A coordinated strike at Canadian crude oil pipelines in October by Climate Direct Action set a new high watermark for risks associated with midstreaming and will likely cause pipeline companies to review security measures, according to a Wood Mackenzie’s October 2016 North America crude markets short-term outlook.
“Much of the opposition to pipelines has been focused on Canada, aimed at Northern Gateway, Energy East, all the way back to Keystone XL but, more recently, we’ve seen an increase in opposition in the U.S.” says Afolabi Ogunnaik, Wood Mackenzie’s senior analyst, Americas refining & oil markets.
“It’s almost as if this wind of opposition to pipelines has been blowing south from Canada towards North Dakota,” he says, referring to protests in reaction to construction of the Dakota Access Pipeline.
The $3.8-billion, four-state project proposed for transporting Bakken crude from North Dakota to southern Illinois follows an almost identical route to that of the proposed Keystone XL Pipeline (with the exception of an Iowa section).
Near Standing Rock Indian Reservation, North Dakota, pipeline protests drew international attention in September during a dramatic clash with pipeline construction and security workers.
The incident was filmed, including footage of security workers using attack dogs that bit at least five protesters, and has been viewed by several million people on YouTube and other social media.
The protests have become increasingly violent, with one woman charged with attempted murder this week after firing shots at police.
Climate Direct Action’s coordinated attacks on Enbridge's Line 4 and Line 67 in Minnesota, TransCanada's Keystone pipeline in North Dakota, Spectra Energy's Express Pipeline in Montana and Kinder Morgan's Trans Mountain line in Washington State were staged as a show of solidarity with the Dakota Access protestors.
“This action is remarkable because it suggests international cooperation against pipelines,” Ogunnaik says. “We’ve been seeing new alliances emerge in opposition to pipelines—whether it’s aboriginal tribes in the U.S. and First Nations in Canada and new alliances between North American tribes and parts of the environmental movements in the U.S…
“The question is, ‘Could [pipeline protests] actually spread some more in the U.S.?’”
The answer, in part, depends on the outcome of a U.S. government consultation process with U.S. indigenous groups currently underway.
“Three government agencies—the Department of Defense, Justice and the Army Corp of Engineers—are conducting these formal consultations,” Ogunnaik says. “Essentially they’re trying to understand how to better engage with these communities when they are permitting big projects, whether it’s an oil pipeline or a coal plant.
“What we are trying to understand is whether this formal consultation could lead to new processes, new laws or new regulations or a change in the permitting process.”
These country-wide consultations with over 500 indigenous groups are expected to conclude in November.
Another part of the answer to Ogunnaik’s question—at least as it relates to pipeline protests spreading within the United States—is the lay of the land.
“The good news for the U.S. is that we have the three big plays, the Bakken in North Dakota, the Permian and Eagle Ford. With the Permian and Eagle Ford, being in Texas, we don’t anticipate these sorts of issues because the pipelines from these plays to refineries or a coastal destination for export are intra-state pipelines, whereas North Dakota is land locked and needs to cross a number of states,” Ogunnaik says.
Pipeline companies across the country, nonetheless, are reviewing their security measures, he adds.