Energy industry observers are urging oil pipeline companies to tread cautiously after the federal government rejected a controversial North Dakota project over the weekend.
Critics told Reuters that the decision against the Dakota Access Pipeline sets a dangerous precedent because — unlike the Keystone XL pipeline rejected last year — the project previously receive state and federal approval and permits.
Dakota Access, a mostly-completed 1,172-mile line from North Dakota's oilfields to Illinois, sought an easement from the Army Corps of Engineers to drill under a Missouri River reservoir in close proximity to the Standing Rock Sioux Tribe.
The tribe argued that the line would cut through its sacred lands and put its water supply at risk, and members of the Standing Rock and other tribes and activists camped at the site for months in order to block construction.
The standoff became increasingly tense as the weather turned colder, but protesters celebrated a victory — at least temporarily — on Sunday when the Army Corps declined to issue the easement.
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.
Dakota Access owner Energy Transfer Partners, for example, previously indicated that pipeline delays were costing tens of millions each month and could ultimately lead to the project’s cancellation.
"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 the publication.