Infrastructure Crossroads: Energy Future Depends on Building Safe, Modern Pipelines

Mark Green
Posted July 14, 2020

U.S. energy infrastructure is at an inflection point, with a number of important natural gas and oil pipelines sidetracked by red tape and court decisions within the past few weeks. Most outrageously, the Dakota Access crude oil pipeline, which has been operating safely for three years, was ordered shut down and drained by a federal judge. More on Dakota Access below.

The inflection point is this: Will we build the safe, modern energy infrastructure that broadly serves the public interest, creates thousands of jobs and harnesses abundant domestic natural gas and oil, or will narrow, often extreme interests continue to block the public good?

Here’s a quick energy reset. For decades, Democratic and Republican presidents called for more domestic energy production to end U.S. reliance on foreign oil. The nation’s security was threatened, and our horizons were limited for want of safe, secure energy. The marriage of safe hydraulic fracturing and horizontal drilling changed that, launching the U.S. energy revolution and closing out the era of energy dependency.

The U.S. became the world’s leading producer of natural gas and oil and even achieved the status of net energy exporter for a period in 2019. We dramatically reduced crude oil imports and dependency, jump-started the economy and – due to increased use of clean natural gas – saw emissions of carbon dioxide fall to their lowest levels in a generation. Since 2000, no nation on earth has reduced them more.

Now, in the year 2020, this forward energy momentum needs sustaining. A big factor is building the infrastructure we need – crude oil pipelines, natural gas gathering lines and more – all of which are the  safe connection between consumers and America’s newly abundant, reliable, cleaner energy.

But we’ve hit a bump in the road, erected by foes of natural gas and oil and progress in general, who have used the legal system and permitting processes to delay or block projects that would let more Americans share the benefits of home-grown energy. In addition to Dakota Access mentioned above, some other recent examples of blocked infrastructure:

• Constitution natural gas pipeline – rejected by New York.
• Northeast Supply Enhancement natural gas line – Buried by red tape.
• Atlantic Coast natural gas pipeline – canceled after years of legal wrangling.
• Keystone XL crude oil pipeline – on hold again after a federal judge invalidated its permit under the Nationwide Permit 12 program, which is used to streamline projects that have broad public benefit and only limited environmental effects. (The same ruling was applied to all new pipeline construction projects, but the U.S. Supreme Court reinstated the program for projects except KXL while the lower-court ruling is on appeal.)

These developments potentially could “send a chilling effect throughout the entire pipeline industry, which then has the potential to limit the growth of energy infrastructure,” API’s Robin Rorick, vice president for midstream and industry operations, told The Hill.

It’s an ominous trend for a nation that’s rich in energy and is a global energy leader. Again the question: Will the wider public good prevail or narrow interests that would take this country down a dangerous path. Writing in the Washington Examiner, economist Stephen Moore mused that had the anti-infrastructure crowd been around during earlier periods of our history, we wouldn’t have built railroads, the interstate highway system or the modern electric grid network.

It’s disturbing to hear activists cheer the damage done to a major sector of the U.S. economy and individual companies that support tens of thousands of jobs – realizing that the American people are the ultimate sufferers.

In the case of Dakota Access (DAPL), the all-stop order issued by a federal judge in Washington, D.C., is “astonishing” and “unprecedented,” oil industry historian and analyst Dan Yergin told Fox Business. It is indeed, as North Dakotans probably already know.

The pipeline is a critical lifeline for state oil production that funds well more than half of the state’s budget. That means oil production is vital for public schools, higher education and health and human services. DAPL is the largest provider of egress or takeaway capacity, according to a legal brief filed by the state, so taking that away is a stranglehold on state oil production – and revenues for schools, colleges and hospitals.

Locally, ad valorem property taxes collected by North Dakota counties traversed by the pipeline, totaling more than $7.5 million in 2018, are threatened by freezing DAPL operations. The state argues:

Court ordered shutdown of DAPL, even if only temporary, would be highly disruptive in North Dakota and would have far-reaching consequences. It would severely impact North Dakota’s economy, as well as state, local, and Tribal government funding.

Terry O’Sullivan, general president of LiUNA (Laborers’ International Union of North America), whose members helped build DAPL, said the ruling weakens U.S. energy security and could harm future infrastructure projects and American jobs:

“The decision second-guesses the rigorous permitting and approval process, which guided the Dakota Access Pipeline as well as that of thousands of crucial infrastructure projects across the country. The ruling also ignores the high standards and reputation for quality of the … building trades men and women who built Dakota Access using the safest and most advanced construction methods. … the highly skilled and trained men and women of LIUNA rely on pipeline projects for family-supporting jobs. Arbitrary shutdowns as in the case of Dakota Access threaten work opportunities because they create an environment of uncertainty surrounding the future of projects.”

Anti-infrastructure activists stand in the way of needed construction and expansion projects. They’re setting America back by denying local communities good-paying union jobs, revenues and reliable, cleaner energy. API President and CEO Mike Sommers:

“We will meet them at the courthouse and fight these battles out legally at every opportunity. The activist community doesn’t want to build anything, anywhere.”

Part of this fight is recognizing that world demand for energy will continue to increase, and that demand will have to be met by someone. Infrastructure is key to whether the U.S. will be that energy source or others, many of them hostile to the U.S.

We urgently need to reform the permitting system, as well as process improvements – such as initiatives to modernize review under the National Environmental Policy Act (NEPA) and to more clearly define Section 401 of the Clean Water Act – to ensure transparent, timely and fair review and input and to minimize never-ending challenges and delays. These put at risk jobs, growth and environmental protection. Jim Snell, a steamfitter interviewed by InsideSources:

“You cannot be pro-business, pro-worker, pro-middle class or even pro-environment if you support halting projects that deliver cleaner-burning, low-cost fuel that consumers and manufacturers need.”

Whether, as a nation, we’re able to build big infrastructure – energy and other kinds – will say a lot about America’s future.