Markets
MPC

Delivery of Crude Oil From Bakken Shale at Risk From Pipeline Shutdown Orders

Earlier this month, a U.S. district court judge ordered the Dakota Access Pipeline temporarily shut down and drained by Aug. 5, when a federal judge found that the U.S. Army Corps of Engineers violated the National Environmental Policy Act. But the pipeline operator, Energy Transfer (NYSE: ET), won a temporary reprieve from the shutdown before a yearlong environmental review was to take place. 

Another Bakken pipeline, operated by Marathon Petroleum's (NYSE: MPC) MPLX Limited Partnership (NYSE: MPLX), was also ordered shut down in early July. The Tesoro High Plains pipeline was deemed by the U.S. Department of the Interior's Bureau of Indian Affairs to be trespassing on Native American land. 

Workers look over an oil refinery site at sunset

Image source: Getty Images.

In addition to the shutdown order of the High Plains, the Interior Department also ordered Marathon to pay $187 million in damages, should it hold through an appeal. The Bakken shale supplies approximately 10% of the 11 million barrels per day currently being produced in the United States, so there are critical delivery implications if both pipelines remain shut. 

The High Plains line, which was shut for the first time in 67 years of operation after the order, delivers oil to Marathon Petroleum's 74,000 barrels-per-day Mandan refinery. Marathon's MPLX Limited Partnership acquired Andeavor Logistics in 2019, which owned the pipeline. Andeavor had been negotiating with Indian tribes since 2013 on pipeline disputes. Marathon has not said whether it will appeal the ruling, according to BNN Bloomberg. 

Both pipeline shutdown decisions come at a time when the Atlantic Coast Pipeline project has been canceled after Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) said it was buying the natural gas assets from Dominion Energy (NYSE: D). The utility, and its partner Duke Energy (NYSE: DUK), then canceled that project. 

10 stocks we like better than Marathon Petroleum
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Marathon Petroleum wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MPC DUK MPLX D ET

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More