Court Deals Deadly Blow To Dakota Access Pipeline

In the second major win for the anti-pipeline movement in the United States on Monday, a district court ruled that the beleaguered Dakota Access Pipeline must shut down by August 5, according to court documents cited by BloombergLaw.

The 570,000 bpd Dakota Access pipeline has been transporting oil since 2017, but resistance to the pipeline did not end with the project's approval or with its first crude shipments.

Energy Transfer Partners LP, the owner of the oil pipeline project, has struggled for years against Native American tribes to clear hurdle after hurdle—each one a potential death blow for the project.

It is the second fossil fuel pipeline project to get the ax on Monday after Dominion Energy and Duke Energy decided to scrap their Atlantic Coast natural gas pipeline project after cost overruns and an overall sense that the project would continue to meet significant resistance from the environmental lobby that has vigorously opposed the project for years.

Today, the United States District Court for the District of Columbia delivered what is sure to be a significant blow for the DAPL oil pipeline project that was designed to carry oil from Bakken/Three Forks area in North Dakota to Patoka, Illinois.

The court's decision was based in part on the Army Corps Engineers' decision to publish just an Environmental Assessment (EA) and not an Environmental Impact Statement (EIS).

The court is giving the pipeline owner 30 days to shut it down. While the long-term impact could be significant, the tribes bringing the case allege that it will cause little disruption and little if any increases in oil by rail shipments, because many of North Dakota's wells have been idled as a result of the pandemic and low oil prices.

"…it is clear that at least some immediate harm to the North Dakota oil industry should be expected from a DAPL shutdown, even if its effects are tempered by a decreased demand for oil," the court opinion read in part.

Energy Transfer's (NYSE: ET) stock price had fallen by nearly 7% by mid-morning, to $6.56 per share.

By Julianne Geiger for Oilprice.com

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