Despite the fight put up by the Sioux tribe, environmentalists, and human rights activists at Standing Rock, President Trump made an executive order for propane and natural gas company Energy Transfer Partners LP (NYSE:$ETP) to commence their $3.8 billion project — the Dakota Access Pipeline — on June 1. However, the situation quickly turned around as the federal court ruled in favor of the Sioux tribe — meaning that the Dakota Access Pipeline might very well have to halt its operations for now.
After the federal court ruling, Energy Transfer’s shares suffered as its price went down 3.8%, closing at $19.76 on June 14. It is the first time that the company’s share prices went down below $20. Shares went down further to close at $19.19 on June 16.
The ruling is a great victory for the Sioux tribe, who filed the lawsuit against the U.S. Army Corps of Engineers. The suit was built upon the belief that Energy Transfer did not conduct a thorough environmental evaluation for its Dakota Access Pipeline project and that Trump disregarded the Native American groups’ treaty rights. The Sioux tribe said that the pipeline would violate their sacred burial grounds — not only that, it could potentially contaminate the water supply and lead to serious public health problems. For Energy Transfers, the lawsuit added to the projects already long record of legal problems and public criticism.
Both the Sioux tribe and Energy Transfers are scheduled to appear in court again on June 21 for further hearing.
At the hearing on June 14, federal judge James Boasberg said that the U.S. Army Corps of Engineers had failed to meet several requirements of the National Environmental Policy Act. As a result, Boasberg order the Army Corps to re-conduct the pipeline’s environmental review in further detail, as well as reassess its permits. In its first environmental review, the Army Corps did not consider the damaging environmental impact in scenarios such as oil spills. Legally speaking, if an oil spill does occur, it will be breaking the Sioux tribe’s fishing and hunting rights.
In order for the Dakota Access Pipeline to resume production, the U.S. Army Corps of Engineers will have to seriously ensure that all requirements of the National Environmental Policy Act has been met, and that no treaty rights nor environmental rights are being broken. The Army Corps has also been asked to evaluate the possibilities of alternative routes for the pipeline that would not affect Sioux’s water supply nor violate treaty rights.
The temporary shut down of the pipeline, as well as Boasberg’s order for the pipeline to undergo extensive environmental and legal analysis, will be costing Energy Transfers quite a lot of money and time. However, the company has attempted to downplay the situation, stating that, “Dakota Access believes the record supports the fact that the Corps properly evaluated both issues, and that the record will enable the Corps to substantiate and reaffirm its prior determinations.”
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