Planning for Failure: Pipelines, Risk, and the Energy Revolution

Abstract

In 2014, as production soared in North Dakota’s oil fields, Energy Transfer Partners proposed a large pipeline to transport the oil to market. The very name of the project—Dakota Access—conveyed the company’s optimistic vision of a needed link between the prolific oil fields and the rest of the country. The vast scale of the pipeline project was matched only by the intensity of the opposition to the route. A bitter controversy erupted at Standing Rock over the risk of a catastrophic oil spill. Tribal members and environmentalists from across the nation united to protest the company’s decision to site the pipeline underneath a lake that serves as the sole source of drinking water for local tribes. The company defended the safety of its pipeline and ultimately prevailed. Dakota Access was completed in 2017. Since it began operation, it has leaked eight times.

One would expect risk governance to take a more preventative approach to risk, as the potential for catastrophic harm increases and the ability to predict an accident decreases. But projects such as Dakota Access raise troubling questions about the current system governing the risks of energy pipelines. Why are pipelines being sited in environmentally sensitive and densely populated areas? To what extent does the system address the long-term risks of spills and releases? These questions are more important than ever before, as the domestic revolution in oil and gas production fundamentally reshapes pipeline networks and the geographic and political landscape of risk.

This Article seeks answers by examining the laws governing energy pipelines through the lens of risk. The analysis reveals a critical flaw in risk governance: the risks associated with “siting” a pipeline are treated separately from the long-term “safety” of the pipeline. This formal legal distinction has a substantial practical effect on the risk landscape. By failing to consider the risks of an accident in the decision of where to locate a pipeline—that is, by failing to plan for failure—the system allows energy pipelines to be sited near people and sensitive ecosystems. This in turn leads to more accidents in vulnerable areas and a greater risk burden on landowners and surrounding communities. The result is a system that sites first—and cleans up later.

Keywords: energy pipelines, risk, siting, safety