The Army Corps of Engineers recently completed the review of DAPL (Dakota Access Pipeline) directed by the Federal Government in early September. The Army Corps has determined that “additional discussion and analysis” are needed before construction is allowed in the controversial area. It has invited the Standing Rock Sioux tribe’s input on the proposed pipelines.
According to the release from the Army Corps of Engineers, “While these discussions are ongoing, construction on or under Corps land bordering Lake Oahe cannot occur because the Army has not made a final decision on whether to grant an easement. The Army will work with the Tribe on a timeline that allows for robust discussion and analysis to be completed expeditiously.”
The protestors, including Native Americans and environmental activists, are against the current route of the DAPL pipeline, as it passes through North Dakota’s Lake Oahe. Lake Oahe is a burial site and a major source of drinking water for the Standing Rock Sioux Reservation settled along the Missouri River.
The protest has grown over time. Yesterday, Bernie Sanders joined the protest arguing that the pipeline shouldn’t be built. Before this, President Obama supported the Standing Rock Sioux tribe. He said that the “Army Corps is examining whether there are ways to reroute this pipeline.”
Energy Transfer Partners (ETP) issued a statement after the announcement by the Army Corps of Engineers calling the decision unjust and against federal law. Energy Transfer is expected to approach the court to pursue this matter further.
According to Kelcy Warren, ETP’s CEO, “This action is motivated purely by politics at the expense of a company that has done nothing but play by the rules it was given.” He went on, “To propose, as the Corps now does, to further delay this pipeline and to engage in what can only be described as a sham process sends a frightening message about the rule of law.”
Energy Transfer Group’s stocks like Energy Transfer Partners, Sunoco Logistics Partners (SXL), and Energy Transfer Equity (ETE) have been rallying after Donald Trump won the US presidential election, reflecting positive investor sentiment towards timely completion of the pipeline. However, this recent announcement by the Army Corps of Engineers might lead to negative investor reactions. ETE, ETP, and SXL have risen 22.7%, 14.5%, and 7.0% YTD (year-to-date), respectively. At the same time, the Alerian MLP ETF (AMLP) has gained 2.1%.