Midstream

Dakota Access Pipeline Can Remain Operational ... for Now

The US Army Corps of Engineers deferred any decision to shut the line back to the district court.

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A scene from the construction of the Energy Transfer-operated Dakota Access Pipeline.

The US Army Corps of Engineers today will allow Energy Transfer’s Dakota Access Pipeline (DAPL) to remain on line during an environmental review process that could take up to a year. The fate of the oil pipeline was in limbo after an environmental permit was vacated last year when an appeal court ruled that the easement that allowed for the pipeline’s construction did not undergo sufficient environmental review.

The Corps could have moved to shut the line pending another review but deferred to Judge James Boasberg of the US District Court of the District of Columbia, who vacated the permit allowing the line to run under Lake Oahe in South Dakota, a key water source for people of the region.

Boasberg gave operators of the pipeline until 19 April to make the case for keeping the line flowing before he issues a ruling.

Keeping the 570,000 B/D line that delivers crude from North Dakota to the US Midwest and Gulf Coast is considered a blow to indigenous groups and environmental activists who have pushed for the taps to be shut.

“This pipeline is unsafe and operating in violation of federal law,” said Earthjustice attorney Jan Hasselman, who has represented the Standing Rock Indian Reservation in its legal challenge against DAPL for about 5 years. “Meanwhile, Energy Transfer is seeking to double capacity, which would make DAPL twice as dangerous. Yet the Biden administration’s decision here is to do nothing. It’s hard to see how we’ll ever transition away from fossil fuels or show the rest of the world that we’re serious about tackling climate change, if we are just going to shrug and look away when the fossil fuel industry brazenly ignores Tribal concerns and tramples our federal environmental laws and safety regulations.”

The Biden administration has been actively trying to boost support and use of renewable fuels as part of a transition from fossil fuels to a lower-carbon economy. The president canceled a Trump-era presidential permit for the unbuilt Keystone XL pipeline from Canada but has yet to move on an operating pipeline like DAPL. The White House recently asked for additional time for a hearing on DAPL to get the new administration up to speed.

Shares of US energy companies that use the Dakota Access Pipeline rose following the Corps' decision. Shares of North Dakota oil producers were trading higher post announcement. Oasis Petroleum was up 5.4% to $69.39 and Continental Resources had gained 2.5% to $25.56.

Energy Transfer shares climbed more than 2% to $8.06.