Ocasio-Cortez Could Deal A Fatal Blow To US Oil Pipelines

Authored by Tsvetana Paraskova via OilPrice.com,

The U.S. oil and gas pipelines industry has had a rough month, with court setbacks for two critical oil pipelines and a ditched plan for a new natural gas pipeline.

And July isn’t over yet, for on the horizon looms yet another potential blow to existing and future oil and gas pipelines. That blow could be delivered by AOC.

Democratic Congresswoman and prominent environmental activist Alexandria Ocasio-Cortez is now seeking an amendment to the text in the next budget to block the U.S. Army Corps of Engineers from issuing permits to oil and gas infrastructure, HuffPost reports.

According to the proposed legislation, “None of the funds made available by this Act may be used by the Corps of Engineers to issue a permit under section 404 of the Federal Water Pollution Control Act (33 U.S.C. 1344) for the discharge of dredged or fill material resulting from an activity to construct a pipeline for the transportation of oil or gas.”  

The proposed amendment was set for discussion at a hearing of the House Committee on Rules on Tuesday.

The amendment could basically prevent the U.S. Army Corps of Engineers from working on and building oil and gas pipelines crossing waterways, derailing not just future pipelines but also the Dakota Access Pipeline, which was ordered shut pending a new environmental review.

Ocasio-Cortez’s proposed amendment, however, is unlikely to pass even in the Democrat-majority House where Democrats are not at all on the same page about dropping oil and gas pipeline projects, not to speak of the Republican-majority Senate, which is unlikely to pass such a measure.

Still, the proposed legislation highlights the growing divide between environmental justice campaigners and the oil and gas industry, and the ever-growing opposition to pipelines in North America.

The Pipelines’ “Black July”

The anti-pipeline camp has scored several huge victories this month.

First, Dominion Energy and Duke Energy said on July 5 that it was canceling the Atlantic Coast Pipeline “due to ongoing delays and increasing cost uncertainty which threaten the economic viability of the project.”

Despite a major win on a right-of-way issue at the U.S. Supreme Court last month, the developers of the Atlantic Coast natural gas pipeline are definitively scrapping the project because of ongoing delays and significant cost overruns.

“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged,” said Thomas F. Farrell II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and CEO.

U.S. Secretary of Energy Dan Brouillette said that “The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline.”

On the next day came the highest-profile setback for oil pipelines – a federal judge ruled on July 6 that the Dakota Access Pipeline, in operation since 2017, must be emptied and shut down within 30 days, by August 5, until a new comprehensive environmental review is completed.

A U.S. Appeals Court ruled a week later that Dakota Access can continue to operate while the court considers whether the pipeline should be shut down as ordered by the lower court’s ruling. 

Ocasio-Cortez’s proposal to block the U.S. Army Corps of Engineers from issuing permits to oil and gas pipelines crossing waterways could directly impact a new permit for Dakota Access should courts order the already operational pipeline to obtain one.  

In the third major blow to oil pipelines in just two days, the U.S. Supreme Court ordered on July 6 that construction of the long-delayed and once-resurrected Keystone XL project cannot begin. The justices at the Supreme Court upheld a lower court ruling that Keystone XL cannot use the so-called Nationwide Permit 12 that allowed pipelines to cross rivers with minimal review if they meet certain criteria. The Supreme Court, however, allowed other pipeline projects to return to use that permit aimed at fast-tracking construction of vital oil and gas infrastructure.

“This is a significant step toward restoring more certainty for energy companies, but declining to revive the permit for Keystone XL is short-sighted as the project has already been thoroughly reviewed for well over a decade,” the American Petroleum Institute (API) commented on the Supreme Court’s decision. 

Court Battles

Dakota Access, Keystone XL, and any other new pipeline project will continue to face challenges to their construction, completion, and operation, potentially delaying in-service dates for new pipelines and adding more costs to already costly projects.

The court order for Dakota Access to shut down shows that even already operational pipelines are not safe from disruptions to their operations.

Regardless of how the proposed amendment from Ocasio-Cortez will pan out in the House committee, the House, and the Senate, Dakota Access and other pipeline projects will continue to face legal challenges for the foreseeable future – to the delight of environmentalists and to the frustration of the oil and gas industry.