Dakota Access faces millions in losses if pipeline stalls — lawyers

By Ellen M. Gilmer | 09/15/2016 07:50 AM EDT

Dakota Access backers will face $430 million in losses and innumerable other harms if the contentious pipeline is paused, lawyers for the company said yesterday.

With a legal brief to the U.S. Court of Appeals for the District of Columbia Circuit, Dakota Access LLC used the opportunity to list all the calamities it would encounter if project opponents succeed in blocking construction.

Chief among them: immediate financial harm, loss of customers, potential loss of work for 8,000 people, and various ripple effects in the oil and gas industry and broader economy. And that’s even if work on the pipeline is stalled only temporarily, the company claimed.

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"Even a temporary or limited injunction would have devastating long- and short-term impacts to the DAPL project," the brief said. "Construction is in the final phases, and flexibility no longer remains to work around short segments of off-limit portions of the pipeline, and as such, any injunction would jeopardize the project itself by causing deviations and delays to the now-critical path construction schedule."

The company is currently barred from working beneath and on the shoreline of Lake Oahe, a dammed section of the Missouri River, while the Army Corps of Engineers considers whether to grant an easement there. Per a court order, it also cannot start construction on a 2-mile section west of the lake. The same court order also blocks construction 20 miles east of the lake, but that portion of the pipeline corridor is virtually complete.

Now tribal opponents are asking the D.C. Circuit to extend the 2-mile construction freeze west of the lake another 18 miles to protect potential burial grounds there (E&ENews PM, Sept. 12).

Dakota Access’ response to that request laid out a catalog of potential harms from such an injunction, adding that it has already incurred "countless dollars in damages that cannot be recovered" from the thousands of protesters gathered near the pipeline’s route in North Dakota.

According to yesterday’s brief, a delay in construction is expected to push the pipeline’s start date beyond its January 2017 target. That means a loss of customer contracts, and "the families of upwards of approximately 8,000 workers will be negatively affected."

Such a hit would amount to more than $430 million, the company said, noting that demobilization alone would cost $200 million, and each month of delay would block in more than $83 million in losses. After a year of delays and related losses — capital expenses, loan renewal fees, lost revenue, penalty payments — the company would be down $1.4 billion, it said.

The Standing Rock Sioux Tribe has countered that continued grading of the land and other construction activities would cause irreparable harm to historical and cultural sites, many of which likely remain undiscovered. The tribe is expected to reply to Dakota Access today.

The Obama administration has urged the company to voluntarily hold off on construction within 20 miles of Lake Oahe while the Army Corps considers an easement needed for the water crossing.

Dakota Access lawyers cited the company’s extensive efforts to avoid cultural sites by consulting archaeologists, navigating around sensitive areas, overlaying the pipeline with existing infrastructure as much as possible and training construction workers in an "Unanticipated Discoveries Plan" for any unknown artifacts encountered along the way.

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