Vandalism and bullying pay.
That’s the message President Obama sent the nation when his administration delayed construction of the previously approved $3.7 billion Dakota Access pipeline. The administration’s decision to halt work on the previously approved pipeline came only minutes after a federal judge refused to stop the project.
Energy industry leaders see a trend: a growing federal government that is cancelling its own federal permits, and declaring projects illegal before they have even been proposed.
The pipeline project, if completed, is estimated to create between 8,000 and 12,000 jobs during construction, according to Energy Transfer Crude Oil Co. LLC, the company building the line.
Yet after some protests by Native American and radical environmentalist activists — and some vandalism of property — the Obama administration, both the Department of the Interior and the Justice Department, halted the project.
The cancellation came on Friday, before a planned Tuesday protest in front of the White House that some expect U.S. Bernie Sanders, the socialist independent from Vermont, to attend.
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The decision to indefinitely pause construction on the Dakota Access is just the latest in a slew of Obama administration actions that have cost American energy companies millions of dollars in investments and the American people thousands of jobs.
These actions rely on the dubious practice of revoking or pausing previously granted approvals for energy infrastructure projects. Under current rules, the Department of the Interior and the Army Corps of Engineers can revoke plans that have already been approved, that private companies have already raised the capital for, and, that in some cases, are already under construction.
Essentially this allows bureaucrats to approve reasonable projects that should get nods, but then yank approval for political reasons if there is any outcry from radical environmentalists. It’s not just oil companies that are feeling the heat. The administration can, and has, pulled the rug out on any project that mines or moves fossil fuels such as coal, oil or natural gas.
In 2011, the Obama administration and the Environmental Protection Agency went after Arch Coal’s Spruce Mine permit in West Virginia with a permit veto. The permit for a 2,000-acre site had been approved by the Army Corps of Engineers in 2007 — a full four years before it was revoked. The federal courts at first supported Arch Coal, but then a later decision upheld the veto.
The move from the administration cost the state the estimated $250 million in investments slated for the Spruce Mine and roughly 200 jobs.
The decision to veto the permit still angers industry officials and West Virginia leaders.
U.S. Sen. Shelley Moore Capito (R-WVA), said the latest action from Obama will make her push harder for a change in the law.
“I sponsored legislation that pushed back on this kind of egregious federal overreach, and I believe it is necessary to push back on the administration’s latest action,” said Moore Capito in a statement to LifeZette. “Regulatory certainty and infrastructure development are critical to our nation’s energy future. Actions like this will only stifle growth and hurt America’s energy economy.”
[lz_table title=”Top 5 states/regions for crude oil production” source=”EIA.gov”]
For June 2016
3.17 million barrels a day
|U.S. offshore/Gulf Coast
1.5 million barrels a day
1.02 milion barrels a day
492000 barrels a day
470000 barrels a day
Energy industry leaders see a trend: a federal government that is increasingly hostile to American energy companies. Industry officials say agencies like the EPA are canceling their own, previously approved, federal permits or blocking approval of projects before they’ve even reviewed the details.
“We have strongly opposed EPA’s use of retroactive vetoes in the Spruce case and its presumptive veto in the gold and copper mine case in Bristol Bay, Alaska,” said Luke Popovich, vice president of external communications for the National Mining Association. “The EPA assumes the right not only to destroy value from projects that it and other agencies have already approved after extensive environmental and engineering testing, but also exercises the right to forbid projects before even seeing the plans for the project.”
Having become the latest cause celebre for the left, the Dakota Access is now just the latest project to fall victim to a regulatory bureaucracy focused on appeasing radical environmentalists.
The protests included Green Party presidential candidate Jill Stein who was issued an arrest warrant by North Dakota police after she allegedly vandalized a project bulldozer.
As for objections from Native Americans, Energy Transfer had been in talks with Sioux leaders for two years. The pipeline doesn’t even cross the land of the Standing Rock Sioux — the tribe leading the protests.
The tribes are receiving political encouragement from the Left-wing environmental group, Earthjustice.
At issue in the next few weeks is whether Energy Transfer has to halt work entirely, and for how long. Industry insiders say not only is much of the work completed, the permits from the U.S. Army Corps of Engineers, like those given to Spruce Mine in 2007, have long been granted.
Radical environmentalists are on something of a winning streak, having successfully blocked approval for the Keystone XL pipeline from Alberta, Canada, to Oklahoma. That pipeline had a number of approvals before President Obama took the unusual step of vetoing it.
Over the last several years, North Dakota has experienced an oil revolution thanks to new techniques used to drill shale, especially in the Bakken Formation areas. The the oil and natural gas waiting underneath North Dakota land is enough to make the Saudis green with envy but needs safe, environmentally sound and reliable infrastructure, namely pipelines, for transport to refineries.
The Bakken Formation is the largest contiguous supply of gas and oil in the United States, according to Geology.com. The U.S. Geological Survey estimates there are 3.65 billion barrels of oil, 1.85 trillion cubic feet of associated/dissolved natural gas, and 148 million barrels of natural gas liquids in the U.S. part of this formation.
The Dakota Access pipeline, if completed, will deliver high-quality crude to the tune of 470,000 barrels a day. The pipeline has a capacity of 570,000 barrels a day. The pipeline was expected to start transporting oil by the end of this year.
The 1,172-mile pipeline will be 30 inches in diameter, and stretch from North Dakota through South Dakota and Iowa, and stop at Patoka, Illinois, where it will connect with other pipelines. The partially completed pipeline will now sit on hold as bureaucrats determine whether to hand radical environmentalists another job-killing win over American energy.
The only good news for energy consumers is that, as with Keystone XL, halting the pipeline won’t halt oil production, which could threaten low gasoline prices.
Instead, it will increase the volume of oil transported to Midwest and Gulf Coast refineries using trucks and rail lines, which will cause more carbon emissions than the pipeline.