Tribes Call for DAPL to be shut down, despite significant disruptive consequences

The Standing Rock Sioux and several other tribes this week filed a brief with the U.S. District Court for the District of Columbia calling for the Dakota Access Pipeline (DAPL) to be shut down while the project undergoes additional environmental review, which could take a year or more.

This comes after a federal judge ruled in March that the U.S. Army Corps of Engineers must conduct an Environmental Impact Statement (EIS) on DAPL, despite its safe operations for nearly three years – safely transporting crude oil from the Bakken region in North Dakota to a the Patoka Oil Terminal in southern Illinois. Further, the Corps had already conducted an Environmental Assessment (EA) on the project before issuing approval, which determined a “Finding of No Significant Impact” (FONSI).

Federal regulators, the state of North Dakota, industry groups, and more than a dozen attorneys general have expressed support with the court that DAPL be able to continue operations while the additional review is conducted. Shutting down DAPL would have severe economic, environmental, and energy security consequences. The ruling could set a dangerous precedent for the future of American energy infrastructure development.

As the North Dakota Petroleum Council wrote in a recent amicus brief:

In sum, shutting down DAPL after three years of operation and under the current market conditions would undermine the substantial commitments North Dakota’s oil producers have made over the past three years. It would further harm the North Dakota oil and gas industry in a time when it is already down due to the coronavirus pandemic. It would also delay any recovery from the pandemic. The loss of oil production would harm not only the companies who produce the oil, but also royalty owners and the state and local governments who rely on royalties and taxes from the production, both during the pandemic and long afterward. It would also harm the service industries and employees who supported the lost production. Ultimately, a shutdown of DAPL in the currently distressed environment likely would cause companies to fail who otherwise might have survived, and jobs to be lost that otherwise might have been saved.

The Corps believes it is “highly likely” that they will be able to substantiate its past permitting decisions after conducting the EIS. As the Corps wrote in their recent brief:

There has already been a great deal of environmental and technical review that informed the Corps’ substantive decisions. Given the amount of analysis that has occurred thus far and the specific easement conditions imposed, it is highly likely that the Corps will ultimately be able to substantiate its existing property management decision after correcting the procedural error identified by the Court.

Without this property interest, the portion of the Pipeline under Lake Oahe would constitute an encroachment on federal land prompting the Corps to undertake an administrative process to determine whether corrective measures, such as removal, are required. Disruptions from removal could include, among other things, creating the “extreme waste” of dismantling and rebuilding the Pipeline. Removal or even temporary decommissioning could create additional construction-related impacts and result in oil being transported by truck or rail—transportation methods that entail both greater risk of spills and greater air pollution than pipeline transport.

The Corps respectfully submits that the Court should not vacate the Corps’ easement decision authorizing Dakota Access to construct a portion of the Dakota Access Pipeline 100 feet under the bed of Lake Oahe. The Corps’ errors were not “serious” in context, and the disruptive consequences of vacatur would be significant.

While opponents have pointed out the oil industry has struggled in light of the coronavirus, additional impairments such as shutting down DAPL will only further impact our nation’s energy producers and hinder development. In order to maintain American energy dominance, it is critical that Dakota Access be able to continue operations, and that policymakers and regulators ensure a streamlined permitting and approval process that provides regulatory certainty for investors.

Letter to the Editor: New natural gas projects are a boon for North Dakota’s economy and environment

The Williston Herald recently published a letter to the editor from GAIN spokesman Craig Stevens recognizing the North Dakota PSC’s approval of a new natural gas processing facility and gathering line near Williston, ND. As Stevens’ letter emphasizes, this energy infrastructure investment will be key to capturing excess natural gas produced during oil drilling that would otherwise be burned off. Instead, that natural gas will be able to be processed and transported to consumers across the region for a variety of uses, including power generation and home heating. Read the full letter below:

The North Dakota Public Service Commission last week approved the construction of a natural gas processing plant and pipeline. With work on the plant scheduled to begin imminently, the Commission’s approval of these projects represents an economic and environmental triumph at a time when America’s energy infrastructure is more important than ever.

Investments in energy infrastructure confer long-term economic advantages. North Dakota’s natural gas producers support thousands of families and provide much of the heat and electricity used by the state’s homes and businesses.

The newly approved projects will contribute to these benefits by creating hundreds of jobs and generating substantial local and state tax revenues, materially improving North Dakota’s resilience to coronavirus-induced economic downturn.

The construction of these facilities is also an important step towards a more responsible energy industry. The expanded production of natural gas has been key to lowering carbon emissions from the power generation sector. As well as being part of a broader shift towards cleaner energy usage, the new plant is designed to capture and process natural gas released by oil drilling that would otherwise be flared or burned off, reducing waste and improving efficiency. Instead, up to 250 million cubic feet of gas each day will be processed for consumer use – increasing access to clean, affordable, American energy.

In the face of a global pandemic, the expansion of domestic energy infrastructure is a tried-and-true solution for lasting prosperity that should be enthusiastically embraced. Projects like these are precisely the type of forward-thinking investments that North Dakota needs.

Craig Stevens, a former senior advisor to U.S. Energy Secretary Sam Bodman, is the spokesman for Grow America’s Infrastructure Now (GAIN).

On the Campaign Trail, Biden Puts Politics Before Energy Security

In an unsurprising announcement this week, Joe Biden’s campaign revealed he plans to rescind the Keystone XL pipeline permit if elected president. The statement from Biden’s campaign is the first that specifically addresses how Biden would handle the project. Pulling the permit would reverse action taken by President Donald Trump, who shortly after entering the White House in 2017 issued a cross-border construction permit for the $8 billion oil sands pipeline to be built across the US-Canada border. Such a politicized decision move would be a significant setback for our nation’s energy infrastructure – a decision that would fail to consider the serious ramifications for Americans who rely on affordable energy or those whose jobs are supported by the energy sector.

Biden campaign policy director Stef Feldman’s written statement to POLITICO said,

“Biden strongly opposed the Keystone pipeline in the last administration, stood alongside President Obama and Secretary Kerry to reject it in 2015, and will proudly stand in the Roosevelt Room again as President and stop it for good by rescinding the Keystone XL pipeline permit.”

The presumptive Democratic nominee’s opposition to the project raises the risk factor for TC Energy, the developer of the project who is attempting to start construction on the cross-border portion of the pipeline this year in order to carry 830,000 barrels of crude oil from Canada to the U.S. If completed, Keystone XL would strengthen grid resiliency and reliability, bolster American energy security, and serve as a critical economic investment when we need it most.

The project has unfortunately become subject to political controversy and targeted by activists as a bellwether for environmental policy. It has faced nearly a decade of permitting challenges and legal hurdles – the latest of which pulled water-crossing permits for the project issued by the Army Corps of Engineers.

However, Keystone XL remains an important infrastructure investment that has the opportunity to lower energy costs and strengthen American energy independence. Joe Biden’s hard stance against the project shows Americans he is willing to put politics before the wellbeing of American consumers and our energy security. Given the toll the coronavirus pandemic has taken on the economy, now is not the time to be gambling with thousands of jobs and our nation’s energy development simply to earn political points.

NWP 12 Ruling Could Limit Production of Personal Protective Equipment

The American Fuel & Petrochemical Manufacturers (AFPM) argued in a brief last week that a recent ruling from the U.S. District Court for the District of Montana barring the Army Corps of Engineers from authorizing pipeline projects under Nationwide Permit 12 (NWP 12) would not only severely delay pending projects, but could also stifle production of personal protective equipment (PPE) and essential supplies that are key to fighting the coronavirus pandemic.

The brief highlighted AFPM’s membership and their role in the economy and producing products that have been critical to mitigating COVID-19. Pipelines are responsible for safely and efficiently transporting oil, natural gas, and petrochemicals – many of which are feedstock for a variety of products:

AFPM’s members manufacture the petrochemicals needed to produce consumer products that are used daily in homes and businesses, and produce the fuels needed to deliver nearly all consumer goods. AFPM’s members support nearly 4 million American jobs and produce a variety of products that are essential components of medical supplies and equipment.

… AFPM submits this brief to bring to the Court’s attention how the district court’s order threatens key national security and public health interests, including essential petrochemical and petroleum supply chains and the response to the current public health crisis. AFPM’s members depend on pipelines to transport refined products, and to move raw materials and feedstock used to manufacture materials used in nearly every sector of the U.S. economy. Many of these materials are indispensable in the production of supplies and protective equipment that are increasingly needed to combat the ongoing COVID-19 pandemic.

With a unprecedented challenges facing the American economy, now is not the time to jeopardize not our energy and manufacturing sectors. The AFPM brief provides further insight into how products like life-saving ventilators, N95 masks, and other medical supplies are produced with fuels and petrochemicals transported by pipelines:

…manufacturing N95 masks, which provide crucial protection for doctors and nurses, requires components derived from propylene, toluene, and xylene—three of the base petrochemicals. Face shields, protective gowns, and testing kit components are also made from petrochemical derivatives that AFPM’s members produce, and ventilators use a variety of engineering polymer components made from petrochemicals.

The permitting delays and costs that stem from the district court’s order risk exacerbating shortages of supplies needed by COVID-19 patients and frontline medical workers. Hospitals’ needs for N95 respirator masks, ventilators, and other equipment have outstripped available supplies, thereby hindering the pandemic response and putting both patients and healthcare workers at risk. This problem will become more acute if AFPM’s members encounter delays—like those described above—in building pipelines necessary to meet the increasing demand for the base petrochemicals from which the components of medical devices and PPE are made.

Further, it is worth noting that the plaintiffs in the lawsuit that led to the suspension of NWP 12 were not seeking a ruling with nationwide impact – rather, they were simply making a case against the Keystone XL Pipeline. The ruling is currently under appeal with the 9th U.S. Circuit Court of Appeals. As the GAIN Coalition recently noted in a statement:

“Ignoring the near ubiquity of these pipelines – and their decades of safely transporting the energy we need on an on-demand basis – in defense of the possible idea of a potential leak demonstrates a caustic view of our country and its people. Instead of bowing to the implausible worst case of an unlikely pipeline discharge, policymakers and judges should consider the growth of technology in the midstream sector, the unparalleled track record of safety of pipelines, and humans’ need for reliable affordable energy and allow regulators, like the Army Corps of Engineers, to act in the best interests of our nation based on the best available science and data.”

API/AOPL Report Finds Strong Pipeline Safety Record

The American Petroleum Institute (API) and Association of Oil Pipe Lines (AOPL) this week released their 2020-2022 Strategic Plan and performance report, finding pipeline safety continues to improve, as total incidents dropped by 17% over the past five years. The report also included several additional positive findings, including but not limited to:

  • Pipeline incidents impacting people or the environment decreased 36% over the last 5 years.
  • Incidents related to the pipeline itself, such as corrosion, cracking or weld failure, were down 50% over the last 5 years in areas impacting people or the environment.
  • Incidents related to installing and maintaining pipeline equipment or operating the pipeline and its valves or pumps were down 13% over the last 5 years in areas impacting people or the environment.
  • In 2019, 77% of incidents from liquids pipelines were contained within an operator’s property.

GAIN released a statement today in support of the report’s findings:

 “The positive results from the API/AOPL report affirm our nation’s growing pipeline network is the safest, most efficient, and most environmentally-conscious method of delivering the natural gas and oil that American consumers rely on each and every day. Even as pipeline mileage increased and domestic energy production reached record levels, the total number of incidents significantly decreased thanks to the commitment and ingenuity from the industry. Pipeline operators continue to go above and beyond required safety standards to meet our nation’s energy needs – not only increasing reliable, safe access to American energy, but also bolstering our national and energy security at a time when we need it most.”

Compared to the alternatives or truck and rail, pipelines remain the safest and most efficient method of transport. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) concludes that pipelines “enable the safe movement of extraordinary quantities of energy products to industry and consumers, literally fueling our economy and way of life.” PHMSA also says pipelines are “one of the safest and least costly ways to transport energy products.” Further, PHMSA says pipelines alleviate the need for other, less safe means of transportation:

“It would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week, to move the volume of even a modest pipeline. The railroad-equivalent of this single pipeline would be a train of 225, 28,000 gallon tank cars”

North Dakota Regulators Approve Natural Gas Processing Plant and Pipeline

The Bismarck Tribune reported the North Dakota Public Service Commission (PSC) this week approved the construction of two natural gas projects; a processing plant along the North Dakota-Montana border and a pipeline in Williams and Mountrail counties.

Outrigger Energy II’s Bill Sanderson Gas Processing Plant, west of Williston, will be able to handle up to 250 million cubic feet of gas per day.

While some officials and activists have called for new oil and gas projects to be put on hold across the country, the PSC’s forward-leaning strategy on infrastructure investment is key to maintaining American energy dominance and ensuring the sector is well-positioned once this pandemic passes. Further, energy infrastructure projects like the processing plant and pipeline are capital-intensive, shovel-ready jobs that support hundreds of high-skilled jobs, create new economic opportunities for the communities around them, and support new streams of tax revenue for state and local use. The Tribune noted Commissioner Randy Christmann said that during the last oil downturn in 2015, “a lot of the players responded by investing into long-term infrastructure that really paid off down the road.”

In addition, these projects are key to reducing flaring – burning off excess natural gas that is surfaced during oil drilling. With record oil production in the Bakken in recent years, flaring peaked at 24% of all gas produced at one point last summer. Key natural gas projects – like the two approved this week – are critical to lowering flaring levels, and instead being able to transport and use that natural gas for consumers in need. As the Tribune notes:

Gas processing plants remove natural gas liquids such as ethane, propane and butane from raw gas extracted from oil wells. Once processed, the gas is ready for use in power generation, home heating and other applications.

These projects are important to supporting the growing use of natural gas-fired electricity generation – which has been lauded not only for its reliability and affordability, but also environmental benefits.

Federal Judge Upholds Canceled Keystone XL Pipeline Permit, Limiting American Energy Development

On Monday, May 11, a federal judge in Montana upheld his April 15 ruling, which canceled a key environmental permit for the Keystone XL oil pipeline. The Nationwide Permit 12 is issued by the U.S. Army Corps of Engineers to authorize dredging work for pipelines and other utility infrastructure across federally-regulated water bodies. This decision not only creates an immediate impediment to the development of Keystone XL, but given the ruling also suspended the use of NWP 12, the sweeping decision will also likely cause delays for other oil and natural gas pipeline projects.

Craig Stevens, a spokesperson for GAIN, criticized the decision, stating:

“The court’s order flies in the face of common sense and throws our nation’s energy and economic security into peril. The judge sided with plants and animals over humanity in a decision that will directly impact hundreds, if not thousands, of jobs and likely raise the cost of energy. There are more than three million miles of pipelines in the United States transporting billions of gallons of crude oil and gasoline, and billions of cubic feet of natural gas products every day.

“Ignoring the near ubiquity of these pipelines – and their decades of safely transporting the energy we need on an on-demand basis – in defense of the possible idea of a potential leak demonstrates a caustic view of our country and its people. Instead of bowing to the implausible worst case of an unlikely pipeline discharge, policymakers and judges should consider the growth of technology in the midstream sector, the unparalleled track record of safety of pipelines, and humans’ need for reliable affordable energy and allow regulators, like the Army Corps of Engineers, to act in the best interests of our nation based on the best available science and data.” 

This ruling is a costly step backwards. America should work together to support companies that seek to invest in and build the infrastructure we need to safely transport energy to consumers across the country. Recent geopolitical unrest with Saudi Arabia and Russia should serve as a serious reminder of as to the importance of American energy independence. Rulings like this harm not only the energy industry, but also the millions of consumers across the nation who rely on affordable, reliable access to gas and oil products.

Energy Industry Powering U.S. Through COVID-19 Crisis

InsideSources recently published an op-ed by GAIN spokesman Craig Stevens highlighting the importance of the energy industry amid the coronavirus pandemic. Stevens points out that essential workers from nurses to doctors and grocery store clerks to truck drivers continue to risk their wellbeing to help us navigate through this crisis – many of the hardworking men and women of the energy industry have been deemed essential, and have been doing their part, too.

Stevens notes that they have been “working diligently to ensure that critical supplies are able to continue being produced, that transportation networks continue to operate throughout this ordeal, and that the lights are able to stay on across the nation.”

While many Americans might simply equate the oil and gas industry to fueling our cars – there is much, much more to it, as Stevens explains:

Most Americans equate a barrel of oil solely to the gasoline that we use to fill our cars. However, while one 42-gallon barrel of oil creates 19.4 gallons of gasoline, — the remaining half is typically used to make an array of petroleum products.

Among the 6,000 products in which petroleum is a key component are many of the critical supplies that are currently in high-demand, including soap, detergents, antiseptic, bandages, vaporizers, food preservatives and medications.

In continuing to provide that key component, the energy industry is helping healthcare professionals and essential workers to have reliable access to the medical supplies, personal protective equipment and cleaning products necessary to treat patients while not exposing themselves.

In addition to the contributions described above, which have efficiently occurred for decades, energy companies have also stepped up to provide generous and innovative contributions to help the U.S. weather the COVID storm:

Shell, for example, is providing free food to healthcare professionals such as nurses and doctors, as well as truck drivers and the delivery people who are vital to maintaining supplies. Energy Transfer is making donations to local food banks and purchasing new technology to aid first responders. ExxonMobil is working with the Global Center for Medical Innovation to develop safer reusable personal protection equipment for healthcare workers, such as face shields and masks. Others continue to contribute on a global scale.

Stevens concludes that the energy industry is often overlooked when it comes to its critical contributions to supporting our everyday life and modern conveniences:

This crisis is a wakeup call that we would be hard pressed to face this challenge as well as we have without the contributions of the industry that quite frankly, we take for granted in normal times.

When the coronavirus pandemic finally passes and Americans are applauding the heroes, let’s save some of that applause for the men and women who kept the lights on and powered the economy through unprecedented times.

FERC appoints director of new Division of LNG Facility Review & Inspection

E&E News today reported the Federal Energy Regulatory Commission (FERC) has tapped Andrew Kohout, a longtime employee and fire safety specialist, to lead its new LNG office known as the Division of LNG Facility Review and Inspection (DLNG).

The article highlighted Kohout’s extensive experience, adding:

Prior to his appointment, Kohout served as the chief of FERC’s LNG Branch 1, where he led a team of engineers through safety, reliability and engineering reviews and inspections of various LNG facilities in the U.S., according to his LinkedIn profile. Kohout has also worked as a FERC modeling specialist and safety and reliability engineer, and he holds a master’s degree in fire protection engineering from the University of Maryland, College Park.

GAIN applauds FERC’s commitment to our nation’s energy infrastructure with the appointment of a FERC veteran to lead DLNG. In a statement last summer, GAIN emphasized support for the new office:

“The GAIN Coalition applauds Chairman Chatterjee for directing his agency’s attention to this pressing issue. As the United States expands its ability to produce domestic energy resources like liquefied natural gas, infrastructure required to transport those products – both at home and abroad – must be reviewed, permitted, and constructed in a timely manner. LNG export terminals represent a powerful economic engine for growth, and as such, deserve the expedient attention of our nation’s regulatory agencies. We encourage FERC to continue its efforts on this front.”

DAPL Legal Challenge Jeopardizes American Energy

The Williston Herald recently published an opinion column from James “Spider” Marks, retired U.S. Army Major General and strategic advisor to the GAIN Coalition, regarding the importance of the Dakota Access Pipeline and the risk presented by ongoing permitting and legal challenges.

A federal court ruled in March that the U.S. Army Corps of Engineers must conduct additional environmental review, known as an Environmental Impact Statement (EIS), despite having already produced an Environmental Assessment (EA) and subsequent review which found the crude oil pipeline posed a “Finding of No Significant Impact.” The pipeline has been safely operating for nearly three years.

Now, activists have called for the pipeline’s operations to be suspended until the additional EIS is completed – a process which could take years. But as Marks writes, such challenges come at a cost:

The decision to pursue needless litigation from known fossil fuel opponents who have one objective in mind – to shut down the pipeline, which has safely operated for nearly three years – represents a dangerous blow to American energy infrastructure when it is more important than ever.

Activists’ opposition to the Dakota Access Pipeline is not rooted in fact. Rather, it is based on an ideological opposition to the use of fossil fuels – which provide the mainstay of American energy. Gambling with our energy infrastructure in the midst of a global pandemic is a recipe for disaster. As Marks writes:

Clearance to operate was granted on the merits of the pipeline’s technology, route, integrity, and oversight; those factors are not impacted by a duplicative review. Further, a halt to operations would likely spur more litigation to many other companies and contracts that affect the entire supply chain. The repercussions of such a ruling could create a ripple effect that would be disastrous to not only the industry, but the entire economy…

…With energy markets roiling, the last thing these companies need is for regulatory guardrails to be undermined and new, unexpected, and often frivolous challenges to arise with ease despite thorough and safe development and review.

An added harmful effect of restricting pipeline operations may be reverting progress made towards achieving greater energy security. The growth of the American energy industry has reduced our reliance on foreign energy sources while increasing our energy exports. In fact, the U.S. Energy Information Administration recently reported energy exports from the United States reached an all-time high in 2019 – the first time in 67 years that annual U.S. gross energy exports exceeded U.S. gross energy imports.

Marks concludes that pipelines have been crucial to achieving that energy independence. Ensuring safe and efficient transport of our energy resources is key to bolstering American energy production – which reduces reliance on foreign energy sources and strengthens the US position in global affairs. In order to maintain this energy success, policymakers must ensure regulatory certainty with a straightforward permitting and approval process for infrastructure development.

…The Dakota Access Pipeline, despite artificial controversy, has succeeded in safely bolstering our economy and energy security. Those gains are now at risk of being undone, and the fallout won’t be limited to a single company. The current case surrounding DAPL will set a precedent for all future energy infrastructure projects, and the wrong decision could damage a critical domestic industry and weaken our international positioning.