October 2016, Vol. 243, No. 10

Editor's Notebook

Building New Pipeline Infrastructure: Always About the Politics

It’s always been about the politics.

If only we could return to those peaceful days of yesteryear when we dutifully met all of the requirements to build a pipeline, constructed it without incident, and covered it up never to be seen again.

This is no longer the case. With climate change as their mantra, a small but dedicated, well-organized and misinformed cadre of anti-fossil fuel activists has turned its attention to the pipeline industry in an effort to block future and even ongoing projects, as we’re seeing with the Dakota Access furor.

Never mind that pipelines are unflinchingly safe and by far the best means of transporting hazardous materials. Never mind that developers are continually minimizing their physical “footprint” or that natural gas companies are working with researchers to mitigate emission issues, particularly involving methane.

The anti-fossil fuel movement is the No. 1 challenge threatening our industry, especially when they have sympathizers in the White House, Ottawa, and elsewhere in public office.

Before I delve into this further, let’s look at recent news that will affect us all in one way or another:

The majors have pulled the plug on the latest Alaska gas pipeline plan and unless I’m wrong, that’s dead.

Oklahoma’s record earthquake on Sept. 3 is being attributed to disposal of fracking wastewater. Fracking is still misunderstood by most people and will face growing scrutiny.

Increasingly violent protests against infrastructure development are now focused on pipeline projects here and in Canada. We’ve all been following the situation with Dakota Access which is trying to build an essential oil pipeline after going through years of public hearings during which opponents had opportunities to speak out. Now the story has been blown completely out of proportion thanks to social media and biased news coverage.

The most stunning news is the unprecedented move by the Obama administration to not only order Dakota Access construction stopped –which might not be a bad idea until tempers chill – but to suggest that prior decisions be reconsidered as to whether to allow the project to continue. More specifically, developers would be subject, after the fact, to the National Environmental Policy Act and other federal laws such as those involving Native American interests. If this holds, it’ll put a chilling damper on new infrastructure.

It’s critical to see how this plays out. If they can block or continue to delay this project, it will mushroom into opposition throughout the U.S. and Canada, especially as the industry moves into more populated areas on the East Coast.

I still believe this isn’t a big movement in terms of number of people, but they’ve become emboldened by Keystone. Before, they were happy to follow orders to disrupt meetings, maybe get arrested and enjoy a photo opp.

With Dakota Access, they’ve destroyed over a million dollars of equipment and provoked physical confrontations. In Canada, a handful of protesters disrupted National Energy Board hearings that will seriously delay the Energy East project.

Prime Minister Trudeau wants to rebuild confidence in their environmental review process by adding extra criteria to existing projects, boosting indigenous consultation and toughening carbon emissions limits. He’s also pledged an overhaul of the NEB and said pipelines can’t get built without more public support. Sound familiar?

An analyst estimates Energy East’s chances of being built falling from 33% to 25%. Another said Canada’s regulatory process is so murky and messy due to political pressure that it’s difficult to say any pipeline approval can be assured.

Until now, the activists were usually the ones to frame the debate, forcing the developers to respond, as we’re seeing with Dakota Access. This is slowly changing. In most cases developers are smarter and come better prepared to answer concerns of landowners and community leaders. They try to minimize their construction footprint and have the patience to endure the permitting process. If the project has merit, it eventually will pass regulatory hurdles unless officials are predisposed to block them, as in New York and Massachusetts.

We have reason for optimism, especially if we can figure out how to handle the opposition, and some companies are good at it. We’ll need oil and gas for decades. So no matter who’s president, no one’s shutting down the industry. Energy isn’t a high priority for them any more than it was with Obama, unless politics gets involved or in his case, becomes part of a “legacy” issue.