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Dakota Access Pipeline Faces Big Day in Court: Stakes Explained

April 9, 2021, 8:45 AM

The embattled Dakota Access pipeline faces a moment of truth Friday as the Biden administration heads to court to reveal its position on the project’s fate.

The Justice Department, Energy Transfer LP, and American Indian tribes are set to appear virtually at 2 p.m. EDT in the U.S. District Court for the District of Columbia, where government lawyers are expected to announce whether Dakota Access must shut down.

Tribal and environmental advocates view the pipeline as a test of President Joe Biden’s commitment to indigenous rights and environmental justice. Biden effectively canceled the not-yet-constructed Keystone XL pipeline on his first day in office.

But shutting down a major, in-service oil pipeline would be unprecedented. It would invite more litigation and the ire of the oil industry, Republicans, and some labor interests.

Here’s an explanation of what’s happened so far and what’s at stake:

1. What’s Dakota Access?

Dakota Access is an Energy Transfer LP pipeline, in service since 2017, that moves crude roughly 1,200 miles from North Dakota oil fields to a hub in Illinois.

The Obama administration approved some permits for the project in 2016 but withheld a final easement and agreed to do additional review after tribes and environmentalists staged a months-long protest near the route. The pipeline crosses a dammed section of the Missouri River a half-mile from the Standing Rock Indian Reservation.

President Donald Trump quickly reversed course after taking office, granting the easement and scrapping the plans for further review.

2. What’s Happened in Court?

The Standing Rock Sioux, Cheyenne River Sioux, and other tribes have been challenging federal approval of Dakota Access since 2016. They failed to block construction but notched some smaller wins along the way.

Their most significant victory came from federal District Court Judge James E. Boasberg last year, when he determined the Army Corps of Engineers violated the National Environmental Policy Act when it approved the pipeline. Boasberg scrapped Dakota Access’s federal easement and ordered it to shut down while the federal government conducted a broader review of the pipeline’s oil spill risks.

The U.S. Court of Appeals for the District of Columbia Circuit stepped in and averted the shutdown last year, saying the district court hadn’t applied the proper legal standard. But in January, the appeals court upheld the merits of the district court’s NEPA decision, agreeing that the easement was invalid because the Army Corps hadn’t complied with the law.

The D.C. Circuit left it to Boasberg to determine the consequences.

3. What Now?

Without an easement, Dakota Access is technically encroaching on federal land. Boasberg ordered the Biden administration to appear in court Friday to say what it intends to do.

The Army Corps could exercise enforcement authority to order Dakota Access to alter or halt operations while additional environmental review is underway. It could also follow the Trump administration’s example and allow oil to continue to flow despite the invalid easement.

The Biden administration has kept mum about its plans. In a press briefing Thursday, White House Press Secretary Jen Psaki said the administration is assessing pipelines individually and weighing “the costs and benefits on the environment and jobs.”

The White House is facing intense pressure from the tribes and their allies, who say allowing Dakota Access to stay in service would be reckless and unlawful. Energy Transfer, North Dakota, and at least one other tribe—the oil-producing Mandan, Hidatsa and Arikara Nation—say a shutdown would create economic havoc.

4. What’s Next?

Energy Transfer and pipeline supporters are expected to go to court if the Biden administration moves to shut down Dakota Access.

With or without a shutdown order, pipeline supporters may also push the D.C. Circuit to reconsider its January ruling that the easement violated federal law. The deadline to seek rehearing is Monday.

If Biden lets the pipeline remain in service, attention will turn back to the district court, where tribes have already filed a fresh request for Boasberg to issue a shutdown order.

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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