East Daley Analytics – Dissecting the Energy Value Chain
Energy Insights and News

Choose Your Pipe Adventure

Comments: 0

The Daley Note: September 15, 2023

A new environmental review of the Dakota Access Pipeline (DAPL) is finally available. The draft report from the US Army Corps of Engineers lays out five possible scenarios for the controversial pipeline without making a recommendation, though regulators appear to be leaning in one direction.

The Army Corps released the draft environmental impact statement (DEIS) last Friday (September 8) concerning DAPL’s easement to cross under Lake Oahe in South Dakota. The DEIS is the result of a federal court order in January 2021 finding that the agency did not adequately evaluate the environmental risks of the pipeline. To the chagrin of opponents, DAPL has continued to operate while the Army Corp conducts the new review.

tdn 9.14

Operated by Energy Transfer (ET), DAPL is the largest transporter of Bakken crude oil. According to East Daley Analytics’ Crude Hub Model, DAPL moves about 600 Mb/d, or nearly 50% of crude production from the Williston Basin (see chart).

The DEIS presents five scenarios for evaluating the DAPL route: 1) the Army Corps does not grant easement and ET must restore the area to pre-pipeline conditions (i.e. remove pipe) 2) the Army Corps does not grant the easement and no further action is required 3) the Army Corps grants the easement consistent with vacated easement conditions 4) the agency grants the easement with additional conditions and 5) a northern reroute of DAPL toward Bismarck, ND.

While the DEIS does not make a specific recommendation, it does suggest certain options could be ruled out. For example, the draft finds options 1 and 2 (i.e. not granting the easement) as “unlikely to meet a project’s purpose and need but should be evaluated to inform decision making.” The DEIS states that it is not a reasonable alternative to use other energy sources in place of DAPL, as proposed by some commenters. Additionally, the DEIS eliminates rail or trucking as viable alternatives to DAPL.

Based on EDA’s reading of the document, the most probable outcome appears to be Option 4. Once the dust settles, we expect the Army Corp to grant the easement for DAPL with additional conditions.

The initial easement permit for DAPL required 36 conditions that the pipeline is currently meeting. The additional conditions proposed in the draft would increase operational safety and facilitate incident notification and shutdown processes. They would not require additional construction activities.

In the event an easement is not granted, DAPL may pursue the Bismark reroute (Option 5). This option would require evaluation by North Dakota state regulators, who previously approved DAPL’s current route.

The Army Corps has scheduled two public meetings in November to gather community feedback on the DEIS. ET is the largest owner in DAPL with a 36.2% stake. Other partners include Enbridge (ENB), Phillips 66 (PSX), MPLX (MPLX) and ExxonMobil (XOM). – Kristine Oleszek Tickers: ET, ENB, MPLX, PSX, XOM.

 

 

 

 

Sign Up for the Crude Oil Edge

East Daley’s Crude Oil Edge provides bi-monthly updates on the US Crude Oil Market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge.

 

Energy Data Studio

East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.

Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.

Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.

The Daley Note

Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.

 

 

 

About the AuthorEast Daley Analytics

prev
Next

Upcoming Events

Dirty Little Secrets Part 2: Take Me to the Gulf

December 04, 2024

Register Here