NEW YORK: U.S. pipeline company Energy Transfer has taken the rare step of invoking force majeure: normally used in times of war or natural disaster: to prevent oil firms from walking away from a proposed expansion of the controversial Dakota Access pipeline, according to two sources familiar with the matter.
Energy Transfer, however, has invoked force majeure because it could not get the permits by a certain date, according to one shipper on the line and another familiar with the declaration. That buys the company more time to get regulatory approvals and prevents customers from walking away from their commitments.
North Dakota's production has dropped by 450,000 bpd, down from a peak of nearly 1.5 million bpd reached last year, according to the Energy Information Administration's data.At least a half-dozen U.S. oil pipeline projects have been put on hold indefinitely so far this year, according to U.S. Energy Department data. U.S. production has dropped from a record 12.9 million bpd in late 2019 to roughly 11 million bpd.
"They're in force majeure right now because they did not get the permits," one source with direct knowledge of the matter said. "Hess believes that DAPL has and will continue to be a critical piece of U.S. energy infrastructure, which allows for transportation of crude oil into expanded domestic markets in the U.S. and abroad," company spokesman Rob Young said.
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