Pipelines

Out of sight, out of mind — until they aren’t — pipelines are as yet a necessary piece of the nation’s energy puzzle, moving oil and natural gas from their origins to refineries, and thence into our gas tanks, stoves, roads, roofs and more.

But against a backdrop of heightened environmental and climate-change awareness, crude oil pipelines now also carry controversy, raising the stakes for the states, which are more or less on their own when it comes to regulating the siting of such pipelines (as long as their regulations aren’t pre-empted by applicable federal laws).

Companies that operate pipelines come under the jurisdiction of the Federal Energy Regulatory Commission. And once pipelines are operational, the U.S. Pipeline Safety Act assigns oversight to the Office of Pipeline Safety (housed within the U.S. Department of Transportation’s Pipeline and Hazardous Materials and Safety Administration).

The latest pipeline to make headlines is the Dakota Access Pipeline, a planned 1,134-mile underground pipe from the Bakken oil fields in northwest North Dakota that would run through South Dakota and Iowa to the Patoka Tank Farm in south central Illinois. If/when completed, the $3.7 billion pipeline is projected to carry more than 450,000 barrels of fracked crude oil per day.

The Supreme Court’s 7-2 ruling in Oneok v. Learjet is a solid win for states, consumer protection, and the Ninth Circuit. The Court held the Natural Gas Act does not preempt state-law antitrust lawsuits alleging price manipulation that affect both federally regulated wholesale natural-gas prices and nonfederally regulated retail natural-gas prices.

Historically, federal regulation of the natural-gas industry has been divided into three segments:  production, interstate gas pipelines (wholesale), and local gas distribution (retail). The federal Natural Gas Act regulates only the second segment—the interstate shipment of gas including rate setting—states regulate the other segments. Since deregulation in the 1970s, pipeline wholesalers have sold natural gas at market rate based on price indices of voluntarily reported data of natural gas sales. In 2003 the indices were found to be inaccurate because natural-gas traders had been reporting false data. 

Last week the President unveiled his $4 trillion budget for Fiscal Year 2016.  The budget highlights the President’s continued support on several energy and environmental topics with emphasis on clean energy.  He reiterated his support for the Climate Action Plan he released in 2013 and called for an increase in funding support for the plan. 

Several agencies made the request for larger...

Today the State Department announced that it had completed its Final Supplemental Environmental Impact Statement for the Keystone XL pipeline. Although the document is not decisional to approve or deny the project, it completes the agency's technical environmental review which found that it did not significantly alter greenhouse gas emissions or the extraction of Canadian oil sands or heavy crude refining in the U.S.

According to an article in the Bismarck Tribune, the North Dakota Department of Health plans to launch a website this week for the public to monitor reported leaks and oil spills. Department officials were quoted saying that the new site will have data on current incidents and information on spills as far back as 1975.