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Oil, ag, municipal groups wade into legal fight to keep Dakota Access operating

Oil, ag, municipal groups wade into legal fight to keep Dakota Access operating

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Three years after the Dakota Access Pipeline began operating, stretches of construction are still visible across the rolling hills just north of Cannon Ball on state Highway 1806 in Morton County.

While the developer of the Dakota Access Pipeline and a government permitting agency make their case to a panel of federal appeals judges to keep the line operational, 14 groups representing oil, agriculture, business and municipal interests have waded into the legal battle.

The groups don’t want to see the pipeline shut down, as a lower court judge ordered in early July. They have filed briefs with the U.S. Court of Appeals for the District of Columbia Circuit outlining the impact of a shutdown on those they represent.

“Shutting down DAPL will cause widespread and likely long-lasting economic and social damage to the communities and people of western North Dakota,” wrote the Western Dakota Energy Association, a group representing counties, cities and school districts in oil- and coal-producing parts of North Dakota.

The association said the schools and local governments it represents depend on oil tax revenue, which is down amid the coronavirus pandemic. The group expects revenue to drop further if the pipeline shuts down, as state officials estimate the value of Bakken crude would take another $5-per-barrel hit on top of already-depressed prices.

That could “lead to an exodus from the Bakken” as oil producers move to other, more competitive shale plays, a shift that could become permanent and something from which North Dakota’s oil industry might never fully recover, the association said.

“That threat is of major concern to the cities, counties, and school districts that WDEA represents, and the tens of thousands who live in those communities,” the group said.

Other groups weighing in range from national associations, such as the American Petroleum Institute and the U.S. Chamber of Commerce, to more regional ones, including the North Dakota Petroleum Council and a number of agriculture groups in the Dakotas concerned about the potential congestion on the rails if a pipeline shutdown leads to more oil trains.

The North Dakota Water Users Association, a trade association that seeks “to protect, develop and manage the state’s water resources,” is among the groups. Its members are involved in projects such as irrigation, rural water and flood protection, and many receive funding through North Dakota’s Resource Trust Fund, which is funded in part by oil tax revenue.

The group wrote in its brief that a pipeline shutdown “will have devastating impacts on some of NDWU’s members, limiting access to reliable, high quality potable water for some members, and in turn, undercutting the ability of those communities to provide water needed for sanitation and hygiene as well as drinking.”

The association said some of its members have suffered from flooding and are vulnerable to future damage without flood improvement projects.

Many of their projects would be delayed or tabled if funding is no longer available due to plummeting oil tax revenues amid a pipeline shutdown, the group said.

The state of North Dakota filed its own brief, and 18 other states that collaborated on a filing outlined concerns about public safety and congestion from oil trains.

The three judges will consider their briefs in determining whether to grant a request to put the shutdown order on hold from pipeline developer Energy Transfer and the U.S. Army Corps of Engineers. The two parties seek the hold while they appeal U.S. District Judge James Boasberg's order, plus another ruling he issued this past spring ordering a lengthy environmental review of the 1,200-mile pipeline that runs from North Dakota to Illinois. The line has transported oil for three years.

Technically, the shutdown order is already on an “administrative” hold, which the appeals court issued until it could hear arguments from Energy Transfer and the Corps, as well as the Standing Rock Sioux Tribe and other tribes suing over the pipeline. The pipeline’s Missouri River crossing is just upstream of the Standing Rock Reservation, where tribal members fear an oil spill could contaminate their water supply.

The parties’ written arguments were filed this week, including ones from Energy Transfer and the Corps on Thursday.

The pipeline company touched on the consequences of a shutdown outlined by many of the groups weighing in on the lawsuit. The company said the chance of a major pipeline leak occurring at the Missouri River crossing is one in 200,000 years.

“Real, devastating harms to third parties outweigh once-in-the-history-of-mankind odds every time,” Energy Transfer said.

The Corps argued a similar point in its filing Thursday.

The court “never balanced the injunction’s economic harm against the small risk of an oil spill,” it said.

The tribes have repeatedly said in court filings that claims of economic devastation as a result of the shutdown are overstated. Shutting down the pipeline, they said in a court document earlier this week, will mean that it is “marginally more expensive for some producers to ship oil out of North Dakota -- nothing more.”

“Continued operation of the pipeline exposes the Tribes to catastrophic risks that have never been properly examined as the law requires, and compounds a history of government-sponsored dispossession of Tribal lands and resources,” the tribes said.

Oral arguments before the panel of judges have not yet been scheduled.

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

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