Dakota Access Pipeline Court Ordered Halt

Sometimes a business losing out is a good thing for the global impact. Not every business is well adapted to current times and sometimes the market needs certain business models to die out to make way for something better.

As retail businesses learn to adapt so they don't close, the oil industry which is responsible for millions of deaths, wars, and occupation, is struggling as well.

You may have forgotten with the huge headlines coming and going in rapid succession, from Black Lives Matter protests to covid craziness, that the Dakota Pipeline threatened the livelihood of thousands native to the planned development site.

Dakota Access Pipeline TLDR History

Informational hearings for landowners took place between August 2014 and January 2015. Dakota Access, LLC, controlled by Energy Transfer Partners, started constructing the pipeline in June 2016 and cost $3.78 billion dollars.

Protests of the Dakota Access Pipeline occurred at several places because of concerns about the pipeline's impact on the environment and to sites sacred to American Indians. Indigenous nations around the country opposed the pipeline, along with the Sioux tribal nations.

The Obama Administration spoke out for the need to analyze environmental impacts more, then later President Trump did his best to fast track the pipeline into operation. Trump signed a presidential memorandum to advance approval of pipeline construction.

Then the Cheyenne River Sioux sued this decision, citing an 1851 treaty and interference with the religious practices of the tribe.

The pipeline goes underneath Lake Oahe, a water supply source for the Sioux Native Americans. The pipeline became active May 2017, despite almost 15,000 people from around the world protesting, staging sit-ins for months near the Standing Rock Indian Reservation.

The pipeline commercial operations started without oil spill response plan for the Missouri River crossing and without emergency response cleanup equipment stored nearby.

Jesse Jackson called the move to put the pipeline closer to the reservation, "environmental racism," as ABC News reported. But the plot thickens like a cup of day old coffee - why would Trump be so eager to support the pipeline?

Trump's 2016 federal disclosure forms show he owned between $15,000 & $50,000 in stock in Energy Transfer Partners - the company in charge of constructing the pipeline - per Al Jazeera.

Surprised? There's more. Energy Transfer Partners CEO Kelcy Warren gave $103,000 to the Trump campaign, as Reuters reports. Despite how crazy this sounds already it gets even crazier with Russian hackers.

Russian government's Internet Research Agency Troll farm spread misinformation on social media sites like Facebook, Twitter and Instagram by creating a fake Facebook Page to enrage people with posts about the pipeline, same sex marriages, and racial issues.

As far as a business model, the oil industry is definitely anachronistic, as surveying your customers for what they like and giving it to them is one of the fundamental ways to grow your brand.

This isn't exactly a strategy being used here. But, there seems to be a positive turn of events. Well, not positive for the oil industry, but positive for the people it affects.

Dakota Access Pipeline Court Ordered Halt

Reuters states:

According to the ruling, the U.S. Army Corps of Engineers violated the National Environmental Policy Act (NEPA) when it granted an easement to Energy Transfer LP (ET.N) to construct and operate a segment of the oil pipeline beneath Lake Oahe in South Dakota, because they failed to produce an adequate Environmental Impact Statement (EIS).

The court ordered Energy Transfer to shut and empty the 570,000 barrel-per-day (bpd) line within 30 days, closing off the biggest artery transporting crude oil out of North Dakota’s Bakken shale basin to Midwest and Gulf Coast regions.

My Take

It is a complicated issue, at least the shutting down part is. While most people not either getting bribes from the oil industry as Trump was blatantly benefiting from or working for the oil corps, would agree that it's not good to endanger the water supplies of local residents, closing down the operations faces additional complications.

First, many jobs will be lost for those working the pipeline, which will cause a loss of economic stimulus from those workers spending their money in the local economy as well as their own struggle to survive.

Second, there will be a question of retaliation from the oil industry. This could take the form of people they hire to sue, or get elected and pass laws hurting Native Americans or other black hat tactics.

Third, it's going to be complicated trying to get the oil in the pipeline now, out of it, and transported elsewhere. It's likely the unused oil will be transported via rail cars to the west and east coasts.

So hey if you own a rail car company - there is some money to be made with this shut down. Many environmental and locals to the area are super relieved and happy to hear this news.

But, there are other elements at play that while working against the oil industry, in a way, soften the blow to their business, in that, oil consumption nationally is already at an all time low.

This is because of covid, people are staying home more, going out less, and using their cars a whole lot less. In addition to individuals, large events people drive to are canceled. 

Those high school and college graduations that were canceled also mean thousands if not tens of thousands of relatives of graduates, especially in college, who live out of town, aren't driving to their family's graduation ceremony. 

There are many other examples of where and how both individual car use and public transit and cross country bus transit are down.

Now, in the aftermath of the Dakota Pipeline shutting down, there will be less oil consumption, yet, we already weren't using as much oil as pre February 2020 this year. So..does it matter that much anyways? 

Ideally, society as a whole would have shifted before now to more renewable sources of energy due to countless studies on the global impact of fossil fuels. It's just hard to convince established industries, with deep pockets and large contributions to politicians who pass the laws regulating oil to switch to going green. 

Perhaps this is the push we needed to ramp up infrastructure around sustainable energy? I don't know. But I do know thousands of Native Americans are happy their water supply and burial grounds aren't threatened anymore. 

This just brings up the important point to think about: if your business model involves harm to other people and the environment, it is time to rethink how you're strategizing for the long term. Certain businesses should be allowed to die.

Operating a business that has longevity means your marketing plan and long term strategy is just as responsive as site optimized for mobile viewers and social media presence.

The values that your company publicly demonstrates is the most attractive value proposition or unique mechanism think tanks can come up with. After all, like attracts like.

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