Energy Transfer, Banks Lost Billions by Ignoring Early Dakota Access Pipeline Concerns
Before that application was filed, on September 30, 2014, the Standing Rock Sioux Tribe met with ETP to express concerns about the Dakota Access pipeline (DAPL) and fears of water contamination. Though the company, now known as Energy Transfer, had re-routed a river crossing to protect the state capital of Bismarck against oil spills, it apparently turned a deaf ear to the Tribe’s objections.
Following that approach proved to be a very costly decision, a new analysis concludes, with ETP, banks, and investors taking billions in losses as a result.
“This case study estimates that the costs incurred by ETP and other firms with ownership stake in DAPL for the entire project are not less than $7.5 billion, but could be higher depending on the terms of confidential contracts,” a new report, “Social Cost and Material Loss: The Dakota Access Pipeline,” concludes, noting that represented nearly double the initial project cost. “The banks that financed DAPL incurred an additional $4.4 billion in costs in the form of account closures, not including costs related to reputational damage.”
In addition, the company’s “poor social risk management” caused taxpayers and “other local stakeholders” to incur at least $38 million in costs, the report concludes.
As opposition to DAPL grew from a handful of locals to a movement attracting thousands of supporters to Standing Rock and backers worldwide, construction fell behind schedule and over-budget, with costs rising from a predicted $3.8 billion to at least $7.5 billion, the new report finds.
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