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New Court Verdict Imperils Dakota Access Pipeline Again

The latest step in the Dakota Access Pipeline’s years-long saga saw on Friday a U.S. Court of Appeals for D.C. deny DAPL’s petition for a rehearing that would have ended the pipeline’s troublesome legal issues.

Energy Transfer Partners LP, the owner of the pipeline project, has struggled for years against Native American tribes resulting in protests, violence during construction, fierce legal battles, and court-directed shutdown orders. Uncertainty surrounding the pipeline even delayed a Bakken crude oil production ramp-up last summer as companies were nervous about investing in additional production crude that may not find transportation out of the basin.

Prior to Friday’s defeat, the pipeline dodged its latest bullet earlier in April when government lawyers told U.S. District Judge Brian Boasberg that they would not order the pipeline to shut down while DAPL undergoes an environmental review—a process that could take as long as a year.

But just because it was not ordered to shut in early April did not mean its troubles were over. The pipeline sought a hearing to quash the environmental review altogether, but on Friday, the D.C. appeals court denied its request for a hearing on the matter. The environmental review will therefore proceed.

This means that technically, Energy Transfer Partners’ pipeline is still trespassing on federal lands at the part where the pipeline goes underneath Lake Oahe—a source of consternation for the Native American tribes that are situated near the Missouri River reservoir.

It has been estimated that pulling the plug on DAPL’s 570,000 bpd of capacity could add another $5 per barrel to the cost of shipping North Dakota crude, making it “nearly impossible” for North Dakota to compete with other oil-producing regions in the United States, according to the Western Dakota Energy Association.

By Julianne Geiger for Oilprice.com

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