Missing Federal Permit, Cancelled Insurance Bond Mean Mounting Legal Woes for Dakota Access Pipeline

Legal and regulatory problems are beginning to pile up for the troubled Dakota Access Pipeline, with a judge asking how the pipeline operator “expects to proceed” without a key federal permit and an insurance company cancelling an important financial guarantee in Iowa.

In Bismarck, North Dakota last week, District Judge James Boasberg scheduled a February 10 status hearing on the pipeline, a day after an appeal court upheld his decision to reject a federal easement for the line. “The U.S. Court of Appeals for the District of Columbia Circuit agreed with a lower court that the Army Corps of Engineers fell short of the National Environmental Policy Act when it allowed Dakota Access to cross a federal reservoir in North Dakota—and that the violation warranted scrapping the easement,” Bloomberg Law reported at the time.

Now, Boasberg is asking the Army Corps how the pipeline can proceed “without a federal permit granting easement for the US$3.8-billion, 1,172-mile (1,886-kilometre) pipeline to cross beneath Lake Oahe, a reservoir along the Missouri River, which is maintained by the Corps,” The Associated Press writes.

“The location of the crossing is just north of the Standing Rock Sioux Reservation that straddles the North Dakota-South Dakota border,” AP explains. “The tribe, which draws its water from the river, says it fears pollution.”

While Texas-based pipeliner Energy Transfer Partners says the line is operating safely, Boasberg determined in April 2020 “that the Corps has not adequately considered how an oil spill under the Missouri River might affect Standing Rock’s fishing and hunting rights, or whether it might disproportionately affect the tribal community.”

Elsewhere, the Indigenous Environmental Network says Dakota Access lost a $250,000 bond issued by Westchester Fire Insurance Company, a subsidiary of international insurer Chubb, after the company notified Energy Transfer that it was cancelling the arrangement. The bond previously protected the section of the pipeline that runs through Iowa. “Surety bonds are used to protect the public from having to pay for any damages or pollution created by existing projects,” IEN explains.

“Dakota Access Pipeline has no federal easement,” the Network said in an email alert. “It’s now losing insurance coverage on the state level which is a requirement for Iowa’s state permit. It is time for President Biden to take action and shut down the Dakota Access Pipeline.”