Industry groups oppose shutdown of Dakota Access Pipeline

By Patrick C. Miller | August 15, 2017

Five industry trade organizations have filed documents in U.S. District Court providing reasons why Judge James Boasberg shouldn’t shut down the Dakota Access Pipeline while the Corps of Engineers deals with permit deficiencies.

Boasberg is expected to decide next month whether to vacate the permit issued earlier this year by the Corps that allowed the pipeline to cross the Missouri River in south central North Dakota near the Standing Rock Sioux Reservation. The 1,172-mile-long, $3.8 billion pipeline—built by Dallas-based Energy Transfer Partners—carries half the state’s oil production to a terminal in Illinois. It has been in operation since June 1.  

The North Dakota Petroleum Council (NDPC) said in its brief that shutting down DAPL would hurt the state’s oil producers in three ways. The first is by a sudden shift in crude oil logistics that could cause a temporary loss of production. Second, producers would bear the cost of finding alternative rail transportation. Third, a shutdown would harm North Dakota’s oil market, including NDPC’s members, thousands of royalty owners and North Dakota citizens.

Four national organizations say that shutting down would seriously harm producers, shippers, operators, refiners and manufacturers throughout the U.S. The American Fuel and Petrochemical Manufacturers, the American Petroleum Institute, the Association of Oil Pipe Lines and the National Association of Manufacturers say they support continued operation of the pipeline while legal matters are being resolved.

Last June, Boasberg issued a ruling which said the Corps of Engineers failed to address tribal environmental justice and treaty rights requirements when it approved an easement allowing DAPL to cross the Missouri River about a half mile north of Standing Rock. The ruling allowed pipeline operations to continue and also upheld the Trump administration’s decision to drop plans for a full environmental impact statement (EIS).

Boasberg called the Corps’ assessment of a potential DAPL spill “largely adequate,” but said it “fell short as to fishing rights, hunting rights, and environmental justice.” He ordered the Corps to submit its assessment of those impacts before deciding whether it was necessary to vacate the permits issued by the Corps or shut down DAPL. Boasberg also said he would evaluate “any disruptive consequences that would result given the current stage of the pipeline’s operation.”

According to NDPC, after DAPL went into service, many producers and their customers stopped transporting oil by rail, which reduced the demand for rail service in North Dakota. “The excess train cars are now either servicing other states or stored in rail storage locations, most of which are outside North Dakota,” the organization said in its brief. “Any disruption in service to DAPL would therefore require a large-scale rail mobilization consisting of rail cars, engines, crews, and associated administrative support.”

The NDPC brief concludes that, “Shutting down DAPL during the remand in this case would pull the rug out from under the North Dakota oil industry and also would harm the state’s royalty owners and all of its citizens. The NDPC therefore urges the Court to avoid the highly disruptive effects of a DAPL shutdown.”

The Standing Rock Sioux Tribe said in an Aug. 7 response that the claims of potential harm from a DAPL shutdown are “exaggerated, unsupported by any evidence, or just wrong.” The tribe also said, “any harm to DAPL’s bottom line is its own fault, as it rushed the pipeline through construction to operation despite the legal cloud over it.”