Illinois court vacates approval of Dakota Access pipeline capacity expansion

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Jan 12 (Reuters) - An Illinois appellate court on Wednesday vacated approval given by the Illinois Commerce Commission (ICC) to allow the expansion of the Dakota Access oil pipeline capacity up to 1.1 million barrels per day.

The Dakota Access Pipeline (DAPL) can transport about 570,000 barrels per day (bpd) of crude oil from North Dakota to the Midwest, though the company said in August it had completed a capacity expansion to 750,000 barrels per day.

The pipeline out of North Dakota's Bakken shale basin had been a source of controversy prior to its completion in 2017. Opponents said its construction destroyed sacred artifacts and posed a threat to pollute Lake Oahe, a critical drinking water supply, and the greater Missouri River.

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Last year the pipeline withstood a legal challenge by Standing Rock Sioux and other adversaries to shut the pipeline. read more .

The decision allowed the pipeline to continue operating at least until a federal environmental review is completed, a process that is expected to take until March 2022. read more

Pipeline owners Energy Transfer (ET.N) and Dakota Access LLC had petitioned the commission for permission to add more pumping stations to the 570,000 barrel per day Illinois pipeline.

In 2020 the commission approved addition of pumping stations that would boost the pipeline's capacity over the objections of environmental groups such as the Sierra Club and the National Resources Defense Council.

The groups appealed to the appellate court, which returned the case to the commission for further consideration on Wednesday.

The commission needed to consider the public need for the proposed improvement, but the court said the commission erroneously interpreted the public to mean the world, not the United States.

The court also found that the commission abused its discretion in finding irrelevant the objectors' evidence that the pipeline's operator, Sunoco (SUN.N), had been fined for safety and environmental violations.

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Reporting by Laura Sanicola in Washington Editing by Leslie Adler, Matthew Lewis and David Gregorio

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Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.