Illinois regulators nix delaying DAPL decision
Tuesday, June 9, 2020

Illinois regulators have rejected a request from environmental groups to delay a decision on that state's permits for the proposed expansion of the Dakota Access pipeline. 

The groups Save Our Illinois Land and the Sierra Club had argued there is less need to expand the pipeline since a pandemic has crushed worldwide oil demand, forcing many companies to curtail production.

Energy Transfer Partners, the parent company for the pipeline, however, countered that the pandemic is a temporary condition. Demand is sure to increase as the economy revives, and once that happens, the pipeline expansion will still be needed to transport constrained Bakken crude.

Dakota Access proposed expanding its Bakken pipeline from 570,000 barrels of oil per day to 1.1 million prior to the pandemic. At the time, North Dakota was posting production records, and had already bumped up against existing crude oil pipeline capacity.

The DAPL expansion will involve construction of three new pumping stations, but no new pipeline construction.

The pipeline has so far received all the permits it needed from North Dakota, South Dakota and Iowa. All it needs now is a final decision from the Illinois Commerce Commission. 

However, the pipeline also faces separate legal issues over its federal permits, after a judge in the District Court of Washington DC ruled that the National Environmental Protection Act required the U.S. Army Corps of Engineers to complete a more stringent environmental study of the pipeline's water crossing under Lake Oahe because the pipeline became controversial.

Judge James Boasberg has asked parties to file a brief on whether the pipeline may continue to operate while that study is conducted, or whether its original permits must be vacated.

The Standing Rock Sioux, along with environmentalists and dozens of House and Senate Democrats, have filed briefs arguing the permits should be vacated, while 14 states, led by Indiana, have filed amicus briefs that outline the economic harm that action would cause in their states. The latter also contends that the final outcome isn't likely to change.

North Dakota, meanwhile, filed its own brief outlining the significant economic harm that would cause here.

Since the state has very little refining capacity, it is dependent on affordable transportation to get its oil and  gas to market. Dakota Access carried 40 percent of the state's crude oil to market in February, according to state figures. Diverting 500,000 barrels of oil from Dakota Access to rail transport would take two or so years, North Dakota's brief contends, and lead to the shut-in of thousands of wells and loss of hundreds of jobs, not to mention the loss of state and local tax revenues. 

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