Published December 7, 2016
Celebratory drumming and singing rang out from Standing Rock Water Protector camps when the Army Corps of Engineers denied Energy Transfer Partnership the easement to drill under the Missouri River just 2,400 feet from the Standing Rock Sioux Reservation, stalling the Dakota Access Pipeline. Crying people exclaimed, “It’s over.” Joyful expression is warranted, it is a major triumph against the pipeline but the tearful heart-songs are wrong, the fight is not over.
The internet exploded in celebratory headlines, articles, and social media posts minutes after the pipeline announcement by Jo-Ellen Darcy, the Army’s Assistant Secretary for Civil Works
The New York Times chimed in with, “Army Blocks Drilling of Dakota Access Oil Pipeline.
CNN’s Facebook page rejoiced, “BREAKING NEWS: A true victory for protestors, construction of Dakota Access Pipeline to be re-routed http://cnn.it/2gRaQGl”
Bipartisanreport.com went even further, “BREAKING: Dakota Access Pipeline IS DEAD, U.S. Government Says NO WAY (DETAILS)”
The big problem is – it’s not even close to true.
Stopping the easement for an environmental impact statement is a lawful way to stall the development of the pipeline – maybe even for years. An environmental impact statement is a document requiring a developer to consider the full spectrum of environmental impacts to the entire ecological system; including animals, plants, air, water, soil, and people. It requires meaningful input from the Standing Rock Sioux Tribe for the current route. It can be appealed and revised in full or in part through layers of legal processes which can tie the company in red tape for years. It is an effective strategy to use, but not in this case.
The likelihood an environmental impact statement will ever happen for the Dakota Access Pipeline is basically none.
Energy Transfer Partnership admitted in court documents that it is under contract to have the Dakota Access Pipeline (DAPL) finished by January 1, 2017. The contracts, with their buyers, assure Energy Transfer Partnership 2014 prices. If the pipeline is not finished in time, the buyers have the right to renegotiate the price of the crude.
The average 2014 WTI Crude Oil prices were $93.17 per barrel, and the projected 2017 price is $49.91 per barrel, according to the United States U.S. Energy Information Administration Short-Term Energy Outlook of November 8, 2016. The most conservative estimate is DAPL will move approximately 470,000 barrels per day, according to Energy Transfer Partners.
That is a $20,332,200 loss per day. In a year Energy Transfer Partners risks losing $7,421,253,000.
The entire project is expected to cost Energy Transfer Partners $3.8 billion. Should the project die, that entire investment is lost with no recovery.
Energy Transfer Partners does not have time to wait, they have to act now.
Litigation is the sit first option. Energy Transfer Partners could file for an emergency injunction or remedy against the Army. Smart lawyers will have prepared these filings ahead of time. Energy Transfer Partners could probably get a quick hearing but the process would take weeks, even for the best lawyers.
Even if Energy Transfer Partners succeed in court, the Army could appeal with the tribe’s lawyers acting in support. Unless the court kept the order to not dig in place during the appeal, DAPL’s dig would proceed during the appeal.
Using legal means, mid-December is earliest reasonable estimation Energy Transfer Partners could start digging lawfully. Even if Energy Transfer Partners successfully takes legal action, and digs within the agreed upon methods and times, it would be cutting it close to get the drill across the river and the pipe laid in time.
Another choice is to drill illegally. Assuming any fine is less than a couple of years’ worth of losses of the higher prices of defaulting on the contract, it would be worth drilling illegally.
And they could probably get away with it.
Energy Transfer Partners is so confident they are moving forward no matter what the Army Corps of Engineers says, they issued a defiant public statement after the easement was denied.
“As stated all along, 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.”
Any illegal activity will not be investigated exclusively by the Obama Administration. It will eventually be handed off to the Trump administration. Trump’s support for DAPL has been clear and it seems improbable that Trump’s administration will bring any charges against Energy Transfer Partners for doing anything they would have allowed them to do legally 23 days later.
The last option for Energy Transfer Partners is to wait for the Trump administration. It may be able to negotiate a delay or diminished drop in the crude oil price if the delay is only a few days. This is a big risk for the company to take.
For Trump to act to approve DAPL, he would be acting against the Army and the Army’s legal duty to the Missouri River under Pick-Sloan. Pick-Sloan was a piece of legislation which created a series of dams, levees, and floodplains along the Missouri River. It gives The Army Corps of Engineers the stewardship authority for things like infrastructure under the Missouri River.
For Trump to take action in favor of DAPL, he would have to counteract Pick-Sloan and the act directly against the Army. This may be in Trump’s character, but it is not a certainty.
This BBSNews article originally appeared on Native News Online.