The operator of the Dakota Access Pipeline estimates it will take three months to empty the pipe of oil and complete steps to preserve it for future use.
The timeline of 86 to 101 days comes as part of the argument Energy Transfer made this week to a federal judge in an effort to halt an order to shut down the line by Aug. 5 -- in about 30 days -- for the duration of a lengthy environmental review.
The company says the line must be filled with an inert gas, such as nitrogen, to keep the pipe from corroding if oil no longer flows through it. Energy Transfer outlined the process in a motion filed Wednesday evening in which it asked the judge to put the order on hold while it appeals the decision to a higher court.
U.S. District Judge James Boasberg denied the company's request Thursday, effectively putting it in the hands of a panel of judges on the U.S. Court of Appeals for the District of Columbia Circuit. Energy Transfer indicated to the judge that it wishes to make its case to the appellate court as soon as possible, according to court documents.
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A company executive wrote in a court filing made public Thursday that while the pipeline operator could turn off the equipment that causes oil to flow through the line by the judge's deadline, "it is not physically possible to 'empty it of oil' in the thirty days provided by the order." The line must undergo a "purge-and-fill process" that involves draining segments of the line one at a time while the pipeline is operating to replace the oil with nitrogen, Vice President of Crude and Liquid Operations Todd Stamm wrote.
An attorney for the Standing Rock Sioux Tribe and other Sioux tribes that have fought the pipeline in court for four years said in an interview Thursday that the tribes are not “overly worried” about the duration of the shutdown process.
“If it takes longer than 30 days to drain the pipeline of oil, I don’t think that’s a major issue,” said Jan Hasselman, an attorney with Earthjustice who represents the tribes.
Energy Transfer says the shutdown process involves “a number of expensive” steps. The company estimates it will cost $24 million to empty the line of oil and take steps to preserve the pipe. The company adds that to maintain the line, it will incur another $67.5-million expense each year the pipeline remains inoperable.
Energy Transfer also discloses the revenue hit it anticipates during a shutdown, estimating it will lose out on at least $2.8 million every day the line sits idle.
Hasselman acknowledged that there are costs associated with shutting down the line but said the company “has a history of wild exaggeration.”
“We think the claims are overblown,” he said.
Energy Transfer, meanwhile, says it is still taking orders to transport oil in August. The company said in a statement Wednesday that it, however, has “never suggested that we would defy a court order.”
Hasselman called the company’s plans to keep operating the pipeline “troubling news" and said the company needs to prepare to start the shutdown process now.
Energy Transfer plans to appeal both Boasberg's shutdown order issued Monday and a ruling this spring requiring the U.S. Army Corps of Engineers to complete a lengthy study of the line's environmental impact. The environmental review is expected to take at least 13 months, during which time the judge is requiring the pipeline to halt operations.
Dakota Access has been pumping oil 1,200 miles from North Dakota to Illinois for three years while the tribes' lawsuit over the project continues to play out. The Standing Rock Reservation sits just downstream of the pipeline's Missouri River crossing, and the tribe worries about a potential oil spill.
Boasberg swiftly rejected an emergency plea by Energy Transfer earlier this week to set aside Monday's order, but the company tried again under a less-rushed timeline. The judge wrote in his ruling Thursday that he "did not see a basis" to grant the company's request.
Energy Transfer's court filings this week offer a glimpse into some of the arguments likely to be made to the appellate court. The motion the company filed Wednesday with Boasberg echoes the fears numerous North Dakota officials have expressed this week about the economic impact of a potential shutdown, something state leaders have vowed to convey to the court during the appeal process.
Before the coronavirus pandemic hit, sending oil demand and prices crashing, the line carried as much as 570,000 barrels per day out of the Bakken, equal to about 40% of North Dakota’s oil output. The company says that amounts to 4.5% of all oil produced in the United States.
The state of North Dakota collects billions of dollars each year in oil tax revenue and is a mineral owner itself. The oil industry also supports thousands of jobs in the western part of the state.
“The severe economic toll -- just as our nation is regaining its footing and struggling to emerge from a global pandemic -- would be in the billions of dollars, with many thousands forced out of work,” Energy Transfer says in its motion.
The company says that while Boasberg acknowledged “the serious effects that (the) shutdown could have for many states, companies, and workers” in Monday’s ruling, he “did not fully grapple with the gravity of those consequences, nor with the large number of innocent actors who would be severely affected by the decision.”
Energy Transfer says that more Bakken crude would need to be transported by train if the pipeline stops operating, which the company contends would result in "a net increase in spill risk, potential fatalities and injuries, and air pollution."
State officials say there is space on other pipelines to carry more Bakken oil, but it will fill up if Dakota Access stops operating. They project that an additional 200,000 barrels per day would need to be shipped via train, equal to about three additional oil trains leaving the state each day. About 300,000 barrels per day are currently transported via rail.
The cost of shipping oil by rail varies depending on the destination, but officials say it is generally several dollars per barrel more than shipping it through Dakota Access.
Hasselman said that because oil production is down due to the pandemic, there is “plenty of room on other pipelines and by rail if needed.”
“At the end of the day, the closure of DAPL means it is marginally more expensive to move North Dakota oil, and that’s it," he said.
