OIL AND GAS

Biden could swing these 5 pipeline battles

Some of the most consequential energy decisions facing President-elect Joe Biden are about pipelines. From Montana to Virginia, his administration will be weighing whether to greenlight large projects, press the eject button or just slow things down.

The outcome could affect oil and gas development — and emissions — around the country.

Biden holds the fate of the Keystone XL and Dakota Access oil pipelines almost entirely in his hands because of litigation and the president's authority over border crossings. Keystone would carry tar sands oil from Canada to the Gulf Coast. The 1,200-mile Dakota Access line carries crude oil from North Dakota to Illinois.

The Mountain Valley pipeline, which would run from West Virginia's natural gas fields to southern Virginia, will likely need a lot of cooperation from a Biden administration if it is to avoid the fate of the Atlantic Coast pipeline, which was canceled earlier this year. The federal role in other projects like Line 3 in Minnesota is more subtle, or further in the future, although Biden's administration could still influence them.

Many of today's pipeline battles are the manifestation of the shale drilling boom that emerged during the George W. Bush and Obama administrations, often referred to as "fracking." After years of debate about drilling, the political fights are now focused on companies' efforts to get the oil and gas to markets around the country and overseas.

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But they've hit opposition. Many of those who live near the pipelines and proposed pipelines are concerned about safety, water contamination and other environmental problems. And climate activists have realized that stopping pipelines is an effective way to contain an industry they would like to see go away, gradually or otherwise.

Opponents scored some victories during Trump's tenure, despite his administration's firm support for oil and gas projects. They're hoping for a friendlier audience at federal agencies after the transition. Kelly Martin, director of the Sierra Club's Beyond Dirty Fuels campaign, said many of the pending projects should never have received federal approval.

"The Trump administration has spent the last four years giving the fossil fuel industry free rein to build dirty oil and gas pipelines through our communities," Martin said. "We are confident that President-elect Biden will follow through on his commitment to prioritizing science and our communities' health and safety."

But industry leaders are making a case to Biden and his allies that pipeline construction is a boon to workers. In particular, they're stressing that while environmentalists are fighting pipelines, they enjoy support from another key part of the Democratic coalition — unions.

"These pipeline projects will provide thousands of good-paying union jobs, but you can't 'build back better' if you don't build," said Association of Oil Pipe Lines Vice President John Stoody, making a nod to Biden's campaign slogan.

The Biden-Harris transition team did not respond to a request for comment about its stance on the different projects.

Here are some of the key pipeline decisions Biden will face:

Keystone XL

This may be the biggest pipeline fight on Biden's radar screen. Since winning the election, Biden hasn't expanded much on his promise, made in May, to revoke the presidential permit allowing the pipeline to cross the U.S.-Canada border (E&E News PM, May 18).

Opponents, however, aren't letting up the pressure against the project, which has taken on totemic status in the climate change debate. The Sierra Club's Doug Hayes notes that Biden pledged to act "immediately."

"And we are confident that he will fulfill that commitment," said Hayes, a senior attorney with the group.

Keystone supporters, though, are still maneuvering to keep the project alive.

Shortly after the election, developer TC Energy Corp. started trying to position its project as in alignment with the president-elect's "Build Back Better" agenda. TC Energy, formerly known as TransCanada Corp., focused on the pro-union message from Biden's campaign.

"The steps that we've already taken with Keystone XL, we believe, have positioned it very favorably," Bevin Wirzba, TC Energy's president of liquids pipelines, said in an investor webcast last month (Greenwire, Nov. 18). "We bring jobs to the economy next year, a key platform for the U.S. government as we recover from the COVID-19 pandemic."

Stoody notes that the Keystone XL project has the support of key unions.

"We are watching closely to see if Biden leaves his building trades supporters out in the cold as one of his first acts in office," he said.

Canadian Prime Minister Justin Trudeau is also part of the effort, having brought up the pipeline in his congratulatory phone call to Biden.

The Canadian government's readout of the call described Keystone XL as a source for "energy cooperation" between the United States and Canada. It also highlighted "cooperating on the fight against climate change."

The Canadian government "fully supports" the proposed 830,000-barrel-a-day pipeline line connecting Alberta with Nebraska, said Ian Cameron, a spokesperson for Canada's Office of the Minister of Natural Resources.

TC Energy has constructed more than 120 miles of pipeline since March, including the border crossing. But Biden could revoke the project's permit to cross the border after he takes office.

Dakota Access

Biden could shut down the Dakota Access pipeline as soon as he takes his hand off the Bible at his inauguration. But unlike his stance on Keystone XL, he's never hinted at his plans.

Rulings in ongoing litigation about the oil pipeline, often called DAPL, have made it uniquely vulnerable to a presidential administration willing to close it (Energywire, Aug. 28).

A federal judge last summer said pipeline builder Energy Transfer LP and the Army Corps of Engineers did an insufficient environmental review of the project, and ordered it to be drained of oil. An appeals court overruled the order to immediately shut down the line, but the case is continuing.

And because of the rulings, DAPL is operating without a permit to cross under the Army Corps' Lake Oahe in North Dakota. Under Trump, the federal government has allowed it to keep operating. Biden doesn't have to.

Environmental groups and Native American tribes will likely press Biden to shut it down. Mass protests against the project in 2016 sparked a national debate about tribal rights and energy development. With a boost from Trump, it was finished in the months after he took office.

The first decision for the new administration will be whether to allow the pipeline to stay open while the Army Corps completes an environmental impact statement (EIS) ordered by U.S. District Judge James Boasberg. The federal government could withdraw its permission at any time, including on Biden's first day in office.

When the EIS is completed, the Biden administration, through the Army Corps, will have to decide whether to issue a new permit.

Shutting DAPL down would score big points with environmentalists, tribes and progressive groups. It would also be a slap at Energy Transfer's co-founder and executive chairman, Kelcy Warren, a top Trump donor.

But a shutdown would cause disruption at a delicate moment for the country's economy. DAPL has been moving crude from North Dakota to Illinois for more than three years. It currently ships about 5% of the nation's domestic production. Oil industry groups have warned of thousands of job losses and higher fuel prices if the pipeline is closed.

"The State's economy, and its economic recovery, will be stymied so long as DAPL remains idle," North Dakota officials wrote in a legal brief last summer opposing the closure of the line (Energywire, July 15). "Imagine the chaos if the court shut down an interstate highway handling a significant portion of a state's interstate commerce, with only 30 days' notice."

And even opponents say shutting it down would risk Biden's standing with unions, which view pipelines as job creators.

There are other paths Biden could follow. He could shut the pipeline temporarily during the environmental review, then issue a permit allowing it to reopen for good, possibly with more environmental conditions. Or he could leave it open during the review, and shut it down if the environmental costs are deemed too high.

Mountain Valley

Some construction is continuing on the Mountain Valley pipeline (MVP), but it keeps getting bogged down in court. The pipeline is currently unable to use a streamlined water permit from the Army Corps and still lacks a right of way permit for work in the Jefferson National Forest.

Judges have tossed several of the pipeline's permits, requiring new ones from federal agencies. If that continues, federal approvals might come more slowly once Trump's political appointees leave their posts.

Still, project developers say it will not meet the same fate as the Atlantic Coast pipeline, which was to have followed a similar southeastern path out of the shale fields of West Virginia.

Project spokesperson Natalie Cox says a right-of-way permit from the Bureau of Land Management is expected by the end of the year or early January, before Trump leaves office.

"We also continue to target a full in-service date during the second half of 2021," she said.

But earlier this month, a federal court said MVP builders cannot use a streamlined water permit for the project until judges conduct a full review of whether the Army Corps improperly weakened a requirement of the permit (E&E News PM, Dec. 1).

That streamlined permit is needed to move forward with dredge-and-fill activities along the pipeline's route. That means the Biden administration could play a key role in determining the permit and the pipeline's ultimate fate.

Opponents of the project say it is in more trouble than developers are letting on. David Sligh, conservation director at Wild Virginia, calls the developers' optimism "bluster." Many of the permits they still need, he said, are crucial and not easily obtained.

"Some of the remaining parts are among the most difficult to construct and protect the environment on the entire path," Sligh said.

The Trump administration pushed for expedited approvals of such permits, a drive that may not continue when Biden takes over.

Line 5 in Michigan

The Biden administration may also be able to influence the fight over Enbridge Inc.'s Line 5 in Michigan.

Gov. Gretchen Whitmer (D) has ordered Enbridge to close a twin section of the pipeline that runs along the floor of the Straits of Mackinac, which connect Lake Michigan with Lake Huron. At the same time, Enbridge is seeking permission to build a tunnel under the straits that would hold a replacement for Line 5.

Whitmer's administration argues that the pipeline is on state property and says Enbridge violated an easement agreement with the state by failing to maintain the line and ensure its safety.

Enbridge filed suit in federal court last month arguing that Whitmer overstepped her authority. The company says only the federal government has authority over the safety of interstate pipelines such as Line 5 (Energywire, Nov. 25).

The suit could give the Biden administration a chance to affirm the ability of Michigan and other states to enforce standards through easements and other contracts, said Beth Wallace, the National Wildlife Federation's Great Lakes campaign manager.

"The Biden administration has an opportunity to be outspoken on many issues that surround this pipeline and the legal action," Wallace said in an email.

And the tunnel project could give the Biden administration a second avenue to address the Michigan project. Biden's team could strengthen Whitmer's hand in the fight by changing the rules for Section 404 water crossing permits so that they apply to pending projects such as the Line 5 tunnel.

The Army Corps is processing such permits for the tunnel project. A public hearing on the project took place on Monday, and the Army Corps is accepting written comments on the permit application until Dec. 17.

Enbridge said it is fighting Whitmer's order and is also pushing forward with the tunnel project.

"We believe the governor's recent actions are wholly without merit," Vern Yu, president of Enbridge's liquids pipeline division, said during the company's investor day webcast yesterday.

Pipeline decisions have an extra layer of politics in Michigan, a battleground state in presidential races. The previous Republican governor backed the pipeline, while Whitmer is seeking to close it. But pipelines are a fault line that can split the Democratic coalition, with environmentalists on one side and unions on the other.

Line 3 in Minnesota

It would be more difficult for the Biden administration to influence Enbridge's plan to replace Line 3, which is opposed by environmental groups and tribes along its route. The line runs through Minnesota on its path from Edmonton, Alberta, to Superior, Wis.

Construction has begun, and changing either its state or federal permits would be tough.

"We have observed that agencies that go through the effort of issuing authorizations in contested proceedings rarely reverse course, particularly when such stays are sought at the proverbial eleventh hour," analysts at Clearview Energy Inc. wrote in a research note.

The Minnesota Public Utilities Commission on Friday rejected an appeal by Native American groups that wanted to reverse a decision authorizing the pipeline's route.

The Army Corps issued permits in November under Section 404 of the Clean Water Act to cross more than 200 lakes and other bodies of water in Minnesota (Energywire, Nov. 24).

However, the permit language allows the Army Corps to "reevaluate" the permit if it finds that Enbridge provided false or inaccurate information or if "significant new information surfaces," according to the Sierra Club, which has opposed the plan. That could potentially allow the Biden administration to influence the pipeline's development. But pipeline critics say the law requires a significant amount of evidence to reverse the permit.

The pipeline carries crude into the United States from Canada's oil sands region. Enbridge wants to replace more than 1,000 miles of the pipe, including 337 miles in Minnesota, and expand its capacity.

Yu, with Enbridge, said the permit fight delayed the start of construction, but it allowed the company to compile a lot of evidence that will help it withstand potential permitting challenges.

"This has gone longer than we like, but we've built up a strong record," he said.

Enbridge began construction on Dec. 1, a day after state regulators issued their final permit for the replacement line. The Sierra Club and other environmental and Native American groups filed suit in the state Court of Appeals to overturn permits from the Minnesota Pollution Control Agency. A separate suit in the same court is challenging an environmental review conducted by the state PUC.

Work was stopped yesterday at one location, according to the Army Corps, after a "potential historic structure" was discovered along the Line 3 route near the Mississippi River.

***Read more about power players and policy changes after the elections in the E&E News special report POWER SHIFT.***

Twitter: @MikeSoraghanEmail: msoraghan@eenews.net

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