Court wrestles with legal doctrine in Dakota Access Pipeline appeal

Nov. 16, 2020

A federal appeals court held arguments over the regulatory approval given to the Dakota Access crude oil pipeline—specifically over the question of how detailed and convincing a regulator’s explanations must be before allowing a project to go ahead.

Energy Transfer LP was allowed to build the pipeline with horizontal drilling under the Missouri River at Lake Oahe in North Dakota. The line has been in commercial operation since June 2017 while fighting over it continues in the case of Standing Rock Sioux Tribe v. US Army Corps of Engineers.

A federal judge in March concluded the Corps of Engineers violated the National Environmental Policy Act (NEPA) by failing to prepare an environmental impact statement (EIS) before granting an easement allowing the line to be built under Lake Oahe. He ruled that substantial points of controversy had not been resolved, and consequently an EIS was needed. He vacated the easement to await an EIS.

The merits of the NEPA ruling and the easement vacatur were argued Nov. 4 before a three-judge panel of the US Court of Appeals for the District of Columbia Circuit. The judges pushed the attorneys for the Corps and the pipeline operator on the question of how points of controversy can be sufficiently resolved to avoid the need for an EIS, which is an elaborate undertaking.

The Corps provided solid explanations for its decision and conducted extensive modeling of hypothetical spills to make it clear that the risks of a significant oil spill were very low, and that should have resolved the controversy and averted the need for an EIS, Justice Department attorney James Maysonett told the court.

The US District Court for the District of Columbia ignored the low risk of an oil spill in making his decision, the attorney said.

How to address controversy

Pushed by Judge Patricia Millett of the appellate court on what is needed to put a controversy to rest, Maysonett said previous court decisions have indicated a “convincing” case must be made. That does not mean a plaintiff will be convinced, but that it must be detailed, clear, rational, and based on expertise, as the Corps’ explanations were in this case, he said.

Attorney Miguel Estrada, arguing on behalf of Energy Transfer and its operating unit Dakota Access LLC, said the Corps had done its job by rationally answering all objections raised by the plaintiffs. At one point, the plaintiffs raised 339 objections, but all were addressed, he said.

The decision of the Corps to grant the easement should have been upheld under the standard of the Administrative Procedure Act, which allows regulators to exercise their judgment so long as it is not “arbitrary and capricious,” Estrada said.

Attorney Jan Hasselman, representing the Standing Rock Sioux Tribe, argued the pipeline should be shut down now that the easement has been vacated. Otherwise, he said, vacatur is meaningless, a position also taken by 27 congressional Democrats in a brief filed in support of the plaintiffs.

In July the district court ordered the easement vacated and the line shut down, but the appeals court stayed the shutdown order. During the oral arguments Nov. 4, Judge David Tatel said the court’s stay of the shutdown order will need to remain in effect as a matter of court policy.

Proposed doubling of volume

The Dakota Access Pipeline carries 570,000 b/d of crude oil more than 1,000 miles from North Dakota to a pipeline hub at Patoka, Ill. Connections there take the oil as far as the Gulf Coast.

Judge Millett expressed an interest in whether additional environmental study is needed because Energy Transfer has been taking steps to get regulatory approvals for a doubling of the pipeline’s capacity (OGJ Online, Oct. 15, 2020).

The Justice Department attorney said the Corps would have to analyze that when the company brings the plan to the Corps for consideration.

Another recent development has been the revamping of NEPA regulations by the White House Council on Environmental Quality, a process completed in July and subsequently challenged in court (OGJ Online, Sept. 2, 2020).

The revised regulations eliminate the requirement that an agency develop an EIS if points of controversy remain. Millett wanted to know whether that change would affect the case before the court. The government’s attorney said he did not know.