Keystone XL Pipeline Halted For More Studies
U.S. District Judge James Boasberg said in April that the pipeline remains “highly controversial” under federal environmental law and a more extensive review was necessary than the environmental assessment that was done. On Monday, the judge wrote that even though the disruption will be significant, he had concluded the pipeline must be shut down.
Senator John Hoeven (R-ND) released the following statement after a U.S. District Court Judge ruled that the Dakota Access Pipeline must be shutdown beginning August 5 while the U.S. Army Corps completes an environmental impact statement:
“The Dakota Access Pipeline is vital energy infrastructure for North Dakota and our nation. The pipeline is equipped with the latest safeguards and technology, and after undergoing years of thorough state regulatory reviews and an extensive federal environmental assessment, it has been operating safely since 2017. Today’s district court ruling comes at a very difficult time because it will severely impact our state’s economy at the same time we are working to recover from the impacts of the COVID-19 pandemic. We anticipate the company will appeal the decision to the Circuit Court which should allow the Dakota Access Pipeline to continue to operate while the Army Corps of Engineers works to finalize its environmental impact statement.”
U.S. Senator Kevin Cramer (R-ND) issued the following statement.
“Shutting down the Dakota Access Pipeline would have devastating consequences to North Dakota and to America’s energy security. This terrible ruling should be promptly appealed.”
Congressman Kelly Armstrong (R-ND) issued the following statement.
“The decision to shut down the Dakota Access is irresponsible and wrong-headed. It ignores all prior precedent and is a win for radical environmentalists. The pipeline has been operating without issue for over three years. This decision will be devastating to North Dakota’s economy, energy industry, and the nation’s national and energy security.”
North Dakota Gov. Doug Burgum (R) issued the following statement.
“This troubling decision, which we expect will be appealed, could have devastating effects on North Dakota’s economy and U.S. energy security. No one cares more about North Dakota’s clean water than the people who live here, and if a single judge is able to shut down a state-of-the-art pipeline project that was permitted and has been operating safely for more than three years, it would have a chilling effect on America’s ability to build, modernize and improve our nation’s critical infrastructure, which we need to do for both energy security and environmental stewardship.”
Former Standing Rock Sioux Tribe Chairman David Archambault issued the following statement:
“To finally, after so many years hear the court say that ‘you guys are right’ its just a good feeling. It just validates the hard work that everybody put into trying to point out our position.”
Energy Transfer Partners issued the following statement:
We believe that the ruling issued this morning from Judge Boasberg is not supported by the law or the facts of the case. Furthermore, we believe that Judge Boasberg has exceeded his authority in ordering the shutdown of the Dakota Access Pipeline, which has been safely operating for more than three years. We will be immediately pursuing all available legal and administrative processes and are confident that once the law and full record are fully considered Dakota Access Pipeline will not be shut down and that oil will continue to flow.
We intend to immediately file a motion to stay this decision and if not granted, to pursue a stay and expedited appeal with the Court of Appeals. We also believe that the Army Corps of Engineers has the ultimate jurisdiction over this matter, pursuant to its regulations governing Corps property.
We will continue to cooperate with the Corps through their process as we believe, as does the Corps per their filing with the District Court, that the 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.
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 Dakota Access Pipeline is the only direct pipeline from North Dakota to the distribution hub in Patoka, Illinois, from where this domestically produced Bakken-produced crude oil is transported to refineries throughout the Midwest and the Gulf Coast. 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. Farmers will suffer as crude transportation will move to rail, displacing corn, wheat and soy crops that would normally be moved to market. Ironically, the counties along these rail lines will face increased environmental risks due to the increased amount of crude oil travelling by rail.
This pipeline is the safest, most environmentally responsible method for moving North Dakota’s crude oil to refining markets around the country. Shutting down this critical piece of infrastructure would throw our country’s crude supply system out of balance, negatively impact several significant industries, inflict more damage on an already struggling economy, and jeopardize our national security.
This was an ill-thought-out decision by the Court that should be quickly remedied.
Oil and gas enthusiasts and supports of environmental energy are quick to point out that halting the Keystone XL Pipeline will have a negative impact on the environment due to more trucks hauling crude oil rather than the railroad. A recent report has estimated North Dakota crude oil uses nearly 900 rail cars per day.
Furthermore, the state of North Dakota has over 50% of its state budget connected to two oil and gas taxes – production and extraction tax.
Orphan Wells Abandoned Across Shale Play USA
Kathleen Sgamma, Western Energy Alliance gives an overview of three different states and their orphan well programs. From North Dakota to Ohio to Pennsylvania, how each state handled their industry aftermarket.
“”There have been a lot of shut ins, which are not abandoned or orphaned, that’s just shut in of oil production,” Sgamma said. “Because literally we were in the situation the last couple of months where if you ran out of storage, you couldn’t find a buyer to take away your barrel of oil. So producers had to shut in many wells.”
Sgamma explains how North Dakota is using CARES Act funds to supplement the oil and gas industry to plug shut in wells. She believes this will help North Dakota’s economy recover as the world economy recovers.
The east coast, however, tells a different story. The lack of oversight and understanding of the environment from centuries ago left behind quite a few environmental clean up opportunities.
“Let’s go back 150 years ago or so when wells were first drilled in Pennsylvania and Texas. This was way before state regulated oil and gas,” Sgamma said. “There were hundreds of thousands of wells by companies who have been off the face of the map for decades if not a century. Literally no one knows where most of those wells are.”
New Opportunities Open Up in Energy
Brandon Davis , Jeremy Pate and Imran Khan, Swan Energy, discuss the recent spike in bankruptcies and how that will impact the rest of the oil and gas industry.
Despite the bankruptcies, lay offs and disruption in industry, Davis sees the marketplace shifting and creating new opportunities.
“Forget all that. You have to take the hand you are dealt, and here we are and there is not a lot we can do about it. ” Davis said. “All the doom and gloom speaking and talking doesn’t do any good, doesn’t help. Just brings out more doom and gloom.”
Davis continues explaining how uncertainty creates opportunity. Swan Energy is aggressively buying natural gas assets. Khan and Pate both agree that natural gas futures look bright, as international markets are waiting for American natural gas, as new innovations are paving new paths in energy development.
The interview transitions into renewable energy and government subsidies. Davis explains how in the past his investors would shy away from anything subsidized due to the lack of control and merit of product or service. However, with the Managed Marketplace, he is considering looking into some solar farms and wind projects because opportunities are being controlled and directed that way.
“I have a hard time getting into something that only makes money if it has subsidies because if the subsidies go away then you are neck deep in it and really in trouble,” Davis said. “Although when you look at these wind farms and they are so massive obviously someone else had much more risk tolerance from that standpoint than I do and I am not tied into the government that much to get any of that.”
Click here for exclusive interview
The Crude Life Podcast can be heard every Monday through Thursday with a Week in Review on Friday.
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