US court denies DAPL rehearing: Update

Adds details from court filings.

A federal appeals court has denied a request from Energy Transfer to rehear a case involving the environmental permitting of its 570,000 b/d Dakota Access crude pipeline (DAPL).

The US Court of Appeals for the District of Columbia Circuit denied the petition without comment, according to a filing today.

The action comes as a lower court is weighing whether to shut DAPL as the US Army Corps of Engineers conducts a new, court-mandated environmental review.

A three-judge panel of the appeals court in January upheld a portion of the lower court ruling that ordered the new Army Corps review and also threw out a key easement for DAPL to cross under Lake Oahe in North Dakota.

Energy Transfer was seeking a rehearing before the district's full court of appeals, which has 15 judges. The company argued that the January appeals court decision conflicted with rulings by other federal courts, including the US Supreme Court.

In the January decision, the appeals court left the door open for the Army Corps to take action on shutting DAPL.

The Army Corps, now under the administration of President Joe Biden, earlier this month told the US District Court for the District of Columbia that it would not immediately move to shut the line, leaving the decision to US district court judge James Boasberg.

A ruling could be imminent after the latest filings in the case this week, including Energy Transfer's updated information on the potential economic impacts of a shutdown.

Shutting the line would cause an "immediate economic shock" and severe rail congestion, including a loss of $378mn-$676mn in revenue each month from May-December 2021 for oil producers, Energy Transfer said in a filing.

In response, the Standing Rock Sioux and other Native American groups said that they "decline to engage in another round of tit-for-tat of litigation experts, as the record is clear that closure of DAPL would involve modest and manageable impacts," according to a filing today. The tribes also said that "DAPL's continued efforts to substantiate its claims of catastrophe rely on unsupported hearsay and exaggeration."

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 shut down 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 startup in June 2017, the line has been expanded amid record-high North Dakota production prior to the Covid-19 pandemic.

By Eunice Bridges