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Energy Transfer Refuses to Shut Down Dakota Access Pipeline Despite Judge's Order

By John Bromels – Jul 8, 2020 at 4:30PM

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The top pipeline company will pursue "all available legal and administrative processes."

Oil infrastructure giant Energy Transfer (ET -1.26%), which operates the controversial Dakota Access Pipeline, is vowing not to shut down the major crude artery in spite of a court order. 

On Monday, July 6, U.S. District Court Judge James Boasberg issued a ruling that the pipeline would have to shut down by August 5 for a thorough environmental review, which could take up to 13 months. On Wednesday, Bloomberg quoted Energy Transfer spokeswoman Vicki Granado as stating bluntly in an email, "We are not shutting down the line." 

Defying the Court's order could subject Energy Transfer to fines or even jail time for its personnel.

The interior of a large pipeline.

Image source: Getty Images.

Tensions run high

The Dakota Access Pipeline is a 1,172-mile underground crude oil pipeline that runs from North Dakota to Illinois. Protests opposing the pipeline's route through the Standing Rock Sioux reservation made national news in 2016. 

In spite of the protests, the pipeline entered service in 2017 and carries 570,000 barrels/day of Bakken shale crude to the Midwest. The Standing Rock Sioux Tribe sued the Army Corps of Engineers in 2016, alleging various procedural shortfalls in the permitting process. Judge Boasberg's ruling was seen as a win for the Sioux and environmental groups opposing the project.

Predictably, Energy Transfer released a statement on Monday calling the ruling "an ill-thought-out decision" that was "not supported by the law or the facts of the case." It vowed to "immediately file a motion to stay this decision and if not granted, to pursue a stay and expedited appeal with the Court of Appeals."

That emergency stay request was denied on Tuesday. It's unclear how Energy Transfer will proceed. The company's shares fell almost 15% on Monday after the ruling was issued but rose nearly 5% on Wednesday.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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