The state board, which granted permission for construction of the oil pipeline in March 2016, is seeking more information about the insurance policy held by Dakota Access LLC, a subsidiary of Texas-based Energy Transfer Partners.

“As of the date of this order, Dakota Access still has not filed with the Board the insurance policies that were effective August 15, 2018,” the board wrote in its Dec. 28 order. “Dakota Access stated such policies are normally available within 30 to 60 days, which means they should have been available by the middle of October. The Board will therefore require Dakota Access to provide the current insurance policies for the Board’s review within seven days of the date of this order.”

One issue which still seems to be unclear is whether the $25 million insurance policy, which was required by the IUB before the permit was issued, is dedicated to cleaning up damage from a spill in Iowa, or if that $25 million could be used in any state along the pipeline’s route, which travels 1,134 miles through North Dakota, South Dakota, Iowa and Illinois.

When the IUB made its order in March 2016 allowing the pipeline, “Among other conditions, the order required Dakota Access to maintain at least $25,000,000 in general liability insurance at all times while the pipeline is operational,” the board wrote.

-Messenger file photo by Hans Madsen
Marisa Cummings, of Sioux City, sings a prayer as she holds a sign and an eagle wing in October 2016 during a protest against the Dakota Access Pipeline on Red Oak Avenue north of old Highway 20 in Calhoun County.

That policy was filed properly just a few days after the order in March 2016, the board wrote. On Aug. 16, 2018, the board was given a letter regarding new insurance policies, with the assurance that copies of the new policies could be filed with the board upon request.

The insurance policy is for about $50 million, Dakota Access said.

However, the board asked for more clarification, since it appears the policy could be used anywhere.

“Dakota Access acknowledges that the policies cover the entire pipeline, and an incident in North Dakota, South Dakota, or Illinois would be covered just as one in Iowa would be covered,” the board wrote on Oct. 16. “The Board only has jurisdiction over the Iowa portion of the pipeline, thus the Board’s order inherently was concerned only with the portion of the pipeline through the state.”

Now that it’s had more time to review the answers to questions it asked in September, the IUB wrote, it appears there may not be $25 million available just for Iowa, as the board intended.

-Messenger file photo by Peter Kaspari
Construction was just beginning in Webster County on the Dakota Access Pipeline, in this September 2016 photo. This construction zone was on 370th Street, just off Lainson Avenue, near Harcourt.

“Based upon the current review of the policies, the Board now understands that the policies do not have specific coverage of $25,000,000 for Iowa since an incident in one of the other states may create claims up to the limits of the policy, effectively leaving no coverage for any affected parties in Iowa,” it wrote.

Dakota Access’s next filing said it would create a policy specifically for Iowa out of the existing $50 million policy: “(Dakota Access) stated that it had discussed the issue with its insurance brokers and could obtain a separate policy covering an incident arising within the borders of Iowa. If it did so, the new policies would total $25,100,000 in coverage for Iowa while excluding Iowa from the initial $25,100,000 in coverage under the existing policies,” the IUB wrote.

The board wants to see details of these policies to make sure Iowa would be covered for a spill originating just outside the state borders, for example, and to determine whether the new split policy would be better or worse for the state than the initial $50 million policy, the board wrote in its December order.

In filings in August and afterwards, Dakota Access has maintained that requiring the $25 million policy was actually not within the bounds of the law, but said that it would comply with the requirement anyway.

“Dakota Access also argues that the Board’s requirement goes beyond what is allowed by Iowa Code…which requires a surety bond or proof of property in the state in an amount of $250,000,” the board wrote.

But Iowa code gives the board “broad powers” to protect landowners from potential damage, the board said. While the law sets a minimum amount, it doesn’t forbid the board from requiring more.

Also, Dakota Access did not object to the board’s order requiring insurance policies back when it was first issued in March 2016, the board wrote in its most recent order.

That would have been the time to raise the issue, not now, it said.

Dakota Access maintains that it has had adequate insurance coverage in place the whole time the pipeline has been in place, and IUB does not seem to contradict this statement.

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