A day after the Army Corps of Engineers announcement that it wouldn’t issue a permit needed to build the Dakota Access Pipeline under Lake Oahe in North Dakota (the center of months of protests), there was celebration among the protesters. The companies behind the pipeline, however, seemed undeterred, saying that they “fully expect to complete construction of the pipeline without any additional rerouting.” Is the battle over, or just delayed–especially given an incoming government that seems much less likely to respond to arguments about tribal land rights or environmental concerns?
The planned route for the $3.8 billion pipeline passed half a mile from the Standing Rock Sioux reservation, and the tribe has been protesting the project for months, arguing that it threatens both sacred sites and their own source of drinking water. So the Army’s announcement on December 4 was a huge win for activists. It also may be particularly hard for Trump–who has said that he supports completing the pipeline and recently owned a stake in one of the companies building the pipeline–to overturn.
“This late in the game, the Obama administration did not have a lot of options, and they chose a procedural one,” says Carolyn Raffensperger, an attorney and executive director of the Science and Environmental Health Network. “The procedural actions . . . are the hardest to challenge in court. It’s also the hardest for the Trump administration to undo.”
That’s because the Army Corps of Engineers said that it would consider alternative routes for the pipeline, and that it would prepare an environmental impact statement (EIS)–a detailed analysis that’s time-consuming to prepare. That’s not something Trump can easily reverse.
“The courts would look with disfavor on a new president coming into office and immediately calling a halt to an environmental analysis that the predecessor administration said was required,” says Patrick Parenteau, a law professor at Vermont Law School. “At a minimum, there would be arguments in court.”
It would be easier, he says, for the Trump administration to go forward with the EIS, and push for a conclusion that the pipeline doesn’t have to be rerouted. Of course–as with all things Trump-related–things might not go as expected.
“They’re bringing some people in who have no real serious D.C. experience and they could screw it up,” he says. “And by screw it up, I mean, just say, ‘Well, we’re not going to do [the EIS], and go ahead and sue us.’ Well, then the courts say, ‘No, you are going to finish it and now you’re going to finish it under our supervision.'”
It’s not clear how long it will take to prepare the EIS–in some cases, because of the level of detail required, it can take years; though in this case, it’s possible that much of the data has already been collected. But it’s impossible for it to happen before January 1, 2017, which is a critical financial deadline for Energy Transfer Partners.
On January 1, shipping contracts that the company negotiated in 2014–when oil was much more valuable–will expire. “My guess is that there are a number of shippers that would prefer not having to ship their oil through the pipeline,” says Raffensperger. “And they would like out of those contracts.”
In November, Energy Transfer Partners said that it had already lost nearly $100 million because of delays. Adding to the financial pressure, some banks are reconsidering their loans to the project. DNB, Norway’s largest bank, sold its assets in the project and is considering pulling its loan. Wells Fargo, which also has investments in the pipeline, offered to meet with Standing Rock Sioux leaders after pressure from customers.
“I think that as banks are looking at their investments . . . there’s going to be more money pulled from this,” Raffensperger says.
The Bakken oil fields are also in financial decline, with fewer rigs and decreased production.
The Standing Rock Sioux tribe also still has a lawsuit in progress against the Army Corps of Engineers, with claims that the permitting process violated the Clean Water Act, the National Environmental Policy Act, and the Rivers and Harbors Act. If they win, that could also force rerouting.
In what would be the worst possible legal outcome–which Parenteau thinks is unlikely–Energy Transfer Partners might ask for and receive declaratory judgment that an EIS is unnecessary and “politically motivated,” and not based on anything different than the analysis the Army Corps did previously.
“I can certainly see the company coming up with some pretty powerful arguments that if the Corps is not obligated to do this EIS, then the court should rule that harm to the company from the delay outweighs whatever policy considerations that the government has now come up with,” he says.
Raffensperger believes that it’s unlikely that Energy Transfer Partners will want to reroute the pipeline, because of the added expense. But if they can’t take the planned route and still decide to build, she thinks the company may try to combine the route with the Keystone XL pipeline, which Trump has also said he wants to resuscitate.
“But it’s all speculation,” she says. “If their financial house of cards collapses, there’s not going to be anything.”
For now, activists are celebrating the Army Corps decision. “This is what happens when we stand together,” said a tweet from the Lakota Law Project on Sunday.
But with inauguration day approaching, this is still an ongoing battle–at Standing Rock and in court.