As a string of infrastructure projects hits the buffers, America’s oil and gas industry is facing up to an uncomfortable new reality: the era of building big new pipelines has probably come to an end. Joe Biden moved quickly last week to cancel the contentious Keystone XL oil pipeline, delivering on a campaign promise to curb emissions and put the clamps on the oil and gas industry’s growth.
Days later, a federal court in Washington ruled against the Dakota Access Pipeline (DAP L), another high-profile project that has been fiercely opposed by both native American and environmental groups. The judge said it needed a new environmental review, putting another big oil infrastructure decision on Mr Biden’s desk.
Suddenly, America’s oil and gas operators are realising that building new pipes — the crucial plumbing of their business — has become much more difficult. “I think the days of the mega gas pipeline or oil pipeline projects are probably behind us,” said Jim Bowe, a partner at King & Spalding, a law firm that advises oil companies.
DAPL, which entered service in 2017, certainly appears vulnerable. Activists are urging the Biden administration to take the unprecedented step of shutting the pipeline and emptying it out while that environmental review is being carried out. Jan Hasselman, lead counsel to the Standing Rock Sioux Tribe that is fighting the pipeline in court, tweeted after the ruling: “@POTUS: Shut. It. Down.”
The industry argues such a move would carry environmental risks of its own and simply push crude on to less safe rail wagons to get to refineries. But some analysts say the Biden administration can order project operator Energy Transfer to start suspending operations in the coming days.
“I think Dakota Access gets shut down,” said Christi Tezak, an analyst at ClearView Energy Partners, noting that such a move would be consistent with Mr Biden’s position when he was vicepresident and when the Obama administration opposed the project