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Federal judge orders Dakota Access Pipeline shut down

Federal judge orders Dakota Access Pipeline shut down

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Pipeline construction stopped (copy)

Construction of the Dakota Access Pipeline took place near St. Anthony at this site in 2016.

The Dakota Access Pipeline must be shut down and emptied of oil within 30 days while a lengthy environmental review of the project is conducted, a federal judge ruled Monday.

The move was requested earlier this year by the Standing Rock Sioux Tribe and three other Sioux tribes in the Dakotas who fear environmental harm from the pipeline and have spent four years in court fighting the project. North Dakota officials have said such a move would have “significant disruptive consequences” for the state, whose oil patch has been hit hard in recent months by falling demand for crude amid the coronavirus pandemic.

Standing Rock Chairman Mike Faith said the tribe is trying to prevent a potential environmental disaster should the pipeline leak.

“For the tribe’s sake, it is good news,” he said of Monday’s ruling. “I think for downstream users, it’s good news also.”

Pipeline developer Energy Transfer moved swiftly to challenge the ruling, filing several legal documents Monday evening seeking to put the shutdown order on hold while it appeals the decision to a higher court.

In an emergency motion, the company said "a number of time-consuming and expensive steps are required to shut the pipeline down safely and empty it of oil," adding that the process "would require well more than 30 days."

Energy Transfer issued a statement earlier in the day calling the ruling “an ill-thought-out decision.” The company said the judge presiding over the matter has exceeded his authority and that the ruling “is not supported by the law or the facts of the case.”

The company said it is “confident that once the law and full record are fully considered Dakota Access Pipeline will not be shut down and that oil will continue to flow.”

The U.S. Army Corps of Engineers issued a permit for the pipeline in 2017 under the direction of President Donald Trump, who just days after taking office in January 2017 green-lighted construction of the pipeline that had become stalled toward the end of the Obama administration.

The Corps referred a Tribune request for comment to the U.S. Department of Justice, which is representing the Corps in the lawsuit. The department had no immediate comment on the ruling, spokeswoman Danielle Nichols said.

U.S. Energy Secretary Dan Brouillette issued a statement saying, "It is disappointing that, once again, an energy infrastructure project that provides thousands of jobs and millions of dollars in economic revenue has been shut down by the well-funded environmental lobby, using our Nation's court system to further their agenda."

North Dakota Attorney General Wayne Stenehjem said the state “will certainly be willing to be involved” in the appeal process. The state filed a brief ahead of the judge’s ruling that cautions of a “serious reduction in economic output in North Dakota and corresponding loss of tax revenue to the state” if the court shut down the pipeline.

The state collects substantial revenue from oil taxes and is a mineral owner itself, leasing property to numerous oil companies.

Gov. Doug Burgum said in a statement that the ruling "could have devastating effects on North Dakota's economy and U.S. energy security."

"No one cares more about North Dakota's clean water than the people who live here," he said. "If a single judge is able to shut down a state-of-the-art pipeline project that was permitted and has been operating safely for more than three years, it would have a chilling effect on America's ability to build, modernize and improve our nation's critical infrastructure, which we need to do for both energy security and environmental stewardship."

The ruling

The $3.8-billion pipeline has been moving Bakken oil to a shipping point in Illinois for three years.

U.S. District Judge James Boasberg, who is overseeing the tribes’ lawsuit, in March ordered the Corps to complete a full Environmental Impact Statement. That ruling was a significant victory for the tribes, but the question of whether the pipeline would be shut down in the meantime had lingered since.

An EIS is a much more stringent review than the Environmental Assessment the Corps completed earlier.

After arguments by both sides and other interested parties this spring, Boasberg on Monday revoked a key Corps permit for the pipeline and ordered that "Dakota Access shall shut down the pipeline and empty it of oil by August 5, 2020."

The pipeline has been carrying as much as 570,000 barrels of oil out of the Bakken each day -- about 40% of the state's daily production before the pandemic hit. Boasberg acknowledged that his order "will cause significant disruption to DAPL, the North Dakota oil industry, and potentially other states." But he also said "the Corps has not been able to substantiate its decision to publish only an EA and not an EIS."

"Given the seriousness of the Corps' ... error, the impossibility of a simple fix, the fact that Dakota Access did assume much of its economic risk knowingly, and the potential harm each day the pipeline operates, the Court is forced to conclude that the flow of oil must cease," Boasberg wrote.

The EIS process, across all federal agencies, typically lasts for more than three years, and the Corps takes longer on average, he wrote in his ruling. But for Dakota Access, the Corps anticipates completing the study in 13 months, he wrote.

“This expedited process, if it proceeds on track, would cabin the economic disruption of a shutdown,” Boasberg wrote, adding that if he did not revoke the permit, “the Corps and Dakota Access would have little incentive to finish the EIS in a timely manner.”

A projected timeline of 13 months could place the environmental review under a new administration less friendly to the fossil fuel industry, if former Vice President Joe Biden were to win the race against President Donald Trump.

Boasberg in 2017 ordered the Corps to revisit several issues pertaining to the easement it granted the pipeline, but he allowed the pipeline to continue operating. Energy Transfer on Monday gave notice that it is also appealing his 2017 ruling.

The Corps completed the work he ordered in August 2018, leading to more legal wrangling when the tribes argued the additional study was flawed. The company over the years has maintained that the pipeline is safe, a contention backed by the Corps.

Oil impact

Assuming Boasberg’s order stands, the shutdown of Dakota Access will force more Bakken oil to be transported by other means at a higher cost, including via trains and trucks, according to people involved in North Dakota’s oil industry.

Existing oil train infrastructure is “primarily still there,” said Ron Ness, president of the North Dakota Petroleum Council, who added that “the rail cars have been parked.”

He called the shutdown of the pipeline “extremely frustrating.”

“This is the equivalent to taking the BNSF railroad and shutting it down for farmers for the fall,” he said. “This is the safest, most reliable, economic way to move Bakken oil to the best market for oil in the country.”

The latest figures available show that pipelines carried 69% of North Dakota’s oil to market in April. Trains hauled 21%, primarily to the east and west coasts. The oil industry used to ship substantially more crude via trains, but that changed in recent years as more pipeline options became available.

The oil-by-rail business has faced scrutiny following fiery oil train explosions, including one in 2013 that killed 47 people in Quebec.

In the brief North Dakota filed with the court earlier this year, the state argued that substantial revenue is at stake should the pipeline be shut down.

Before the pandemic, the state anticipated it would collect $4.9 billion in direct revenue from the oil and gas industry over a two-year budget cycle. Officials estimated the state has brought in an additional $317 million in oil tax revenue since the pipeline started operating in 2017, as a result of decreased shipping costs and higher oil prices for crude delivered to the Gulf Coast.

Attorney General Wayne Stenehjem said Monday that a sudden uptick in oil train traffic could cause problems for farmers looking to haul grain to market via trains.

“I think it needs to be emphasized that the consequences are much more serious than the judge realizes for North Dakota and other states,” he said.

Energy Transfer said the “economic implications of the Judge’s order are too big to ignore.”

The American Petroleum Institute, a national trade group for the oil and gas industry, is calling for federal permitting reform for energy projects in wake of Monday’s ruling and an announcement over the weekend that the developers of a major proposed pipeline in the eastern United States are ending their project after it faced delays.

“Our nation’s outdated and convoluted permitting rules are opening the door for a barrage of baseless, activist-led litigation, undermining American energy progress and denying local communities the environmental, employment and economic benefits modern pipelines provide,” the group said in a statement.

Pipeline opponents weigh in

Alice Brownotter, a 16-year-old Standing Rock tribal member who is among the youth active in campaigning against the pipeline, heard about the ruling when she woke up Monday morning.

"I was like, 'What the heck is going on? Did this actually work?'" she said. "All this hard work actually paid off."

As part of her activism, she took part in a run from Standing Rock to Washington, D.C., with other young Native Americans in 2016. There, she spoke with federal officials and explained the importance of water to the tribe.

Four years later, she spent Monday afternoon boating and tubing on the Missouri River. She said the prospect of having no oil, "nothing deadly," flowing through the pipeline is "like a sigh of relief."

The tribe fears a pipeline spill into the Missouri River would contaminate water that tribal members rely on for drinking, fishing and religious practices.

Thousands of pipeline opponents from around the world who took up their cause flocked to southern North Dakota in 2016 and 2017 to protest the project, raising the profile of the tribes' fight. Some clashed with police, resulting in more than 760 arrests.

"The Standing Rock Sioux Tribe and millions of others who fought against the Dakota Access Pipeline showed us the power of standing together against injustice," Vermont Sen. Bernie Sanders tweeted on Monday.

Sanders, who made fighting climate change a significant part of his unsuccessful campaign for the Democratic presidential nomination this year, added, "We can create a future where a clean environment and indigenous rights matter more than Big Oil’s profits."

Standing Rock leaders, meanwhile, are looking ahead to the next steps in fighting the pipeline.

Faith on Monday said the Corps has not approached the tribe about the EIS. He is calling for “true consultation” that is “face to face.” He said the tribe “is going to do its best to work with the Corps to take a hard look during the EIS process.”

“The bottom line of all this is that the EIS will probably tell us that they should have used a different route in the first place that did not affect Sioux Nation treaty rights,” he said.

The Corps did consider alternate routes for the pipeline’s Missouri River crossing, including one north of Bismarck, but ultimately permitted the pipeline to cross under the water just north of the reservation near Cannon Ball.

The ruling comes as Energy Transfer seeks to nearly double the capacity of the pipeline to carry 1.1 million barrels per day of oil. It has secured permits from regulators in North Dakota and Iowa but still needs to acquire permission from Illinois, where it faces opposition by environmental groups. In North Dakota, the company plans to build a pump station west of Linton in Emmons County to boost the line’s horsepower.

Standing Rock leaders hope to continue working with state officials and several private companies to conduct a spill response exercise along the Missouri River. The idea came up during a meeting at the state Capitol in December and was endorsed by the governor.

“Let’s say it does reopen, we still have to have that plan in place of a quick response team, at least to try to get the oil off the river and off the sides,” Faith said, adding that the tribe still wants to see the pipeline shut down permanently.

Reach Amy R. Sisk at 701-250-8252 or amy.sisk@bismarcktribune.com.

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