- Opposition from environmentalists and landowners has been increasingly successful in blocking pipeline projects in court
- Pipeline developers face added costs, challenges in winning community support
- Investors may prefer expansion of existing infrastructure in future energy projects
Developers of multi-billion dollar pipeline projects in the oil and gas sector have faced increasing challenges, as opposition from environmentalists and landowners makes it more difficult to win the permits and community support necessary for such work.
The oil and gas industry argues that pipelines are necessary to expand production and deliver their product to markets, and the Trump Administration has backed the industry and sought to accelerate pipeline approvals. However, a rushed process has made the pipelines more susceptible to legal challenges. Inadequate environmental safeguards led to court orders to shut down the Dakota Access pipeline and block construction of the proposed Keystone XL pipeline, and higher costs caused by legal opposition led to the cancellation of the Atlantic Coast Pipeline.
The increased difficulty of pipeline development may spur investors to focus on the expansion of energy projects where rights of way and environmental permits have already been secured.