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The future of American fossil fuel infrastructure became decisively murkier this week. A planned 600-mile gas pipeline along the Atlantic coast was axed, a federal judge in Washington D.C. ordered the Dakota Access Pipeline (also known as DAPL) shut down for violating US environmental law, and the Supreme Court rejected a request to immediately restart construction of the Keystone XL Pipeline. While the details of the three pipeline stories are quite different, the key takeaway of numerous news organizations was remarkably consistent: due to immense, and growing, political and legal opposition, those seeking to build pipelines are increasingly finding them more trouble than they’re worth.
According to U.S. Energy Secretary Dan Brouillette, this was precisely why Duke and Dominion Energy decided to cancel their planned Atlantic Coast Pipeline. “The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline,” said Brouillette in a statement. “Duke and Dominion [made] the difficult decision to end this project because it is no longer economically viable due to the costly legal battles they would continue to face.”
With respect to DAPL, a legal challenge brought by the Standing Rock Sioux and Cheyenne River Sioux succeeded in shutting down the already-in-service pipeline (albeit temporarily) on the grounds that by not first completing an environmental impact statement, the U.S. Army Corps of Engineers violated the National Environmental Policy Act when it granted an easement for a segment of pipeline construction. The judge in the case ordered the Army Corps of Engineers to complete the applicable environmental review before the pipeline resumes services, thus imposing a costly delay on the pipeline’s backing company, Energy Transfer LP. The company says it will challenge the decision.
In the case of Keystone XL – an important project for transporting Alberta crude oil to US refineries – a federal district judge in Montana previously blocked a permit crucial for construction. The Trump Administration, hoping to get construction started again, petitioned the Supreme Court for a stay of the order. This would allow construction to resume while the parties await appeal. The Supreme Court, however, refused to issue a stay, giving no explanation for its decision.
Regardless of what appellate courts decide with respect to DAPL or Keystone, the aforementioned decisions serve as harbingers of what awaits any company seeking to build new fossil fuel infrastructure: furious protests, terrible publicity, and relentless lawsuits attacking every aspect of the construction process. As the cost of battling such opposition gets factored into the price of oil and gas itself, it will effectively serve as an unofficial carbon tax - levied in addition to various jurisdictions’ official carbon taxes - thereby increasingly hindering fossil fuels’ economic competitiveness with ever-cheaper clean energy.