The U.S. Army Corps of Engineers said in a court filing it will grant Energy Transfer Partners LP the easement it needs to finish the controversial Dakota Access oil pipeline.

The company needs the easement to complete work under Lake Oahe, following President Trump’s memorandum that advised expediting review of the project. Trump took office promising to favor oil and natural gas developments as well as support new infrastructure, which has included reviving TransCanada Corp.’s Keystone XL pipeline.

The move to allow completion of Dakota Access, after months of heated protests, is a blow to opponents who have argued the pipeline would damage sites culturally significant to Native Americans and pose an environmental hazard where it crosses the Missouri River. The 1,172-mile project is emblematic of the broader battle over new pipelines. The $3.8 billion line has been stalled since September when the Obama administration halted work to reconsider prior decisions to allow it.

In January, the Department of the Army, withholding the final easement necessary for construction beneath the lake, initiated an Environmental Impact Statement, which Energy Transfer failed to block in court. Energy Transfer has argued it went through the full permitting process and has the necessary approvals.

The project was originally scheduled to be operational by the end of 2016. Now it’s expected to start operating June 1, assuming no new obstacles prevent it, a person familiar with the matter said Feb. 3. Lisa Dillinger, a spokeswoman for Energy Transfer, confirmed that the project would be in service in the second quarter.

Energy Transfer and White House spokeswoman Kelly Love did not immediately respond to e-mail and phone requests seeking comment.

The pipeline could help cut costs for drillers in North Dakota’s Bakken shale play as the U.S. oil industry recovers from the worst rout in a generation. Producers in the region — which hasn’t rebounded as quickly as more profitable plays like the Permian Basin in Texas — have turned to more costly rail shipments when existing pipes filled up. Dakota Access, with a capacity of about 470,000 barrels a day, would ship about half of the current Bakken crude production and enable producers to access Midwest and Gulf Coast markets.

Energy Transfer owns the project with Phillips 66 and Sunoco Logistics Partners LP. Marathon Petroleum Corp. and Enbridge Energy Partners LP announced a venture in August that would also take a minority stake in the pipeline.

By Meenal Vemburkar
Bloomberg News


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