Setbacks hamper pipeline industry backed by Trump

Setbacks hamper pipeline industry backed by Trump

Setbacks hamper pipeline industry backed by Trump

BILLINGS, Mont. — After a U.S. energy boom and strong backing from President Donald Trump propelled a major expansion of the nation’s sprawling oil and gas pipeline network, mounting political pressures and legal setbacks have put its future growth in doubt even as the pandemic saps demand for fuel.

Two major oil pipeline projects suffered courtroom blows this week: The U.S. Supreme Court upheld the cancellation of a key permit for the Keystone XL oil sands pipeline from Canada, and a federal judge ordered the Dakota Access Pipeline shut down more than three years after it started moving oil across the U.S. Northern Plains.

The rulings came a day after utilities cancelled an $8 billion natural gas pipeline through West Virginia, Virginia and North Carolina amid mounting delays and bitter opposition from environmentalists.

Industry representatives took consolation from the Supreme Court’s decision that the permit it denied for Keystone XL can once again be used for other projects. That would allow more than 70 pipeline projects that faced potentially billions of dollars of delays to proceed.

But that outcome may be “too little too late” for some companies already making changes to their plans, said Ben Cowan, who represents pipeline companies as an attorney with Locke Lord LLP.

The recent blows against the industry have emboldened environmentalists and Native American activists, who routinely oppose fossil fuel pipelines because of potential spills and their contribution to climate change.

Montana farmer Dena Hoff, a Keystone opponent, witnessed the environmental damage that pipelines can cause in 2015 when a pipeline broke beneath the Yellowstone river adjacent to her farm and spilled 31,000 gallons (117,000 litres) of crude that fouled downstream water supplies serving 6,000 people.

She said the years of protests against Keystone and other lines have made the public listen. “There’s more to this argument than jobs and tax dollars,” Hoff said Thursday.

Industry executives acknowledged pipeline opponents have found some success in the courts, but insist that continued demand for oil and gas means new lines will be needed.

“We will meet them at the courthouse and fight these battles out legally at every opportunity,” said American Petroleum Institute President Mike Sommers. “The activist community doesn’t want to build anything, anywhere.”

Construction crews installed almost 30,000 miles (48,000 kilometres) of new oil pipelines and nearly 10,000 miles (16,000 kilometres) of new interstate gas transmission lines over the past 10 years, according to government data and figures provided by the Interstate Natural Gas Association of America. Most projects attracted far less attention than huge endeavours like the 600-mile (965-kilometre) Atlantic Coast line. That shows companies can successfully balance landowner concerns, environmental impacts and similar issues, said Joan Dreskin, vice-president of the gas association.

The building spree came after breakthroughs in drilling techniques allowed fossil fuel companies to ramp up production and make the U.S. the world’s top oil and gas producer.

That steep rise toppled off a cliff earlier this year, when a price dispute between Russia and Saudi Arabia combined with the onset of the pandemic caused oil prices to crater. Natural gas prices also have fallen in recent years, driven in part by oversupply.

A loss by Trump in November could add to the industry’s troubles. Since his election, the Republican president has issued directives to speed up pipeline permitting and even interceded personally with Keystone XL, issuing a special presidential permit for the 1,200-mile (1,900-kilometre) pipeline that would stretch from Alberta to Nebraska after it was stalled by an earlier court ruling.

Democratic presidential candidate Joe Biden’s campaign has said he would rescind Keystone’s permit. His administration also could make it harder for Dakota Access to resume operations and prolong the court-ordered environmental review of the project, said Aaron Brady, vice-president of energy at IHS Markit.

Dakota Access is by far the largest pipeline out of the Bakken shale formation of North Dakota and Montana. An extended shutdown could force oil companies to use more costly and risky transport methods, such as by rail.

Similar constraints loom over natural gas producers with the defeat of the Atlantic Coast Pipeline and successful attempts to block pipelines in the Northeast. That could rein in future growth of the Marcellus gas fields, which boosted U.S. production to record highs last decade, said Rich Redash, head of global gas planning at S&P Global Platts.

“It’s going to be more challenging to expand, particularly if you’re in an area where the opposition is organized, better funded and supported by state and local elected officials,” Redash said.

The Keystone case was referred back the 9th Circuit Court of Appeals for further consideration. That could leave unresolved for another year or longer the fate of a U.S. Army Corps of Engineers’ permit program that pipeline companies use for quick approval of the hundreds of river and wetlands crossings involved with large pipeline projects.

Environmentalists and local officials already are using the original ruling that cancelled the permit as justification to seek court orders against other projects, such as the Permian Highway pipeline in Texas.

Despite high-profile spills and fatal gas transmission explosions, the industry for years has avoided proposed safety regulations that would require companies to install costly automatic shut-off valves for pipelines. Meanwhile, courtroom fights and protests against pipelines have only gotten more intense.

As that opposition gets more sophisticated, it will mean more delays and higher costs for projects that rely on federal permits, said Jason Bordoff, founding director at Columbia University’s Center on Global Energy Policy.

“Trump’s energy dominance agenda backfired, as his Administration was taken to task for cutting corners in their environmental reviews,” Bordoff said in an email. “With a more careful and thorough environmental review process, other pipeline projects may yet be able to move forward.”

__ Bussewitz reported from New York.

___

Follow Matthew Brown at https://twitter.com/matthewbrownap

Matthew Brown And Cathy Bussewitz, The Associated Press

oil and gas

Just Posted

(File photo from The Canadian Press)
Red Deer down to 66 active COVID-19 cases

Red Deer has lowest number of active cases since last November

Orange shirts, shoes, flowers and messages are displayed on the steps outside the legislature in Victoria, B.C., on Tuesday, June 8, 2021 following a ceremony hosted by the Songhees and Esquimalt First Nations in honour of the 215 residential school children whose remains have been discovered buried near the facility in Kamloops, B.C. THE CANADIAN PRESS/Chad Hipolito
Alberta city cancels Canada Day fireworks at site of former residential school

City of St. Albert says that the are where the display was planned, is the site of the former Youville Residential School

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Alberta reports 100 new cases of COVID-19

The Central zone sits at 218 active cases

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer drops to 71 active cases of COVID-19

Province adds 127 new cases of the virus

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Children walk with their parents to Sherwood Park Elementary in North Vancouver for the first day back to school on Sept. 10, 2020. THE CANADIAN PRESS/Jonathan Hayward
Study reassures parents, teachers that COVID-19 infrequently shared at school

Federally funded study in Vancouver finds risk at school and in the community was identical

Conservative MP Kevin Waugh rises during Question Period in the House of Commons Tuesday April 13, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Single-game sports betting about to become legal in Canada

Senate passes bill to take sports gambling away from overseas agencies

Air Canada planes sit on the tarmac at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. THE CANADIAN PRESS/Nathan Denette
Pilots say no reason to continue quarantines for vaccinated international travellers

Prime minister says Canada still trying to limit number of incoming tourists

Fans watch the warm-up before Game 6 between the Toronto Maple Leafs and the Montreal Canadiens in NHL playoff hockey action Saturday, May 29, 2021 in Montreal. Quebec’s easing of COVID-19 restrictions will allow 2,500 fans to attend the game for the first time in fourteen months. THE CANADIAN PRESS/Ryan Remiorz
Two-thirds of Canadians say governments shouldn’t lift all COVID-19 restrictions

Poll reports Canadians who gained pandemic weight say they have gained 16 pounds on average

Paul Bernardo is shown in this courtroom sketch during Ontario court proceedings via video link in Napanee, Ont., on October 5, 2018. Teen killer and serial rapist Paul Bernardo is set for a parole hearing today. The designated dangerous offender, has been eligible for full parole for more than three years. Bernardo’s horrific crimes in the 1980s and early 1990s include for kidnapping, torturing and killing Kristen French and Leslie Mahaffy near St. Catharines, Ont. THE CANADIAN PRESS/Greg Banning
Killer rapist Paul Bernardo, who was denied parole, had plans to relocate to Kelowna

Designated dangerous offender has been eligible for full parole for more than three years

People look over the damage after a tornado touched down in Mascouche, Que., north of Montreal, Monday, June 21, 2021. Dozens of homes were damaged and one death has been confirmed. THE CANADIAN PRESS/Ryan Remiorz
One dead and extensive damage as tornado hits Mascouche, Que., north of Montreal

Damage reported in several parts of the city, and emergency teams dispatched to sectors hardest hit

FILE - In this Nov. 29, 2020, file photo, Las Vegas Raiders defensive end Carl Nassib leaves the field after an NFL football game against the Atlanta Falcons in Atlanta. Nassib on Monday, June 21, 2021, became the first active NFL player to come out as gay. Nassib announced the news on Instagram, saying he was not doing it for the attention but because “I just think that representation and visibility are so important.” (AP Photo/John Bazemore, File)
Nassib becomes first active NFL player to come out as gay

More than a dozen NFL players have come out as gay after their careers were over

A pair of Alberta residents were arrested after police responded to a report of a woman who had allegedly been assaulted and confined against her will on June 20, 2021. (File photo)
Salmon Arm RCMP arrest 2 Albertans suspected in alleged assault, unlawful confinement

Firearms, stolen items seized including NHL hockey cards believed to be worth thousands

Most Read