ND Pipeline Decision Creates Uncertainty For Energy Sector

Opponents of the pipeline hailed the decision, but industry supporters countered that it would set a dangerous precedent for future pipeline projects.

Mnet 97491 North Dakota Pipeline Ap Large

The Dakota Access Pipeline this year became the latest flashpoint in battles between environmental advocates and the energy sector over massive oil pipelines.

But observers told Reuters this week that the decision to halt construction on the most controversial portion of the project crosses into uncharted territory for both industry and regulators.

Unlike the Keystone XL pipeline — which drew the ire of environmentalists until the Obama administration rejected it last year — Dakota Access had secured approval and permits from authorities to move forward with construction.

The mostly-built pipeline, however, became a source of controversy after its owner, Energy Transfer Partners, sought an easement to drill under a Missouri River reservoir in North Dakota.

The nearby Standing Rock Sioux Tribe argued that construction would cross its sacred lands and jeopardize its water supply.

Members of the Standing Rock and other tribes converged on the site to protest construction for months, and their high-profile standoff with law enforcement became more tense as the weather turned colder.

On Sunday, the Army Corps of Engineers declined to allow Energy Transfer Partners to drill under Lake Oahe — effectively halting the project for the time being.

Opponents of the pipeline hailed the decision, but industry supporters countered that it would set a dangerous precedent for future pipeline projects.

Although analysts conceded that federal policy would likely become more pipeline-friendly once President-elect Donald Trump takes office, they nonetheless said that pipeline companies should proceed carefully.

"Until you see that Trump has a track record of approving things and showing that things can get built in time, it's tough to say it's not a murky environment for pipelines," Drillinginfo's Sarp Ozkan told Reuters.

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