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BlogOil

Corps of Engineers Helps Out in DAPL Legal Fight

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By August 28, 2020 No Comments

The U.S. Army Corps of Engineers asked a federal appeals court to reinstate Dakota Access Pipeline permit and reverse a lower court’s ruling

““The district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects,” ACE said in the brief.”

Reuters, 8/26/2020

Article Summary

  • U.S. Army Corps of Engineers requested a reversal of a ruling that vacated an environmental permit allowing the Dakota Access crude oil pipeline to operate on U.S. land.
  • In early August, a federal judge ordered the U.S. Army Corps of Engineers (ACE) to detail options by the end of the month for resolving the loss of the permit.
  • The loss of the permit could require pipeline owner Energy Transfer to shut and drain the 570 MBbl/d pipeline, the biggest in the Bakken region.

AEGIS View

The loss of DAPL would have a major impact on Bakken price differentials. The discount to Cushing for Bakken crude is around $2/Bbl for the Clearbrook forward curve. A $2/Bbl discount is likely not pricing in the high likelihood of DAPL going offline since the Bakken without DAPL would probably command a steeper discount as producers utilize more crude-by-rail.

We continue to monitor oil, gas, NGLs, regional markets, jet fuel, and interest rates for hedging opportunities. To learn more and see AEGIS opinion and recommendations, go to AEGIS View publications, or contact info@aegis-energy.com. Like what you see? Share this article with the button on the bottom right of your desktop. Market questions or comments? Contact us at view@aegis-energy.com.

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