President Biden’s pending decision whether to shut down the controversial Dakota Access oil pipeline could deepen early tensions between environmentalists and unions that endorsed him.
Biden’s day-one order to revoke a permit for the better-known Keystone XL oil pipeline between Canada and the United States drew backlash from organized labor and some centrist Democrats who say the cancellation will kill thousands of construction jobs.
Now, liberal lawmakers, celebrities, and indigenous leaders have asked the president to shutter Dakota Access, which critics warn would trigger more backlash since the pipeline is already operational, unlike Keystone. The Dakota Access pipeline has been carrying oil for more than three years from North Dakota to Illinois.
“That would set a huge new precedent,” said Robin Rorick, the vice president of midstream for the American Petroleum Institute, the largest U.S. oil lobby group. “It creates a situation where it’s death by 1,000 cuts for the pipeline industry.”
Analysts say the circumstances surrounding Dakota Access are unique.
In his first days in office, President Donald Trump directed the Army Corps of Engineers to approve the pipeline after the Obama administration held up permits in response to significant protests during 2015 and 2016.
The Standing Rock Sioux Tribe, the reservation of which is near the pipeline, argued that the Dakota Access could pollute the Missouri River, the tribe’s primary source of drinking water, and harm sacred cultural lands and tribal burial grounds.
Oil was flowing through the pipeline by June 2017.
But in July of last year, a federal district court judge ordered the Dakota Access pipeline to shut down and empty its oil because the Trump administration’s environmental review for a critical permit was too deficient for the pipeline to continue operating.
The D.C. Circuit Court of Appeals later granted the pipeline’s developer, Energy Transfer Partners, temporary relief by issuing an order allowing the oil to continue flowing while it undergoes another environmental review.
At the same time, the D.C. Circuit affirmed the lower court’s ruling that the pipeline was operating illegally without a sufficient permit from the Corps for the pipeline to cross under Lake Oahe, a reservoir formed by a dam on the Missouri River.
The court let the Corps decide whether to shut down the pipeline while it conducted another environmental review. Under Trump, the Corps declined to do so.
Biden, however, could decide to enforce a temporary shutdown of the pipeline. The court recently granted the administration extra time for the Corps to address deficiencies in the old review. The move could mean the administration will look to shutter the pipeline in the meantime and perhaps permanently if the Corps’s environmental review makes that determination.
Christi Tezak, managing director of ClearView Energy Partners, a research group, suggested the pipeline would deserve it if Biden enforced a temporary shutdown.
“The question of shutting down an operating pipeline arises in part because it’s also rare a project that flunked its environment review in the courts twice,” Tezak said. “Dakota Access lacks permission to be where it is, so why wouldn’t Biden do this?”
Liberal environmentalists expect Biden to deliver because nixing Dakota Access would help fulfill his promise to strengthen relations with Native American tribes and to confront environmental “injustices” toward groups exposed to pollution. His interior secretary nominee, Rep. Deb Haaland, drew national attention by joining tribal leaders for four days of protests in 2016 against Dakota Access. She’d be the first Native American Cabinet secretary.
“This is one of the early critical tests of whether Biden’s commitment to environmental justice and indigenous rights extends behind rhetoric and applies to big decisions,” said Collin Rees, a senior campaigner with Oil Change U.S., a group that advocates keeping oil in the ground.
The oil industry counters that a shutdown would harm oil producers in the Bakken shale basin, which primarily exists in North Dakota.
Bakken producers could see hundreds of thousands of barrels per day without an exit route this year, just as production is starting to recover from the coronavirus pandemic, which reduced demand for transportation fuels derived from fossil fuels.
Rail exports and other existing pipelines won’t be able to absorb the production quickly enough, Rorick said.
Oil output in the Bakken has recovered to about 1.2 million barrels per day, compared to a low of 900,000 barrels a day in May and a high of 1.6 million barrels a day in February 2020 before the pandemic.
“We are not talking about shutting down Dakota Access in a bubble,” Rorick said. “We are recovering from a pandemic.”
In a recent letter protesting Biden’s Keystone decision, centrist Democrat Sen. Joe Manchin warned the president against opposing other pipelines, arguing that oil demand wouldn’t change and would be met by more dangerous trucks and rail.
Beyond Keystone and Dakota Access, Biden has signaled his administration would make it harder for pipelines to obtain the federal permits they need to be built in the first place, as a way to respond to climate change.
AFL-CIO President Richard Trumka, a Biden supporter, recently said the president should supplement any future decisions to stop pipelines with a plan for replacing the jobs associated with them.
The Biden administration is facing questions from traditional allies on how its clean energy and infrastructure spending agenda will create new jobs that can replace lost work in the fossil fuel industry.
“He will have to navigate between competing camps in the Democratic Party moving forward, and I think it’s reasonable to be concerned that he would shift too far and in a way that becomes a problem,” said Jeff Kupfer, a former Energy Department senior official in the George W. Bush administration.
Shutting down Dakota Access would not have a significant immediate effect on jobs, analysts say, since it’s already been built and there isn’t much work associated with keeping a pipeline operating. The vast majority of jobs related to Keystone were from temporary construction work.
But a stoppage of Dakota Access could trickle down to oil producers in the Bakken, who’d have to deal with lower prices and reduced output due to the lack of transportation alternatives.
“The jobs are not insignificant,” Rorick said.
Rees was not dismissive of the job concerns. He urged the Biden administration to lean into specific solutions, such as providing a plan for oil workers to plug abandoned wells.
“They need to get real on what their plans are,” Rees said. “We need to be taking concrete steps on jobs and being honest about what the transition away from fossil fuels entails.”
