The North Central Iowa Regional Economic & Port Authority released their much-anticipated, natural-gas pipeline study this week.
Why it matters
The Port Authority, which was a joint creation back in 2015 by Worth, Mitchell, Winnebago and Cerro Gordo Counties, have maintained since their formation they would try to bring more natural gas to the region.
A white paper drafted by the Port Authority at the time argued north Iowa is uniquely positioned to take advantage of nearby natural gas supply lines, and doing so would bring economic growth and prosperity to the region.
To this end, the Port Authority commissioned an engineering study to “establish a natural gas infrastructure strategic plan for the Port Authority that will serve as a guide for their future energy development.”
This study, conducted by Montana-Dakota Utilities Co., proposes the Port Authority build a natural gas pipeline connecting our area to existing natural gas supplies west of Worth and Mitchell counties.
Here’s what the final draft of the study says:
• The pipeline would stretch 34 miles, starting near Joice and ending in St. Ansgar.
• The pipeline would be split up into 3 phases or sections.
• The pipeline would be built in private easements.
• The total cost of the project is estimated around $36,328,000.
• The Port Authority should secure an ‘anchor customer’ before starting the project.
The high cost of the project makes funding it a challenge, so the three items recommended to address this are — constructing in phases, finding a big consumer or ‘anchor customer’ right away and constructing in private easements so the Port Authority can sell the pipeline to potential pipeline operators once it is operational.
By the Numbers
According to the report, the pipeline would need to generate $2.9 million per year in order to pay for itself. This means the pipeline would have to sell 16,500 MCFD (million cubic feet per day) of natural gas.
What they’re saying
The report said the benefits of moving forward with the project would include the following:
“The pipeline will provide safe, reliable energy to the surrounding counties, help attract new businesses, create jobs, and offer cost savings for rural homes, farms, and communities currently being served by liquid propane. Natural gas is one of the Nation’s most abundant and cost-effective energy resources. On average, compared to propane, a residential home will save approximately $1,200/year, a commercial business approximately $4,800/year, and an agricultural grain drying operation approximately $24,000/year by using natural gas from this pipeline infrastructure.”
The bigger picture
The Port Authority has received a considerable amount of backlash from the public over the project.
Much of the criticism stems from the Port Authorities perceived lack of transparency.
When the Port Authority was formed in 2015, the supervisor boards from each of the four counties passed the measure unanimously, along with letters of support from just about every school district and city council, along with several prominent businesses in Worth and Mitchell Counties.
But since the Port Authority meetings are generally held in Cerro Gordo County at the Chamber of Commerce building in Mason City, much of the public in Mitchell and Worth counties seemed to have either lost track or forgotten about it.
So when the news became public in early 2018 that the Port Authority had commissioned a study to build a pipeline, many were caught off-guard by the news. Claims of corruption and lack of transparency began to surface, and likely played a big part in long-time politician and former Port Authority chair Merlin Bartz losing re-election to the Worth County Board of Supervisors in 2018.
Further criticisms have also sparked debate over who should pay for a pipeline: either the government (in this case, the Port Authority) or the private homeowners, farmers and industries that would use the natural gas.
Opponents of the pipeline don’t like the idea of the government stepping in to build this infrastructure, and believe that
if private industry wants it they will build it themselves.
On the other hand, supporters believe if the Port Authority doesn’t do it, then it won’t get built at all. Then our region will continue struggling to support growing industry and attract new ones.
What happens next:
If the Port Authority decides to go forward with the pipeline, they would need to secure that “anchor customer”. A company by the name of Midstream Methanol is a potential candidate, and has been in talks with the Port Authority. Then, the report recommends the following:
“After securing an anchor customer, we recommend continuing with detailed engineering design, permitting and right of way acquisition of the selected pipeline routes. After the engineering plans are complete, the right of way is secured, and permits are obtained, the pipeline will be ready for construction.”
To see the full report, click here.