American Oil and Gas Reporter - August 2020 - 16

pages 16-23_Layout 1 8/11/2020 1:54 PM Page 16

IndustryDigest
Ruling Allows DAPL
To Keep Operating
BISMARCK, N.D.-Oil can continue
to flow through the Dakota Access
Pipeline, but its long-term future
remains uncertain after a three-judge
panel for the U.S. Court of Appeals for
the District of Columbia Circuit
granted an administrative stay of a
lower court order to shut down and
empty the line on or before Aug. 5.
The initial order came on July 6 from
Judge James Boasberg, who told the
pipeline to cease operations while the
U.S. Army Corps of Engineers prepared
an environmental impact statement on
DAPL's crossing of the Missouri River
(AOGR, July 2020, pg. 15). The Aug. 5
order, issued by circuit judges Karen
LeCraft Henderson, David S. Tatel and
Thomas B. Griffith, faulted Boasberg's
injunction for failing to meet traditional
criteria for an injunction. However, the
order did not overrule Boasberg's
determination that the Corps must
conduct a full environmental impact
statement, instead of the less extensive
assessment it submitted.
Even so, industry representatives and
their allies took heart from the August
decision. Media accounts quote NDPC
President Ron Ness acknowledging both
the immediate victory and the longerterm task. "The decision today allows
the pipeline to continue operating,"
Ness is quoted. "It appears there are
more legal issues to be resolved, but
today would have been the day it would
have been shut down, so it's good news
to keep that pipeline operating and
going forward."
According to published reports, the
higher court reprimanded the lower
court for failing to apply the four-factor
test required for an injunction, which
includes a condition that a remedy not
undermine the public interest. Media
accounts note that North Dakota
Attorney General Wayne Stenehjem
filed a legal brief warning a shutdown
could cost thousands of North Dakotans
their jobs and drain $2 billion from the
state's tax revenues.
Another amicus curiae brief, filed by
Steptoe & Johnson LLP attorneys David
Coburn and Joshua Runyan on behalf of
an industry and business coalition,
cautions that losing DAPL's refinery
markets could eliminate 7,000 jobs in
oil and gas extraction alone. It predicts
16 THE AMERICAN OIL & GAS REPORTER

other fallout would include a cascade of
abandoned wells and hardships for
refineries specifically configured for the
sort of crude DAPL transports.
"Given recent economic events that
have adversely impacted crude
production, substitute crude may not be
immediately available to these refineries
and, even if available, may not be
economic, resulting in production cuts,"
the brief states. "A DAPL closure will
irreparably devastate the
competitiveness of numerous refineries
that rely on its crude, impairing their
ability to fully recover in this economic
climate and putting them at risk of
possible closure and concomitant job
loss. For consumers, less refined
product will translate into higher prices
for gasoline at the pump."
Unfortunately, says American
Petroleum Institute Senior Vice
President and Chief Legal Officer Paul
G. Afonso, the court's requirements for
more environmental review are
emblematic of a deeper problem. "The
failure to uphold the easement granted
years ago by the federal government
exemplifies the problems with our
outdated permitting system, which
allows protracted challenges to advance
within the courts and ultimately take
away jobs, tax dollars, and investments
that pipelines bring to communities that
sorely need them," he assesses. "We
will continue to be involved in this
litigation on this case to ensure all
communities can benefit from modern
infrastructure projects." ❒

Supreme Court Puts
Much Of East Oklahoma
Into Indian Reservation
OKLAHOMA CITY-The Petroleum
Alliance of Oklahoma is praising the
response of Governor Kevin J. Stitt to a
U.S. Supreme Court ruling that 19
million acres of land in the eastern half
of Oklahoma should be part of the Five
(Muscogee, Cherokee, Chickasaw,
Choctaw and Seminole) Nations' Indian
reservations.
On July 9, the Supreme Court ruled
in McGirt v. Oklahoma that Congress
never took the step to disestablish the
reservation land, and therefore, the
acreage belongs to the tribes until
Congress takes explicit action to give the
land to the state, published reports say.

Consequently, those reports suggest,
oil and gas operations on the affected
lands now could be subject to federal
and Indian-rather than state-
environmental regulation, and taxing
and permitting jurisdictions.
Stating that he was "committed to
working with all Oklahomans, tribal
and nontribal, to create a practical and
sustainable path forward," Stitt on July
20 announced formation of the
Oklahoma Commission on Cooperative
Sovereignty, to be chaired by Devon
Energy co-founder Larry Nichols. Also
serving on the commission is
Continental Resources founder and
Executive Chairman Harold Hamm.
According to PAO, Stitt also
officially requested that the
administrator of the U.S. Environmental
Protection Agency activate an
Oklahoma-specific provision in the
2005 federal highway bill to give state
agencies primacy on environmental
regulations in Indian country.
"Governor Stitt acted to make sure
trusted and experienced state agencies
such as the Oklahoma Department of
Environmental Quality, Oklahoma
Corporation Commission, Oklahoma
Water Resources Board, and Oklahoma
Department of Agriculture, Food and
Forestry can continue to enforce
regulations delegated to the state by
EPA in Indian country," praises Alliance
President Brook A. Simmons. "This
action was absolutely critical to provide
regulatory certainty for businesses,
farmers, ranchers, landowners and every
state resident."
The petitioner in McGirt sought to
overturn a criminal conviction in
Oklahoma state court by contending he
should have been tried in federal court
under the Major Crimes Act as offenses
committed by an Indian within the
limits of an Indian reservation.
But, even though McGirt dealt with a
criminal issue, an analysis by Houston
attorneys Schiffer Hicks Johnson PLLC
(SHJ) explains, because the eastern half
of Oklahoma must be treated as a
reservation under the court's ruling,
tribes will have the power to regulate
commercial conduct where it impacts
the health or welfare of the tribe,
including oil and gas operations.
"Now that eastern Oklahoma must be
treated as 'Indian country' under the
Major Crimes Act, the federal government
(with possible delegation to the tribes) can
American Oil and Gas Reporter - August 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2020
