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Corps stalls on Dakota Access shutdown decision; matter likely falls to judge

Corps stalls on Dakota Access shutdown decision; matter likely falls to judge

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The Dakota Access Pipeline, pictured here during construction in 2016, faces ongoing legal challenges.

Whether the Dakota Access Pipeline can keep operating during a lengthy environmental review remains an open question following a court hearing Friday, in which the U.S. Army Corps of Engineers said it was in a "continuous process of evaluating" the situation.

The Corps was expected to say whether it would force the pipeline to stop pumping oil temporarily, but that decision will likely now fall to a federal judge overseeing the pipeline litigation.

U.S. District Court Judge James Boasberg said he was "surprised" by the announcement from the Corps, adding that he "would have thought there would be a decision one way or another at this point." He had granted the agency more time to brief incoming Biden administration officials on the matter ahead of Friday's court hearing.

Jan Hasselman, an attorney for the Standing Rock Sioux Tribe whose reservation lies just downstream of the pipeline's Missouri River crossing, said the tribe is "deeply disappointed."

"The decision today is to continue to let it operate, which is the same decision as the previous administration," he said. "The pipeline is going to keep operating, exposing the tribe and its members to the risk of a disaster while the Army Corps studies what those risks are."

The Corps has been weighing whether to shut down the pipeline for eight months, ever since a federal appeals court upheld part of a ruling revoking the easement for the pipeline's river crossing. Boasberg rescinded the permit last summer while the Corps conducts a court-ordered study that will go more in-depth into environmental issues surrounding the pipeline than previous work. The review began last September and is expected to take until March 2022, an attorney for the Corps said Friday.

When Boasberg canceled the permit, he ordered the pipeline to shut down as well. The appeals court overturned that part of his ruling, however, saying he "did not make the findings necessary" to justify such a move. The court indicated the Corps should make a decision as to whether to shut down the pipeline. The line is considered an "encroachment" on federal property managed by the Corps.

Dakota Access, which is controlled by pipeline developer Energy Transfer, plans to ask for a rehearing of the appeals court ruling, said David Debold, an attorney for the company. He suggested Boasberg hold off making a shutdown decision in the meantime.

Hasselman called the rehearing request "a Hail Mary legal tactic that we don't think can or should succeed."

The pipeline company also sought more time to file additional information with Boasberg. "A lot has changed economically" for the line since the last update to the court on the topic, Debold said. The price of oil has risen in recent months, he said, and vaccine distribution is underway to help bring an end to the coronavirus pandemic, which curtailed travel and the demand for oil.

Standing Rock argued that the court has already entertained competing arguments from experts on both sides of the pipeline debate many times, but Boasberg granted Energy Transfer another 10 days to make its case.

The Corps on Friday did not rule out the possibility that it could still make a shutdown decision at some point. It is taking into consideration information about the safety of the pipeline's operation and conversations with various tribes involved in the dispute, said Ben Schifman, an attorney for the U.S. Department of Justice who spoke on behalf of the Corps.

Standing Rock still wants to hear from the Biden administration, Tribal Councilman Brandon Mauai told reporters after the court hearing.

"We are asking the president ... to take action, and his administration did not," he said. "So we continue to pressure them."

Environmental review

Friday's court hearing brought to light new details about the study underway on the pipeline -- a process known as an Environmental Impact Statement. The EIS, once it's complete, will determine whether the Corps reissues a permit for the pipeline.

The Corps' anticipated timeline, announced by Schifman, would mean the review is expected to take a total of 18 months.

"Frankly, it's pretty fast," Hasselman said on a call with reporters after the court hearing. "While it's important we move ahead and get this process going, it's crucial that the Army Corps take the time to really consider the difficult technical questions that are being presented here and engage with the tribe ... to make sure this decision is fully informed."

There is no deadline required for an EIS, but the process for some infrastructure projects can take years.

Standing Rock and two other Sioux tribes fighting the pipeline will be "cooperating agencies" during the EIS process, Schifman said, adding that the Corps most recently met with tribal leaders in late March.

The tribes won't necessarily get to sign off on the Corps' final permitting decision, but cooperating status allows them to bring their expertise to the table, Hasselman said.

"Nation-to-nation consultation is something that we've been wanting and continue to want, but we want meaningful consultation," Mauai said. "If it's a listening session where this administration is only going to hear us but not take (us) into serious consideration, then let's call it for what it is."

North Dakota Attorney General Wayne Stenehjem has also asked the Corps to recognize the state as a cooperating agency. State officials oppose a pipeline shutdown on grounds that it could shift more oil onto trains, cost the oil industry jobs and cause North Dakota crude to become less competitive with other shale plays such as the Permian Basin of Texas and New Mexico. The state collects billions of dollars each year in oil tax revenue.

The Mandan, Hidatsa and Arikara Nation has also requested that the Corps consult with it ahead of a shutdown decision. Part of the Fort Berthold Indian Reservation lies in the heart of the oil patch, and over half the oil produced there flows through Dakota Access, according to the tribe.

What's next for oil

The legal tug-of-war over the pipeline has had many in North Dakota on edge, particularly this year as Joe Biden assumed the presidency and began to crack down on fossil fuels through various orders in an effort to combat climate change.

On his first day in office, he canceled the permit for the Keystone XL, a controversial oil pipeline that had not yet finished construction.

The threat of a shutdown of Dakota Access has forced Bakken oil producers to consider more costly rail and truck transport as a Plan B, said Ron Ness, president of the North Dakota Petroleum Council.

"They've got a business to conduct," he said in an interview. "They've certainly all likely looked at alternative options to move barrels of oil. At the end of the day, this oil is going to get to market."

He argued the pipeline should keep operating while the EIS is underway, an option the Corps is allowing for now.

"There are huge ramifications in our state, all the way from jobs to budgets to our economy," he said. "There are a lot of parties watching and monitoring it and hoping this great piece of energy infrastructure will be allowed to continue."

If another shutdown order comes, Ness said he expects an appeal.

Standing Rock has fought the pipeline in court for five years. Tribal members have long been concerned about the potential for an oil spill, while Energy Transfer maintains the line is safe.

The past two presidents both have stepped into the Dakota Access dispute. During the pipeline's construction in late 2016, the Obama administration said it would not approve the line's easement, and it planned to launch a thorough environmental review. Less than two months later, President Donald Trump assumed office and immediately signed a series of memos aimed at speeding up the project's permitting.

The pipeline has been in operation for nearly four years and pumps as much as half of North Dakota's daily oil output to market. It can transport up to 570,000 barrels per day of Bakken crude from western North Dakota to Illinois.

Gov. Doug Burgum said in a statement Friday that requiring Dakota Access to stop pumping oil "would send a dangerous signal to the capital formation needed to rebuild our nation's infrastructure by demonstrating that legally permitted and completed essential infrastructure can be shut down after years of safe operation."

Work began last fall to nearly double the pipeline's capacity to 1.1 million barrels per day. Part of the expansion involves adding new pump stations to boost the line's horsepower, including at a site west of Linton in Emmons County. Corps officials have indicated they will consider the expansion plans as they conduct their environmental review.

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

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