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A month ago, I wrote:
President Barack Obama just took the rule of law, crumpled it up, and tossed along a riverbank in North Dakota.
He continues to treat the rule of law like wastepaper by putting up another (likely temporary) blockade in front of the Dakota Access Pipeline.
On Sunday, the Army Corps of Engineers refused to issue an easement to allow pipeline construction under the Missouri River, declaring it will “explore alternate routes for the pipeline crossing.”
In June, the Corps approved the easement but didn't finalize it.
What changed was the pipeline became a symbolic issue for anti-energy, “Keep it in the ground” protesters, like Bill McKibben. Since this summer, thousands have encamped on federal land in North Dakota and have been ordered to leave by December 5. According to local law enforcement, these protesters are “armed, hostile” and not peaceful, and they inspired attacks on other pipelines in four states.
In September, a federal judge saw that proper procedures were followed in allowing approving the project and refused to stop it. But the Obama administration immediately pressed the pause button. Two months later, President Barack Obama telegraphed what the Corps just did by saying the pipeline should be re-routed—even though a federal judge noted that the pipeline’s path was modified 140 times and would run adjacent to a natural gas pipeline that’s been in the ground for over 30 years.
What's interesting is the Corps never admits that it shouldn’t have approved the pipeline in the first place. It states:
[T]his decsision does not alter the Army's position that the Corps' prior reviews and action have comported with legal requirements.
In other words, the review process was followed correctly--just like a federal judge confirmed months ago. Nevertheless, the Corps (i.e. the White House) arbitrarily changed its mind.
Business and Labor Unhappy
Energy Transfer Partners, the company building the DAPL, called the move, “a purely political action,” adding:
This is nothing new from this Administration, since over the last four months the Administration has demonstrated by its action and inaction that it intended to delay a decision in this matter until President Obama is out of office.
Both business groups and labor blasted the decision.
Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, said:
The Obama administration sent a clear message: if your special interest-funded protest is loud enough and has enough celebrities tweeting their support, then the rule of law and the facts no longer matter.
Terry O’Sullivan, General President of the Laborers’ International Union of North America, called the decision, “short-sighted, gutless, and irresponsible.”
Administration Attacks the Rule of Law
This action certainly was a thumb in the eye to the rule of law. To borrow from Professor Richard Epstein, the rule of law is a set of “known, consistent, and certain rules” that are applied in a neutral manner by the government. It's one way our society functions.
There's an implicit agreement: Government establishes a process for getting permission to build a major infrastructure project like a pipeline. If businesses follow those rules it should be assured of a definitive, rational decision. Both business and government function as partners.
Energy Transfer Partners spent years talking to local residents and Native American tribes. They worked with governments at all levels to demonstrate that the pipeline would be safe. They negotiated with private land owners to build the pipeline on their land. They made changes to the pipeline to protect the environment and culturally-sensitive lands.
The company followed the rules, only to have the Obama administration pull the rug out from under them to placate anti-energy activists like McKibben who thinks a modern, 21st Century economy can function without access to abundant energy.
Changing the rules in the middle of the game is fundamentally unfair, the AFL-CIO explained in November:
Once these processes have been completed, it is fundamentally unfair to hold union members’ livelihoods and their families’ financial security hostage to endless delay.
Uncertainty Has Consequences
Such decisions have ripple effects--mostly unseen. Other companies are watching.
They know that what’s happening with the Dakota Access Pipeline can just as easily be done to a natural gas pipeline or an electric power line --even if it links to a wind or solar farm. Any type of energy infrastructure investment is at risk from ad-hoc agency decisions that reject the rule of law.
Such uncertainty has consequences. Fewer needed energy projects will be attempted because the regulatory and permitting risk is too high.
As a result, it will be harder to move energy from where it’s produced to where it’s consumed. That means higher costs for families and factories. It also means higher transportation costs for energy producers, less investment in production, and fewer jobs created in the sector.
Hopefully this could be a fragile, temporary win for the anti-energy crowd. A Trump spokesman said the incoming administration supports the Dakota Access Pipeline and will review the Corps’ decision once it takes office next January.
Nevertheless, it’s a bold reminder that how we permit infrastructure projects needs serious reform. The first place to start is having a White House that stops playing politics with our infrastructure needs while respecting the rule of law and the fairness and certainty it provides.