After a lengthy discussion, the Barton County Commission Monday morning approved sending a letter to the Kansas Corporation Commission requesting it take into consideration the impact of the proposed Grainbelt Express transmission line on oil production in the county.
The action came despite assurances from representatives of project developer Houston, Texas,-based Clean Line Energy Partners, that the line would not interfere with existing oil leases. They also said they will work with oil producers concerning future development in the region.
However, Barton County’ action may prove to be only ceremonial since the decision on the wind power line is ultimately in the hands of the KCC. The agency will hold hearings on the matter next week in Topeka and a finalized route for the line should be set by Nov. 12.
Clean Line is developing the electricity transmission line to move 3,500 megawatts of wind energy from Ford County in western Kansas to communities in Missouri, Illinois, Indiana and points farther east. The energy will be transported via an approximately 700-mile overhead, high-voltage direct current transmission line at a cost of about $2 million per mile.
The proposed route runs west of Great Bend and north, following U.S. Highway 281 to just south of Russell, where it will jog east of that city. The transmission lines will run through private property, and land owners will be asked to sign legally binding agreements.
Construction won’t begin until 2016 at the earliest.
“I am not a rabble rouser,” said Jana Reed. It was Reed who came before the commission Sept. 16 with concerns about the line and how it would impact oil leases that prompted the discussion Monday morning.
She wanted the county to seek an injunction. Such action was taken in Marshall County and she said opposition is growing in Russell County.
Reed spoke on behalf of her family which owns land near Galatia on which there is a lucrative well. The proposed line will pass directly over the site and that is the problem.
The wires would prevent the well from being serviced since equipment such as pulling units are too tall to fit beneath them.
The oil well has produced 42,000 barrels since 2007. It is valued at $4.5 million and has a life expectancy of 40-45 years.
“We will not shut down existing wells,” said Diana Rivera, Clean Line’s project development manager. The company did an extensive study and new were the oil production was when it planned the route and did what it could to minimize the impact.
While major changes in path are unlikely, they can make minor shifts and other engineering alterations to accommodate the wells, she said.
“We want to work with everyone,” Rivera said. “We want to be good neighbors.”
Reed also questioned the viability of the company itself. “It is just a start up,” she said.
She fears the landowners will be left holding the bag should the company go under. She was also concerned there was no escrow account to cover the costs of restoring the property should the project fail.
Rivera said her company was founded in 2001 by a veteran of the wind power industry. Clean Line has also drawn investment from other major players in the global energy market.
A county report noted there are eight leases that fall under the proposed route, but these are not the only concern, said Tim Scheck, chairman of the Kansas Independent Oil and Gas Producers. “There are more wells to be drilled.”
His members wanted something in writing indicating Clean Line would avoid impacting current or future development.
Scheck was questioned by commissioners on how he defined future production and just how these areas would be determined. This, he said, would be handled by the attorneys.
But, he said, he can’t reveal what his organization plans to do when it comes to the upcoming hearings.
Although Clean Line may have contacted land owners and held meetings, Scheck said the biggest issue lease holders have with the project is that they weren’t notified about the proposed route in advance.
Sometimes, he said, those who own the mineral rights on a parcel of land are not the same as those who hold the surface rights.
There were also worries about the affect on property values.
A taxing issue
“The county does have an interest in this,” said County Administrator Richard Boeckman. The county receives a considerable amount of tax revenue from oil production.
However, utilizing a state statute approved in 2001, Clean Line will receive a 10-year property tax abatement, Rivera said. None the less, it will compensate the county $7,500 per mile and sign agreements to leave roads it uses either in the same condition they are now or better.
“It is not our intent to burden the county,” Rivera said.
Then, there was the matter of eminent domain, which is the right of an entity such as a public utility, to demand the use of property over the objections of a property owner. Technically, Clean Line has this authority since it was granted utility status by the State of Kansas.
The thought of this upset Commissioner Jennifer Schartz. She felt it was unfair for someone to be denied use of their land.
She said she supports wind energy, but was conflicted by the impact of this project. “Not only are we not gaining money, we are also losing money.”
“We have no intent to use eminent domain,” Rivera said.
Clean Line is also paying landowners for what amount to leases, and this might get lost in the debate, said commission Chairman Don Cates. “There are those who will benefit from this and we cannot forget about them.”
The next step
Rivera said they are preparing for the next phase. First, they had to get a route proposed and their first priority was to work with the landowners in the area.
There were just too many mineral right holders involved so it wasn’t practical to start there. Now, they are ready to do so.
They are planning a series of meetings with oil producers and those with a vested interest in oil production.
Even after the final route is OKed by the KCC, Rivera said there is still some flexibility.
“We will be working in Barton County hopefully for years to come,” she said. She encouraged anyone with concerns to contact the company.
Other questions have been raised along the line path, but the oil issue has only been raised in Barton and Russell counties, she said.
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