Victory for Energy Transfer’s DAPL: US Army to Provide Easement



US Army to provide easement to DAPL

On February 8, the US Army stated that it would provide the easement to Energy Transfer Partners’s (ETP) and Sunoco Logistics Partners’s (SXL) Dakota Access Pipeline (or DAPL) to drill under Lake Oahe. This action occurred after President Donald Trump issued an executive order to expedite the review and approval process for the Dakota Access Pipeline.

The construction of the Dakota Access Pipeline near the Missouri River was put on hold by the Obama administration following a protest by the Standing Rock Sioux tribe. Trump also issued an executive order to move forward with the controversial Keystone Pipeline project by TransCanada Corporation (TRP).

Article continues below advertisement

Changing of the guard

In December 2016, the US Army denied an easement to Energy Transfer Partners to drill under Lake Oahe and subsequently filed to begin a fresh environmental impact study (or EIS) of DAPL. However, the Trump administration directed the US Army to cancel or modify earlier memorandums on the EIS and the easement denial. Moreover, the Trump administration directed the Army to consider the EIS issued in July 2016.

When can the project come online?

The DAPL project was in its advanced stage before the blockade, and the majority of the pipeline had already been laid. Only the section near the Missouri River has yet to be drilled. Energy Transfer Partners (ETP) expects to complete the project within 60 days after receiving the easement.

Is the tension over for Energy Transfer Partners?

Although the US Army provided the easement to the DAPL project, the tension might not be completely over for Energy Transfer Partners (ETP). In response to the Army’s decision, the Standing Rock Sioux tribe stated that it would challenge the decision in court and would seek to shut down pipeline operations if the owners completed the pipeline.

In the next article, we’ll look at the recent stock performance of Energy Transfer Equity (ETE) and its subsidiaries.


More From Market Realist