U.S. appeals court denies Dakota Access rehearing request, environmental review to continue

NEW YORK (Reuters) – A U.S. appeals court on Friday denied Dakota Access LLC’s petition for a rehearing on a court decision to cancel a key permit for its oil pipeline, court documents show.

The decision by the United States Court of Appeals for the District of Columbia means the Dakota Access Pipeline (DAPL) technically is still trespassing on federal land because it does not have a permit to cross under South Dakota’s Lake Oahe. The environmental review of the line is continuing, and is not expected to be completed until March 2022.

The 570,000 barrel-per-day DAPL began operating in mid-2017 but drew controversy during construction as Native American tribes and activists protested its route under Oahe, a critical drinking water source for the tribes.

DAPL is the largest pipeline out of the Bakken region, which produces about 1 million barrels of crude per day in North Dakota and eastern Montana. If the pipeline were forced to close, the state of North Dakota estimates production could fall by 400,000 bpd temporarily.

Last summer, a U.S. district court judge threw out a federal permit for the line to operate under the lake and ordered an environmental review for that section of the pipeline. A three-judge panel at the circuit court in January upheld the lower court’s decision to vacate the permit and require the review.

The pipeline’s operators wanted the circuit court to reconsider the panel’s decision.

“This marks the complete end of the appeals court proceedings on this case,” said attorney Jeffrey Rasmussen, of Patterson Earnhart Real Bird & Wilson LLP, which represents the Yankton Sioux Tribe in the case.

It is possible, however, that Dakota Access could petition the U.S. Supreme Court to keep the line running.

A spokeswoman for Energy Transfer LP, DAPL’s majority owner, declined to comment on current or pending legal matters.

(Reporting by Laila Kearney and Devika Krishna Kumar; Editing by Dan Grebler)

U.S. Army Corps allows Dakota Access pipeline to stay open during review

By Laila Kearney and Devika Krishna Kumar

NEW YORK (Reuters) -The U.S. Army Corps of Engineers on Friday said it will allow Energy Transfer’s Dakota Access oil pipeline to keep running during an environmental review, a blow to activists who wanted the line shut after a key environmental permit was scrapped last year.

The Dakota Access Pipeline (DAPL) has been the flashpoint for a years-long legal battle between its operator, Energy Transfer LP, and several Native tribes that want it shut after opposing its construction. It is the most important artery for crude transport out of North Dakota, shipping up to 570,000 barrels of North Dakota’s crude production daily.

Energy Transfer shares were up 2.5% in afternoon trading.

Last year, native tribes led by the Standing Rock Sioux won a victory when Judge James Boasberg of the U.S. District Court of the District of Columbia vacated a permit allowing the line to run under Lake Oahe, a key water source.

The Corps could have shut the line pending another review, but deferred to the judge. Boasberg gave operators of the pipeline until April 19 to make the case for keeping the line flowing before he issues a ruling.

The tribes opposing DAPL sought to shut the line, and frustrated tribal representatives decried what they called one in a series of decisions that abrogates the rights of Native Americans.

“It’s the continuation of a terrible history that we believed was going to change,” Earthjustice lawyer Jan Hasselman, who represents the Standing Rock Sioux, told the court. “So we are really disappointed to hear this news from the Army Corps.”

Energy companies said a shutdown would increase reliance on crowded rail lines and smaller pipelines and hamper transport of crude from the Bakken region, where more than 1 million barrels are produced daily.

The Army Corps is expected to produce an environmental impact statement (EIS) by March of 2022, said Corps attorney Ben Schifman.

“The Corps is proceeding with the EIS process … but at this time has not taken any additional action,” he said.

The Standing Rock Sioux and environmental groups have ramped up pressure on the White House to shut the line. President Joe Biden’s administration is trying to reduce U.S. carbon emissions and protect minority groups from pollution threats. It canceled a presidential permit for the unbuilt Keystone XL pipeline from Canada but has not shut an operating pipeline.

In 2016, tens of thousands of protesters flocked to the site to support tribes who said they had not been adequately consulted about the line’s construction.

(Reporting by Laila Kearney and Devika Krishna Kumar; editing by David Evans, David Gregorio and Grant McCool)

Fate of Dakota Access pipeline at stake at Friday court hearing

By Laila Kearney and Devika Krishna Kumar

NEW YORK (Reuters) – The fate of the Dakota Access pipeline could be decided at a U.S. court hearing Friday, where federal regulators could set in motion a months-long shutdown of the line while the Biden Administration completes an environmental review.

The market has been increasingly worried about a possible shutdown as the White House aims to reduce the nation’s reliance on fossil fuels and address concerns of minority communities harmed by carbon emissions. Biden’s administration has restricted oil-and-gas leasing on federal lands and cancelled permits for the proposed Canada-to-U.S. Keystone XL line and a U.S. Virgin Islands refinery expansion.

Energy Transfer’s Dakota Access Pipeline (DAPL) ships up to 570,000 barrels of North Dakota’s crude production to the U.S. Midwest and Gulf Coast. It has been in danger of shutting down since a D.C. court threw out a key permit last summer that allowed it to operate under a water source used by Native American tribes.

The U.S. Army Corps of Engineers, which is in charge of issuing permits for pipelines to travel under waterways, is expected to detail plans for DAPL at the hearing before the U.S. District Court for the District of Columbia.

That court canceled the line’s permit in July and ordered it to undergo a more thorough environmental review. The Corps has allowed DAPL to operate since as it assessed its options and brought the Biden administration up to speed.

“It is more likely than not that the pipeline gets shut down, at least temporarily,” said Glenn Schwartz, analyst at energy consultancy Rapidan Energy Group, which put the odds at a temporary shutdown at 70%.

The line has been in operation since 2017, when incoming President Donald Trump fast-tracked the permitting process and allowed the line to enter service despite opposition from environmental groups and Native American tribes.

Environmental groups and Native American tribes say the pipeline threatens a drinking water supply and should not continue to run, and they have ramped up pressure on the White House to shut the line.

Since its permit to cross under Lake Oahe was thrown out, DAPL has been legally trespassing on federal land, and the Army Corps must now decide if the line should continue running. A district court could order the line shut if the Army Corps chooses not to pursue a closure.

If the line were to be shut, oil shippers out of the Bakken region in North Dakota and eastern Montana would have to rely on existing smaller pipelines and shipping by rail.

“U.S. crude markets would be shaken up by the shutdown of the primary link from the Bakken to Midwest and Gulf Coast markets,” wrote analysts at BTU Analytics.

(Reporting by Laila Kearney and Devika Krishna Kumar; editing by David Evans)