Diamond Pipeline’s PSC Hearing Is Brief, Ruling Expected In Weeks

The proposed route for the Diamond Pipeline.
Credit Diamond Pipeline LLC

An evidentiary hearing at the Arkansas Public Service Commission on how the $900 million Diamond Pipeline will cross five major in-state water sources lasted less than 15 minutes on Thursday after opponents of the 440-mile crude oil line withdrew their testimony.

The regulatory docket before PSC Administrative Law Judge Susan D’Auteuil was held at the commission’s headquarters in downtown Little Rock to consider a June 7 application by Diamond Pipeline LLC to construct the pipeline across the Arkansas River in Franklin County; the Illinois Bayou in Pope County; the White River in Prairie County; the Saint Francis River in Arkansas County; and the Mississippi River in Crittenden County.

In the brief proceedings, Judge D’Auteuil allowed attorneys for Diamond Pipeline and the commission staff to enter electronic testimony into the court record that mirrored statements filed with the state utility regulator earlier this month in support of the controversial pipeline.

Attorneys for Clarksville Water & Light Co. withdrew testimony in opposition of the project as part of an agreement reached on Wednesday with Diamond Pipeline officials to drop the case in return fora $6.6 million escrow fund to build a water treatment facility to protect the Johnson County community’s water supply.

Despite the short hearing, D’Auteuil did make a point to remark that the PSC administrative court had received a host of public comments since the docket was first opened more than two months ago by the joint venture formed by Houston-based Plains All American Pipeline and Valero Corp. of San Antonio.

“I want the record to note there has been a number of public comments filed and received by the secretary of the Public Service Commission,” the PSC law judge said.

At D’Auteuil’s prompting, Diamond Pipeline officials quickly entered testimony electronically from company engineer Stephen Lee stressing that the pipeline would not pose a “public safety threat” or contaminate the water supply if there was an oil spill.

Commission staff then entered similar supporting electronic testimony from Robert Henry, the PSC chief of pipeline safety, who said in earlier queries that the project will not jeopardize public safety or result in “an unlawful paramount public or private use of the navigable waterway or its underlying bed at the point of the proposed crossing.”

Without opposition to the project in the court record, all that is left for Diamond Pipeline officials to begin construction on the project is for the PSC judge to issue an order on the company’s application, and then the pipeliner can iron out final details related to engineering plans, permits and right-of-way acquisition.

On May 26, the Little Rock Corps of Engineers office, serving as the lead for the project, approved the Diamond Pipeline nationwide permit to cross Arkansas. In the following week, the Corps of Engineers’ Tulsa and Memphis districts also approved nationwide permits for jurisdictional boundaries in Oklahoma and Tennessee.

Judge D’Auteuil told the parties gathered at the hearing that she would consider the testimony from Diamond Pipeline and the PSC staff, enter a transcript of the proceedings into the docket record, and then issue a final ruling.

“There is not a specified statutory requirement for an order deadline, (but) the transcript is due within ten days,” said PSC Executive Director John Bethel. “I anticipate the order would be entered within a few weeks following the receipt of the transcript.”

Diamond Pipeline spokeswoman Karen Rugaard, who traveled from Houston to attend the hearing, said the company goal is still to begin construction in the fourth quarter of 2016.

“I not familiar with the (PSC) proceedings, but construction should begin by the end of the year,” said Rugaard, manager of stakeholder relations for Plains All American.

There were several other interested parties at hearing, but none chose to testify during hearings’ public comment period. Clarksville City Councilor Danna Schneider, a vocal opponent of the Diamond Pipeline who on yesterday backed her community’s decision to reach a deal with Diamond Pipeline, said she drove to Little Rock this morning because she was curious about the regulatory proceedings.

“I just wanted to see how the process worked,” she said.

Three other court observers from Conway, who were members of the local International Union of Operator Engineers (IUOE), backed out of testifying in the proceedings after Judge D’Auteuil asked for public commenters to take the stand.

Eric Wright, a representative for the local pipeliner’s union, said his group wanted to make sure Plains All American hired the best labor for the pipeline project once it gets underway. He said union workers were part of the construction crew that built the last 30 miles of Magellan Midstream Partners’ recently dedicated 210-mile refined products pipeline from Fort Smith to Little Rock.