AUSTIN, Texas — The pipeline that has generated billions of dollars in deals for oil companies is in trouble.
A Texas auction-edge pipeline, which would allow pipelines to flow from Texas to North Dakota without the need for pipeline approval, is on the brink of failure, according to an investor advisory group.
The U.S. Environmental Protection Agency said Thursday that it had suspended the approval process for the $3,200-per-barrel Texas pipeline, saying the company was not complying with federal safety rules and the agency could impose fines.
“The company did not comply with the safety standards in its permits,” the EPA said in a statement.
“The agency has been unable to determine the cause of this failure.”
The agency also said it is reviewing its process for approving new oil pipeline projects and is working with the state to find the cause.
The pipeline has been in development for several years, with many investors hoping the pipeline would be built along a large oil pipeline from Texas that carries crude from North Dakota to the Gulf of Mexico.
But as a result of delays and environmental regulations, it has been delayed several times and many have complained that it is not getting built.
Pipeline supporters say the Texas pipeline would move natural gas from the Gulf Coast to Texas refineries without the pipeline approval process.
On Thursday, the Texas Railroad Commission said that while the agency’s initial report was “not satisfactory,” the company had completed work on the project.
It said the Texas Department of Transportation is “reviewing the project and will have additional information to provide to the commission in the coming days.”
Greg Abbott has said that the company is “going to have to pay the consequences” of its failure.
In a statement Thursday, Abbott called the pipeline’s construction “a disaster” that will have a devastating impact on the economy of Texas.
The state is now in the process of shutting down the pipeline.
Abbott said the company has already spent $7 billion on the pipeline and has spent about $1 billion on new infrastructure.
He said the state would need to “fund the cost of the project” as soon as the project is built, including adding new facilities to service the pipeline that are not currently available.
If the company fails to comply with state and federal safety requirements, Abbott said the pipeline could be suspended for two years, a process that would delay the completion of the pipeline by at least another decade.
The company has been sued by landowners and environmental groups.