Despite Years of Safe Operation, Tribe Continues to Baselessly Oppose DAPL

The Bismarck Tribune today reported the Standing Rock Sioux and other tribes in the Dakotas have again asked a federal judge to stop the flow of oil in the Dakota Access Pipeline. This comes after more than three years of safe operation, transporting up to 570,000 bpd from the Bakken oilfields of North Dakota to an oil terminal in southern Illinois.

But despite DAPL’s impressive safety record, tribes contend that the potential harm to their water supply outweighs any economic impacts of shutting down the line. The U.S. Army Corps of Engineers maintains that the tribe fails to recognize that the risks of an extreme spill, which could only result from a “perfect storm” of malfunctions and operator errors, are “not just low, but remote and speculative.” Further, the Corps explains that many of these worst-case-scenarios that the Tribe has propagated in court are “not just unlikely, but physically impossible.”

As GAIN has previously pointed out, oil and natural gas pipelines crossed beneath the Missouri River upstream of the SRST’s reservation long before the Dakota Access Pipeline was built. In fact, DAPL’s Lake Oahe crossing runs adjacent to an interstate natural gas pipeline built in 1982. Further upstream, there are at least four other pipeline crossing along with a major refining complex located adjacent to the river. But unlike DAPL, the SRST didn’t subject these projects to months of disruptive protests or lengthy litigation.

Over their two-year rigorous permitting and review of DAPL, the U.S. Army Corps of Engineers found that the materials and methods to construct the pipeline pose minimal risk:

“Given the HDD approach used for both crossings and the avoidance of impacts that results from this technique, the attempt to cross at a narrow expanse of the river further limiting risk, the reduced potential for impacts resulting from the HDD process, movement of a pump station away from the River at the request of the Corps, the necessity to cross the Missouri River in at least one location, and the federal programs governing response actions, the risk to water resources from this crossing are minimal.”

Perhaps even more significant though is the SRST’s decision to relocate its water intake facility less than two miles downstream of a railroad bridge used to carry oil tank cars over the river. Statistically, pipelines are 451 times safer than rail according to the U.S. Department of Transportation, yet the tribe is more concerned about the Dakota Access Pipeline—located nearly 70 miles away –than it is about a railroad located within eyesight of its water intake plant.

Trump Administration Issues Executive Order on “Modernizing America’s Water Resource Management and Water Infrastructure”

This week the Trump Administration continued its efforts to streamline and modernize regulations surrounding our nation’s infrastructure, now including America’s water resources and accompanying infrastructure.

On October 13, 2020, President Trump issued an executive order outlining reforms to the organization of agencies and agency efforts towards water management and infrastructure.

It reads: “Abundant, safe, and reliable supplies of water are critical to quality of life for all Americans, fueling our economy, providing food for our citizens and the world, generating energy, protecting public health, supporting rich and diverse wildlife and plant species, and affording recreational opportunities. While America is blessed with abundant natural resources, those resources must be effectively managed, and our water infrastructure must be modernized to meet the needs of current and future generations.

Executive departments and agencies (agencies) that engage in water-related matters, including water storage and supply, water quality and restoration activities, water infrastructure, transportation on our rivers and inland waterways, and water forecasting, must work together where they have joint or overlapping responsibilities. This order will ensure that agencies do that more efficiently and effectively to improve our country’s water resource management, modernize our water infrastructure, and prioritize the availability of clean, safe, and reliable water supplies.”

The executive order keeps in the vein of other regulatory changes by the Administration, particularly those to the National Environmental Protection Act and the EPA’s Cost-Benefit Analysis protocols, by consolidating management and clarifying objectives while removing duplicative regulation to improve outcomes.

A major portion of the executive order is the establishment of the Water Subcabinet. Secretaries of the Interior, Commerce, Agriculture, Energy, and Army will join the Administrator of the Environmental Protection Agency as co-chairs on the Subcabinet.

The objective of the Subcabinet will be to streamline the Federal government’s approach to water resources while upgrading water infrastructure, public health safeguards, and creating jobs. Another priority will be the development of a national strategy to improve water storage and supply, drought resiliency, and source water protections. Additionally, advancement in water data management, research, modeling, and forecasting will fall to the Subcabinet.

Water is more essential a resource than any other to the wellbeing of Americans and the Trump Administration deserves recognition for addressing it head on. Moreover, the Administration has repeatedly shown a sharp eye to removing duplicative regulations enacted by prior Administration that bodes well for the effectiveness of this executive order.

Simultaneously, the Administration has put an emphasis on bolstering the water workforce during the toughest of times for many. As infrastructure buildout in so many industries, especially energy, has shown – it is a jobs creator.

GAIN is looking forward to the enactment and success of President Trump’s executive order.

Democrats Must Preserve an ‘All-of-the-Above’ Energy Strategy

Real Clear Energy published an opinion editorial from Col. Tom Magness, a former commander in the U.S. Army Corps of Engineers, regarding the energy strategy of Democratic presidential nominee Joe Biden. Magness remarks how Biden is proposing a $2 trillion public spending project that lacks detail and will leave taxpayers to pay the price. Biden’s proposed plan strays further left from President Obama’s moderate “All-of-the-Above” energy strategy – which proved to be largely successfully.

Magness explains the significant gains in the energy sector the U.S. has made over the past decade, writing:

“The growth of the U.S. natural gas industry under the Obama administration lowered household energy costs, created jobs, contributed to a major reduction in emissions, and played a significant role in accelerating the country’s recovery from the 2008 Financial Crisis. This was, and has remained under President Trump’s leadership, the right path for Americans.

Under President Trump American energy continued to make gains in energy sufficiency and production, as well as emissions reductions to the benefit of the American economy. This includes the largest absolute reduction in emissions by any country since 2000; adding tens of thousands of jobs thanks to large scale energy infrastructure projects like Keystone XL and Dakota Access; and an expectation to be a net energy exporter by the close of 2020.”

Considering the vast environmental and economic achievements made over the past decade, we cannot afford to reverse such important success.. Pipeline projects, which help transport oil and natural gas, are a key part of keeping up this success. With brutal economic hardships brought on by the COVID-19 pandemic in 2020, Americans cannot afford higher energy costs, increased tax rates, and potential employment cuts over the next four years. Magness emphasizes the benefits of continued reliance on pipeline projects:

“A recent report from the Consumer Energy Alliance found that delays, obstruction, and cancellation of pipeline projects are threatening nearly $14 billion in economic activity, over 66,000 jobs, and more than $280 million a year in state and local tax revenue – crucial investment and employment that could go a long way in our nation’s long road to a COVID-19 recovery.”

In closing, Magness highlights how Joe Biden’s campaign should reconsider President Obama’s realistic approach of an “all-of-the-above” strategy. Magness concludes:

“A strong embrace of an all-of-the-above approach could reshape the debate on energy and curtail the unrealistic policies now championed by the left. Perhaps some draft language for the campaign reads: the continued development of safe and responsible natural gas production and accompanying infrastructure is not just compatible with, but a precondition of, a resilient economy and a cleaner future.  Surely on that we can all agree.”

Permian Energy Infrastructure Can Boost Economy Post-COVID

Dallas Morning News today published an op-ed from Guy Caruso, former administrator of the U.S. Energy Information Administration (EIA), regarding the important role energy infrastructure can play in post-COVID economic recovery. Caruso writes, “Policymakers should understand the stability, economic investment and promise that energy development and infrastructure projects can bring to our nation in a time of unprecedented uncertainty.

Caruso points out that record domestic energy production, growth of U.S. energy exports, and investment in infrastructure have all contributed to U.S. energy self-sufficiency. Texas, as the top producer of both crude oil and natural gas, plays an especially important role in our nation’s energy future. Caruso specifically highlights the Permian Basin, noting:

The Permian houses more than 7,000 oil fields in West Texas and accounts for nearly 40% of all oil production and 15% of natural gas production in the U.S., according to the Texas Railroad Commission. Given its strategic location in a state on the Gulf Coast, the Permian has been a key driver in the rise of American energy exports. But while energy companies have invested significant resources into growing the crude oil pipeline network in the region, natural gas infrastructure, on the other hand, has lagged behind in recent years.

While natural gas infrastructure has not been sufficient in recent years with record production, developers have recognized the need, and a number of projects have either been announced or are under construction. Caruso notes that, “Infrastructure projects like the Lone Star Express Pipeline expansion, Permian Highway Pipeline and Whistler Pipeline are designed to play a critical role in moving Permian natural gas and natural gas liquids to consumers.”

In conclusion, Caruso emphasizes how investment in energy infrastructure – and fostering the regulatory environment conducive to such development – can be significant as the U.S. recovers from the coronavirus pandemic and its affiliated economic challenges. He concludes:

As the American economy continues to rebound from the pandemic-induced economic downtown, it is important that we have the infrastructure in place to streamline that process and ensure reliable, affordable access to domestically produced energy resources.

The best way to ensure our nation’s energy future and stability is by fostering a regulatory environment that is conducive to large-scale infrastructure investment. Whether that is solar and wind farms, hydropower dams, or oil and gas pipelines, it is paramount that American policymakers and regulators provide regulatory certitude and consistency and a straightforward permitting and approval process that relies on scientific review and fact.

Anti-Pipeline Activism Taking its Toll on U.S. Economy

Tulsa World today published an opinion piece from former Oklahoma Corporation Commission chairman Patrice Douglas regarding the consequences of anti-pipeline activism. Short-sighted opposition to critical energy infrastructure development is starting to take its toll on an economy already facing unprecedented challenges. Douglas writes:

Projects like the operational but long-disputed Dakota Access, stalled Keystone XL, cancelled Atlantic Coast and the nearly complete Permian Highway Pipeline have been the focus of extraneous legal and political scrutiny, which in some cases has resulted in litigation with significant and detrimental economic consequences. As arguments develop inside and outside the courtroom, a common understanding of what is at stake is imperative to avoid permanent harm to an industry whose well-being is directly attached to the economic health of the country as a whole.

Douglas emphasizes that pipeline opponents either overlook or fail to understand the rigor of the multi-year pipeline permitting and approval process. She explains:

Though requirements vary slightly from state to state, all proposals have to undergo extensive scientific review, community consultation and structural evaluation at the local, state and national level. This culminates in an environmental assessment that, as in the case of Dakota Access, can be nearly 1,000 pages in length. Although this process does not entirely eliminate the possibility of future accidents, it does ensure that the degree of risk that approved projects entail is at level far below that of alternative methods of transportation like truck and rail, which are more polluting, costly for roads and bridges and have a greater chance of experiencing disruption.

The impact of anti-energy activism extends far beyond the oil and gas industry. Douglas notes that opponents “invent highly improbable disasters as justification for curtailing energy infrastructure development, but the comprehensive economic damage that ensues from frivolous anti-pipeline litigation is not just hypothetical.” The economic impacts are real, and consumers are left to pay the price:

A recent Consumer Energy Alliance report found that pipeline delays are already causing nearly $14 billion in lost investment, threatening more than 66,000 jobs and sapping hundreds of millions of dollars’ worth of state tax revenue. Another report found a Dakota Access shutdown alone would lead to the loss of more than 7,000 jobs and $900 million in state tax revenues.

Douglas argues that these figures are only going to grow as anti-energy rhetoric and challenges continue, and should not be dismissed as “acceptable costs in the push for a cleaner future.” She concludes:

Understanding the importance of energy infrastructure does not require one to ignore legitimate and nuanced concerns over pipeline construction. To be sure, there are meaningful conversations to be had about the permitting and oversight process for new projects. Pipeline companies and their investors, least of all stakeholders, do not want to see an accident occur. However, the excessive politicization and litigation of the issue by ill-informed environmental reactionaries, who more often than not are immune to the negative economic consequences of their own advocacy, is measurably harmful.

2019 U.S. Energy Information Administration Natural Gas Annual Shows Impressive Yields

Last week the United States Energy Information Administration (EIA) released its 2019 natural gas annual, tabulating domestic production, consumption, and more. It is difficult to ignore that the country is weeks out from a presidential election and even more difficult to ignore the energy implications that are before voters.

Candidate Joe Biden has put forth an ambitious energy plan that eschews natural gas and pushes for significant taxpayer funded investment in renewable technologies. Similar positions ratified by Sacramento legislators have made the California electrical blackouts a bellwether for consequences of mixing in renewables to an energy grid too quickly.

Moreover, the Biden energy and anti-natural gas plan has swung far left of his former White House mate, President Barack Obama. In 2012 then President Obama stated: “Natural gas actually burns cleaner than some other fossil fuels. It’s an ideal energy source that we potentially could use for the next 100 years.” Sadly, this position earns an elected a swearing from environmentalists hysterically committed to renewables today, tomorrow, and forever.

The Energy Information Administration’s report this week supports Obama’s comments and we hope encourages Americans to remain optimistic about the country’s energy. Findings include:

  • Both U.S. dry natural gas production and consumption rose to record highs in 2019.
  • Deliveries of natural gas to consumers in 2019 were 28.3 Tcf, or 77.6 Bcf/d, an increase of 2.7% from 2018 deliveries. Four of five sectors (residential, commercial, industrial, and vehicle fuel) remained essentially flat from 2018, while electric power deliveries saw an increase to consumers in 2019.
  • For the fourth consecutive year, the United States was a natural gas net exporter (exports minus imports) in 2019, exporting 1,915 Bcf (5.2 Bcf/d) more natural gas than it imported for the year. U.S. natural gas imports decreased for the second consecutive year.

To put it simply, the United States is upping its natural gas production and efficiently folding it into the energy grid. Consumer groups will undoubtedly follow-up with reports showing that this delivered consumer savings. It’s also reasonable to presume that natural gas consumption increases has offset more carbon-intensive energy resources, meaning environmental gains will be made. Additionally, the country is in a position to export our vast natural gas resources to others. Growing as an exporter will better natural security standards and off economic gains to Americans.

President Obama accurately characterized natural gas and its values in 2012. They are being realized at record levels. No matter November’s victor, natural gas must continue to be the foundation of the American energy system.

Former U.S. EIA Administrator Weighs in on the Real Costs of the Dakota Access Pipeline Shutdown

Bloomberg Law recently published an analysis from Guy Caruso, former administrator of the U.S. Energy Information Administration (EIA), regarding the significant impact of a Dakota Access Pipeline (DAPL) shutdown.

DAPL, which has safely transported up to 570,000 barrels of crude oil per day from the Bakken to Southern Illinois for more than three years, was ordered by a U.S. district judge in July to be shuttered until the U.S. Army Corps of Engineers performs additional environmental review.

While an appellate court has temporarily reversed the shutdown order, the pipeline’s fate is still in limbo. In his analysis, Caruso explains that a DAPL shutdown would have significant economic ramifications, threaten our infrastructure permitting process, and jeopardize American energy independence and energy security.

Regarding the economic impact, Caruso writes:

Its shutdown would force those resources to be moved by rail, a less reliable and much more costly option. And the shift could take as long as two years, according to the head of the state’s Department of Mineral Resources.

The resulting backlog would force drillers to cut production. As many as 3,000 upstream jobs would be lost, according to research by the American Petroleum Institute. Another 1,900 jobs could be sacrificed in industries that support production. In total, a shutdown may cost 7,400 jobs when impacts down the line are considered.

The blow to state coffers would be equally costly. North Dakota and Montana stand to lose $832 million of production taxes, and another $69 million in income taxes paid by producers over 13 months, the time expected to complete a new environmental assessment. The loss in tax revenue will surely be felt by public services such as schools and state programs, as well as other public infrastructure projects, which are largely supported by state revenues from the oil and gas industry.

Regarding the dangerous precedent set for future infrastructure permitting and development:

But perhaps the most concerning outcome of a DAPL shutdown is the dangerous precedent set for the future of American infrastructure development. As the Corps laid out in a recent filing, “the district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects that excite opposition from some sector of society.”

If developers meet or exceed all permitting requirements, receiving all necessary approvals from federal, state, and local agencies—the regulatory process should instill the certitude and consistency that their investment will indeed be able to operate and function as intended. Without this confidence, the incentive to invest in critical infrastructure quickly diminishes when there is a chance that legal challenges could prevail and permits may be pulled after more than three years of safe operation.

Regarding the risks to American energy independence and security:

A shutdown would hit hardworking men and women at a time when they can afford it least. And it could set back our country’s march toward increased energy security immeasurably.

Over the past two decades domestic production has wholly rewritten the U.S. energy outlook. Once reliant on foreign suppliers, U.S. total annual energy exports in 2019 exceeded total annual energy imports for the first time in 67 years, and the U.S. became a net total energy exporter. That achievement owes to robust production here at home unlocked by investment in infrastructure, notably pipelines.

Caruso concludes that rather than pandering to anti-energy activists and creating additional hurdles for infrastructure – which undermines the regulatory process, threatens jobs and economic growth, and creates uncertainty for developers – we must instead be leaning into opportunities to invest in our nation’s pipeline network. This starts with the D.C. Circuit upholding the Corps’ initial findings on DAPL, which were “grounded in evidence then and remain grounded in evidence now.”

Infrastructure projects support the U.S. economy amid COVID-19

The Hill published an opinion editorial by Professor Bernard Weinstein, associate director of the Maguire Energy Institute and adjunct professor of business economics at Southern Methodist University, highlighting the vital role pipelines play in facilitating successful energy development in the United States, and how they can help boost the nation’s economy post-COVID. However, Weinstein points out that constant regulatory hurdles and pipeline antagonists continue to get in the way of growth for infrastructure projects – hampering critical economic growth. Weinstein explains the numerous setbacks for pipelines this past year:

“Unfortunately, many environmental organizations and other groups opposed to fossil fuels are pushing back against these investments, especially in the case of pipelines. Lawsuits against both operating and proposed pipelines have multiplied, and anti-carbon activists are pressuring pension funds, university endowments, and foundations to “divest” their portfolios of companies engaged in the production and transportation of oil and gas.”

Not only are pipelines facing setbacks from regulatory agencies, but environmental activists are pushing lawsuits and divestment from pipeline projects. Infrastructure projects are being shut down while opposition neglect to consider the bigger picture. Some states are very firm in their stances against pipeline projects, such as New York:

“In New York State, it is virtually impossible to build a transmission pipeline. For example, after an eight-year battle, the proposed Constitution Pipeline that would have delivered cheap natural gas from the Marcellus to the New York City gateway was canceled early this year. New York also rejected the proposed Williams Pipeline that would have carried natural gas from Pennsylvania through New Jersey, running beneath New York Harbor and the Atlantic Ocean before connecting to an existing pipeline system off Long Island.”

There are unfortunate consequences for consumers on the other side of the coin. According to a 2017 study from the Consumer Energy Alliance, New England residents pay, on average, 151% more than the national average for electricity. Massachusetts relies on imported fossil fuels that jack price on energy for residents – a problem that could be easily solved with the entrance of pipelines to the area. Continuous setbacks of infrastructure development not only inconvenience hardworking Americans from higher energy bills, but also cut jobs from workers in the oil and gas industry. Weinstein explains how holdups of these projects negatively impact the economy in a recent study:

“A recent study by the Consumer Energy Alliance has documented more than $13.6 billion of “shovel ready” projects that are bottled up in litigation, permit delays, and other forms of push-back by environmentalists. About 66,000 jobs paying an average of $117,000 are at risk, and state and local governments face the prospect of losing more than $280 million in annual revenue while already suffering huge shortfalls because of the pandemic. Spending on pipeline construction also can have a large multiplier effect by spurring demand in manufacturing and other industrial sectors in the energy supply chain.”

With record-breaking unemployment rates amid COVID-19, our nation has limited wiggle room to dismiss economic activity. Setbacks for projects like Keystone XL and Dakota Access and the cancellation of the Atlantic Coast Pipeline cut jobs for workers and deprive municipalities and states of crucial tax dollars. Anti-energy rhetoric, legal challenges, and regulatory hurdles are threatening American energy independence and our energy future – now is the time to welcome investment in our critical energy infrastructure.

Mountain Valley Pipeline Regains Key Water-crossing Permits

The U.S. Army Corps of Engineers on Friday reissued water-crossing construction permits for the Mountain Valley natural gas pipeline in Virginia and West Virginia, a key step forward for the project. This is the latest development in the rigorous, multi-year regulatory process for the 303-mile pipeline.

Also on Friday, the U.S. Forest Service released its proposal for the pipeline to pass through the Jefferson National Forest, but a decision on that permit is not expected until the end of the year.

It is imperative policymakers and regulators provide a straightforward permitting and approval process, and regulatory certitude, for critical infrastructure development – like the Mountain Valley Pipeline. A recent report from the Consumer Energy Alliance found nearly $14 billion in investment is at risk with pipeline cancellations, delays, and challenges – including more than 66,000 jobs and more than $280 million in state and local tax revenue.

Rather than creating additional bureaucratic hurdles and kowtowing to legal challenges, now is the time to welcome investment in our critical infrastructure network. Not only will projects like Mountain Valley safely and efficiently transport domestically-produced natural gas, they also create new economic opportunities, investing more than $4 billion – supporting thousands of jobs and millions in state and local tax revenues.

Oil & Gas is Key Partner in U.S. Economic & Environmental Goals

A recent op-ed in The Hill authored by Anne Bradbury, CEO of the American Exploration and Production Council, highlights the important role of the U.S. energy sector in providing affordable, reliable energy and its role in fueling the American economy. She notes:

There is an inextricable link between a healthy and robust economy and a reliable and affordable energy source. Real, lasting climate solutions are driven by innovation and technological breakthroughs that enhance our way of life and reduce emissions.

Bradbury specifically highlights the critical contributions of the oil and gas industry, noting that the U.S. shale industry is credited with driving 10 percent of U.S. GDP growth from 2010-2015, and providing about 1 million direct upstream onshore jobs – a crucial economic boost in light of the Great Recession. Speaking further to the economic benefits, Bradbury writes:

Each onshore rig supports 22+ direct jobs, each job at an average pay of $60,000. For each direct job, we estimate another three indirect jobs. And, oil and natural gas industry sector-projects are higher paying, provide better health and retirement benefits, have more long-term job growth opportunities, and are more stable careers than jobs in renewable energy, according to a national survey of union and nonunion workers by North America’s Building Trades Unions (NABTU).

In addition to the notable economic benefits, Bradbury emphasizes the environmental achievements and conservation efforts in the past couple decades:

We have already reduced emissions and made energy production and consumption cleaner and more efficient than ever before. From 2005-2017, total U.S. electricity generation increased by 4 percent while related CO2 emissions fell 27 percent. Approximately 61 percent of that reduction was from switching to natural gas.

Methane emissions from five of the largest producing oil and gas regions across the country have fallen nearly 70 percent — even as natural gas production in those regions tripled over the 2011-2018 period, demonstrating the industry’s commitment to finding and implementing innovative solutions to further protect our environment.

Bradbury concludes that despite the critical role of the industry, activists have continued their campaign against oil and gas, with some going as far as demanding fossil fuels be kept in the ground. However, these positions are short-sighted and fail to recognize the important contributions of the industry in providing affordable, reliable energy for American consumers and keeping the American economy moving. Bradbury writes:

Restricting oil and gas production in the U.S. will significantly drive up energy costs, forcing manufacturers and small businesses to close –– further hurting jobs and our economy…

Our industry has been instrumental in solving challenges in the past. We know how to collaborate with other industries — as well as with government officials and nonprofits — to deliver innovative technologies that meet legislative and policy goals to grow jobs and reduce emissions.