By Laila Kearney and Devika Krishna Kumar
NEW YORK (Reuters) -The U.S. Army Corps of Engineers is expected to lay out its recommendations on the Dakota Access oil pipeline at a federal court hearing on Friday that could involve shutting down the line for several months during an environmental review.
Energy Transfer (NYSE:ET)'s Dakota Access Pipeline (DAPL) ships up to 570,000 barrels of North Dakota's crude production to the U.S. Midwest and Gulf Coast. It is the largest pipeline out of the Bakken region, where more than 1 million barrels of oil are produced daily.
The pipeline drew fierce opposition from climate activists and Native American tribes, with months of protests. Eventually, the Trump administration authorized a key permit to complete construction and the pipeline entered service in 2017.
Last summer, the U.S. District Court for the District of Columbia threw out that permit, which allowed it to operate under a water source used by Native American tribes.
The Army Corps, which is in charge of issuing permits for pipelines to travel under waterways, is expected to say whether DAPL should stop running as a result of the tossed permit.
Bloomberg reported Friday that a U.S. government official told the pipeline's opponents on a call the previous day that the Corps did not plan to announce an imminent shutdown and would instead defer to the court on a decision.
One source briefed on the matter confirmed that report to Reuters. The Army Corps could not be reached for comment.
Environmental groups and Native American tribes say the pipeline threatens a drinking water supply and should not continue to run, and they have ramped up pressure on the White House to shut the line.
The industry fears a shutdown is more likely because Biden's White House has pledged to reduce the nation's reliance on fossil fuels, drastically cut carbon emissions and fight pollution that disproportionately harms communities of color.
If the line were to be shut, oil shippers out of the Bakken region in North Dakota and eastern Montana would have to rely on existing smaller pipelines and shipping by rail.
"A permanent shutdown of the pipeline would be far-reaching," wrote analysts at BTU Analytics.