Court allows DAPL crude line to stay in service: Update

Adds details from ruling, Energy Transfer comments

A federal appeals court ordered a partial stay on a lower court ruling to shut the 570,000 b/d Dakota Access crude pipeline (DAPL), allowing Energy Transfer to keep it in service during legal proceedings.

The US Court of Appeals for the District of Columbia Circuit said the lower court "did not make the findings necessary for injunctive relief," according to the ruling today.

But the Appeals court also upheld a portion of the lower court ruling that threw out a federal easement allowing DAPL to cross under the Missouri river.

US District Court judge James Boasberg on 6 July ruled that Energy Transfer must shut the line and empty it within 30 days, as a result of a long-standing legal battle over its environmental permitting. Boasberg also threw out the Missouri river federal easement, citing the "seriousness" of errors underlying the project's permit.

The Appeals court said today that the US administration and Energy Transfer "have failed to make a strong showing of likely success on their claims" that the district court erred in directing the Army Corps to prepare an environmental impact statement. The court also directed the Army Corps to clarify to the district court whether it intends to allow the continued operation of DAPL "notwithstanding vacatur of the easement."

Energy Transfer said today that it will need to "run the course" with the litigation and is confident that the pipeline will continue to operate. The company also said it is still reviewing the Appeals court decision.

The American Petroleum Institute said the failure of the Appeals court to uphold the DAPL easement shows the problems with an outdated permitting system, which "allows protracted challenges to advance within the courts and ultimately take away jobs, tax dollars, and investments that pipelines bring to communities that sorely need them."

Meanwhile, opponents of the DAPL said the line is now operating illegally because the easement is invalid. "As the environmental review process gets underway in the months ahead, we look forward to showing why the Dakota Access pipeline is too dangerous to operate," said Standing Rock Sioux Tribe chairman Mike Faith.

A DAPL shutdown would cut off a major conduit of crude from the Bakken shale in North Dakota to the US midcontinent and the Gulf coast.

DAPL moves Bakken crude to Patoka, Illinois, where it connects to another Energy Transfer pipeline to Nederland, Texas.

Energy Transfer has told the court that it would take about three months and $24mn to safely purge the pipeline of oil and preserve it for future use.

The underlying lawsuit was brought by the Standing Rock Sioux tribe and other Native American groups who contend that the Army Corps of Engineers failed to adequately study certain issues related to potential oil spills from the pipeline, which went into service in June 2017.

Boasberg on 25 March ordered the Army Corps of Engineers to conduct a new environmental review for the contested DAPL easement and said it would consider a request to cease operations on the line during the study.

The initial startup of DAPL was delayed for months in 2016 and 2017 amid large protests led by the Standing Rock tribe and regulatory delays. Since its startup in June 2017, the line has been expanded amid record-high production in North Dakota prior to the Covid-19 pandemic and growing demand to export US crude.

By Eunice Bridges