Dakota Access Pipeline Delay Means Costs for Oil Shippers, Producers

Gulf of Mexico by Chad Teer from Coquitlam, Canada - Flickr.com - image description page, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=341202

Gulf of Mexico by Chad Teer from Coquitlam, Canada - Flickr.com - image description page, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=341202

While protestors around the nation celebrate the temporary halt on parts of the Dakota Access pipeline in North Dakota, local oil producers and shippers are facing possible extended delays on quickly moving oil to the Gulf of Mexico.

The controversial pipeline is a roughly 1,100-mile, $3.8 billion project that travels through four states and was expected to come online by later this year. However, countless delays from protests and lawsuits have become obstacles for the original construction timeline, causing shippers to find themselves stuck with oil they cannot transport to the Gulf.

Little commercial storage in North Dakota makes a lack of pipeline infrastructure a problem for shippers, potentially forcing them to sell off oil at a loss, transport the oil using more expensive routes, or use pipelines that are already crowded with oil transports.

The fate of the pipeline is unknown, and the pipeline developers declined to comment on whether they would consider a reroute if they are not able to build on the protested land.

A possible reroute means much more expenses and a possible delay of several years, according to Brigham McCown, the former head of PHMSA under George W. Bush.

While the government halted construction on a 40-mile stretch of land near Lake Oahe in North Dakota, construction of the Dakota Access pipeline continues in other areas of the route through North Dakota, South Dakota, Iowa, and Illinois.

Source:
Newsweek