A federal court is unlikely to halt service on Energy Transfer Partners LP's Dakota Access oil pipeline even after the U.S. Army Corps of Engineers was forced to extend a court-ordered environmental review, analysts said.
Christi Tezak, an analyst with ClearView Energy, called the delay of the review an "impactful thing, but not fatal."
Height Securities LLC agreed. "We believe that the corps is taking somewhat longer than expected to fill out the administrative record of decision, but that the U.S. District Court for the District of Columbia is still fundamentally not likely to vacate the Army Corps' permit and force [Dakota Access LLC] to halt operations," the company's analysts said in an Oct. 10 note.
Katie Bays, an analyst for Height, said in an interview that she suspected that if the court was going to rule against the Army Corps and Dakota Access, it would probably have already vacated the project's permit.
Bays also said the Army Corps and Dakota Access have made a strong argument before the court that a service disruption would not serve the public interest.
The Army Corps told the court Oct. 6 that it would need more time for the environmental analysis of the Dakota Access oil pipeline, until April 2018, because the agency is waiting on information from the operator. The analysis was originally expected to be complete in December 2017.
In June, the U.S. District Court for the District of Columbia agreed with the Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe that the Army Corps had failed to adequately consider all the environmental impacts of the pipeline, and the court ordered the Corps to perform additional analysis. (U.S. District Court for the District of Columbia docket 16-1534)
The Dakota Access pipeline entered commercial service June 1. The 1,172-mile pipeline moves crude oil from North Dakota's Bakken Shale to a hub in Illinois, where the oil enters another pipeline on the way to Gulf Coast refineries.