U.S. Won’t Shut Dakota Access Pipe Amid New Environmental Review

The Dakota Access pipeline that’s been at the center of a years-long battle between oil companies and the Standing Rock Sioux tribe won’t be forced to shut down while federal regulators conduct a new environmental analysis.

The Biden administration’s decision to allow the line to keep operating is a victory for pipeline owner Energy Transfer LP and drillers such as Continental Resources Inc. that use it transport crude from North Dakota’s Bakken oil field. The move will likely come as a relief to an oil industry beset by President Joe Biden’s aggressive climate campaign, which has included canceling the permit for the $9 billion Keystone XL oil pipeline and pausing leasing on federal lands.

Justice Department lawyer Ben Schifman told the U.S. District Court for the District of Columbia that the federal government has authority to take enforcement action against Dakota Access --which could include a shutdown-- but won’t do so “at this time.”

Opponents of the pipeline, including several tribes that pushed the court to issue its own shutdown order, viewed Friday’s hearing as test of Biden’s commitment to Indigenous rights and climate action. Their motion for a shutdown is pending before the judge, who could issue a decision in the coming weeks.

Environmental protesters demonstrate against the Dakota Access pipeline, in Washington, D.C., on April 1.

Photographer: Chip Somodevilla/Getty Images

Judge James E. Boasberg gave Dakota Access 10 days to file updated legal declarations addressing the impacts of a shutdown.

At issue is whether the U.S.’s authorization of the 570,000 barrel-a-day crude pipeline overlooked key environmental concerns. An appellate court in January affirmed that the project’s approval by the Army Corp of Engineers was unlawful. The Army Corps won’t challenge that decision, Schifman said Friday, but Dakota Access will. Boasberg said he’d have to evaluate whether the company’s rehearing petition would affect his ability to rule on a shutdown.

Meanwhile, the Army Corps is conducting a court-ordered environmental impact statement that’s expected to conclude in March 2022, and is consulting with the Sioux tribes that oppose the pipeline, as well as the Mandan, Hidatsa and Arikara Nation, an-oil producing tribe in North Dakota that supports the project.

Energy Transfer, which is controlled by billionaire Kelcy Warren, jumped as much as 4.7% in New York while Phillips 66 Partners, which owns a minority stake in the project, surged as much as 10%. Continental climbed as much as 6.8%.

An Army Corps official, Stacey Jensen, told pipeline opponents in a call Thursday that the agency wouldn’t seek to shut the line, said Dallas Goldtooth, an official with the Indigenous Environmental Network.

Jensen, who serves as assistant for regulatory and tribal affairs in the Corps office of Assistant Secretary of the Army for Civil Works, said in an interview that the matter is in the hands of the Justice Department.

Dakota Access Pipeline Faces Big Day in Court: Stakes Explained

“In a meeting with members of Biden’s staff earlier this year, we were told that this new administration wanted to ‘get this right,’” Standing Rock Sioux Chairman Mike Faith said in a statement Friday. “Unfortunately, this reported update from the U.S. Army Corps of Engineers shows it has chosen to ignore our pleas and stick to the wrong path.

The case is Standing Rock Sioux Tribe v. Army Corps of Engineers, D.D.C., No. 1:16-cv-01534.

--With assistance from Gerson Freitas Jr..

To contact the reporters on this story:
Ellen Gilmer in Arlington at egilmer@bloomberg.net;
Ari Natter in Washington at anatter5@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at jmorgan97@bloomberg.net

Catherine Traywick

© 2021 Bloomberg L.P. All rights reserved. Used with permission.