What the Greenpeace verdict means for the professional protest industry.

 “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”— Isoroku Yamamoto

As any international business traveler can attest, understanding local rules and customs is essential—especially in conservative cultures. While some leeway may be granted to foreign visitors, ignorance of the law is rarely a convincing excuse, and it's best to avoid needing one in the first place. Foreign jails are far less comfortable than foreign hotels, and if you find yourself in contact with your home embassy while abroad, chances are something has gone terribly wrong.

Consider Singapore, where spitting in public is illegal and possession of even a small amount of an illicit drug can carry a death sentence. Or Saudi Arabia, where alcohol is largely banned and adultery is a capital offense (public beheading is the preferred method of execution, in case you were wondering). Shoplifting while overseas is also a bad idea, as one never knows which countries still impose hand amputation for even petty theft. Why chance it? Landing in Kuala Lumpur is not the same as landing in Toronto, no matter how familiar the baggage claim area might seem.

Situational awareness

What is true between countries also holds across different states of the US: what is permissible in California might not be in, say, North Dakota. The Peace Garden State has voted for Republican candidates in 15 consecutive presidential elections, most recently backing Donald Trump by more than 36%. Of the 94 seats in the North Dakota House of Representatives, Republicans currently hold 82—a percentage surpassed only by their dominance in the state Senate, where they occupy 42 of 47 seats. Unsurprisingly, the oil and gas sector enjoys strong support, having accounted for half of the state’s annual tax collections since 2008.

North Dakota would thus seem a suboptimal place to launch a campaign of “militant direct action” against a proposed oil pipeline—one marked by allegations of trespassing on private property, destroying construction equipment, and assaulting employees and contractors. Using improvised explosive devices to attack police would also seem unwise, as would deploying hacked information to threaten officers and their families. Killing the livestock of local farmers and ranchers as part of an intimidation operation could land you in a spot of bother—just as using Facebook to instruct others on how to murder security guards might. Alas, it seems not everyone is guided by prudence:

“The environmental lobby Greenpeace is finally getting its just desserts after a North Dakota jury on Wednesday ordered it to pay $667 million in damages for its thuggish campaign last decade to block the Dakota Access Pipeline.

Pipeline company Energy Transfer LP provided compelling evidence during a three-week trial that Greenpeace defamed the company and abetted vandals. Its organizers trained protesters and even brought lockboxes they used to chain themselves to construction equipment. Protesters lobbed human feces and burning logs at security officers and vandalized construction equipment.

Greenpeace sought to get the pipeline’s financiers to pull out of the project by erroneously claiming the company’s ‘personnel deliberately desecrated documented burial grounds and other culturally important sites,’ among other falsehoods. Energy Transfer said this malicious campaign delayed the pipeline’s construction and increased its costs by hundreds of millions of dollars.”

We’ll see

The satisfaction of a well-earned comeuppance notwithstanding, the verdict against Greenpeace is sure to have far-reaching consequences for years to come—well beyond what most energy analysts are currently modeling. In our view, the shockwaves from the events in the Morton County courthouse are still in the early stages of propagation. If we’re right, there will be significant winners and losers. Let’s partition between them and anticipate how things might unfold from here.

 

The most obvious winner from this episode is Energy Transfer and its hard-charging co-founder and executive chairman, Kelcy Warren. The stalwart billionaire has long held a well-earned reputation as a man of his word—a consistency that cuts differently depending on which side of his friend-foe divide you land. In the aftermath of the Dakota Access Pipeline fiasco, he vowed to do everything in his power to hold those responsible to account. It may have taken nearly nine years to make good on that promise, but make good he did. Pity the foolish environmentalists who pick the next fight with the man or his company.

You best not miss

The US hydrocarbon industry in general—and midstream operators in particular—also stand to benefit handsomely from Warren’s vendetta. The use of physical violence to disrupt duly permitted construction projects now carries existential risk for those who resort to such tactics. Emboldened by this ruling, other industry players will undoubtedly go to the legal mat with full force, as their shareholders will expect nothing less. Companies that remain on the back foot will now have only themselves to blame.

The verdict comes at a time when the new Trump administration is charging full steam ahead with its so-called energy dominance agenda. Executive orders aimed at accelerating approvals for new energy infrastructure projects have been promptly followed by swift permit issuances, leaving opponents scrambling. The industry is also seeking help from Trump to fend off a flurry of lawsuits filed by state attorneys general accusing it of covering up the effects of climate change. As with much of the president’s agenda, his energy team is flooding the field at a pace designed to overwhelm the capacity of antagonists to respond.

As we’ve long predicted, not everyone in the energy industry is thrilled with these developments. Trump clearly wants volume production up and prices down—a combination that’s not conducive to profits for the price-taking side of the sector. Midstream players, service providers, and royalty firms all stand to profit handsomely on volume growth, but primary energy producers themselves don’t appear poised for a windfall. Reporting from CERAWeek—an annual conference so prestigious it’s become known as “the Super Bowl of energy”—Bloomberg columnist Javier Blas, commented on the mood:

“The comments in private that I heard were not of celebration. It is an industry that now is fearing lower economic growth and certainly… they are now very aware that the White House wants oil prices to go down perhaps as low as $50 a barrel and that is not very profitable for the American oil industry.

I think that to me, one very interesting bit was when a senior executive of an American oil company told me, he said, ‘We thought that Chris Wright, the energy secretary was our guy, someone from the industry. And hearing Houston, we just realized that Mr. Wright is Trump’s guy. He’s not our guy. He’s going to do what the White House is telling him to do and that means $50 oil and bankruptcies in the oil patch, so be it.’ And that’s why I think that the mood at CERAWeek was not as celebratory as otherwise would have in mind.”

Release the Kraken!

The professional environmental protest industry has been left predictably reeling. For its part, Greenpeace has vowed to vigorously appeal the decision—a logical choice, given the existential nature of the damages awarded:

“The jury has officially reached a verdict in our trial against Big Oil company Energy Transfer’s meritless lawsuit.

This verdict is not the end of this case. Although a jury of nine people in North Dakota has decided that Greenpeace entities are liable for over $660 million in damages, this isn’t over.

We’re going to appeal. And we’re prepared to fight this all the way to victory.”

Greenpeace’s allies—and many in the mainstream media—are still spinning the Energy Transfer case as an assault on free speech, rather than a successful repudiation of wanton criminality. Here is a typical missive from Amnesty International’s Secretary General, Agnès Callamard:

“This devastating verdict sets an array of deeply damaging precedents on the rights to freedom of speech, association and peaceful protest and puts the very future of Greenpeace at risk…

Energy Transfer’s chosen path of legal action could be seen as a strategic lawsuit against public participation (SLAPP), which has had the effect of stifling the rights to freedom of expression and peaceful assembly and inflicting significant harm on Greenpeace, draining their resources through protracted cases and exorbitant damages, and impeding their ability to fight back.”

To those in the industry, the howls of unfair play coming from the very mouths of those who perfected the art are more than a little rich. The cold dish of turnabout has been fairly served. In a legal war of attrition—where businesses are finally prepared to strike back to the maximum extent, as Warren has successfully done—the final outcome is not in doubt.