Ruling on Dakota Access pipeline surprises oil industry

A judge's ruling that might open the door for at least a temporary shutdown of the disputed Dakota Access pipeline surprised the industry that hailed the project as a "game changer" for North Dakota oil.

But shippers said Thursday that they aren't concerned that there will be any long-term disruption to service on the $3.8 billion pipeline that on June 1 began moving crude from the Bakken oil patch to a distribution point in Illinois, from which it's shipped to the Gulf Coast and potentially high-paying markets abroad.

"It's business as usual today," said Ron Ness, president of the North Dakota Petroleum Council, which represents nearly 500 energy companies including Texas-based Energy Transfer Partners, which built Dakota Access.

U.S. District Judge James Boasberg ruled Wednesday that the Army Corps of Engineers "largely complied" with environmental law when approving the pipeline but didn't adequately consider some matters important to the Standing Rock Sioux. The tribe draws its water from Lake Oahe and is opposed to the pipeline crossing beneath the Missouri River reservoir in North Dakota.

"Obviously, we don't know how all that plays out," Ness said. "But clearly the pipeline is running. It's a critical element of the nation's energy infrastructure."

The pipeline — whose completion was pushed through earlier this year by the Trump administration — has the capacity to move half of North Dakota's daily oil production. Ness just a few weeks ago called it a "game-changer that opens up everything."

But the Standing Rock Sioux and other tribes are fighting the project in federal court in Washington, D.C., and they've hailed Boasberg's ruling as a victory.

Boasberg said the Corps didn't adequately consider how an oil spill under Lake Oahe might affect tribal fishing and hunting rights, or whether it might disproportionately affect the tribal community. He will rule later on whether the pipeline should be shut down while the Corps reconsiders those matters, though he acknowledged such a move "would carry serious consequences that a court should not lightly impose."

ETP in a Thursday statement to The Associated Press said, "Dakota Access believes the record supports the fact that the Corps properly evaluated both issues, and that the record will enable the Corps to substantiate and reaffirm its prior determinations."

"Pipeline operations can and will continue as this limited remand process unfolds," the company said.

Corps spokeswoman Catalina Carrasco said the agency was still reviewing Boasberg's decision and couldn't immediately comment on a potential timeline for the additional review, or on whether a possible outcome might be requiring that the pipeline at Lake Oahe be dug up and moved.

Standing Rock attorney Jan Hasselman said Boasberg's decision "resets the clock to where we were last fall," when the tribe was pushing for a more thorough environmental study and consideration of alternate routes.

"The Corps could decide that it's safe enough and just grant the same permit. Or it could say we need to look at something different, either a different route or different safety/mitigation options," he said. "There will be a lot of advocacy around those options in the weeks and months ahead."

The lawsuit has dragged on nearly a year. Grow America's Infrastructure Now, a pro-pipeline coalition of businesses, trade associations and labor groups, expressed confidence that Boasberg's ruling will "do nothing to impact the ongoing operation of the pipeline."

The pipeline runs through the Dakotas and Iowa to Illinois. In Iowa Thursday, the Sierra Club Iowa Chapter and the Science and Environmental Health Network asked the Iowa Utilities Board to revoke the state permit that authorized pipeline construction there.

The board granted the permit in March 2016 based on ETP obtaining "all necessary and required permits and authorizations." The environmental groups contend Boasberg's ruling nullifies the Corps' permit and therefore makes the Iowa permit void.

The board declined to comment, but a spokesman said members will act on the motion at some point after Dakota Access and the other parties have had an opportunity to respond.

The Sierra Club and a group of landowners have sued the board over its approval of the pipeline in Iowa and their appeal is before the Iowa Supreme Court.


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Associated Press writer David Pitt contributed to this story from Des Moines, Iowa.