Cenovus CEO Calls Dakota Pipeline Court Order “Disturbing”

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The order of a US judge to close the Dakota Access pipeline for further environmental review – more than three years after the pumping of oil began – is a “fairly disturbing decision” that could have implications for future infrastructure development like power lines and highways, said the CEO. from Cenovus Energy.On Monday, US district judge James Boasberg in Washington, DC, wrote that he was “aware of the disruption” that the pipeline shutdown would cause, but that it must be done within 30 days.

Alex Pourbaix, President and CEO of Cenovus, based in Calgary, said he was surprised by the decision to stop a pipeline that had been in operation for three years, suggesting that the impact could have repercussions on the future development of ‘a variety of infrastructure projects in the United States. States.

“My general comment is that in the future, if this is the new standard, I think it will be extremely difficult for anyone to invest in any type of infrastructure,” he said during a presentation at the TD Securities Virtual Energy Conference. Tuesday.

“And not just pipeline infrastructure, high-voltage power lines, highways, name them. If there is a possibility to come back to these regulatory decisions, years after the fact, I think that is a really important problem. “

Cenovus Energy CEO Alex Pourbaix said the court order suspending the operation of the Dakota Access pipeline could have implications for other infrastructure in the United States, including power lines and roads. (Jeff McIntosh / The Canadian Press)

Pourbaix said it was a “pretty disturbing decision,” a decision he said means producers in the Bakken area of ​​North Dakota are going to have to look at rail options to move their oil.

According to the ruling, the US Army Corps of Engineers violated the National Environmental Policy Act (NEPA) by granting an easement to Energy Transfer to build and operate a segment of the pipeline under Lake Oahe in South Dakota, because they failed to produce an adequate environmental impact study.

The court ordered Energy Transfer to close and empty the 570,000 barrel per day line within 30 days, closing the largest artery carrying crude oil out of the Bakken North Dakota shale to Midwest and Gulf Coast regions.

“Given the seriousness of the Corps NEPA error, the impossibility of a simple solution, the fact that Dakota Access assumed a large part of its economic risks knowingly and the potential damage every day pipeline operation, the Court is forced to conclude that the flow of oil must stop, “he said.

Rarely do regulators or authorities force a pipeline to drain, unless it is a spill, sources in the oil market told Reuters.

Energy Transfer has stated that it is considering legal and administrative measures to avoid a shutdown and is considering an appeal if those efforts fail.

The Dakota Access pipeline was the subject of months of protests in 2016 and 2017, sometimes violent, during its construction near the Standing Rock Sioux reserve which straddles the North Dakota-South Dakota border.

The Standing Rock Sioux filed a lawsuit against the pipeline even after it began transporting oil from North Dakota through South Dakota and Iowa and to a shipping point in Illinois in 2017. The pipeline crosses under the Missouri River, just north of the reserve, where it draws it’s water.

The U.S. Supreme Court on Monday did not authorize the construction of TC Energy Corp’s Keystone XL oil sands pipeline. which allows dredging of pipelines across water bodies.

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