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Dakota Access faces yet another legal hurdle, this time in Illinois, where environmental groups have been vigorously opposing the pipeline’s proposed expansion project.

In January, several of the groups filed an appeal of the Illinois State Commerce Commission’s 2020 decision approving the permits allowing Dakota Access to nearly double in transport capacity, to 1.1 million barrels of oil per day.

The Illinois 4th District Appellate Court vacated the permit issued for the expansion on Wednesday. The court did not order the pipeline to stop transporting additional oil. It just remanded the permit back to the Illinois Commerce Commission for reconsideration.

The court said the Commission should have considered only the United State’s need for the project, not the world’s, when it was evaluating the public need for the expansion. The court also said the commission erred when it did not consider the safety and environmental record of Sunoco, the pipeline’s operator. Sunoco has recently been fined for safety and environmental violations related to a different pipeline.

The appellate court’s review was triggered by an appeal filed in January by the Sierra Club, Natural Resources Defense Council, Save Our Illinois Land, and landowner William Klingele, who all praised the court’s decision.

“Save Our Illinois Land, Sierra Club, NRDC, and landowner Bill Klingele are pleased that the Court vacated the Illinois Commerce Commission’s flawed approval of DAPL and ETCO’s unnecessary capacity expansion,” lead counsel for the coalition Jon Albers said. “The Court’s agreement that Sunoco’s poor record was a pipeline operator is relevant to the ICC’s decision and conclusion that exports are not a proper component in considering public interest will hopefully lead to a just result in the end. We are still evaluating the various aspects of the decision dn will take appropriate action.”

Industry groups, meanwhile, were dismayed by the decision.

“Once again, an activist court has attempted to impose its political will in a straightforward regulatory manner,” Grow America’s Infrastructure Now spokesman Craig Stevens said. “DAPL’s developer, Energy Transfer, followed all necessary permitting measures with state and local regulators along the line’s route in North Dakota, South Dakota, Iowa, and Illinois – all of which ultimately granted approval for the increased capacity. When courts act to quash regulators’ mindful decisions, it undermines their authority and risks private investment as regulatory certitude is imperiled. DAPL has safely transported crude oil from North Dakota to the Midwest for more than 4.5 years, playing a critical role in our nation’s economy, energy security, and national security. We are confident the DAPL will ultimately achieve its needed approval for increased capacity.”

Part of the Dakota Access pipeline expansion is already in place and operational. The pipeline’s current carrying capacity is 750,000 barrels per day, up from 570,000.

Pipeline Authority Justin Kringstad told reporters during the state’s monthly oil production report that he did not expect any near-term impacts to the pipeline system as a result of the decision, since the system is expected to continue operating as it has been.

“Obviously the uncertainty is the big thing that this brings in to play,” Kringstad said. “Again, anytime these kick back through the regulatory process or through the judicial process, it just adds that layer of uncertainty.”

That can affect where companies decide to allocate capital, Kringstad said.

“If you’re a producer looking at long-term plans for the Bakken or other fields and then looking at multi-year decisions, those are things that all get written down as concerns on where the capital is going to get allocated,” he said. “Uncertainty is never good for anyone in the business or regulatory side. So that’s the biggest concern is just the uncertainty that it brings to the table that wasn’t there a few days ago.”

The loss of the Illinois permit is the latest legal wrinkle in the Dakota Access case, which lost its federal permits in 2020 after a federal judge decided the U.S. Army Corps of Engineers erred in completing the shorter Environmental Assessment instead of the lengthier Environmental Impact Statement.

Judge James Boasberg ordered the pipeline to empty of oil as well, but an appeals court held that Boasberg had not adequately examined the shut-down order’s economic impact, among other legally required factors. The additional environmental study, however, was upheld and is still underway. It’s expected to be completed this year in September. In the meantime, Dakota Access has appealed the court-ordered study to the Supreme Court, which is expected to meet soon to decide what cases it will be hearing.

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