Appeals Court Allows Dakota Access Pipeline to Continue Operating
By Rebecca Elliott
A federal appeals court said the Dakota Access pipeline can
continue carrying oil for now, a win for pipeline operator Energy
Transfer LP and North Dakota oil producers.
The decision by a three-judge panel on Wednesday effectively
reverses a lower court's order that the pipeline be emptied of
crude by Aug. 5 and remain shut down while the U.S. Army Corps of
Engineers completes an environmental-impact statement of the
conduit's crossing under Lake Oahe, a process expected to take 13
The appeals court said a lower court would continue to consider
arguments about whether the pipeline should be emptied, but said it
didn't find immediate cause to do so.
Dakota Access has been carrying oil nearly 1,200 miles from
North Dakota to Illinois since 2017. As of earlier this year, it
transported nearly 40% of North Dakota's oil, according to East
Daley Capital Advisors Inc. But a federal judge ruled earlier this
year that the Army Corps didn't conduct a sufficient environmental
review before granting the pipeline an easement to cross Lake Oahe,
a reservoir on the Missouri River.
Allowing the pipe to continue carrying oil helps not only Energy
Transfer and its partners -- Enbridge Inc., Phillips 66 and
Marathon Petroleum Corp. -- but also companies such as Marathon Oil
Corp. and Hess Corp. that produce oil in the region.
It's gotten harder in recent years to build oil and gas
pipelines because of opposition from environmental groups, Native
American tribes and landowners. The builders of the $8 billion
Atlantic Coast Pipeline recently pulled the plug on the project,
which would have carried natural gas along the East Coast, while
the Keystone XL oil pipeline, proposed more than a decade ago,
still hasn't been built.
Energy Transfer didn't immediately respond to a request for
comment. The value of its shares increased roughly 3% Wednesday,
eclipsing a gain of around 1% in the price of U.S. benchmark
The Standing Rock Sioux Tribe said it would continue to fight
"As the environmental review process gets underway in the months
ahead, we look forward to showing why the Dakota Access Pipeline is
too dangerous to operate," Mike Faith, the tribe's chairman, said
in a statement.
Dakota Access has helped facilitate the growth of the North
Dakota region's Bakken Shale boom. North Dakota oil output
increased around 40% from mid-2017, when the pipeline began
operating, through March, when the coronavirus pandemic took hold
in the U.S., Energy Information Administration data show.
The pipeline faces political risk even if it ultimately prevails
in court. The Army Corps said in an April court filing that it
expected to complete its environmental impact statement by the
middle of next year. That means that if Democrat Joe Biden wins the
presidential election, his administration could have a say in the
"We think that a newly elected president would face strong
pressure to suspend the permits even if the D.C. Circuit does not,"
ClearView Energy Partners LLC analysts said in a recent note.
Mr. Biden's campaign didn't respond to requests for comment
about whether it would seek to pull the plug on Dakota Access. The
Army Corps declined to comment on whether it had begun the
environmental review process or if the Trump administration's
overhaul of the National Environmental Policy Act affects its
Write to Rebecca Elliott at firstname.lastname@example.org
(END) Dow Jones Newswires
August 05, 2020 17:39 ET (21:39 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.