From energy workers to grain farmers with the American consumer in between, the harm caused by shutting down the Dakota Access pipeline while yet another environmental study is conducted will stretch far beyond North Dakota’s borders.
So said various parties in amicus briefs filed Monday and Tuesday in the DC Circuit’s Court of Appeals in a case that has dealt North Dakota’s oil and gas industry a major blow while it is already struggling amid a pandemic.
Judge James Boasberg ruled in March that Dakota Access must prepare a lengthier Environmental Impact Statement rather than the shorter Environmental Assessment it had relied upon for the crossing under Lake Oahe. Then, in July, he also decided that Dakota Access must cease operation by Aug. 5 and remain empty for the 13 months or so the U.S. Army Corps of Engineers has estimated they’ll need to complete the study.
Energy Transfer Partners is appealing the ruling, and has requested an emergency stay of the shutdown order.
North Dakota, meanwhile, in its brief, outlined billions in losses for the state’s oil and gas industry, as well at least $2 billion in lost state tax revenues that support a variety of programs including health and human services, many of which are already under strain due to pandemic-induced costs and revenue losses.
Thousands of jobs would also be lost amid the pipeline’s shutdown, at a time when the state has already received more than 76,000 unemployment claims due to the pandemic and paid out more than $146 million in benefits from Feb. 1 through June 2020. The DAPL shutdown would add another 8,950 temporary losses, but between 4,475 to 7,175 of them could also become permanent.
“While the district court recognized proof of the ‘reverberating’ effects a shutdown would have, it declined to meaningfully confront the devastating and irreparable impacts a shutdown will have on innocent residents of North Dakota, rather than just DAPL’s owners,” North Dakota Solicitor General Matthew A. Sagsveen wrote in the state’s brief.
The District Court said the economic risks had been knowingly entered by Dakota Access, but what about everyone else who is harmed? Sagsveen asked.
“How can it be said that other industries, and their employees, have only themselves to blame for the hardship the district court’s Order would cause, including third-party oil and natural gas gatherers, processors, transmission providers, vendors, and the many supporting local industries such as restaurants and hotels.” he wrote. “Or other industries, such as farming, that would experience serious disruption from rail congestion.”
These real harms far outweigh any “purely speculative harm” that is “highly unlikely to occur” in the 13 months it would take to complete the court-ordered Environmental Impact Statement, a study that is unlikely to reach a different conclusion.
Meanwhile, the U.S. Army Corps of Engineers has also entered an appeal of Boasberg’s ruling, and that has already been consolidated with Energy Transfer Partner’s appeal.
The Corps took issue with the court’s stated reasons for its ruling.
“It did not enter this injunction to protect the Tribes or to prevent irreparable harm,” the Corps wrote. “It saw the economic hardships that the order would create, and brushed them aside. Rather, the court entered this order because it wanted to (1) give NEPA more ‘bite’; (2) send a strong message that the Corps, Dakota Access LLC, and the oil and gas industry should not have relied on the ‘continued operation of this pipeline in the face of litigation’; and (3) give the Corps and Dakota Access a powerful ‘incentive to finish’ an environmental impact statement ‘in a timely manner.”
But NEPA is a procedural statute, not the Clean Air or Water Act, and, as such, none of the court’s reasons provide a proper legal foundation for enjoining an already operating pipeline.
Further, the “highly controversial” requirement doesn’t mean the Corps must convince plaintiffs to abandon their opposition to the pipeline.
“It cannot be that ‘the hyperbolic cries of highly agitated, not- in-my-backyard neighbors’ can compel an agency to prepare an EIS,” The Corps wrote. “Every court to consider the matter has confirmed that this factor does not create a ‘heckler’s veto.’ Otherwise, ‘opposition’—and ‘not the reasoned analysis set forth in the environmental assessment”—‘would determine whether an environmental impact statement would have to be prepared.’”
Boasberg’s decision, if allowed to stand, will present a new level of judicial review impossible for agencies to meet, creating “powerful new headwinds against vital infrastructure projects.”
Montana and Indiana in their brief, meanwhile, argued that shutting down DAPL not only ties up transportation for agricultural commodities but jeopardizes food security, particularly during a pandemic, when supply chains have already faced significant disruption.
Grain producing states like Indiana, Minnesota, Montana, North Dakota, and South Dakota would lose at least $345 million in revenue, as well as thousands of jobs.
“It will affect the food security of all who rely on Midwestern grain producers to ship affordable food through rail transport,” the states wrote. “In short, the disruption caused by diverting thousands of barrels of oil to already over-crowded trains will not be isolated to a single industry or sector of the economy but will have far-reaching effects on the most vulnerable populations.”
One doesn’t need to speculate on how this will look either. One has only to look at the situation during the boom.
“A recent analysis looking at present-day grain production volumes in twelve high-producing States, applying the same methodology as a 2015 USDA study that revealed staggering farm losses from the 2014 congestion, suggests that if rail congestion were to affect the grain markets over an entire marketing year, the revenue losses to America’s farmers could range from $526 million to $1.3 billion,” the states wrote.
Industry groups, meanwhile, honed in on the disruption to the national energy supply.
Their brief, led by the American Petroleum Institute, included the Association of Oil Pipelines, US Chamber of Commerce, and National Association of Convenience Stores.
Shutting Dakota Access down affects businesses up and down the supply chain, not to mention every American consumer at the gasoline pump. Allowing the pipeline to continue operating, however, poses minimal risk because federal agencies, such as PHMSA, will continue to regulate the pipeline and enforce safety standards and emergency response protocols while the EIS is prepared.
“Should any release occur, PHMSA requires Dakota Access to have adequate measures in place to respond to any release and mitigate impacts to Plaintiffs’ resources,” they wrote. “EPA can also require the full clean-up and remediation of the release. And the Oil Spill Liability Trust Fund will reimburse Plaintiffs for any costs and damages, including natural resource damages, resulting from a release, thereby ensuring that no irreparable injury results. The harms Plaintiffs seek to avoid are thus already mitigated through extensive federal regulation,” they wrote.