Lakota Sioux marcher at Standing Rock (Oceti Sakowin) camp after the Army Corps of Engineers' denied a permit for the Dakota Access pipeline to tunnel under Lake Oahe. Photo by Brian Nevins.
On Sunday, December 4, 2016, the US Army Corps of Engineers announced that they will not grant the final easement for the Dakota Access Pipeline (DAPL) and instead will prepare an Environmental Impact Statement (EIS) that considers alternate routes. This announcement comes in response to the courageous efforts of the Standing Rock Sioux Tribe, the more than 300 tribes that have stood with them, the thousands of Water Protectors who have joined the efforts at camp, and the millions of Americans who have taken action to support their fight. We applaud the Obama administration for this decision, but most of all we send our deepest gratitude to the Standing Rock Sioux Tribe and their allies. It is their lead that we follow in this fight and we continue to stand in solidarity with them.
The fight to reject DAPL is not over, but this announcement ensures that for now, Energy Transfer Partners cannot complete the project under Lake Oahe.
This post is intended to answer a few common questions about the Corps’ announcement and provide some analysis of the situation going forward.
What exactly does the Corps’ decision mean?
The Corps did not deny the final easement or deny the DAPL crossing at Lake Oahe. Rather, it announced that it “will not grant an easement to cross Lake Oahe at the current location based on the current record”; and instead will prepare an EIS to evaluate alternative routes for the pipeline, potential risks and impacts of oil spills, and other environmental and cultural impacts. Previously, the Corps only prepared a less rigorous Environmental Assessment that was limited to a small section of the pipeline.
A decision on the easement to cross Lake Oahe remains pending, and in fact that is the federal action for which the EIS will be prepared. If the easement had been denied, there would be no outstanding federal decision left to be made that would provide the basis for an EIS.
The Corps’ announcement indicated that an EIS will include a “robust consideration of alternative locations for the pipeline crossing the Missouri River, including, but not limited to, more detailed information on the alternative crossing that was considered roughly ten miles north of Bismarck.” Thus, we can expect the EIS to consider the route north of Bismarck, the Lake Oahe crossing, the “no action alternative” (i.e., a denial of any route across the Missouri River), and other routes not yet identified. The announcement also indicated that an EIS will evaluate the potential risks of oil spills and impacts to Lake Oahe and the Standing Rock Sioux Tribe’s water intakes, as well as the extent of the Tribe’s water rights, treaty rights, and fishing and hunting rights.
Everything else regarding the EIS process is unclear at this point. The Corps will likely publish a “Notice of Intent to Prepare an Environmental Impact Statement” in the Federal Register that should provide more details. That is ordinarily followed by a scoping comment period, where the public has an opportunity to weigh in on the appropriate scope of the EIS (e.g., whether it should include the entire pipeline through North Dakota, South Dakota, Iowa and Illinois, and what types of impacts should be analyzed). After the scoping period, the Corps will likely prepare a draft EIS and allow public comment before preparing a final EIS and issuing a final Record of Decision. The entire process usually takes six months to a year or more, although it’s possible the Corps will attempt to expedite the process for DAPL by narrowing the scope of their review.
Can the incoming administration reverse the Corps’ decision?
The incoming administration may very well try to reverse the EIS decision, but that may not be a simple feat. Agency decisions must be based on sound reasoning and well-supported by the facts. The Corps decided that an EIS is warranted after months of careful consideration. It set forth the legal basis and reasoning for the decision in a memorandum from Assistant Secretary of the Army Jo-Ellen Darcy, and the decision to prepare an EIS is fully supported by the National Environmental Policy Act (NEPA) and its implementing regulations.
If a Trump administration were to reverse course on a decision like this, it too would have to be accompanied by sound reasoning that makes a rational connection between the facts found and the decision made. Any hasty or arbitrary decision would be legally vulnerable and subject to further litigation. Of course, that’s not to say the incoming administration won’t rush a decision.
Another scenario would be for Congress to approve the final easement and deem it compliant with all environmental laws, either through an appropriations rider, a stand-alone bill, or some other mechanism that garners enough support from the House and Senate.
Will DAPL drill under Lake Oahe despite the Corps’ decision?
It is unlikely that DAPL will drill under Lake Oahe and adjacent Corps property without the easement. Doing so would subject DAPL to serious criminal penalties and could jeopardize project completion altogether.
Following the Corps’ announcement on Sunday, Energy Transfer Partners and Sunoco Logistics released the following statement: “ETP and SXL are fully committed to ensuring that this vital project is brought to completion and fully expect to complete construction of the pipeline without any additional rerouting in and around Lake Oahe. Nothing this Administration has done today changes that in any way.” While some have interpreted that as an intent to immediately move forward with drilling, the statement is silent as to timing. It’s more likely this is a public reassurance to investors that eventually, whether at the conclusion of an EIS or through a Trump administration approval, they expect to complete the pipeline under Lake Oahe without a costly and time-consuming reroute. It does not say they will blatantly violate the law and construct the line through federal jurisdiction prior to receiving approval.
As DAPL acknowledged in a November 15 court filing, “Dakota Access faces a real threat of adverse legal consequences if it proceeds with the construction… The legal consequences of construction beneath federal land without a judgment in hand could be severe.” A willful violation of the Corps’ directive could subject the company to stiff financial penalties or even jail time for corporate officials, result in the Corps denying any other Missouri River crossings, and would likely violate state-level approvals and financial agreements.
Instead, DAPL is probably pinning its hopes for project completion on less risky avenues. First, DAPL may believe the project will be quickly approved under the incoming administration after January 20, 2017, either through a Corps reversal of the EIS decision and swift approval of the easement, or some form of congressional approval (see above). The costs of waiting six to eight weeks and seeking approval under a Trump administration are likely less than the potential costs of violating the law.
The second avenue to completion DAPL is pursuing is through the courts. DAPL has filed a claim in U.S. District Court for the District of Columbia seeking a declaratory judgment that it already has all necessary legal approvals and does not need the final easement in order to go forward. While this claim may be a long-shot, DAPL has moved for summary judgment and the court has set a briefing schedule that includes oral arguments in February and a decision soon thereafter. The fact that DAPL is asking a federal judge to essentially give them permission to complete the project under Lake Oahe makes it less likely DAPL would move forward with drilling unless and until the judge rules in their favor.
How risky is DAPL’s financial situation?
If the DAPL pipeline does not become operational by the start of the new year - and it is very unlikely it will operate before Jan 1,2017 - it’s financing will be jeopardized. Companies that would ship oil on DAPL entered into long-term shipping contracts in 2014 at a time when oil prices were averaging close to $100 per barrel and Bakken production was soaring and projected to continue increasing through 2020. Starting in late 2014, oil prices have plummeted and now hover in the $40-$50 range, while Bakken oil production has steadily declined. Thus, it is likely that some of the shippers want to terminate or renegotiate their contracts, which they have a right to if the DAPL is not operational by January 1.
In a recent court filing, DAPL explained: “Dakota Access has long-term transportation contracts with nine shippers to have the pipeline completed, tested, and in service by January 1, 2017. Those shippers have the right to terminate those contracts if that condition is unmet, id., and every day of delay beyond that date increases the likelihood they will do so.”
Last month, the Institute for Energy Economics and Financial Analysis (IEEFA) released a report detailing the high-risk financing of DAPL and the changes in market conditions over the last two years that could spell trouble for DAPL.
DAPL previously estimated that it will take 90-120 days to complete drilling under Lake Oahe, although that time frame may be shorter now that the company has its equipment in place and appears to have already drilled up to the border of Corps property. Nonetheless, it is almost certain that at this point, DAPL cannot meet the January 1 in-service deadline under any circumstances.
What will happen to the camps at Standing Rock?
The Chairman of the Standing Rock Sioux Tribe released a statement asking people to return home once the weather clears, and many will do so. According to a statement released by the main coalition of grassroots Native groups living and working at the encampments, others will stay to hold the space to advance the reclamation of unceded tribal territory affirmed in the 1851 Treaty of Ft. Laramie, continue to build community, and keep a close eye on the company which remains poised and ready to finish the project.
What’s the status of the Tribe’s court case challenging the Corps’ approval of DAPL?
The Standing Rock Sioux Tribe filed a lawsuit in federal court in Washington, DC challenging the Corps’ compliance with the National Historic Preservation Act, NEPA, and the Clean Water Act in permitting DAPL. While the Tribe was unsuccessful in getting a preliminary injunction stopping construction, the legal claims continue to move forward on the merits. DAPL intervened in that case and filed a cross-claim and motion for summary judgment, which alleges the Corps’ July 25 approval already conveyed the right to drill under Lake Oahe and no further easement approval is required. The court held a status conference on December 9th, 2016, where it set a briefing schedule that should result in the resolution of DAPL’s cross-claim by February 2017. The court has not yet set a briefing schedule for the Tribe’s original claims, but those claims will move forward after February.
How can the Administration prevent this from happening again?
The Corps used a blanket permit called Nationwide Permit 12 (NWP 12) to fast-track the approval of DAPL without adequate environmental review, tribal consultation or opportunities for public input.
Ordinarily, the Corps and other agencies must carefully evaluate the potential environmental impacts of major pipeline projects like DAPL before construction can begin. The oil industry has begun to realize that the more the public learns of the risks of these projects, the more the opposition grows. The Corps’ NWP 12 process allows them to shut the public out of the process and approve massive pipeline projects behind closed doors.
The good news is NWP 12 expires on March 17, 2017, and the Corps is currently considering whether to renew it. The Obama Administration should direct the Army Corps not to reissue Nationwide Permit 12 for use with interstate oil pipelines. As DAPL has made clear, projects like this deserve more robust public engagement, tribal consultation, and a full EIS that evaluates (among other things) the risks and impacts of oil spills. Those risks were underscored again last week, when a landowner in North Dakota discovered a 176,000-gallon crude oil spill in a creek that went undetected by the company’s monitoring system. If the Corps and the Administration want to avoid situations like the Dakota Access opposition in the future, they must stop using NWP 12 to circumvent the transparent review process for oil pipelines that the law requires.
In sum, construction on DAPL is unlikely to resume before January 21. After that, the company will pursue all political and legal avenues to move forward as quickly as possible. It could get the go-ahead from the Corps under the new administration, or from the courts in as little as a few months. Other factors that could affect project completion include additional litigation, financial pressures, and more creative and courageous actions by the Water Protectors who have defied all odds to stop this pipeline in its tracks.
Oceti Sakowin Camp. Photo by Josué Rivas.