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Judge orders Dakota Access pipeline shut down

Underground line has carried crude across Iowa for 3 years

In this Oct. 5, 2016, photo, heavy equipment is seen at a site where sections of the Dakota Access pipeline were being b
In this Oct. 5, 2016, photo, heavy equipment is seen at a site where sections of the Dakota Access pipeline were being buried near the town of St. Anthony in Morton County, N.D. A federal judge on Monday sided with the Standing Rock Sioux Tribe and ordered the Dakota Access pipeline to shut down until more environmental review is done. (Tom Stromme/Bismarck Tribune via AP, File)

The Dakota Access underground pipeline, which has moved more than a half billion barrels of crude across four states including Iowa since it started three years ago, must shut down by Aug. 5, a federal judge ruled Monday in a stunning defeat for the Trump administration and the oil industry.

The decision, which shuts the pipeline during a court-ordered environmental review that’s expected to extend into 2021, is a momentous win for Native American tribes that have opposed the Energy Transfer Partners project for years both in court and in protests that drew international attention and at times turned violent.

The ruling comes just a day after Dominion Energy and Duke Energy scuttled another project, the Atlantic Coast natural gas pipeline, after years of legal delays.

Environmentalists have increasingly used the courts to try to block additional investment in fossil fuel infrastructure while they push for a clean energy transition. The legal onslaught has led to delays and disruptions for other pipelines, including Keystone XL.

But Monday’s order, if upheld on appeal, marks the first time that a major oil pipeline already in service will be forced to shutter because of environmental concerns.

The Dakota Access pipeline carries roughly 500,000 barrels of crude every day from the Bakken region of North Dakota, diagonally through South Dakota and Iowa, to a hub in Illinois.

The U.S. District Court for the District of Columbia said a crucial permit for Dakota Access fell too far short of National Environmental Policy Act requirements to allow the pipeline to continue operating while regulators conduct a broader analysis the court ordered in a previous decision. The ruling scraps a critical permit that was issued by the Army Corps of Engineers.

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U.S. District Judge James E. Boasberg said Dakota Access must shut down the pipeline and empty it by Aug. 5.

“Today is a historic day for the Standing Rock Sioux Tribe and the many people who have supported us in the fight against the pipeline,” tribal Chairman Mike Faith said in a statement. “This pipeline should have never been built here. We told them that from the beginning.”

Boasberg acknowledged his ruling would cause major disruptions for Dakota Access and the North Dakota drillers that supply its oil.

“Yet, given the seriousness of the Corps’ NEPA error, the impossibility of a simple fix, the fact that Dakota Access did assume much of its economic risk knowingly, and the potential harm each day the pipeline operates, the Court is forced to conclude that the flow of oil must cease,” he wrote, referring to the National Environmental Policy Act.

The Army Corps referred questions about the ruling to the Justice Department, which didn’t immediately respond to requests for comment, including on whether it intends to appeal. Energy Transfer also didn’t respond.

The ruling comes as Energy Transfer Partners is in the process of greatly increasing the flow of crude through the pipeline to meet what it said was a growing demand. Iowa regulators have approved an amendment to the Dakota Access permit to increase its flow across Iowa to 1.1 million barrels per day, or roughly double. However, the company must first upgrade a pumping station on land it owns in Cambridge, near Ames.

A spokesman for the Iowa Utilities Board said Monday that increased flow has not begun.

“Dakota Access is required to inform the IUB when construction at the pump station begins and at this time, there has been no notice of construction filed with the IUB,” he said.

Katie Bays, co-founder of Washington-based Sandhill Strategy, said the court ruling is “likely to be enormously disruptive” to the project.

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The Army Corps’ 18-month timeline for addressing flaws in its environmental review makes Energy Transfer “vulnerable to a change in administration and a more draconian policy towards oil pipelines,” she said.

ClearView Energy Partners analyst Christine Tezak said “there is a strong possibility that the new Biden Administration could decide to not reissue the authorizations now that the permits have been vacated.”

The ruling “just totally overturns that conventional wisdom” that the courts would never force an in-service pipeline to shut down, said Southern Methodist University law professor James W. Coleman.

“There’s no legal rule that says you won’t shut down an existing pipeline but people felt like that was such a constant that they could count on it,” he said.

Coleman assigned 50-50 odds to the prospect that the U.S. Court of Appeals for the District of Columbia Circuit would stay the lower court’s decision. Some analysts speculated lower odds.

The pro-pipeline GAIN Coalition argued that Monday’s decision jeopardizes energy security and said it’s confident “common sense will prevail and this decision will be stayed or overturned.”

The American Petroleum Institute called for permitting reform.

“Our nation’s outdated and convoluted permitting rules are opening the door for a barrage of baseless, activist-led litigation, undermining American energy progress and denying local communities the environmental, employment and economic benefits modern pipelines provide,” the oil industry group said.

Boasberg’s decision comes after four years of litigation from tribes opposed to Dakota Access’ route across Lake Oahe, a dammed section of the Missouri River just a half-mile from the Standing Rock Indian Reservation in the Dakotas.

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The Standing Rock Sioux, Cheyenne River Sioux and others sued the Corps for approving the water crossing in 2016, saying it put tribal water supplies and cultural resources at risk.

Their frustrations triggered an outpouring of support from fellow tribes, Indigenous advocates and environmentalists from across the country. Thousands of pipeline opponents camped out in North Dakota for months to show their opposition.

Others in Iowa were arrested as they blocked construction sites and some landowners tried to fight in court against allowing the pipeline to cross their farmland, though regulators allowed the private Dakota Access investors to condemn land for the route.

The Obama administration responded to the opposition by withholding a final permit and committing to a new consultation process. But President Donald Trump quickly put Dakota Access back on track after taking office in 2017.

But the district court in Washington found flaws in the government’s pipeline approval process. Boasberg had ordered the Corps to conduct additional environmental review in mid-2017, but allowed the pipeline to remain in service during that time.

Earlier this year, the court again identified shortcomings in the review, concluding that the agency didn’t fully consider expert disagreement over the risk of an oil spill in Lake Oahe.

The Army Corps has said it expects to finish the analysis in mid-2021.

Bloomberg News and Erin Jordan of The Gazette contributed.

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