Dakota Access Pipeline Driven by ‘High-Risk Financing’ in Overbuilt Region; Little-Known Economic Weaknesses in Controversial Project

The Institute for Energy Economics and Financial Analysis today published a report noting weaknesses in the financing behind the Dakota Access Pipeline and questions  around the long-term usefulness of the project.    The report—“The High-Risk Financing Behind the Dakota Access Pipeline: A Potential Stranded Asset in the Bakken Region of North Dakota”— describes how the company behind the pipeline is under extreme financial to complete the project and how the pipeline is at risk of becoming a stranded asset in the region’s overbuilt oil-transport infrastructure.  “While the Dakota Access Pipeline has gained notoriety for questions it raises about tribal sovereignty and its impact on drinking water, we’ve found serious, less-publicized problems around the finances and economics of the project,” said Cathy Kunkel, an IEEFA energy analyst and lead author of the report.  The report notes that the project faces a Jan. 1 completion deadline that it cannot meet, a failure that would trigger a potential reset with producers and shippers who can renegotiate contracts signed two years ago with the developer, Energy Transfer Partners.