🛢️ A legal decision casts doubt on the viability of massive oil pipelines

The long-protested Dakota Access pipeline was ordered to be shut down by a federal judge this week. Within 24 hours developers of the Atlantic Coast Pipeline canceled the project.   

It’s a sign of how environmental activists are becoming more and more savvy with using the law and creating complications for pipeline companies. 

  • Previously, judges typically maintained the status quo: And that meant not shutting off an active pipeline. The lawsuit turned on whether the Dakota Access pipeline posed an environmental risk under a federal law. The judge ruled that it needed to be halted until a review is completed (this could take several years). Previously, environmental activists had focused on oil wells for litigation. But pipelines require more federal and local permits, which are more vulnerable to litigation, according to Bloomberg.

  • The Dakota Access decision was unprecedented: SMU law professor James Coleman told Bloomberg that a judge had never shut down an oil pipeline because of environmental concerns.

  • “A turning point” for pipelines: Industry insiders say the end of the Dakota and Atlantic Coast will be a setback with lasting repercussions into the future, potentially leading to far fewer big projects. And the judicial ruling on the Dakota Access means other judges could agree that existing pipelines can be shut down.

The Verdict

Expect the litigation to continue. The environmental groups are playing the long game and want to use the law to block as many pipeline projects as possible, until it becomes so difficult to transport vast oil quantities that companies must consider more renewable energy options.