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Major North American Pipelines Projects Hit With Setbacks

A court-ordered shutdown of the Dakota Access Pipeline (DAPL) is the latest in a series of setbacks this year for North American pipeline projects.

The US District Court for the District of Columbia ordered Energy Transfer to shut down the 570,000 B/D DAPL and remove oil from the pipeline by 5 August. The 1,172-mile pipeline, which transports crude oil from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois, will be shut pending further environmental review.

Energy Transfer’s Dakota Access unit filed an emergency request for a stay to shut down the pipeline, only to have it denied. The company said that if a stay was not granted, it would pursue a stay and expedited appeal with the Court of Appeals

“The economic implications of the judge’s order are too big to ignore, and we will do all we can to ensure its continued operation,” the company said in a press release. “Billions of dollars in tax and royalty revenue will be lost by state, local, and tribal governments in North Dakota, South Dakota, Iowa, and Illinois.”

The decision to shut the DAPL follows Dominion Energy and Duke Energy’s cancellation of their $8-billion Atlantic Coast Pipeline (ACP) due to ongoing delays and increasing cost uncertainty, which threaten the economic viability of the project.

Despite a 7-2 victory in June at the US Supreme Court, which vindicated the project and decisions made by permitting agencies, the companies said recent developments created an unacceptable layer of uncertainty and anticipated delays for ACP.

ACP would have run 600 miles between North Carolina, Virginia, and West Virginia with a capacity of 1.5 Bcf/D.

Another key project facing issues is TC Energy’s $8-billion Keystone XL Pipeline. The proposed pipeline expansion was excluded from a Supreme Court decision to reinstate Nationwide Permit 12, which is used by the Army Corp of Engineers to fast-track pipeline projects.  

The 1,210-mile pipeline, which runs from Hardisty, Alberta, to Steele City, Nebraska, where it will connect with existing facilities to reach US Gulf Coast refiners would delivery 830,000 B/D of crude oil.

Keystone XL has been in development since 2008, facing legal oppositions from environmental groups, US politicians, and US courts. In 2015, US President Obama vetoed a bill to build the pipeline, and later rejected TC Energy’s application to build the pipeline.

In 2017, US President Trump signed a memorandum to clear the way for Keystone XL.

Despite these setbacks for North American pipeline projects, Keystone XL is not completely off the table, and Energy Transfer plans to keep working toward keeping DAPL from shutting down.

Energy Transfer said it will continue to cooperate with the Corps through their process as they both believe proper procedures were followed in granting the original easement and that their work will reconfirm that the easement across federally owned lands in North Dakota was properly granted.

Also, the reinstated Nationwide Permit 12 remains intact for other pipeline projects.

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