A Dakota Access shut-in would likely mean a 400,000 barrel per day shut-in for North Dakota oil production at least temporarily, oil and gas regulators said Thursday afternoon during North Dakota’s monthly oil production report.
“We anticipate, because a large percentage of DAPL transportation is firm transportation, that there would have to be at least some temporary shut-in, while people arranged alternate transportation,” North Dakota Department of Mineral Resources Director Lynn Helms said.
A shut down order for the pipeline, which can carry up to 570,000 barrels of oil, would trigger a force majeur situation. Oil companies would need to have that in place first, before they could be released from their contracts and able to move on with alternative transportation. The alternatives, more than likely, would predominantly be truck or rail, which might also take some time to ramp up.
“We would have to have an incremental increase in the amount of tank cars, available crews, loading, staffing, all those things that have to take place in order to switch those barrels off the pipeline system into the rail network,” North Dakota Pipeline Authority Justin Kringstad said. “The ultimate destination for those barrels, I think we would start to see an increase in volume heading towards the Gulf Coast. You have to ultimately find an off-loading facility that would readily be available to take large volumes. I don’t know how much additional appetite there would be on the east and west coast for that crude by rail.”
How long the shut-in would last depends on several factors, Helms said, including how much time the pipeline has before it must empty completely of oil.
Dakota Access was in court April 9 for a hearing on whether the pipeline should shut down while a lengthier, court-ordered environmental study takes place. The Biden administration said then that oil could keep flowing while the study is done. That puts the ball for any immediate shut-down of the pipeline firmly in Judge James Boasberg’s court.
Boasberg set a 10-day deadline for new briefs from Energy Transfer Partners and other parties on the matter. That timeline means there will likely be a new day in court on the shutdown question not long after April 19.
Energy Transfer, meanwhile, is concurrently pursuing an appeal of the appeals court’s decision not to stay the order to do an Environmental Impact Statement. They are asking for the matter to be heard by all the appeals court judges instead of just one.