EQB suspends

pipeline permit

By KURT NESBITT

Journal Staff Writer

ST. PAUL -- The state Environmental Quality Board voted unanimously Thursday to suspend the City of Hutchinson's pipeline routing permit after staff recommended the suspension in the wake of complaints about the city's construction practices and an investigation into those practices made by EQB staff.

The board and Hutchinson struck an agreement in October that addressed violations of an agricultural impact mitigation plan regarding the repair of some drainage tile that was cut during construction. The agreement recognized that EQB could investigate the entire length of the pipeline to see whether or not other violations of the routing permit and the agricultural impact mitigation plan had taken place.

The EQB issued a pipeline routing permit to the City of Hutchinson in December of 2002 for the 90-mile natural gas pipeline, which runs from Trimont in Martin County to Hutchinson in McLeod County.

The EQB changed the permit in March 2003 to more specifically identify the route and to incorporate the agricultural impact mitigation plan as an enforceable part of the permit. That change required HUC to follow certain construction practices to help restore the farmland. HUC agreed to follow the requirements.

"We lost our patience," said EQB member Gene Hugoson, commissioner of the Minnesota Department of Agriculture. "We had been dealing with this for a number of months and they made promises to correct the problems but nothing got resolved. We were doing it for leverage."

Thursday's action will suspend the project until Hutchinson meets three requirements set by the EQB.

First, Hutchinson must turn over documents the EQB requested in November and December of this year. Second, it must also pay the board $25,000 for its expenses during the investigation. Third, the city must make another agreement with the EQB that says the city will pay for "actual future crop losses incurred by any landowner along the entire 90 miles of pipeline." The resolution also gives the EQB the authority to start litigation against Hutchinson.

EQB Chair Robert Schroeder recommended changing the language of the resolution to allow a faster reinstatement of the permit after he is satisfied that Hutchinson has followed the order. The original resolution would have required the entire board to consider the city's progress and then vote on whether or not to reinstate the city's permit regular meetings. The vote came before any other discussion about the pipeline. Hugoson said the change "was to facilitate a quicker turnaround."

"I was surprised at the action taken today," said Bruce Hanson, the Minneapolis attorney that represents Hutchinson. "I feel that it's unnecessary, and it increases the adversarial nature of this process."

Attorneys for SibRenFAIR, a group of farmers who have legal issues with the pipeline, declined to comment on the board's decision, but thanked the EQB staff for its work.

"It's nice to see a state agency listening," said Minneapolis attorney Kevin Johnson, who represented SibRenFAIR Thursday.

Bob Patton of the Department of Agriculture said that if the state and Hutchinson come to an agreement on the crop losses, then most of the information the state is looking for will "become moot." He said the order will not stop the investigation. Hugoson said the order is demanding part of the information that investigators previously requested.

The board discussed briefly -- and denied -- a proposed resolution that would have directed Hutchinson to get EQB permission before tapping the pipeline to connect with a pipeline running from Fairfax to Winthrop.

Hanson said 'I'm not asking for anything except for you to delay action until January."

Suspending the permit would do nothing except make the situation more contentious, Hanson said. He repeated his request for the board to delay action until January so that the information the EQB was asking could be collected.

"We have never had problems like this," said one of the EQB board members. "We have had complaints from the EQB and the Department of Agriculture. This is going to alter how pipelines are handled in Minnesota. ... This has turned into nothing but a bureaucratic nightmare. We are running out of patience."

Hanson said that county inspectors "have been fully supportive" and "anytime there is resistance, it's going to be a contentious issue. I did the first pipeline case back in 1988 when the regulations were adopted. Most of the time, there's a good rapport with the companies."

EQB's attorney, Minnesota Assistant Attorney General Dwight Wagenius, analyzed the order. He said the adequacy of the notice requirement is not a problem in the suspension order. He said that the Minnesota Data Practices Act says cities must produce copies of public documents within a reasonable amount of time, but because Hutchinson is "acting in a proprietary fashion," some of the information can be designated as information that contains trade secrets. But in that case, the city still must answer the request. He told Hanson "the controversy came from your client's non-compliance, not from the EQB trying to achieve it."

Wagenius said he has heard from experts that the soil that was allegedly damaged during the construction can't be separated again.

"Since there is no way to repair it, your client was expected to pay for the crop losses as a surrogate for the restoration of the soil," Wagenius said.

According to a recent memo sent to EQB staff, inspections on Nov. 3 and Nov.12 found 12 sites in four counties where topsoil was mixed with subsoil, large rocks in the right-of-way and compacted soil. Staff reported those findings to the board at its November meeting along with photographs taken on a site in Watonwan County that showed 'large clods of clay on the surface of the right-of-way'.

EQB staff wrote to the Hutchinson Utilities Commission on Nov. 7 and Dec. 1 requesting copies of a number of documents, including notes taken by soil scientists and the log books of the pipeline inspectors, who had told EQB staff that they kept such information. EQB had also asked Hutchinson to pay $25,000 to cover the ongoing expenses in the investigation.

On Dec. 10, a landowner in Sibley County complained about HUC cutting a valve on his property to tap into the pipeline and run a connection to a smaller pipeline that runs between Fairfax and Winthrop.

A memo sent to the board on Dec. 11 said EQB had never heard about the tap until the landowner called to complain. The EQB spoke with the New Ulm Public Utilities Commission, which indicated that it wanted the tap so it could sell part of its gas allotment to Fairfax and had planned to do so for a while. The memo noted that there is nothing about this tap in the HUC application, the permit or the documents submitted to the Minnesota Public Utilities Commission during its hearings.

The EQB began receiving complaints around July 14, shortly after the construction of the pipeline started. Most complaints dealt with HUC proceeding with the construction and were mainly related to the stripping of topsoil and lack of notice to landowners.

A week later, one of SibRenFAIR's attorneys, Kevin Johnson, wrote the EQB a letter that claimed HUC was not following the agricultural impact mitigation plan in Martin County and asked EQB to take immediate action -- including suspension of the permit -- to get HUC to comply.

Staff from the EQB, the Department of Agriculture, HUC representatives, landowners and county officials met to talk about HUC's obligations under the mitigation agreement in St. James and in New Ulm in August. EQB and Department of Agriculture staff inspected several pieces of land later that day and found topsoil had not been stripped according to the plan, but was removed using an alternative procedure developed by the soil scientist hired by HUC.

Complaints about the way HUC was repairing drainage tile first came in October, mainly alleging that Hutchinson was using the wrong kind of support material over the pipeline.

The EQB held a special meeting on Oct. 28 to consider the drainage tile complaints and approved a stipulation agreement with HUC regarding that issue. The EQB staff agreed to drop a part of that agreement that required HUC to pay farmers for future crop losses. The agreement also recognized that EQB might investigate HUC's construction practices and that EQB might seek additional sanctions for other violations and that HUC would pay the cost of the investigation.

EQB staff and a representative of the Department of Agriculture went to New Ulm on Nov.3 to meet with HUC representatives and conducted interviews with pipeline inspectors who had worked on the construction. They found problems with topsoil in Sibley County.

On Nov. 7, the EQB staff wrote to HUC and requested copies of a number of documents, including the construction inspectors' notes, the soil scientist's notes and a report on an alternative soil-stripping method that the soil scientist prepared. An attorney for HUC notified the EQB that HUC "was reluctant to provide the requested documents because they might end up in the hands of the SibRenFAIR attorney," the resolution said.