Dakota Pipeline Protests Rise on Hope Project Is ‘Keystone-ed’
(Bloomberg) -- The Dakota Access Pipeline has been stalled by the White House. Now protesters want to make sure it’s killed.
As construction on a segment of the controversial project remains frozen, critics are escalating efforts to ensure the Dakota line meets the same fate as the last major pipeline that drew the intervention of President Obama. He rejected TransCanada Corp.’s cross-border Keystone XL pipeline last year, citing environmental concerns, after more than seven years of debate and protests.
Energy Transfer Partners LP has reaffirmed its commitment to finishing its 1,172-mile (1,886-kilometer) Dakota line, which is nearly 60 percent complete.
"All eyes are on President Obama right now," said Jason Kowalski, policy director at 350.org, one of the groups fighting Dakota Access. "This sort of opposition is the new normal and should have an effect on industry behavior."
Critics say the project would damage culturally significant sites in North Dakota and create an environmental hazard where it crosses the Missouri River.
Opponents held a "day of action" on Tuesday with more than 200 events across the country. Senator Bernie Sanders, a former presidential candidate, spoke at a protest held outside the White House. The effort follows the Obama administration’s action last week, when federal agencies withdrew permission for work to go ahead on one section until they have a chance to review it further.
While protesters are hoping to draw parallels between Dakota and Keystone, White House Press Secretary Josh Earnest noted the two cases have different considerations.
"The issues related to the construction of that pipeline are somewhat different than the issues that have arisen in the context of this one," he said during a press briefing on Wednesday.
Much of what happens next is unknown, but any potential re-routing of the pipeline would be a costly and complicated endeavor, said Brigham McCown, chairman and founder of the Alliance for Innovation and Infrastructure and a former chief of the Pipeline and Hazardous Materials Safety Administration. Like with Keystone, the opposition wants the pipeline rejected, not just rerouted, he said on a conference call Thursday -- but the permits are likely to be upheld.
The big question for Energy Transfer, and North Dakota drillers who will see transport cost savings from the pipeline, is how long the federal review will delay the project. It was slated to be in service by the end of the year.
Assuming the resolution doesn’t involve new permits, the line is likely to be in service in the first quarter next year, said Katie Bays, an analyst at Height Securities LLC, an advisory and investment firm based in Washington D.C. If the end result is a process that requires new permits, that may take a few more months and push the in-service date to the end of the second quarter, she said.
Energy Transfer Partners fell 0.8 percent to $36.57 in New York Thursday.
Allowing the Dakota project to wind up in the hands of the next president’s administration probably isn’t what the White House wants, Bays said. The Justice Department’s intervention is one way Obama can keep the environmental lobby engaged in the election, she said.
Most industry experts are expecting the project to resume after a delay, said Bays. "I don’t think anyone’s base-case assumption should be that the pipeline is going to get ‘Keystone-ed.’"