A showdown on the Great Plains seems inevitable as the company pushes to complete a controversial pipeline, opponents dig in and Trump’s election tips the political balance.
As President-Elect Donald Trump sailed to victory on Election Day, developers of the Dakota Access Pipeline now predict that they face no significant delay to finish the pipeline.
In a statement issued Tuesday, the company noted it has finished all its work in North Dakota but for the tunneling under the Missouri River. The company is marshaling its equipment now to finish the project as hundreds of opponents camp nearby.
Energy Transfer Partners (ETP) of Dallas, Texas, still needs a final easement from the U.S. Army Corps of Engineers on land next to the river to complete the project.
Standing Rock Sioux Tribal Chairman Dave Archambault II has asked President Obama to halt or reroute the pipeline. But with the election of Donald Trump to the presidency, any halt to the project would likely be only temporary.
The Army Corps reiterated its request Wednesday to ETP to voluntarily stand down from the project while it considers whether to reconsider earlier permits, and the easement. But the company instead is mustering equipment, and stated Tuesday it hopes to be ready to drill under the river within two weeks.
It has good reason to hurry.
The company has stated in court filings that if it cannot start moving oil as it promised in its shipping contracts by the end of the year, it could effectively cancel the project.
- Background stories: Here's a primer on the pipeline project, including the key players on all sides, a brief history of broken treaty promises and a closer look at the courtroom battle. And here's what we're reading related to the controversy.
- March 28: What the completed Dakota Access pipeline means for key players.
- Feb. 23: Dakota Access Pipeline protest camp closed; 46 holdouts arrested.
- Feb. 22: Preparing to leave, Standing Rock protesters ceremonially burn camp.
- Feb. 13: Judge rejects tribes’ bid to halt Dakota Access Pipeline; feds plan to shut down protest camp.
- Feb. 1: Hundreds rally as the Seattle City Council considers divesting from Wells Fargo because of its role as a Dakota Access Pipeline lender.
- Jan. 24, 2017: Donald Trump signs executive orders advancing the Keystone and Dakota Access pipelines. The Standing Rock Sioux tribe says it will push back.
- Dec. 4, 2016: Tribes celebrate as Corps rejects Dakota Access pipeline easement
- Nov. 21: Washington tribes urge that Obama stop, reroute Dakota Access Pipeline
- Nov. 12: Hundreds rally in Tacoma against Dakota Access Pipeline
- Live updates from from Seattle Times journalists on the scene Oct. 26, 27 and 28.
- Oct. 25: Tribes in Washington state call on President Obama to improve federal consultations over infrastructure projects
- Oct. 24: Citing treaty claim, protesters occupy land a rancher recently sold to pipeline developer Energy Transfer Partners.
- See photos from the Dakota Access Pipeline protests.
“In connection with its long-term transportation contracts with 9 committed shippers, Dakota Access has committed to complete, test and have DAPL in service by January 1, 2017,” Joey Mahmoud, vice president of Dakota Access and executive vice president of engineering and construction of Energy Transfer Partners, wrote in a federal-court declaration last September.
“The long-term transportation contracts give shippers a right to terminate their commitments if DAPL is not in full service per the contract deadline. Meanwhile, faced with an uncertain delay, shippers would need to determine alternative sources for secure, reliable transportation of crude oil supplies to the refineries … and loss of shippers to the project could effectively result in project cancellation.”
ETP signed its contracts with shippers in the spring of 2014, before a crash in both production and prices for oil out of the Bakken took hold.
Today there is more than enough capacity in existing pipelines to move oil out of the Bakken, noted Clark Williams-Derry, an energy analyst at the Sightline Institute in Seattle. That could render the Dakota Access Pipeline’s (DAPL) capacity completely superfluous as soon as it’s finished, Williams-Derry said.
Despite the doubts expressed in the declaration about the timeline it now faces, the company is pushing ahead. Analysts see value in the pipeline.
Gurpal Dosanjh, an analyst with Bloomberg Intelligence, sees long-term value for the pipeline no matter what. “It’s the only game in town, the shortest route,” he said.
If anything, a drop in oil prices makes the pipeline more valuable, Dosanjh said. Savings realized in shipping by pipeline, rather than the more expensive rail option, mean more to producers now:
“They are burning cash and have high debt, and that difference actually counts for a lot more,” he said.
The company took a risk by beginning construction before it had all its permits and easements in hand. That’s possible under the expedited, piecemeal review of the pipeline that never considered the pipeline route in its entirety.
No federal agency has jurisdiction over oil pipelines. Indeed the project had virtually no federal review at all. The Corps, under a so-called Nationwide Permit 12, only investigated locations where the more than 1,100- mile-long pipeline touches water in its route across four states from North Dakota to Illinois.
There, it connects with other pipelines to refineries.
The Standing Rock Sioux and other tribes have repeatedly said they were never meaningfully consulted in the project.
They say the project poses unacceptable risks especially to water quality in the Missouri River, the drinking- water supply for the tribe and millions of people downstream.
But industry analysts say they expect the company to keep forging ahead, and the pipeline to go forward.
“I think the easement gets granted, and I think it happens before the inauguration,” said Brandon Barnes, an analyst with Bloomberg Intelligence. “I think it happens in November.”
He said any move by Obama now to deny the easement could just be overturned by Trump.
“That seems like a Pyrrhic victory. Does he look petty doing that? Is he really defending the tribes?” he said.
Concern by critics that the Corps didn’t do enough overlooks what little the law asks, Barnes said.
Lawyers for the Standing Rock Sioux disagree and have sued to stop the project in federal court. That suit is still pending.
For all the hurry to move oil by the end of the year, getting a later start than the company anticipated because of slow downs imposed by the Obama administration now makes that impossible. It takes 90 to 120 days to drill under the river, according to the company’s construction plan. Winter weather could make that more difficult. So could future disruptions.
A wild card is the growing opposition, based not only on a critique of permits, laws and regulations, but moral grounds. Tribes from around the nation and world, students, clergy, human-rights advocates and opponents of every stripe have converged in a movement against the pipeline. The protests are about far more than just one project.
Environmental groups around the world are criticizing banks for providing financing for the project. Several social-media campaigns are under way urging consumers to yank their money out of banks funding the pipeline. Seattle City Council member Kshama Sawant is pushing to pull Seattle’s $3 billion out of Wells Fargo Bank, one of the largest lenders to the project, according to federal lending documents.
Many Washington tribes fighting fossil-fuel projects in this state have visited the opposition camp in North Dakota and sent donations of everything from cash to smoked fish. Washington tribes and their supporters will march in Tacoma this Saturday in support of the pipeline opponents, and some tribal members still at the camp vow to stay until the project is stopped.
Meanwhile, North Dakota, an oil-dependent state, has met opponents with force.
Morton County has organized police response from 24 counties and eight neighboring states and arrested more than 430 pipeline opponents since last August.
Law-enforcement officers, private security and even the National Guard have been deployed against demonstrators, using tear gas, pepper spray, rubber bullets, beanbag shot guns, noise cannons, armored personnel carriers and dogs.
The law-enforcement response has cost $4.4 million, according to the Morton County Sheriff’s Office and drawn criticism from around the world and from U.N. observers at the scale and militarization of the response.
For Archambault, there is only one answer.
“The only possible path forward for the Standing Rock Sioux Tribe is a decision that denies the easement or subjects it to a full environmental-impact statement and tribal consultation,” he said.
“The only urgency here arises from DAPL’s reckless decision to build to either (side) of the Missouri River without a permit.”