Crude oil can continue to flow on the Dakota Access pipeline (DAPL) after the U.S. Court of Appeals for the D.C. Circuit issued an administrative stay of a lower court’s July 6 order vacating the pipeline’s water-crossing permits.
The purpose of the stay, according to the appeals court, “is to give the court sufficient opportunity to consider the emergency motion for stay and should not be construed in any way as a ruling on the merits of that motion.”
Both Dallas-based DAPL operator Energy Transfer LP and the U.S. Army Corps of Engineers had filed appeals and requests for emergency stay after District Court Judge James Boasberg vacated the permits for DAPL to cross under Lake Oahe via a right-of-way administered by the Corps. In his order, Boasberg ordered the 570,000 b/d pipeline to be shut down and emptied by Aug. 5 while the Corps conducted an environmental impact statement (EIS). That process was expected to last through April.
The Native American Tribes, led by the Standing Rock Sioux who challenged the Corps’ environmental review of the Lake Oahe easement, have until Monday (July 20) to file their response. The Corps and DAPL then have until July 23 to reply. The court has not yet indicated whether it plans to hear oral argument on the issue.
If the appeals court denies the motion to leave the stay in place for the duration of the appeals, ClearView Energy Partners LLC analysts expect the timeline of the lower court’s shutdown order to be extended day-for-day of that suspension based on observation of other cases.
The Tribes indicated their willingness to negotiate a longer timeline for shutdown should the D.C. Circuit deny a stay pending the full review. Therefore, the Aug. 5 deadline to shut down and empty the pipeline looks likely to become less binding, and “could be fluid even if the stay request fails,” according to ClearView.
However, the legal battle is far from over.
Even if the Court grants a stay, the project’s permit could be denied if Trump’s reelection bid fails, “the fact that it is completed notwithstanding,” ClearView said. Analysts noted the final EIS would fall to a newly inaugurated Biden Administration.
“We would not rule out the possibility that the Corps could decide to administratively suspend the permits sometime after inauguration if the new administration has concerns about the contents of the EIS,” ClearView said.
Analysts pointed out that the Corps administratively suspended the Nationwide Permit 12 for Mountain Valley before the Fourth Circuit vacated them in 2018.
“We think that a newly elected President Biden would face strong pressure to suspend the permits even if the D.C. Circuit does not,” said the ClearView team.
Whether a new administration suspends the permits also would hinge on the state of the energy market at that time. “In other words, we would not rule out a Biden Administration reissuing permits to this project.”
That said, if the Corps is allowed to and suspends the permits on its own, this could prove particularly problematic for DAPL, which argues in its motion for stay that the Corps has the ultimate authority on whether the pipeline operates in the Lake Oahe easement.
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