Biden administration opposes DAPL shutdown

  • Market: Crude oil
  • 05/03/21

The administration of President Joe Biden reiterated arguments from the previous administration against the shutdown of the 570,000 b/d Dakota Access crude pipeline (DAPL) in a case involving its environmental permitting.

The US Army Corps of Engineers cited a previous argument that plaintiffs in the case "have not met the applicable standard" for a shutdown, repeating an argument from the agency when it was under the administration of former president Donald Trump.

"The Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing," the agency told a federal court today.

US District Court judge James Boasberg could rule this week on whether to shut the pipeline during a new court-mandated environmental review. The Army Corps said the review will be complete by March 2022.

Boasberg earlier this month asked the Army Corps to give its position on a possible shut down before he issued a ruling. The agency previously said that it would not immediately move to shut DAPL despite a federal court ruling that vacated a key easement and ordered the new environmental review. The Army Corps also declined to issue an enforcement action on its own, leaving Boasberg to decide.

Energy Transfer is planning to ask the US Supreme Court to review the case, following the US Court of Appeals for the District of Columbia Circuit last week denying a petition to rehear the case.

DAPL moves Bakken crude to Patoka, Illinois, where it connects to another Energy Transfer pipeline to Nederland, Texas. It is the largest crude pipeline out of the Bakken shale.

A pipeline shutdown would shift large volumes of crude onto railcars and alternate pipelines.

The underlying lawsuit brought by the Standing Rock Sioux and other Native American groups contends that the Army Corps' original environmental review failed to adequately study certain issues related to potential oil spills from the pipeline.

The initial startup of DAPL was delayed for months in 2016 and 2017 amid large protests and regulatory delays. Since its start-up in June 2017, the line has been expanded amid record-high North Dakota production prior to the Covid-19 pandemic.


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