PIPELINES UNDER LAWFARE ASSAULT
On July 2, the Bureau of Indian Affairs ordered an oil pipeline that has moved crude oil through North Dakota since 1953 to shut down over a right-of-way dispute between the pipeline owner and the regional indigenous tribe. Then, only four days later, a federal judge ordered the Dakota Access Pipeline, which has also trans-ported oil from North Dakota for three years, to cease operations, pending a full environmental review by the federal government. Although the latter order was reversed on appeal just yesterday, the rapid succession of these particular government shutdown de-crees may end up making July 2020 a watershed month for oil-and-gas pipeline operation and development in the U.S.
Legal challenges to planned pipelines are certainly nothing new. Environmentalists often attempt to delay new projects through ex-pensive litigation that, in some cases, makes development cost-prohibitive. Cancellations of the Atlantic Coast Pipeline and Consti-tution Pipeline, in addition to the recent Supreme Court decision to maintain the halt on construction of the Keystone XL Pipeline, are some of their triumphs from this year.
Ironically, such wins for activists may prove pyrrhic victories, for pipelines are not only the cheapest but also the safest way for oil and natural gas to travel. Forcing a developer to shut down an oil pipeline, for example, actually raises the risk of a spill dramatically because that oil must be moved to market by truck or rail instead. Trucks, which can crash or overturn, carry a much greater risk of spillage (not to mention their environmental impact on roads, car-bon emissions, and noise pollution), and several derailments of oil shipments by train that caused explosions and fatalities in recent years caution against further expansion of that mode. An increase in demand for rail capacity to move oil and gas also encroaches on that capacity for other industries that rail their products to market—such as agriculture, metals, mining, and building materials—and increases their costs. Another irony is that, without oil and gas, not a single wind turbine or solar panel could be delivered or even made. Not only the steel, fiberglass, aluminum, and concrete used to manufacture wind turbines but also certain materials contained in solar panels are the products of energy-intensive mining or manufacturing processes that rely on these legacy fuels.
When environmentalists manage to nix a planned pipeline, they arguably sabotage their own purported long-term goals, but the losing side at least is left to deal with a status quo to which it has been accustomed. However, if activists continue to succeed in shuttering established pipelines, U.S. oil and gas production and processing may endure significant and unpredictable disruption that can ripple through the broader U.S. economy.