Agriculture, energy and water groups rallied behind developers of the Dakota Access pipeline this past week as a federal appeals court weighs whether to allow the oil conduit to remain operational while litigation over a key approval for the project proceeds.
Trade associations and nonprofits throughout North and South Dakota called for the U.S. Court of Appeals for the District of Columbia Circuit to block a lower bench from temporarily shutting down Dakota Access as the Army Corps of Engineers completes an environmental impact statement supporting one of the pipeline’s permits.
In “friend of the court” briefs this week, the groups echoed concerns raised by pipeline developer Energy Transfer LP and the Army Corps that shutting down the pipeline would inflict serious harm on the local economy in the midst of the coronavirus pandemic.
Counties, cities and school districts that rely on tax revenue from the oil and gas industry will all suffer economic hardship as a result of shutting down the pipeline, the Western Dakota Energy Association wrote.
The group noted that in May, the price of a barrel of oil fell to $14.28, far below the North Dakota Legislature’s forecast of $48 per barrel in 2020.
“The court’s Order would only exacerbate these already-dire circumstances,” the western North Dakota nonprofit wrote.
“[T]he State cannot so easily adjust the buckets of revenue distribution to account for extreme, long-term impacts such as those from a global pandemic — or the shutdown of a pipeline that is a central artery delivering not only oil to market, but also State revenue to local governments and school districts,” the nonprofit wrote.
Loss of tax revenue from the pipeline could also drain North Dakota’s Resources Trust Fund, which finances management of the state’s water resources, according to the North Dakota Water Users Association.
“Shutting down DAPL, which provides a significant portion of this tax revenue, will have devastating impacts on some of NDWU’s members, limiting access to reliable, high quality potable water for some members, and in turn undercutting the ability of those communities to provide water needed for sanitation and hygiene as well as drinking,” the group wrote.
The trust fund is also responsible for funding major flood protection projects in the state, and shutting down the pipeline would reduce the funds available for those projects, the group said.
Farmers in both North and South Dakota could also see increased grain shipping costs if oil displaced from the Dakota Access pipeline is shifted to rail transport. That in turn could hurt the agricultural industry in those states, which relies heavily on rail service, said groups including the North Dakota Farm Bureau and the South Dakota Corn Growers Association.
“Many farmers view pipelines such as DAPL as the long-term solution to ease rail congestion for the agriculture industry, and a shutdown of an active pipeline would give rise to the very problems the pipeline was meant to address,” the groups wrote.
Their message sharply contrasted that of the Native American tribes opposing the pipeline, who described the economic impacts of the project as overblown, noting that the drop in oil production would mean a much smaller quantity of oil would need to be shifted to rail transport (Energywire, July 21).
In replies to the tribes yesterday, the pipeline developer and the Army Corps doubled down on their arguments in defense of keeping the pipeline running.
They renewed calls for the court to halt an order from the U.S. District Court for the District of Columbia, which said that the pipeline needed to be shut off and drained of oil by Aug. 5. The D.C. Circuit has temporarily put that order on hold.
Judge James Boasberg, an Obama appointee to the district court, ordered the pipeline to be shut down after he ruled in March that the Army Corps had violated the National Environmental Policy Act in approving the pipeline’s crossing beneath Lake Oahe, located about a half mile from the Standing Rock Sioux reservation.
“While Plaintiffs believe that the billions in losses many have documented would be ‘lost in the noise’ of a pandemic-induced temporary economic slowdown, there is little common-sense support for the proposition that digging harder gets you out of a hole faster,” ETP wrote.