Sparing Energy Transfer LP’s Dakota Access Pipeline (DAPL) from further regulatory headaches, the U.S. Army Corps of Engineers has reportedly decided not to take action to enforce the crude oil line’s vacated easement to cross under Lake Oahe.
DAPL’s crossing of the large reservoir, behind the Oahe Dam on the Missouri River that begins in central South Dakota and continues north into North Dakota, has proved controversial, drawing legal challenges from the Standing Rock Sioux Tribe.
Last year, Judge James Boasberg of the U.S. District Court of the D.C. Circuit found that the Army Corps had violated the National Environmental Policy Act by giving an easement to DAPL for the Lake Oahe crossing. Boasberg ordered the agency to draft an Environmental Impact Statement (EIS); the judge also called on DAPL to halt operations pending the completion of the EIS, but on appeal the pipeline’s right to keep flowing oil was upheld.
Project opponents had hoped the Army Corps under the Biden Administration would require DAPL to stop operations pending completion of the EIS. However, a key hearing came and went Friday with no clear plans for such an action, frustrating Standing Rock representatives and environmental advocates.
“We are gravely concerned about the continued operation of this pipeline, which poses an unacceptable risk to our sovereign nation,” Chairman Mike Faith of the Standing Rock Sioux Tribe said Friday. “In a meeting with members of Biden’s staff earlier this year, we were told that this new administration wanted to ‘get this right.’ Unfortunately, today’s update from the U.S. Army Corps of Engineers shows it has chosen to ignore our pleas and stick to the wrong path.”
According to analysts at ClearView Energy Partners LLC, the Army Corps during Friday’s hearing, a status meeting before the D.C. Circuit, did not “robustly defend” its choice to allow DAPL operations to continue.
The agency “left on the table the possibility (if perhaps not a convincing one) that it could change its mind,” the ClearView analysts said.
For now, the lack of action from the Army Corps favors DAPL, according to the firm. However, a January order from the D.C. Circuit “suggested the Corps should determine whether to ‘enforce its property rights…promptly.’ Based on our observations of today’s hearing we do not think that Judge Boasberg thinks the Corps’ decision to continue to ‘evaluate’ whether DAPL should continue to operate is responsive to the D.C. Circuit’s instructions,” the ClearView analysts said.
Analysts at Tudor, Pickering, Holt & Co. (TPH) described the latest development as a “modest positive” for DAPL stakeholders and Bakken Shale operators dependent on the pipeline’s 570,000 b/d of takeaway capacity.
“With the Army Corps seemingly comfortable with interim operations, the remaining decision now lies with the D.C. District Court as it contemplates a pending shutdown request from tribal parties,” the TPH analysts said. “…Meanwhile, Dakota Access is likely to request that the D.C. Court of Appeals revisit the January panel decision mandating an EIS and vacatur of the federal easement under Lake Oahe, with potential for further escalation should the appeal fail.”
The 1,172-mile DAPL, which began operations in 2017, transports crude oil from the Bakken to refineries in the Gulf Coast and Midwest, and to other downstream markets.
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