantial disturbance to agricultural land associated with installation, replacement, removal, operation or maintenance of a pipeline” with the exception of “work performed during an emergency.”

Murken, Tweedy Foley, and several others also reported seeing tree clearing along the pipeline’s route, which the IUB said could also constitute construction. The board is looking into the issue and has asked Dakota Access to comment on whether it is in violation of pre-permit filing requirements by Monday, when the board next meets (PDF).

“If Dakota Access is found to have violated the Board’s order, the Board may levy against Dakota Access a civil penalty in an amount not to exceed $100,000 for each violation,” Thursday’s order stated. “Each day that the violation continues constitutes a separate offense, up to a maximum of $200,000 for a related series of violations.”

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Gavin Aronsen is an editor and reporter for and founding member of the Iowa Informer. He previously worked as a city reporter for the Ames Tribune, research assistant to investigative journalist Wayne Barrett at the Village Voice, and in various roles at Mother Jones, where his work contributed to a National Magazine Award nomination for the magazine's digital media coverage of the Occupy Wall Street movement. Email: garonsen [at] iowainformer [dot] com.