Vandalism and celebrity arrests have shoved protests against the Dakota Access Pipeline (DAPL) into the national spotlight, but a slew of projects face environmental resistance and the potential for significant delays.
Rover and Constitution head the list, but others include Algonquin, Atlantic Coast, Mountain Valley and Sabal Trail, analysts said on Oct. 19 during a Robert W. Baird & Co. conference call.
“We’re really concerned that DAPL would enter ‘pipeline purgatory,’ where it’s not quite alive, not quite dead, just being constantly litigated,” Matthew Hoza, energy analyst with BTU Analytics LLC, said. “A lot of opposition groups’ goal is to delay, delay, delay. What we’re seeing here is the anti-fossil fuel movement co-opt local or regional concerns to push its agenda.”
DAPL is engaged in a three-venue challenge to construction:
- Ongoing negotiations among Energy Transfer Partners LP (NYSE: ETP), the U.S. Army Corps of Engineers and Standing Rock Sioux Tribe over granting of an easement for construction;
- Case in U.S. District Court for the District of Columbia, which issued the preliminary injunction to the pipeline’s construction; and
- Case in U.S. D.C. Court of Appeals, which heard the appeal by the Standing Rock Sioux Tribe following the District Court’s denial of the preliminary injunction.
“It’s a live controversy. There’s a case there that will continue,” Brandon Barnes, senior energy litigation analyst with Bloomberg Intelligence, said, “but the threat of stopping construction is over.”
But the threat of delay is not over. Environmentalists’ strategy of disrupting construction of midstream infrastructure to discourage production and consumption of oil and gas can be seen less at the federal level than at state and local levels.
“With DAPL, we’ve seen a lot of pushback about Native Americans’ input into the environmental process,” Hoza said. “With Constitution, we’ve seen a big flashpoint with a maple syrup farm in northeast Pennsylvania.”
In Florida, the Sabal Trail Pipeline’s route through minority communities led to the charge of racism.
“There are these local concerns that we’re seeing; but really, what’s really driving all of this is the anti-fossil fuel movement,” he said.
Barnes expects DAPL’s easement to be granted by the court, but for litigation to continue as construction continues. His expectation is that ETP will be notified about the easement status by the end of October prior to a status conference with a judge on Nov. 11.
While Rover has encountered only typical delays, Constitution is on a three-venue track like DAPL. The denial of a water quality certificate by the State of New York is now in litigation in the Second Circuit Court and, depending on the way the court tilts, could put the project at risk.
“We can surmise that there was a lot of politics being injected into all of this based on the fact that everything was fine until it hit the governor’s desk,” Barnes said. “That leaves us to believe that the project’s facts and arguments are a little more favorable, and if the law is equal for both sides, then I give an edge to Constitution.”
Constitution is not the only project encountering political struggles in New York. Dominion Transmission Inc.’s New Market project, which involves installation of a compressor station, will likely miss its Nov. 1 in-service date.
“That project has hit what we call the ‘Wall of Cuomo’ in New York state,” said Hoza, referring to Gov. Andrew Cuomo. “They are just waiting for an air quality permit and they’ve been waiting for it.”
He expressed concern about delays dogging several projects, especially Nexus, which is only 60% committed. The Federal Energy Regulatory Commission may extend the comment period on that project as well as on Atlantic Coast. The U.S. Forestry Service and a Virginia state agency are suggesting reroutes on Mountain Valley.
“We have given all greenfield projects coming out of the Northeast a one- to two-year delay,” Hoza said.
Joseph Markman can be reached at jmarkman@hartenergy.com or @JHMarkman.
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