It is not a good time to be in the pipeline business! The gas and oil industry is experiencing decreases in revenue due to reduced demand during the COVID-19 shutdowns. Over the last few weeks, court orders have shut down existing pipelines and levied heavy fines on energy companies, and a new pipeline project was canceled.
Most people will recall the massive protests that occurred on the Standing Rock Sioux Reservation over the construction of the Dakota Access Pipeline (DAPL) beginning in 2016. Thousands of water protectors from around the world gathered together in opposition to the pipeline crossing through sacred land and passing underneath the Missouri River — the main water source for Native communities.
In early July, a court ruling out of the U.S. District Court for the District of Columbia ordered that all oil flowing through the DAPL must stop immediately. The court determined the pipeline was operating illegally due to the U.S. Army Corps of Engineers’ neglect to produce an adequate environmental impact study. Naturally, the Dakota Access company is appealing the decision, but a final determination will not occur until after the 2020 election.
In the same week as the DAPL decision, the Bureau of Indian Affairs ordered the Tesoro High Plains Pipeline Company to pay a $187 million penalty for trespassing on the Fort Berthold Indian Reservation. The Tesoro High Plains pipeline operates in cooperation with the Dakota Access Pipeline. In combination, the two lines account for one-third of the oil extracted from the Bakken shale fields in North Dakota. BIA determined that Tesoro did not secure the proper right of way permissions from individual landowners and the Arikara, Hidatas and Mandan Nations.
Beginning in 2013, Duke Energy and Dominion Energy started planning a new 604-mile natural gas pipeline from West Virginia to North Carolina. Called the Atlantic Coast Pipeline, proponents argued that the pipeline would provide much-needed energy to the mid-Atlantic region of the U.S. The environmental community objected to the project due in large part to the impacts on National Forest lands and the pipeline crossing the Appalachian Trail.
Despite the opposition, in early 2020 the Supreme Court upheld the authority of the U.S. Forest Service to permit the project in a 7-2 decision. Yet by early July, the tide had shifted due in large part to protests and myriad legal battles by both citizens and environmental organizations. Citing an increase in cost from an estimated $5 billion in construction cost to $8 billion due to legal fees and delays, the Atlantic Coast Pipeline was canceled by Duke and Dominion.
While July provided multiple victories for Native communities and environmental causes, the fight to end the extraction of fossil fuels in favor of transitioning to renewable sources of energy continues. Big Oil and Gas have been dealt their blows, but they are in no way down for the count.