Iron County enters into agreement with Enbridge
November 16, 2019
By RICHARD JENKINS
Hurley — The Iron County Board of Supervisors approved an option agreement Tuesday that gives Enbridge Inc. the ability to purchase an easement on Iron County land if the company moves forward with a plan to reroute its Line 5 pipeline.
“It’s an agreement we would make with the county, where, if the day comes where we actually do build the pipeline, we would exercise that option and then we would negotiate an easement — a perpetual easement — with the county for that pipeline to exist on the Iron County property,” said Paul Halverson, a right-of-way agent for Enbridge.
Halverson made clear the company hasn’t decided to move forward with the pipeline reroute.
“There’s not, for sure, a pipeline project today. We’re weighing alternatives and the possibility of building a reroute of Line 5,” Halverson said. He said the company continues to explore various routes and options — including keeping the pipeline where it is.
If the company does move forward with rerouting the pipeline, it would be to move it off tribal land owned by the Bad River Band of Lake Superior Chippewa. The tribe filed a lawsuit in July seeking to have the roughly 12-mile section of pipeline on tribal land removed, Wisconsin Public Radio reported, and the company has since offered at least $24 million to resolve the dispute and allow the pipeline to stay in place.
Enbridge spokeswoman Julie Kellner told the Daily Globe that offer remains on the table and the company hasn’t heard from the tribe.
The pipeline — which carries light crude and natural gas liquids between Superior, Wisconsin and Sarnia, Ontario — began operations in 1953, Halverson said Tuesday.
Iron County will receive $110,130 for approving the option on approximately 115.39 acres spread over the 11 parcels. This includes roughly 45.5 acres of actual easement land, 63.6 acres of temporary workspace and 6.35 acres of additional temporary workspace.
Halverson said these figures were estimates for the time being, but exact acreages would be calculated if the company moves forward with the project.
The company valued the land at $1,200-an-acre when determining what to pay for the option agreement, Halverson said, and will pay 125% of that value for the easement acres and 50% of the value for the temporary workspace categories as they revert to the county once the pipeline is installed.
He said the company is also offering to pay Iron County the same $10-per-linear foot signing bonus that it gave to private landowners it has entered into agreements with.
This would bring the county an additional $395,770 for the 39,577 feet of proposed pipeline on the county land, according to information presented at the meeting, bringing the total payment to $505,900.
Regardless of whether Enbridge decides to purchase an easement on county land and move the pipeline, Halverson said Iron County would keep its money.
The option lasts for three years, according to Halverson, with a possible two-year extension for the company.
If the company exercised its extension, it would pay an additional $500 per parcel.
If an easement is purchased it would be a 50-foot wide easement, through which the 30-inch diameter pipe used in existing Line 5 pipeline would run.
Any additional easements for things like access roads on county land will be negotiated in the future, Halverson said.
During the board’s discussion, questions were raised regarding Enbridge’s recent purchase of property from the city of Mellen.
Earlier this month, Mellen’s city council approved the sale of city land as part of the potential reroute. Duluth TV station KBJR reported Mellen received $1 million for the land, with an additional $3.25 million if the pipeline is built.
Halverson told the board the Mellen price was higher than the Iron County agreement because the deal included money for potential negative impacts or damage as a result of the possible pipeline project.
“(Mellen’s agreement) was set up in such a way it would cover anticipated costs,” he said.
With Iron County’s deal, Halverson said matters such as payments for access roads, the loss of timber value on the land and any other issues would all be handled in the future as they happened.
“Any other damages that occur, Enbridge will take care of it. We will come back and figure that out at the time when we have a better answer for what that actually is,” Halverson said.
He said Iron County’s way was better as it would deal with real costs compared to estimates and forecasts.
County officials signed the necessary documents to complete the option agreement following the board meeting.