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Dakota Access Pipeline 84% Built; Opening 1Q2017 Possible, ETP Execs Say

Despite an ongoing fight, the controversial Dakota Access oil pipeline construction continues and is 84% complete as of a 3Q2016 earnings conference call Thursday by Texas-based Energy Transfer Partners (ETP), CFO Tom Long told analysts.

A final federal decision on an easement for a water crossing under part of the Missouri River in southcentral North Dakota is "imminent," according to President Matt Ramsey.

"We remain confident that we will receive the easement from the Army Corps in a timeframe that will not result in significant delays in proceeding with drilling activities under Lake Oahe," said Long, predicting that commercial operations of the nearly 1,200-mile pipeline through four upper Midwest states will commence in the first quarter next year.

While reiterating ETP's commitment to protect all cultural resources, along with the environment and safety aspects of the undertaking, Long said his company's commitment is inherent in the project's route and the earlier approval by the U.S. Army Corps of Engineers (USACE). "[Almost all of the route, 99.98%] is on private land and does not cross any land owned by or under the control of the Standing Rock Sioux tribe," he said. Environmental activist groups and the Standing Rock Sioux have turned the project into a prolonged national demonstration against alleged mistreatment of Native American tribes by various government agencies (see Shale Daily, Nov. 9).

Now awaiting an easement from the USACE to complete work beneath Lake Oahe, construction continues on the remaining segments of the pipeline, Long said. The pipeline will be double-walled for a 90-115-foot crossing below Lake Oahe, with remote-controlled shutoff valves on each side.

"This land has been studied, surveyed and constructed upon at least twice before over the past several decades," Long said. "Multiple archeological studies conducted with the state historic preservation offices found no culturally significant items or sacred site along the route under construction."

Separately on Thursday, Christi Tezak, managing director at ClearView Energy Partners LLC, agreed that Dakota Access eventually will be completed, but the Obama administration may delay action and leave the final USACE permitting to President-elect Trump's administration.

"Even if the current administration continues to delay, or even deny, the [USACE] easement, the incoming administration may find more than ample evidence in the existing record to justify a decision to approve it," Tezak said in a ClearView analysis, adding that the tribes would likely appeal to the courts but are not likely to succeed.

Tezak cited a status conference held Thursday by U.S. District Court Judge James Boasberg on the complaints against the USACE earlier approvals of the pipeline. She said she continues to expect that outgoing the Obama administration will initiate additional delay to the pipeline's completion. Another status conference has been set for Dec. 9.

On the conference call, Long said ETP "continues to believe that the USACE will soon issue the easement for approximately 500 feet on each side of the lake necessary for the crossing beneath Lake Oahe, the sole remaining authorization necessary for the completion of the project. We received the [original] permit from the Corps for the crossing on July 25 of this year."

In response to a question from an analyst, Ramsey said the USACE re-review process has "now been probably 65, 70 days. They're not requiring any additional information out of us. We're in constant communication with them, and we feel like the decision is imminent..."

In response to a question about how much of the pipeline capacity has been contracted for, COO Marshall McCrea indicated that of the maximum 570,000 b/d capacity more than 450,000 b/d has been contracted for in terms of what has been publicly disclosed. "We are confident that as the project is completed, that we will contract up to complete capacity," McCrea said.

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