Dakota Access Pipeline May Continue Operations After Appeals-Court Stay on Shut-down Ruling

July 15, 2020October 3rd, 2020
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Price impact on Bakken and Rockies differentials may be on hold. 

“The Dakota Access oil pipeline can continue to operate amid an ongoing court battle, a U.S. Appeals Court said on Tuesday, setting aside for now a lower court’s order earlier this month to shut and empty the line.”

Reuters, 7/14/2020

Article Summary

  • A federal judge had ordered shutdown of Dakota Access Pipeline (DAPL) on July 6, with effect in August
  • This stay issued by the appeals court allows DAPL to keep operating while the permitting legal issues are decided
  • DAPL has capacity of 570 MBbl/d, from the Bakken play to refining and pipeline hubs in Illinois

AEGIS View

As discussed in-depth here, DAPL’s capacity is supportive for Bakken oil-price differentials. If oil production grows at all in the Bakken (including the return of shut-in production), DAPL’s absence would likely require some crude-by-rail solutions to dispose of excess crude. The result would likely be weaker in-basin pricing, and weaker pricing at Clearbrook and Guernsey as oil is pushed into other markets.

We continue to monitor oil, gas, NGLs, and regional markets 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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