Energy Transfer Partners’ recent performance
Energy Transfer Partners (ETP) appears now to be facing a double whammy of weak energy prices and environmental roadblocks. ETP’s shares plunged 2.8% on Thursday, June 15, 2017, after a US federal judge ordered the US Army Corps of Engineers to reconsider their previous environmental study on the controversial DAPL (Dakota Access Pipeline).
According to the judge, the US Army Corps of Engineers “did not adequately consider the impacts of an oil spill on fishing rights, hunting rights, or environmental justice, or the degree to which the pipeline’s effects are likely to be highly controversial.”
The pipeline’s operations might be stopped to complete the environmental review. The controversial 1,172-mile pipeline, which began operation on June 1, now faces the possibility of shutdown due to the environmental concerns raised by the Standing Rock Sioux.
Previously, two million gallons of drilling fluid spillage was reported near ETP’s Rover Pipeline project site. The FERC (Federal Energy Regulatory Commission) halted new horizontal drilling on the project, which is resulting in project delays.
Declining oil prices
ETP has plunged a whopping 11.7% since the beginning of this month due to the huge decline in crude oil prices. Crude oil prices have fallen below $45 per barrel since the Gulf crisis unfolded.
The Alerian MLP ETF (AMLP), which consists of 25 energy MLPs (master limited partnerships), has fallen 4.8%. ETP, a constituent of AMLP, has relatively high crude oil exposure through its natural gas midstream and crude oil acquisition and marketing business.
ETP is currently trading close to its 52-week low. The partnership saw a new YTD (year-to-date) low by the end of trading on June 15. Energy Transfer Equity (ETE), which is dependent on Energy Transfer Partners for distribution income, has also seen YTD lows.