Energy Subcommittee Hears Testimony from Pipeline Stakeholders and Dakota Access

Today, the Energy Subcommittee of the House Energy and Commerce Committee held a hearing in Washington, DC to gather information from a number of stakeholders on various energy infrastructure projects. The hearing was entitled “Modernizing Energy and Electricity Delivery Systems: Challenges and Opportunities to Promote Infrastructure Improvement and Expansion.” The committee heard from various stakeholders with vested interest in energy infrastructure projects, including members of the labor and construction community, Native American Community, electrical grid builders and operators, and pipeline builders and operators.

Pipeline projects across America were a key focus of testimony from many of the individuals on the panel and during many of the questions from the Committee. Notably, many of the half-truths, misrepresentation, and partisan politics that have pervaded pipeline projects over the past six months were addressed.

During the hearing Joey Mahmoud, Project Manager for the Dakota Access Pipeline spoke on the impact of these half-truths and misrepresentations on the Dakota Access Pipeline specifically.

Mr. Mahmoud noted that the letter of the law was followed closely throughout the approval process, including extensive Native American consultations by both the company constructing Dakota Access and the U.S. Army Corps of Engineers. Despite following a clearly delineated legal process, a political decision was made to stall the final easement necessary to complete construction at the 11th hour in spite of the efforts of four state regulators, the work of the U.S. Army Corps of Engineers in conjunction with other federal agencies.

Mr. Mahmoud’s testimony concluded with an emphasis on the importance of the role of the federal government to enforce the rule of law:

“Mr. Chairman, we came to realize that even a company as large as Energy Transfer is helpless in the face of a government which will neither obey nor enforce the law. We came to realize that playing by the rules can count for little. And we came to realize that good faith efforts to reach accommodation with the many different stakeholders can be a fool’s errand when political motivation overrides the rule of law.”

Now that the government has given final easement, construction continues toward the completion of Dakota Access.

What Others Are Saying on the USACE’s Decision to Grant Final Dakota Access Easement

In addition to MAIN Coalition spokesman Craig Stevens’ statement, the following MAIN Coalition members also issued statements following the release of the final easement necessary to finish construction of the Dakota Access Pipeline by the U.S. Army Corps of Engineers:

Ed Wiederstein, Chairman, Midwest Alliance for Infrastructure Now (MAIN) Coalition said, “The MAIN Coalition is pleased that the U.S. Army Corps of Engineers has decided to move forward with the final easement – thus ensuring the completion of the long awaited Dakota Access Pipeline. We thank the U.S. Army Corps of Engineers for their hard work and deliberation on this project which allowed for this important decision to be reached, and we thank the Trump Administration for moving this project forward.”

Bill Gerhard, President,  Iowa State Building and Construction Trades Council said, “The decision to grant the final easement for the Dakota Access Pipeline following an extensive and thorough review has been eagerly anticipated by thousands of hardworking men and women. We applaud the U.S. Army Corps of Engineers for their decision to issue the final easement.”

Andy Peterson, President, North Dakota Chamber of Commerce stated, “With the issuance of the final easement at Lake Oahe, our state can put the long saga of Dakota Access’ construction behind them and look forward to operation of this important pipeline project. Our state relies on a stable and lawful regulatory climate to ensure business transactions can occur unencumbered by political interference – the Corps’ engineering decision to grant this easement is a positive step forward for both the project and North Dakota.”

 Ron Ness, President, North Dakota Petroleum Council said, “The U.S. Army Corps of Engineers’ decision to grant the final easement to the Dakota Access Pipeline is a welcome decision for both the oil and gas industry, as well as for businesses and individuals across North Dakota. Our state has waited a long time for this final easement, even following approvals by our own Public Service Commission, and endured months of divisive and disruptive protests. We thank the Corps for their expedient decision following a directive from the Trump Administration to ensure the lawful regulatory review process is carried through to completion.”

Mike Ralston, President of the Iowa Association of Business and Industry stated, “The Iowa Association of Business and Industry thanks the U.S. Army Corps of Engineers for their decision to move forward with the Dakota Access Pipeline. The directive issued by the Trump Administration only a few short weeks ago sought a lawful conclusion to the long process of pipeline approval and we are thankful that we will see the completion of the project soon.”

Dawna Leitzke, Executive Director, South Dakota Petroleum and Propane Marketers Association said,  “The South Dakota Petroleum and Propane Marketers Association applauds the decision by the U.S. Army Corps of Engineers to issue the final easement for the Dakota Access Pipeline. South Dakotans look forward to the completion of this important infrastructure project and a step toward a future of American energy independence.”

USA Today Editorial Supports Completion of Dakota Access

The USA Today Editorial Board called for the completion of the Dakota Access Pipeline in a piece published on December 5th.

According to the board’s piece, despite attempts to block the project, oil produced in North Dakota will not be kept in the ground.

“The issue of where to route pipelines is always going to be a sticking point. Native tribes are not the only ones who would prefer to not have them in or near their backyards. But pipelines fill a vital need for the economy and for America’s energy security, and therefore need to be built.

As for combating climate change, the ultimate goal of many environmental groups, taking on individual pipelines is not the answer. The answer is to impose costs on carbon emissions so polluters can’t keep using the atmosphere as a free dumping ground for greenhouse gases. That way, markets can figure out the best way to adapt.

Pipeline fights can make for a great spectacle. But, no matter which side wins, they will have little impact on the environment beyond their immediate environs.”

MAIN Coalition Statement on Refusal To Grant An Easement at Lake Oahe

Following the Obama Administration’s decision to not grant an easement for the Dakota Access Pipeline at Lake Oahe, MAIN Coalition spokesman Craig Stevens issued the following statement:

“This purely political decision flies in the face of common sense and the rule of law.  Unfortunately, it’s not surprising that the President would, again, use executive fiat in an attempt to enhance his legacy among the extreme Left.  That the President continues to believe that he is above the law is simply un-American and it is this arrogance that working class Americans soundly rejected on November 8.  For millions of hard-working people across the heartland, January 20 cannot come soon enough.

“President Obama’s decision not to issue the final easement is a rejection of the entire regulatory and judicial system, as well as the scores of Army Corps of Engineers and civil servants who toiled for more than 800 days to ensure the process was followed correctly, in accordance with the law.

“The pipeline – at no point – crosses the Standing Rock Sioux tribe’s reservation, is collocated with a three-decades old natural gas pipeline, and has received all requisite state and federal approvals.  The only remaining piece of the 1,172-mile puzzle was the final easement for a 1,000 foot portion abutting Lake Oahe.  There is no reasonable logical, factual, environmental, or scientific reason for this not to be issued – in fact the Army Corps of Engineers had already recommended the approval of the easement.

“With President-elect Trump set to take office in just a few weeks, we are hopeful that this is not the final word on the Dakota Access Pipeline.”

-###-

Dakota Access Ensures Costs Remain Low For North Dakota Producers

In an article published in Bloomberg Businessweek, recently reviewed energy and economic analyses point to a significantly reduced cost to ship petroleum by pipeline rather than by railroad or truck. This is important because those few dollars difference in cost to energy companies directly relates to the opportunities for companies to expand operations and hire individuals from engineers to craft trades to develop the infrastructure necessary to develop North Dakota resources.

According to the article, “[u]nlike Texas, which has pumped oil for more than a century and is home to thousands of miles of pipelines, North Dakota never had a reason to build much energy infrastructure. As oil gushed out of remote areas miles from any town or pipeline, wildcatters, middlemen, and traders raced to get it out by truck, train, and barge. By 2015, 800,000 barrels of crude a day was being railed out of North Dakota. Moving oil by train costs a lot more than pumping it through a pipeline, but when world crude prices hovered around $100 a barrel—as they did for several years—there was enough profit to go around. Now that prices have fallen, those transportation costs have become critical. Refineries on the East Coast, once among the biggest buyers of Bakken crude, have reverted to importing foreign oil rather than paying to ship it halfway across the country.”

Despite the massive production available in North Dakota, the high cost of transportation has actually led some American refiners to import foreign oil, rather than use domestic supplies, because of the economic realities.

The key to closing that cost gap and reducing dependence is to construct the infrastructure necessary to make North Dakota oil economically viable for the long-term future. An important part of that infrastructure investment is the Dakota Access Pipeline.

According to data compiled from Valero and Bloomberg Intelligence, current costs to ship Bakken oil to refineries across the United States by rail can range as high as $10 per barrel – at roughly $50 per barrel, that’s 10% of the total price. The estimated cost of delivery of a barrel moved by the Dakota Access pipeline would fall to about $5 per barrel, creating long-term stability for producers, refiners, and ultimately, consumers.

With the development of the Dakota Access Pipeline, transportation costs would essentially be reduced by half. Imagine if you could shave 5% off the cost of a gallon of gas, and ensure that the gallon of gas wasn’t supporting a foreign government. Not only that, but by reducing the cost of transportation, opportunities for production increase allowing more North Dakotans the opportunity to work. Right now North Dakota’s major oil producing counties support on average approximately 10% of the state workforce, and that’s with only 38 oil and gas rigs operating in November of this year. Compare that to more than 200 rigs back in 2014.

Lean operation has made production more efficient, but reducing costs for producers allows for greater development and greater economic opportunity.

Local Voices Matter in the Dakota Access Discussion Too

In an opinion piece published in The Hill by Bill Gerhard president of the Iowa State Building and Construction Trades Council and Dawna Leitzke, executive director for the South Dakota Petroleum and Propane Marketers Association, the authors point out that for more than two years many people within the states where Dakota Access is being constructed have actually supported the project.

In the piece Mr. Gerhard and Ms. Leitzke write: “In recent weeks, a growing amount of media attention has been focused on the ongoing protests against the Dakota Access Pipeline in North Dakota. Reports of trespassing, arson, and attempted murder are deeply troubling. Equally worrisome is the protest’s rapid spreading from North Dakota into South Dakota, Iowa and other states – a trend that promises only to grow unless law and order are restored to the region.  Unfortunately, the voices of those who live in the states where the pipeline is being constructed are not being heard, which is why we’d like to share our perspective.”

We’ve noted the presence of anti-development activists before among the protesters at Standing Rock, and often it’s their activities that the media covers.

Local voices matter too, public support and a need for this project led to the Dakota Access Pipeline’s approval by four separate state utility regulators.

Pipeline Workers Face Great Risk In Midst of Anti-DAPL Protest

An article in the Billings Gazette, highlights the experience of Cory Bryson, a North Dakotan and business representative for LiUNA Local 563 in Bismarck.

Mr. Bryson recalls sitting in multiple public hearings in North Dakota and notes how the tribe failed to attend any of the PSC meetings.

In fact he also conducted outreach to Chairman Archambault on how to work better with tribes in the future, but the men have yet to meet.

Sadly, the public participation of union members in the permitting process has made them a target for anti-pipeline activists. “A lot of the violence is coming from people who are from out of state bringing their own agendas,” Mr. Bryson said. “protests go from protecting the water to anti-oil, anti-pipeline, anti-fracking and anti-police. Too many groups are involved.” Mr. Bryson also indicated he received threats himself. He’s been followed in his car by vehicles with out-of-state license plates. Once, protesters threatened to burn his family in their home.

These type of scare tactics are not only threatening to the rule of law, but they unfairly target individuals who are providing for their families. Without closure on the issuance of an easement underneath Lake Oahe, it is clear protesters will continue to engage in these deliberately threatening actions, and continue to target American workers.

Pipeline in Illinois Expected to Be Done by End of Month

Fifteen percent of the entire Dakota Access Pipeline runs through Illinois, and a company spokeswoman said this week that the construction portion of the project will soon be 100 percent complete in this state.

“Construction in Illinois began in May and is expected to be complete by Dec. 1,” said Dakota Access Pipeline’s Lisa Dillinger. “The four-state project is now 85 percent complete and anticipated to be in service in early 2017.”

Dakota Access traverses approximately 177 miles of Illinois, Dillinger said, including portions of Hancock, Adams, Schuyler, Brown, Pike, Scott, Morgan, Macoupin, Montgomery, Bond, Fayette and Marion counties, where it ends. The $3.8 billion, 1,172-mile pipeline also crosses North and South Dakota and Iowa.

Continue Reading >>

The Dakota Access Debate Has Grown Out of Proportion

The Washington Post recently published a supportive opinion editorial from former Senator J. Bennett Johnston (D-LA) and Daryl Owen of Owen Associates which examined how the protest and activity over the Dakota Access pipeline has grown of proportion.

From violent protest activity to millions of dollars of damage to equipment and even disturbing death threats to employees – the tactics being deployed against the project are unseemly and unnecessary.

In the column, Johnston and Owen highlight efforts of sabotage against operational pipelines across the country and the danger that such actions can create. They write that the protests are no longer about opposition to the project, but rather a new tool in the effort to stop the development and use of fossil fuels.

In addition to examining the true nature of the protest and the violence ensuing, Johnston and Owen highlight that, “[t]his is, after all, a pipeline project,” and not simply the first of which would cross the Missouri River – it would be one of dozens that do so carrying American energy products. The final piece of the puzzle, is as they say, “part and parcel of a river-crossing permit the pipeline has already received. It is a simple ministerial action authorizing the pipeline to cross beneath federal lands and, for want of a simple signature by an Army Corps bureaucrat, would finalize the process. By arbitrarily refusing to follow the law, the Justice Department has placed a lawfully permitted, vital $4 billion infrastructure project into suspended animation.”

The authors also note that the tribe who has sought to stall the project “largely refused to engage in [the] consultations” after much inquiry – a fact echoed by a federal court judge who reviewed the Army Corps findings and determinations. Johnston and Owen write that “there is much to be discussed and much to be regretted about the past 150 years of U.S.-tribal relations. But a real estate document for a pipeline river crossing seems hardly the pretext to do so.”

The Administration and Federal Government’s decision to withhold the final piece of multi-billion dollar project, in Owen and Johnston’s own words, it sends “a chilling message to the private sector about the rule of law as it relates to infrastructure development.”

It is simply unacceptable that the Federal Government has continued to delay the completion of this project – after all, their approval was already granted in July of this year. The fact remains, a single 1,000 foot section of an 1100 mile project, is currently held up by opponents who have already stated their mission is far greater than the Dakota Access Pipeline – but simply to withhold the development of America’s energy future.

 

 

 

Statements from Associations and Unions on Corps Further Delay of DAPL

A chorus of voices continue to decry and demand the approval the Dakota Access Pipeline following the Corps decision to further delay a project that has already been extensively reviewed and approved by four state agencies and the federal government. Statements from the NAM, API, IUOE, and AOPL are included below.

Americans Have Demanded Change: Manufacturers Respond to President’s Decision on DAPL
National Association of Manufacturers, November 14, 2016

National Association of Manufacturers (NAM) President and CEO Jay Timmons issued the following statement on President Obama’s decision to continue to delay approval of a key portion of the Dakota Access Pipeline project:

“Americans demanded change last week. Disregard for the rule of law and bad decisions from Washington, like the one today, are why so many have been frustrated and sought change.

“Manufacturers in Florida, Louisiana, Texas, Missouri, Mississippi, Illinois, Oklahoma, Minnesota, Arkansas and many other states who signed on to supply this project are now left hanging in continuing regulatory limbo and must come to grips with today’s wrongheaded decision.

“We look forward to working with the next administration on access to our energy to fix this mess, as the president-elect has indicated that he values the importance of energy infrastructure.”

Learn more about the importance of investing in our nation’s infrastructure, including ways to advance energy infrastructure, by reading the NAM’s Building to Win initiative.

API questions Obama administration action to delay the Dakota Access Pipeline
WASHINGTON, November 14, 2016 – API Midstream Group Director Robin Rorick questioned actions by the Obama administration to unilaterally delay construction of the Dakota Access Pipeline.

“It defies logic that the Obama administration would ignore the rule of law by unilaterally delaying this critical infrastructure that would create American jobs and benefit American consumers,” said API Midstream Group Director Robin Rorick. “This project went through an established, open and transparent permitting process where comments from numerous stakeholders were considered. The administration’s actions to further delay this project with no legal justification contradict multiple court rulings; set a dangerous precedent for other infrastructure projects including roads, bridges and electricity transmission lines; and ignore calls to uphold the rule of law by the governors of North Dakota, South Dakota, and Iowa.

“Modernizing our infrastructure helps move energy our nation demands more efficiently, helps save consumers money, and provides tens of thousands of well-paying jobs. It’s unfortunate that the Obama administration would turn its back on its own citizens and put politics over sound public policy. I hope the administration reconsiders today’s action for the good of our nation’s energy future.”

API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 30 million Americans.

IUOE Calls for Immediate Issuance of Easement for Dakota Access

WASHINGTON, DC – James T. Callahan, General President of the International Union of Operating Engineers (IUOE), issued the following statement regarding the Dakota Access pipeline:

“The Administration’s announcement today raises more questions than it answers. The United States cannot afford to further delay the Dakota Access pipeline and throw workers off a job at the tail end of the construction season in the High Plains. The project has jumped through every regulatory hoop and cleared every hurdle in a rigorous, years-long permitting process and is nearly built.

The Administration has failed to identify what could realistically be achieved by more review. Despite years of study and hundreds of meetings that the Army Corps has conducted with tribes, farmers and communities along the route, the Administration insists on more meetings. The uncertainty looming over this project for construction workers, law enforcement and other companies looking to invest in energy infrastructure has gone on long enough.

As we near the end of this construction season, employment in the oil and gas pipeline industry continues its downward spiral, down by over 20% in the last two years. It is high time to finish this vital domestic energy project.”

AOPL: Pipeline Operators Decry Continued Administration Interference in Pipeline Approval Process

WASHINGTON, DC – The Association of Oil Pipe Lines (AOPL) decried the current administration’s continued refusal today to grant final approval for the Dakota Access Pipeline project even while admitting previous project decisions met legal requirements.

“This administration continues to astonish after admitting previous Dakota Access pipeline decisions were legal, which include the environmental and cultural finding of no significant impact, they are still refusing to provide final approval for the project,” said Andrew Black, AOPL President and CEO.

In July, the Army Corps of Engineers (Corps) issued a formal Finding of No Significant Impact after conducting an environmental review of the Dakota Access Pipeline project. Required by the National Environmental Policy Act (NEPA), the NEPA review represents the federal government’s official assessment of the environmental and cultural impacts of the project.

Dakota Access’s federal NEPA review found the proposed route for the pipeline is the preferred alternative and would have less of an impact on the environment than all other alternatives, including a different route of the pipeline or no pipeline at all.

A federal district court judge in September found the 250 interactions between the Corps, Dakota Access representatives and consulting tribal, cultural and historic representatives met or exceed the Corps’ legal obligations.

The administration after announcing in September an unprecedented halt to the approval process to conduct a review of previous agency actions has now “concluded that [the Corps’] previous decisions comported with legal requirements.” And yet, the administration in its November 14, 2016, letter to stakeholders still questions whether it will grant the final easement for the project.

The administration’s refusal to approve Dakota Access after finding the project meets its environmental and cultural obligations and admitting these findings were legal denies American workers the good-paying jobs this project will create. Refusing to approve Dakota Access denies American consumers the potential to benefit from lower prices additional supplies of energy transported by pipeline will bring.

AOPL urges the administration to respect the legal environmental and consultation approvals Dakota Access has already obtained and grant final approval to this project.