Pipelines and Energy Infrastructure Pose Conflict

January 31, 2017

 

Special TipSheet: Pipelines and Energy Infrastructure Pose Conflict

 
As part of our Journalists’ Guide to Energy & Environment 2017 special report, TipSheet has prepared a series of look-aheads for key issues to watch in the coming year.
 

As the nation forges forward in 2017, environmental journalists are likely to have a lot of news about pipelines, terminals, refineries, oil trains and other energy infrastructure. President Donald Trump’s Jan. 24 executive orders on the Keystone XL and Dakota Access pipelines are only the beginning of the story, not the end.

After years of struggle, many thought the Keystone XL pipeline, which would carry oil from Canadian tar sands to an ultimate destination in Texas for export, was dead. Environmentalists had seized on it in 2010, partly as a surrogate for an anti-warming campaign against fossil fuels. Canada, the oil industry and U.S. Republicans urged the Obama administration to approve it.

Finally, in November 2015, then-President Barack Obama (via the State Department), announced rejection of the permit for the KXL pipeline, saying it would harm the climate and not produce many jobs.

Keystone XL pipeline
Oil pipeline pumping station, part of the Keystone XL project, in rural Saline, Neb. Photo: Shannon Ramos, Flickr Creative Commons

The KXL pipeline made news partly because it was a symbol. In fact, many other pipelines, for both gas and oil, were being proposed and built on both sides of the U.S.-Canada border during the eight Obama years. Some were approved and built; others were protested and stopped. Some pipeline proposals are still pending.

Industry sought the various pipelines as a way of bringing to market not only diluted bitumen from oil sands, but the vast amounts of natural gas produced by horizontal drilling and hydraulic fracturing (“fracking”) in shale formations. The Athabascan oil sands in Alberta give Canada oil reserves ranking among the largest in the world. Environmentalists view this oil source as one of the dirtiest.

But extracting and processing bitumen is expensive, and tar sands oil is only profitable to produce when the price of crude is above a certain level. Projects to mine oil sands took off at least five years ago, when oil was hovering above $100 a barrel. The $20 low oil touched in early 2016 posed a grim outlook. At today’s $50 level, prospects for profits still look iffy, so transportation costs matter.

Pipeline politics vary with geography

The politics of oil and gas infrastructure vary according to where people live. In the oilfields it means jobs. Along the route, it can pose threats of pollution and disaster. At the end of the pipeline, whether at a refinery or terminal, profits and jobs are often offset by pollution and safety hazards.

Some of the decisions about pipelines happen at federal agencies such as the Federal Energy Regulatory Commission and the Pipeline and Hazardous Materials Safety Administration. Many others happen at the state and local levels.

For example, routing of pipelines requires land rights. That sometimes must be forcibly acquired through eminent domain proceedings, which take place under state, county and city law. When property owners resist, it can be news.

Railroads have also come to the fore as a way of transporting crude, especially where pipelines are constrained. Oil trains have significant safety problems. The 2013 disaster at Lac-Mégantic in Quebec killed 47, and many smaller derailments in the U.S. since then caused pollution, damage and injury while the Federal Railroad Administration and other agencies struggled to get a handle on the problem.

The spike in accidents was prompted partially by a big rise in oil train shipments during 2013-2016, but the number of shipments has now begun to wane. Watch to see whether the Railroad Administration under Trump loosens the safety rules tightened by the Obama administration — and whether it supports public disclosure of risky rail routes.

Ports and terminals have been — and are likely to continue being — another point of contention in energy infrastructure. To get to export markets, tar sands oil and Wyoming coal, as well as fracked Bakken shale oil, all need to get to ocean ports, for which there are many sites in the Pacific Northwest. Localities have opposed, and successfully stopped, quite a few such facilities. Others, such as the coal export terminal on the Columbia River at Longview, Wash., are still being fought over.

Emissions from refineries part of the puzzle

Refineries are another key link in the U.S. energy infrastructure. Partly for regulatory reasons and partly for economic ones, few new refineries have been built in the U.S., although some existing ones have been upgraded.

The regulatory ground for U.S. Environmental Protection Agency controls on hazardous air pollution emissions from refineries is still unsettled, and intervention by the Trump administration or even Congressional Republicans is something to watch for.

The coming year may see a dawning realism about energy infrastructure. Few of these things can or will be easily accomplished by a mere stroke of Trump’s executive pen. Some media outlets have pointed this out.

The KXL and Dakota Access pipelines will be test cases. Even though Trump favors them, their progress may be slowed by a welter of regulatory hurdles, court cases, and state and local resistance. An executive order can not force a court to rule one way or another. Nor can it change the economic realities of energy markets.


* From the weekly news magazine SEJournal Online, Vol. 2, No. 5. Content from each new issue of SEJournal Online is available to the public via the SEJournal Online main pageSubscribe to the e-newsletter here.  And see past issues of the SEJournal archived here.

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