Bloomberg Law
May 18, 2021, 8:01 AM

Shuttering Dakota Access Will Impact More Than a Pipeline

Tom Magness
Tom Magness
Grow America’s Infrastructure Now

After more than four years of successful operation, the Dakota Access Pipeline (DAPL) is again in limbo as a U.S. district court decides whether the line will be allowed to operate while an additional environmental study is completed. A lot hangs in the balance—for our country’s energy security, economy and, most critically, the integrity of our regulatory system.

The pipeline resurfaced in headlines last summer after U.S. District Judge James Boasberg vacated the pipeline’s easement for a water crossing at Lake Oahe. Boasberg reasoned that the U.S. Army Corps of Engineers should have conducted a more in-depth environmental review, known as an environmental impact statement (EIS), for the site and ordered the pipeline to be shut down and emptied until the study was completed.

The Corps appealed the decision, and an appellate court reversed the shutdown order, citing a lack of “necessary findings.” The appellate court stopped short, however, of upholding the federal easement, putting the fate of the pipeline back in the lower court’s jurisdiction.

Corps Says Pipeline Can Operate During Environmental Review

The U.S. Army Corps of Engineers has declined to independently halt the pipeline while the latest environmental review is completed. The analysis, now underway, is expected to take until early next year to complete. Which means Boasberg will decide whether the pipeline will be allowed to continue to run in the interim. His ruling is expected as early as this week.

The issue reveals the fine line between judicial oversight and regulation from the bench. Our nation’s experts, the engineers at the Corps, have made it clear that DAPL should be allowed to continue operations. But will Boasberg step over the Corps’ regulatory authority to decide whether the pipeline can safely operate until the study is completed?

By precedent and statute, the Corps—an extension of the Executive Branch— has the authority to decide whether the pipeline should continue to operate. There are many examples, from immigration to traffic laws, in which such discretion is held at this level. In fact, a lawsuit filed by North Dakota contends that the Corps did not go far enough to assert its authority. Maybe so. But what’s certain is that the Corps’ support for keeping the pipeline running is not arbitrary.

The Corps is an organization of career, non-partisan professionals. These men and women are tasked with assessing the impact of major infrastructure projects and ensuring the safety of our communities and the environment. Their decisions are based on science and evidence, not political influence.

That the Corps ruled against shutting down the pipeline reiterates its safety, which is further proven by nearly four years of operations without a single major incident. The omitted study was a process oversight, not a safety hazard, for a 1,000-foot section representing less than 0.002% of the total pipeline.

The Justice Department May 3 reaffirmed the Corps’ decision. In a brief to Boasberg, the agency noted: “It is possible that … the Corps would find new information, but to date the Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing.” In other words, there is no reason to believe the pipeline cannot operate safely while the new study is conducted.

Unfortunately, there is a great deal of political pressure to shut the pipeline. The pipeline has become a lightning rod for activists intent on keeping fossil fuels in the ground, with opponents too often seeking to leverage the judicial system to achieve their goal.

But that’s not what this issue is about. It is a matter of ensuring the integrity of our regulatory system. When a developer follows all the rules, receives the necessary permits, and has proven their ability to operate safely, they should be allowed to continue doing so.

Consequences of Decision

A lot hangs in the balance. DAPL moves over a million barrels of crude oil per day. Those shipments would have to be moved by rail or truck if the pipeline were shut down, which have much less reliable safety records and produce significantly higher emissions. The resulting backlog would cost producers up to $5.4 billion this year, up to $1.4 billion in lost tax revenue for local and state governments, and eliminate as many as 24,000 jobs.

This decision has broad impacts. Mark Fox, tribal chairman of the Mandan, Hidatsa and Arikara Nation, cautioned the court that if DAPL is shutdown, “much of our Reservation’s production will be difficult to move to market and future production will be sharply curtailed.”

The tribe relies on the pipeline to move about 60% of its oil production to markets. Further, more than 80% of the MHA Nation’s budget is made up of oil and gas royalties and tax revenues. The MHA Nation estimates a shutdown would incur losses of over $160 million a year.

The U.S. regulatory process is rigorous. It is entrusted to professionals who put their task of protecting our communities ahead of ideology. It benefits from checks and balances offered by the courts. But it is jeopardized when jurisprudence crosses the line and prematurely usurps regulatory oversight. For that reason, it’s critical that Boasberg stand by the Corps’ decision to keep DAPL running.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Tom Magness is a strategic adviser to the Grow America’s Infrastructure Now (GAIN). He formerly served as a commander in the U.S. Army Corps of Engineers.