Comments by OSFR historian Jim Tatum.
-A river is like a life: once taken, it cannot be brought back-
Fearing Protests, Pipeline Execs Show Muted Reaction to Trump’s Dakota Access, Keystone Orders
By Sharon Kelly • Thursday, January 26, 2017 – 10:35
If President Donald Trump expected to hear roars of approval from the pipeline industry after this week’s executive orders pushing the Keystone XL pipeline and Dakota Access pipeline (DAPL) forward, he might have been hugely disappointed.
Reaction at the Marcellus-Utica Midstream Conference and Exhibition in Pittsburgh on Wednesday was remarkably muted.
“We can be very thankful about announcements like we saw yesterday, about DAPL and Keystone,” said Alan S. Armstrong, President and CEO of The Williams Co., Inc., which owns or operates over 33,000 miles of pipeline systems across the U.S., “but I will tell you, that is not changing the opposition that we have at a local level.”
“And I’m going to tell you, it may even enhance [that opposition],” Armstrong, whose company is so large that it’s involved with roughly a third of the nation’s natural gas, added.
Public participation and protests — especially when it comes to lodging public comments with the Federal Energy Regulatory Commission (FERC) and protests aimed at state and local governments — seemed to have these industry executives nervous, despite the Trump administration’s aggressive moves to push pipeline construction.
“What is that total impact of public opposition?” asked Harry W. New, President of pipeline contractor Willbros Oil and Gas. “I think it’s hard to really equate that — and I think it’s huge.”
After Trump’s orders on the Dakota Access pipeline, hastily organized protests outside the White House drew a crowd that organizers estimated at over 1,000 participants on Tuesday. Nationwide, protests sprang up from New York City to Idaho.
Those protests have industry observers wary. “I don’t know if you’ve all seen on your cell phones but this morning, Greenpeace unfurled a banner at the White House, a big big banner, against pipelines,” said panel moderator and Hart Energy executive editor Leslie Haines. “So you’re right, it’s going to be volatile. The more he promotes energy, the more people like Greenpeace are going to react.”
“Yeah, I think, um, what our executives have said about that is I don’t think they’d ever — they’d ever say that they think permitting pipeline construction is going to get easier,” said Spectra Energy’s Robert Huffman, when asked about the impact of the new administration for Spectra.
There may be good reason for the oil industry to seek distance from Trump. He enters office with the lowest approval rating of any U.S. president since polling began, according to a Jan. 23 Gallup poll.
Opposition to Trump has emerged from the left, the right, the legal community, and even — bizarrely — Trump’s own past legal positions. The Women’s March in D.C., aimed at opposing Trump’s agenda, drew three times as many people as Trump’s inauguration, the New York Times reported. Trump’s expected executive order authorizing water-boarding prompted Senate Armed Services Committee Chairman John McCain to state bluntly, “we are not bringing back torture,” Yahoo news reported.
With less than a week on the job, he’s already been sued for violating the U.S. Constitution by letting his businesses take payments from foreign governments. Trump called for a “major” inquiry into election fraud during the election that swept him into office — after his own lawyers wrote “[a]ll available evidence suggests that the 2016 general election was not tainted by fraud or mistake,” in post-election legal briefs.
With a Republican majority in Congress and the chance to appoint the next Supreme Court justice (as well as his own authoritarian leanings, fanned by the oil industry), Trump may feel personally insulated against any backlash.
But state and local officials face a very different political calculus. Similarly, industries that support Trump’s agenda risk welding their brands to a sinking ship, especially if Trump fails to deliver the jobs he has promised.
And for the pipeline industry, experts at the Marcellus conference warned, public opposition can slow down projects enough to throw timetables off schedule. That problem is especially worrisome for the natural gas industry, which is in the precarious position of keeping drillers squeezed by low prices from going broke — while at the same time convincing utilities to make long-term commitments to buying natural gas instead of investing in renewable energy.
The midstream industry, which connects drillers to buyers, is trying to thread a very delicate needle by keeping the price of natural gas confined to a tiny window in which drillers at one end of the pipe can make money but buyers at the other end of the pipe find the price attractive compared to coal (also expected to face less regulation under Trump) — all while competing against wind and solar, which have offered buyers plunging costs over the past decade.
So when protests, permitting reviews, and lawsuits throw project timetables off schedule, pipeline companies and contractors start to sweat.
And it’s not just the feds who control whether and how a pipeline gets built. State and local governments are often involved — and, at least in some places, those politicians might not want to be seen as aligned with President Trump’s agenda.
“We might have the mandate from on high that the federal government is supposed to move heaven and earth to move forward these kinds of projects,” Scott Janoe, an attorney with Baker Botts LLP, told the crowd, “but I can envision a California or states that are less in line with the administration’s thinking being the stumbling block.”
Not everyone at the conference was quite as restrained in their enthusiasm for Trump.
“Wow, what a change in the past four months,” said Steven M. Woodward, vice president of Antero Resources Corp. and Antero Midstream Partners LP, describing hearing Trump talk in September. “I would have never guessed that he would have been our next president. I know statistically most of us were amazed, but I’ll tell ya, the day he got up here on this stage, he delivered the message we all needed to hear in this industry.”
“We all have different opinions as to whether that was a good decision or a bad decision,” Mr. Woodward added, “but bottom line, I think he has our country’s best in his heart — and particularly our industry.”