WASHINGTON (Legal Newsline) - North Dakota has filed a motion to intervene as a defendant in a federal lawsuit brought by the Standing Rock Sioux Tribe to shut down a major oil pipeline, arguing that the State has significant environmental and economic interests in the litigation.
Last month, the tribe filed the lawsuit in D.C. federal court against the U.S. Army Corps of Engineers, asking the court for an order to shut down the Dakota Access Pipeline (DAPL) until it fully complied with U.S. regulations. The lawsuit filed on Oct. 14 alleges that the pipeline violates the Clean Water Act, National Historic Preservation Act and the 1868 Treaty of Fort Laramie and poses a threat to the tribe’s water and its public health in general.
North Dakota Attorney General Drew Wrigley's office filed its motion to intervene on Nov. 7, arguing that closure of the 1,174-mile-long pipeline would cause “immediate” fiscal harm to the state in the form of lost taxes and fees.
“(A)lmost 60% of the total of all tax and fee revenue received by the state comes from oil and gas extraction and production,” the motion states. “These revenues support programs from which all state residents benefit including education, health care, water resource management, law enforcement, roadways, libraries, veterans’ services, public housing, parks and recreation, and other public services.”
Currently, about half of the state’s crude oil production flows to market using the DAPL, according to the motion, and the state lacks adequate rail capacity to transport the oil if the pipeline were be to shut down.
“Closing DAPL will therefore result in the loss of substantial tax revenue for the state of North Dakota and its citizens,” the motion states. “(T)he state estimates that an order closing DAPL would reduce state revenues for the first 12 months by approximately $900 million, assuming a 50% decrease in oil production for three months before producers are gradually able to transition more production from DAPL to rail. …”
A DAPL shutdown would likely result in a forced drop in oil production in North Dakota and interfere with existing energy contracts, according to the motion.
“(I)f DAPL is shut down, 550,000 to 600,000 barrels of oil per day will likely remain shut-in until economically viable alternate transportation can be secured and contracts revised,” Wrigley and co-counsel argue. “This would result in an estimated temporary loss of 8,450 to 9,300 full-time jobs and a permanent loss of 1,700 to 2,200 full-time jobs.”
A concern for state officials if the tribe’s lawsuit is successful is that shutting down the pipeline would require a shift in oil transport to rail cars and trucks. This would cause a doubling of air pollution and increased risks of oil spills, the state’s motion argues.
A collateral effect from a shutdown would be the destabilization of the state’s agricultural supply chains, the motion states. A DAPL shutdown would lead to the repurposing of rail cars currently used to ship agricultural products for crude oil, leading to increased costs for farmers as they scramble for ways to transport their goods to markets, according to state officials.
The focus of the tribe’s lawsuit is where the pipeline crosses the Missouri River, which is just upstream from the Standing Rock reservation. If the lawsuit led to the closing of that section of the pipeline, the State would be forced to seek an alternative route that would affect other cultural and environmental resources around North Dakota, the motion says.
The North Dakota legal action is the latest in ongoing state and federal litigation over issues related to Energy Transfer’s pipeline and the destructive protests against its construction in 2016-2017.
In a federal lawsuit, the state argues that North Dakota should be compensated by the federal government to the tune of $38 million in damages resulting from law enforcement costs and property damage during the protests.
In addition, Greenpeace, a defendant in a lawsuit filed by Energy Transfer over the damage the company sustained during the demonstrations, is now trying to use a new European Union directive to dismiss the company’s litigation, which was filed in Morton County, N.D.