Buffalo gets S.D. well permit, will sell water to TransCanada for building KXL pipeline

Capitol News Bureau
KELO Harding County

PIERRE, S.D. (KELO) — The South Dakota Water Management Board approved a state permit Thursday for the town of Buffalo to operate another well.

Town president Gary Johnson signed a water purchase agreement December 17, 2019, with two officials for TransCanada Keystone Pipeline company to sell 100,000 gallons per day to be used for various purposes in constructing the Keystone XL pipeline.

The proposed crude-oil pipeline would run from Alberta through Montana, South Dakota and into Nebraska, where it would connect with an existing network.

Under the agreement, TransCanada agreed to pay a $58,972 administrative fee and a $7 charge per 1,000 gallons.

The town of Buffalo in turn has a contract with the Harding County Chamber of Commerce to pay $5 per 1,000 gallons, after 500,000 gallons have been taken.

Dakota Rural Action and some of its allies initially opposed Buffalo’s permit application for 82 acre-feet from the Hell Creek aquifer. Buffalo already had five of the 12 well permits in that area for the aquifer.

But the state board’s hearing officer, Rodney Freeman of Huron, ruled May 20 in favor of Buffalo that evidence of the sale shouldn’t be presented. He said the state board’s decision would be whether the water would be put to a beneficial use and the permit would be in the public interest.

“That is a vastly different question than whether the pipeline itself is being used as a beneficial use and whether it is in the public interest,” Freeman’s written decision stated. “The question before this Board is limited to the use of the water and is not an opportunity to re-litigate the PUC permit that was granted in 2010.”

None of the intervenors participated in the hearing Thursday. They issued a statement saying the state board wouldn’t provide adequate safeguards to protect against spread of COVID-19. Freeman on July 2 had denied a request that DRA attorney Bruce Ellison of Rapid City, who is 70 with a heart condition, be allowed to participate remotely or that the hearing be delayed 60 days.

Whitney Kilts, a natural-resources engineer for the state water-rights program, recommended approval of the permit application Thursday. She said a monitoring well about 4 miles away hasn’t been affected by Buffalo’s use of the aquifer.

Kilts said Thursday her report didn’t reflect the pending sale of water from the town to TransCanada. She said the application indicated Buffalo wanted a deeper well to get better-quality water and to retire two existing wells. Kilts said it wouldn’t be “a surprise” to have to retire wells.

Eric Gronlund, chief engineer for the state’s water-rights program, said the application was for municipal use. “So it is fairly all-encompassing,” he said Thursday.

Gronlund added that a local government’s sale of water for a construction project was “a fairly common” practice.

Town attorney Dusty Ginsbach (pronounced gins-baw) asked Ryan Smith, the town’s public works superintendent, about the application Thursday. Smith said he patterned it after the town’s previous one from 1999.

“Our uses and needs haven’t changed,” Smith said.


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