Federal appeals court sets Nov. 4 court date for Dakota Access Pipeline fight

Houston — A federal appeals court scheduled a Nov. 4 court hearing for arguments in the ongoing fight to shutter the Dakota Access Pipeline that would come one day after the US presidential election, which is also expected to play a key role in the crude pipeline's ultimate outcome.

The legal fight over the three-year-old, 570,000 b/d pipeline is simultaneously progressing in two federal courts. With the US Court of Appeals for District of Columbia Circuit setting the Nov. 4 date before a three-judge panel, the US District Court for DC just set a new schedule one day prior with deadlines for legal arguments and responses drawn out until Dec. 18.

The court battle pits the Standing Rock Sioux Tribe and other plaintiffs against pipeline operator Energy Transfer and the US Army Corps of Engineers in the effort to close the pipeline that serves as the main crude oil artery for the Bakken Shale from North Dakota to Illinois.

The timeline still gives the Corps of Engineers time to decide what actions, if any, to take regarding the pipeline being allowed to keep flowing crude while operating without a key environmental permit that was yanked by the court. Earlier in September, the Corps also initiated a more thorough, court-ordered environmental review of the pipeline that could take until late 2021.

The oil and gas industry and environmentalists are closely watching the case that could determine whether an existing crude pipeline can permanently be closed after it's built and up and running. The legal argument is that the pipeline's construction should never have been allowed because permitting allegedly was fast-tracked by the Corps and the Trump administration without undergoing proper environmental reviews.

The plaintiffs contend the pipeline is operating illegally and must be closed while the environmental review is ongoing, but the pipeline owners and the Corps of Engineers argue the permit should have never been vacated and the additional environmental study is unnecessary. And, if the study does continue, whether it's overseen by the pipeline-friendly Trump administration or by Democratic nominee Joe Biden also could influence its outcome.

The appellate court already ruled on Aug. 5 that the pipeline could remain open for now -- the same day that was the initial deadline for the crude system to be closed. But, as part of a mixed-bag ruling, the panel also kicked the case back to US Judge James Boasberg, who initially ordered the pipeline shuttered, to potentially make a stronger argument for its unprecedented closure. That's why the case is now moving forward in both courts.

The plaintiffs also are still asking the appellate court to dissolve the partial stay of the pipeline shutdown, while the defendants want the court to cancel both the additional review and the vacating of the environmental permit.

Bakken woes

The Dakota Access Pipeline was completed in 2017 after a wave of protests and arrests involving environmentalists and indigenous groups, especially the Standing Rock Sioux, made the pipeline the most hotly debated fossil fuel project in the country.

Energy Transfer has long planned to essentially double the capacity of the embattled pipeline system, but it first intends to increase Dakota Access' capacity to more than 750,000 b/d from the Bakken in North Dakota to Illinois.

The ongoing coronavirus pandemic and the resulting collapse in crude demand have put the need for expansions somewhat in doubt.

On Sept. 16, state officials said North Dakota oil production returned above 1 million b/d in July for the first time since April as shut-ins eased below 300,000 b/d. But state regulators continue to warn of a prolonged downturn ahead without higher crude prices as front-month NYMEX WTI currently hovers near $41/b.

North Dakota officials reiterated the future of the Dakota Access Pipeline will play a critical role in satisfying crude demand from the Bakken Shale.