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Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

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Dakota Pipeline Activists Shouldn’t Celebrate Just Yet

DAPL

As environmentalists, Native Americans and those opposed to the Dakota Access pipeline (DAPL) celebrated the White House’s denial of a construction permit to Energy Transfer Partners (ETP) this weekend, North Dakota’s oil and gas industry will continue efforts to build a cheaper way to transport the state’s energy resources to the rest of the country.

Jo-Ellen Darcy, the civil works assistant secretary for the U.S. Army Corps of Engineers, released a statement on the agency’s decision on Sunday, stating “there’s more work to do” regarding research on alternative routes for the contested pipeline.

Though it seems that the rejection advantages the Standing Rock Sioux tribe and its allies, the legal reality is that ETP will likely receive the approval it needs once Republican President-elect Donald Trump takes office in January.

“This is nothing new from this administration, since over the last four months, the administration has demonstrated by its action and inaction that it intended to delay a decision in this matter until President Obama is out of office,” the consortium of companies leading the project said in the statement to Bloomberg.

Reporting from The Wall Street Journal shows that Trump himself has between $500,000 to $1 million invested in ETP and the company’s CEO, Kelcy Warren, donated $100,000 to Trump’s presidential campaign – which gives weight to arguments recently launched by 2008 GOP Vice Presidential Nominee Sarah Palin claiming that the new president’s business policies may lead to “crony capitalism.”

ETP is set to benefit from its proximity to the Trump apparatus as soon as he is sworn in next month. And that’s literally what ETP has said in the near past.

“I’m pretty confident that worst case, January 20th, [Inauguration Day], we get our easement and proceed,” the company’s CEO, who has also insisted that the line will not be rerouted no matter what, told the WSJ in November.

But hotly contested issues aside, building DAPL will nearly halve per-barrel transportation costs from North Dakota to refineries in Houston, Texas, and St. James, Louisiana. From the current $9-$11 range, costs will fall to $5-$5.50 – a sizeable cut in today’s $50-barrel market.

The state’s industry has seen a 20 percent drop in production over the past two years, twice the size of the effect of the oil price crisis in Texas and Oklahoma. The $3.8 billion pipeline, which would cut through ancestral Native American lands and risk local water supplies, has been designed to reduce the financial affects of rail-based oil transport and make North Dakota a viable production center once again. Related: Will Solar Stocks See A DotCom Style Bubble?

During a press conference last month, Lynn Helms of North Dakota’s Department of Mineral Resources said that the real benefit of the line is that it gives “a known value to the transport costs, as opposed to costs that can be all over the map and change very quickly.”

This is why, even though oil companies with signed contracts to use the DAPL will have the option to withdraw from their commitments if it is not built by January 1st, it is unlikely that a swift abandonment of the project by ETP’s costumers will ensue.

Trump’s support means the pipeline is by no means doomed, and the economics of U.S. energy transport practically mandates DAPL’s construction.

For North Dakota’s oil barons, it’s a waiting game, and for them, it’s better late than never.

By Zainab Calcuttawala for Oilprice.com

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  • Randy Verret on December 05 2016 said:
    Where is there any proof to substantiate your statement that the pipeline "would cut through ancestral Native American lands and risk local water supplies?" I have seen no evidence that the archeological studies were insufficient or that the Standing Rock Sioux could substantiate any (real) water protection issues with the proposed Missouri River crossing. A federal judge after review of the Standing Rock injunction rejected their arguments. The REAL issue (here) is that you have a well established permitting process with extensive public input & agency review and all that is (simply) invalidated by the White House due to political pressure. Sure looks that way when you (actually) look at all the facts in this case and attempts by Energy Transfer Partners to constructively engage the tribe. It sure would be refreshing if the media returned to some journalistic integrity and showed some sense of balance, rather than the ongoing default position with the "High Plains Drama" and all the theater. Our country is done a great disservice when there is not intelligent discourse & debate on these important energy matters...
  • Coffeeguyzz on December 05 2016 said:
    DAPL already crosses the MIssouri upstream, connecting Williams to McKenzie counties. The water intake for Williston is 14 miles downstream.
    While the current water intake for the SRS is located at Fort Yates, 20 miles below the Oahe crossing, it is closing in a few weeks for a state of the art water treatment/pumping/filtering complex to go online.
    This new plant is located in Mobridge, South Dakota, 70 miles downstream.
  • James Rose on December 06 2016 said:
    This was poorly written because it regurgitated far left propaganda as fact, when anyone can peruse the federal court's findings of fact and verify that the pipeline is NOT on native land, and the nearest alleged burial site is 1.2 miles from the line. It also regurgitates non-falsifiable allegations concerning Trump's supposed interests which cannot be proven nor denied, and is typical of the far left's methods of passing off disinformation.
  • John bozeman on December 06 2016 said:
    Doesn't fighting for the status quo represent cronyism ? What about big-time dem supporter warren buffet's railroad that currently Charges that 11 dollar transportation fee ?
  • Joe on December 06 2016 said:
    This pipeline is going to get built, especially with Trump as president. There are all sorts of reasons behind the motives of the protesters but if we just take a look at one of them, that is, water quality, all that is needed is a bit more education. While there are pipeline breaks at rivers, the chances are extremely small; much smaller than dying in a car crash, dying of lung cancer, or even being hit by lightning. There are thousands of pipelines crossing rivers in America and in the last 50 years were only a few leaks. If this risk is unacceptable people should look at other risks in their life and immediately stop driving, stop smoking, stop drinking alcohol, and stop crossing streets. There also needs to be more critical reporting on the protest to find the real truth on why people are protesting.

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