The company owning the controversial Dakota Access oil pipeline and the Standing Rock Sioux Tribe resumed a long-standing regulatory battle this week, after North Dakota’s regulators began hearings on whether Dakota Access’s owner Energy Transfer should be allowed to double the pipeline’s capacity.
North Dakota Public Service Commission started hearings on Wednesday on whether to allow Energy Transfer to build pump stations in North Dakota in order to boost the pipeline capacity, and both the company and the Standing Rock Sioux Tribe weighed in on the issue. The commission is expected to come to a decision at a later date.
Energy Transfer, whose original Dakota Access pipeline began operations in 2017, plans to double the oil flow capacity of the pipeline to 1.1 million barrels per day (bpd) from the current 570,000 bpd to meet rising production from the Bakken.
Even after Dakota Access entered into service, the Bakken shale play started to see at the end of 2018 all pipelines full to capacity again, leading to hefty discounts of the oil from the Bakken compared to WTI.
Energy Transfer argues that “Optimizing capacity will enable further development in the Bakken, which means more jobs and economic benefits for local communities.”
The company says that so far the Dakota Access pipeline “has helped to improve the region’s drilling economics by lowering transportation costs for operators and is providing a safer means of transportation over truck or rail.”
At the hearing on Wednesday, Energy Transfer officials said that the expansion does not increase the risk of an oil spill.
But the Standing Rock Sioux, who had opposed the original pipeline project too, beg to differ from the company’s assessment.
“Worst case” spill will be far more dangerous under proposal to double pipeline capacity,” Standing Rock Sioux said before the hearing.
“The Tribe is concerned that, if approved, the DAPL capacity expansion will set the stage for yet another Energy Transfer pipeline spill, with devastating consequences for the Tribe, the environment and the citizens of North Dakota,” they argued.
By Tsvetana Paraskova for Oilprice.com
