Energy Transfer Partners Seeks Court Ruling on Dakota Access Pipeline
December 06 2016 - 4:30PM
Dow Jones News
Energy Transfer Partners LP, the company behind the embattled
Dakota Access pipeline, is continuing to pursue a court challenge
to force the Obama administration to approve completion of the
project instead of counting on a better reception from Donald
Trump.
A day after the Obama administration put the brakes on the
nearly 1,200 mile oil pipeline by denying a permit needed to finish
the route, a spokesman for Mr. Trump said Monday that the incoming
administration supports completing it.
But instead of waiting until the president-elect takes office
next month, Dallas-based Energy Transfer Partners is pressing ahead
with a request to a federal judge to allow the company to
immediately cross beneath a Missouri River reservoir, the final
1,100-foot link to be built in the pipeline.
Analysts say Energy Transfer Partners has two potential reasons
to seek a faster resolution: It is losing millions of dollars due
to delays, and a longer wait could scuttle a $2 billion deal to
sell a stake in the pipeline.
Lawyers for Energy Transfer Partners asked U.S. District Judge
James Boasberg for an expedited ruling late Monday that would allow
the company to complete the project. The delays have already cost
the company $450 million, the company said in court papers filed in
U.S. District Court in Washington, DC.
A hearing in the case is scheduled for Friday morning in
Washington, D.C.
A spokeswoman for the company didn't immediately respond to a
request for comment Tuesday.
The company's lawyers argued Monday that the Army Corps of
Engineers had already approved the reservoir crossing, and that the
final, needed approval—an easement—is nothing more than a
perfunctory "ministerial" document. The delays amount to political
interference and aren't supported by the law, they argued.
The Standing Rock Sioux tribe, which has garnered international
attention for its monthslong protest of the pipeline, has asked the
court to halt the project, arguing the reservoir crossing could
contaminate their water supply, which is 70 miles downstream from
the project.
Aside from the hundreds of millions of dollars Energy Transfer
has already lost, further delays of the project could also scuttle
a deal to sell roughly half its stake in the pipeline.
Energy Transfer and Sunoco Logistics Partners LP, which is also
building the pipeline, reached a $2 billion deal in August to sell
a minority stake in the pipeline to Enbridge Inc. and Marathon
Petroleum Corp.
But under the deal's provisions, Enbridge and Marathon can walk
away from the deal in early January if the Army Corps of Engineers
hasn't released the project, according to securities filings.
"Closing of the investment transaction is subject to a number of
conditions, not all of which have been met at this time," an
Enbridge spokesman said. "We're working with our potential partners
to understand the implications of recent developments on the
transaction."
A Marathon spokesman didn't immediately respond to a request for
comment.
The protests have become a major headache for the Energy
Transfer Partners and Sunoco, both part of the web of pipeline
companies run by billionaire Kelcy Warren.
Native American activists and other protesters have been
gathering near the project site since August and have seen their
numbers swell in recent days with the arrival of hundreds of U.S.
military veterans, garnering blanket media coverage.
Dave Archambault II, chairman of the Standing Rock Sioux, said
Monday that it was time for the protesters to leave, citing both
their recent win against construction of the pipeline and harsh
winter conditions.
But Energy Transfer has given little consideration to waiting
out the protesters, according to a person familiar with company's
thinking. Digging under the reservoir is a significant undertaking,
which could take as many as 90 days, and the company wants to avoid
further losses, the person said.
Write to Christopher Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
December 06, 2016 16:15 ET (21:15 GMT)
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