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First DAPL Oil Shipment Set for This Week, But Law Enforcement Costs Remain

By insidesources. Originally published at ValueWalk.

Months behind schedule, the day has come: The Dakota Access Pipeline will be ready to carry oil as early as Monday and no later than Wednesday. The opening date comes months after the project’s projected completion, but still slightly ahead of the estimate given by Energy Transfer Partners after obtaining the final easement. Although the first DAPL oil shipment is just days away, underlying tensions of the protest continue. The Standing Rock and Cheyenne River Sioux tribes have continued to fight the pipeline’s opening in court and the state of North Dakota continues to try to find reimbursement for law enforcement costs related to the protest.

DAPL #NoDAPL DAPL Protests Standing Rock Protest Camp
By U.S. Department of the Interior (P1020105) [CC BY-SA 2.0], via Wikimedia Commons

Since the Army Corps of Engineers granted the easement under Lake Oahe, Energy Transfer Partners has raced to finish the project and make up for time lost to months of protests. Area tribes fought to the end to halt construction. A second area Sioux tribe, the Cheyenne River Sioux, filed a suit alleging that the pipeline violated its religious freedom. The tribe argued that the presence of the pipeline would desecrate the Missouri River, which they consider sacred and use in various religious rituals.

That claim was rejected by U.S. District Judge James Boasberg last week.

“Although the tribe’s members may feel unable to use the water from Lake Oahe in their religious ceremonies once the pipeline is operational, there is no specific ban on their religious exercise,” he said in his opinion.

He also suggested that the tribe’s legal challenges had little hope for success.

“The critical factor here is Cheyenne River’s lack of likelihood of success on the merits … plaintiff does not have a strong case on appeal,” Boasberg said. (Boasberg had previously ruled against the tribe last fall, when he denied the Standing Rock tribe’s request for an injunction. That request argued that the tribe had not been properly consulted about the environmental impact of the pipeline by Energy Transfer Partners.)

In response, the tribe filed paperwork to request an injunction that would halt oil shipment while they filed an appeal. On Saturday, the U.S. Court of Appeals for the District of Columbia denied an emergency injunction pending the appeal of Boasberg’s decision. As a result, DAPL oil shipment can proceed as soon as construction and safety tests are complete.

Although DAPL construction is essentially finished, North Dakota continues to grapple with how to cover the more than $38 million in law-enforcement costs incurred during the months-long protests. For months, North Dakota’s congressional delegation has sought federal help, but so far has received little. Energy Transfer Partners has offered to cover the entirety of the costs, but opinions vary over the ethical ramifications of accepting the offer.

Two state government watchdog groups have come down on opposite sides of the issue. Dustin Gawrylow, managing director of the North Dakota Watchdog Network, which monitors state spending, argues that the state would be foolish not to take the money.

“You take the money when you can get it,” he said, while acknowledging that the company also stood to benefit. “They’re not spending [the money] out of the goodness of their heart. They’re spending it to build goodwill in North Dakota [after months of protests.]”

However, some worry that accepting reimbursement from the oil company makes it look like police were bought off by the oil companies. Common Cause, a nonpartisan group promoting government accountability, warns that accepting the money presents the state with an ethical dilemma, since the donation comes from an industry North Dakota regulates. In addition, accepting could bring bad publicity, since protesters alleged during the standoff this summer that police were in the the pipeline’s pocket.

“For Energy Transfer to offer a donation, basically that’s paying off the state for using state resources as personal security,” said Joye Braun, a protest leader.

Others say that the company should not be forced to pay for costs incurred by protesters.

“If ETP pays up to the State of North Dakota for the violent and often unlawful activities of the #NoDAPL activists it will set a terrible precedent,” writes Rob Port, a local political commentator, “whereby companies trying to construct controversial projects are expected to pony up for the misdeeds of the extremist who oppose them.”

However, North Dakota could see some relief in the former of higher oil tax revenues once DAPL oil shipment begins. DAPL oil shipment is cheaper than the transportation methods currently being used and the transportation cost savings will likely lead to higher prices at the wellhead.

“Every additional dollar that an oil company is able to get from a barrel, that doesn’t just help them but it helps the state,” said North Dakota Tax Commissioner Ryan Rauschenberger.

Industry experts estimate that DAPL oil shipment will save oil companies $1-$3 per barrel in transportation costs. It is estimated that North Dakota’s state government gains an additional $34 million per year for each dollar increase in the price of oil. The state can also expect to gain about $10 million in property taxes paid by Energy Transfer Partners for the pipeline property.

Rauschenberger says it is difficult to give an exact estimate on the amount of tax revenue DAPL completion could bring the state, but says that the number could be as high as $100 million.

When operating at capacity, DAPL will be able to ship up to 570,000 barrels per day to a transportation hub in Illinois, though initially the pipeline will only ship up to 470,000 barrels per day. Still, this handles a good portion of North Dakota’s crude production, recently estimated to be about 942,000 barrels per day.

The post First DAPL Oil Shipment Set for This Week, But Law Enforcement Costs Remain appeared first on ValueWalk.

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