Easy resolution unlikely for contentious
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[September 19, 2016]
By Catherine Ngai and Ernest Scheyder
NEW YORK/CANNON BALL, NORTH DAKOTA
(Reuters) - A potential rerouting of a long-anticipated pipeline at the
center of a protest in North Dakota would be a laborious and costly
task, possibly delaying a startup by months and provoking further
opposition from Native American and environmental groups who were
instrumental in halting construction.
The 1,172-mile (1,886 km) Dakota Access pipeline was slated to start up
by the end of the year, transporting more than 470,000 barrels per day
of crude oil through four states into Illinois before it hooks up to
another pipeline down to Texas.
But in a stunning twist last week, the U.S. Justice Department and other
federal agencies intervened to delay construction in what industry and
labor representatives called an "unprecedented" move.
The halt on the $3.7 billion project was the result of a groundswell of
protest from Native American tribes and environmentalists, some of whom
now are vowing to continue the fight until the project is permanently
While there are a few options for rerouting the line, most still cross
either culturally important lands to Native Americans or large
waterways. The more extensive a reroute, the more likely it is that
regulatory obstacles crop up.
"We're entering unchartered waters if a reroute happens at this stage
and I can't think of another example of a case where this has happened,"
said Afolabi Ogunnaike, a senior analyst at consultancy Wood Mackenzie.
"Should a reroute take place, there are some major challenges."
North Dakota's governor, Jack Dalrymple, told Reuters on Friday that he
hoped regulators would give the go-ahead for construction to resume
shortly. If that does not happen, an alternative solution does not
appear to be easy to come by.
Energy Transfer Partners <ETP.N>, the company constructing the line,
declined to comment. It had said it is committed to completing the
The protest is concentrated in Cannon Ball, North Dakota, near Lake
Oahe, a large and culturally-important reservoir located on the Missouri
River in central southern North Dakota, where the line was supposed to
The U.S. Army Corps of Engineers now needs to decide whether it
correctly followed the National Environmental Policy Act (NEPA) and
other federal laws. If they did not, the permit process may need to be
restarted, which could take at least 120 days. It is unclear when the
NEPA review will be finished.
The other option -- rerouting the pipeline -- also presents substantial
challenges. The surrounding land where the pipeline could cross has a
number of national parks or wetlands, commercial and residential uses,
or Native American reservations.
An early proposal involved sending the pipeline from the Bakken shale,
where more than a million barrels of oil is produced daily, a bit
further north and crossing the Missouri north of the state capital of
Bismarck. The current crossing is about 30 miles south of the state
"Knowing that the destination of the pipeline is to the east and looking
at where the majority of the oil is sourced from, at some point, you
have to cross the Missouri River," said Eric Hansen, director of
environmental services at Westwood Professional Services, a surveying
and engineering firm that works in North Dakota.
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Protesters demonstrate against the Energy Transfer Partners' Dakota
Access oil pipeline near the Standing Rock Sioux reservation, in Los
Angeles, California, September 13, 2016. REUTERS/Lucy Nicholson
Activists have said they will continue their protest, fearing damage
to the water supply in the event of a leak, though there are many
pipelines in the United States that carry fuel under waterways.
"No one can live without water. We just want this to stop. We won't
leave until it does," said Valerie Eagle Shield, a member of the
Standing Rock Sioux tribe, the Native American tribe whose lands
would be directly affected.
Energy Transfer Partners preferred the more southerly route
eventually decided upon because it was 11 miles shorter and would
have less impact on the land, according to a U.S. Army Corps
environmental assessment from July. It also cost $23 million less
than the first proposed pipeline route.
The path with fewest obstacles, experts say, is even further north,
heading from the small town of Stanley, located in the Bakken, due
east, avoiding the Missouri River altogether.
However, that would require substantial changes and new state and
federal permits, and would make it difficult to gather oil from the
Bakken, which is not an issue for the current pipeline path. The
state and federal regulatory review for the current pipeline took
more than two years, according to North Dakota officials.
"A permitting process is quite complicated," Hansen said. "As they
come up with alternatives, they'll have similar issues to face and
re-permitting for any reroutes."
In addition, winter is coming, which will make construction a
challenge if the situation is not resolved.
Meanwhile, protesters, emboldened by their success, are prepared to
take their opposition into the cold winter months, while locals in a
section of the line in Iowa are also stepping up their pressure.
"This is a large issue, and why expedite it when we have to sit down
and consider the ways to move forward. Why rush?" said Dave
Archambault II, chairman of the Standing Rock Sioux Tribe, in Fort
Yates, North Dakota.
(Additional reporting by Valerie Volcovici in Washington; Editing by
David Gaffen and Edward Tobin)
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