Dakota Access pipeline protest quickly turning into quagmire for industry

dakota accessNative groups and eco-activists appear to be settled in for a long fight with Energy Transfer Partners, industry

Media pundits love to be right…unless they’re right about something they’ve warned about, and then that something comes true. Welcome to the Dakota Access pipeline standoff, the next chapter in the alliance between eco-activists and Native Americans. It won’t be pretty for the oil and gas industry.

Dakota Access
Dakota Access @HarshaWalia Twitter photo.

A month ago I wrote about how effective the partnership between Canadian First Nations and eco-activists had been in opposing two pipeline projects, Enbridge’s 525,000 b/d North Gateway and Kinder Morgan’s 525,000 b/d Trans Mountain expansion, both designed to transport diluted bitumen from the Alberta oil sands to tidewater and on to Asian markets.

And how the Canadian experience should be avoided at all costs by American pipeline operators.

Since then, the Native American/eco-activist opposition to Dakota Access has deepened and it appears the standoff could drag on for a long time – with significant costs to Bakken oil producers in North Dakota and Montana.

The worst case scenario seems to be unfolding.

dakota access
Video: Well automation systems reduce costs, increase efficiency. Complete systems installed starting at $3,000 in Permian Basin.

Here’s an overview of recent events:

This morning, eco-activists belonging to a group called Climate Direct Action were arrested after they shut down five pipelines carrying crude from Canadian oil sands into the US market. The companies involved condemned the actions, saying they were dangerous and irresponsible. Not a deterrent to protestors – more like catnip to a tabby.

A coalition of 75 US and Canadian native groups opposing expansion of oil production have joined the Standing Rock Sioux Nation’s Dakota Access fight. That means more resources and experienced strategists to bolster the Sioux efforts.

The Sioux took their fight to Washington, asking a Congress panel to force the US Army Corp of Engineers withdraw Dakota Access Pipeline permits. The request was supported by the Democrats. What happens if Republicans lose control of the House and Senate, which after the weekend now appears possible?

Energy Transfer Partners LP bought more than 6,000 acres of land adjacent to the Dakota Access route in North Dakota. Federal regulators do not have authority over private land and cannot block construction on it. This is a tactic cooked up by corporate lawyers who’ve never seen a pipeline project in the wild. Predictably, nothing has changed, because Monday, after a federal appeals court lifted an injunction against construction, both the Interior and Justice departments asked the company to voluntarily cease construction until a compromise can be worked out – assuming such a thing is even possible. That is a powerful request. Will Energy Transfer comply?

Now, what role has the American Petroleum Institute, chief trade association and political voice for the oil and gas industry, played in this controversy?

dakota access
Click here to watch production manager Dave Kuhnert explain how EndurAlloy™ production tubing has cut Crownquest Operating LLC’s Permian Basin well operating costs and extended well run-times.

In short, the wrong one.

“Moving forward, it’s critical that the rule of law is followed as the need for new energy infrastructure grows,” said Jack Gerard, API’s CEO.

Unions were no better.

“The administration’s attempts to shut down construction of the Dakota Access Pipeline show that it is putting politics ahead of the rule of law,” said North America’s Building Trades Unions President Sean McGarvey.

Judging by the Canadian experience, politics is a much better solution than the rule of law – which requires enforcement, which leads to conflict, which only leads to more conflict and the entrenchment of both sides in their positions.

I can’t imagine any government wants to send in police or the National Guard to clear away the 4,000-plus protestors who are amassed near the controversial project.

A negotiated settlement is clearly the best solution. When I interviewed local journalism professor Mark Trahant, he thought that early on the Sioux probably would have preferred to negotiate.

dakota access
Click here to see Quantum’s patented dual wellbore clean out technology now available in Permian Basin. Experience production increase, fewer future interventions, and no formation damage. Available in Alberta and Texas.

“I think it could’ve been resolved in terms of rethinking the actual route of the pipeline. But then it became bigger than that,” he said. “The whole issue became about climate change as well as the actual incident [bulldozing a burial site during the Labor Day weekend] with the community.”

Now, Energy Transfer, buttressed by the API and unions, appears to be intransigent.

And the Sioux and their allies appear to be just as intransigent:

“Indigenous people have been standing up together everywhere in the face of new destructive fossil fuel projects, with no better example than at Standing Rock in North Dakota,” said Grand Chief Phillip, President of the Union of BC Indian Chiefs.

“We are standing with our Indigenous tribes as they stand with us in solidarity,” says Jesse McLaughlin, Vice-Chairman of Standing Rock Sioux Tribe.

And the more industry flounders, thrashing about with half-baked strategies, the more it gets drawn into the quagmire.

I could be wrong. Maybe industry’s strong arm tactics work, the Sioux lose heart and give up. Maybe the federal government can work out a compromise.

But the way this issue has developed doesn’t suggest those are likely scenarios.

What a mess.

dakota access
Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com

Facebook Comments

Be the first to comment

Leave a Reply

Your email address will not be published.