North Dakota Oil

The three-year-old Dakota Access Pipeline (DAPL), which moves crude supply from North Dakota’s Bakken Shale, is facing pressure that puts “impossible” standards on any infrastructure development, according to the U.S. Army Corps of Engineers and sponsor Energy Transfer LP.

The pipeline, completed in 2017 and carrying oil from the Bakken Shale of North Dakota since then, has faced an onslaught of litigation. The Standing Rock Sioux, as well as other tribes and environmental groups, have argued that if DAPL were to leak it could contaminate drinking water and sacred ancestral lands. 

The latest legal assault centers around whether the U.S. Army Corps of Engineers conducted a thorough review of the environmental impacts. Under the National Environmental Policy Act (NEPA), an environmental assessment (EA) is required for infrastructure projects, and if a more in-depth analysis is determined, an environmental impact statement (EIS) must be done.

The Army Corps is responsible for evaluating and issuing permits for all U.S. water crossings under the Clean Water Act. The federal agency has jurisdiction over only 37 miles of DAPL, which stretches 1,168 total miles, but the land under its jurisdiction encompasses 202 water crossings. 

The Army Corps was required to review and complete each water crossing as a single project. An EA was completed for the route under Lake Oahe.

In early July the U.S. District Court for the District of Columbia (DC) ordered Energy Transfer to temporarily halt operations while the Army Corps completed a more thorough EIS. That ruling was followed one week later by an administrative stay by the U.S. Court of Appeals for the DC Circuit.

The shutdown order now is on hold while the circuit court weighs the appeals in Standing Rock Sioux Tribe v. Army Corps of Engineers, No. 20-5197. 

Meanwhile, the district court earlier in August also ruled that the permit approved for a pipeline easement to cross Lake Oahe should be vacated. The large reservoir is behind the Oahe Dam on the Missouri River, which begins in central South Dakota and continues north into North Dakota.

The court rulings are creating impossible standards for future infrastructure projects, the Army Corps and Energy Transfer argued in briefs on Wednesday to the circuit court. The district court abused its discretion in vacating the easement permit and ordering an EIS, attorneys argued. 

‘Heightened Standard’

“The district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects,” the Army Corps said in its brief. “If not corrected, the district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects that excite opposition from some sector of society.”

The district court “ruled against the Corps even though the record shows that the Corps analyzed the Tribes’ criticisms and rationally concluded that the effects of its action are not ‘highly controversial’ or significant,” Corps attorneys argued. Attorneys said “the risk of any oil spill reaching the waters of Lake Oahe is extremely low.”

Energy Transfer attorneys said the district court’s order would plunder government resources because of needless reviews and cause both economic and environmental harm “far beyond the astronomically unlikely spill risk that plaintiffs claim they seek to prevent.”

If DAPL were required to halt operations, substantial financial losses would ensue, Energy Transfer attorneys warned. Not only would it financially harm the Dallas midstream operator, but oil and gas producers would face monetary losses along with the states. In addition, without other transport options, operators may need to shut-in thousands of wells at an estimated cost of $5-7.5 billion through 2021, according to Energy Transfer.

Energy Transfer’s legal team also said the mandate to prevent oil from flowing would open new oversight under NEPA. “The disruptive effects here are enormous and unprecedented,” Energy Transfer argued. “This is the first NEPA decision to order an operational pipeline shut down during remand to the agency.”

The plaintiffs were given until Sept. 16 to respond. 

Meanwhile, related proceedings continue to proceed in district court. Although the circuit court stayed the shutdown order, it left intact a portion of the decision to vacate the federal easement. The district court now has to consider whether canceling the easement permit should halt the flow of oil. The Army Corps is scheduled to provide an update in the coming days about whether the pipeline could remain in service without the easement.