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Contractor Behind DAPL Assessment Was Working on Connecting Pipeline for the Same Company

A private firm that conducted the environmental review for the highly contentious Dakota Access pipeline was simultaneously working for Energy Transfer.

Activists protest in solidarity with the Standing Rock uprising during a demonstration in Oakland, California, on September 13, 2016. (Photo: Peg Hunter)

A private firm that conducted the environmental review for the highly contentious Dakota Access Pipeline was simultaneously working for Energy Transfer, the company behind the project, on a connecting pipeline.

A DeSmog investigation also found that during the review period, the firm — Perennial Environmental Services LLC (“Perennial”) — advocated for opening new regions for oil and gas drilling.

In 2014, Energy Transfer hired Perennial, a Houston-based environmental consultancy, to perform the Environmental Assessment (EA) for its then-proposed Dakota Access Pipeline, a four-state project that will carry crude oil from North Dakota’s Bakken region to Illinois.

Yet Perennial was already working at the time for another subsidiary company of Energy Transfer, Trunkline.

Perennial provided Energy Transfer with environmental permitting services in its project to convert portions of Trunkline from a gas to oil pipeline.

Since DAP will connect to Trunkline in Patoka, Illinois, Trunkline will serve in essence as Dakota Access’ southern leg, moving its Bakken oil to refineries in the Gulf of Mexico region.

Trunkline’s most recent financial reports filed at the Federal Energy Regulatory Commission (FERC) show that in 2015 alone the company paid Perennial $335,699.

A section from Trunkline’s 2015 financial report to FERC, showing payment to Perennial Environmental Services.

The interconnectedness between the two pipelines suggests Perennial had a potential interest in providing an environmental assessment that was beneficial to Energy Transfer’s Dakota Access pipeline.

In its final EA report for Dakota Access, Perennial concluded the project woould not cause a significant impact on the environment.

Both Perennial and Energy Transfer have strongly denied to DeSmog any bias in the work related to the EA.

Following the EA’s publication, the US Army Corps of Engineers (USACE) approved the pipeline over the objection of three other federal agencies and despite fierce opposition from Native Americans and other residents living along its route.

While Energy Transfer paid Perennial for the EA, the regulating agency for the project — the USACE — did not vet the contractor for possible conflict of interest since, according to USACE regulations, an EA does not require it to screen such contractors.

Still, the EA is prepared and written on behalf and under the supervision of the USACE, which takes ultimate responsibility for verifying its contents.

Dennis Woods, one of Perennial’s founding partners and a co-author on the EA, even told DeSmog that Perennial “provided support to the USACE for the preparation of their environmental assessment.”

Dakota Access Reviewer Decries “Excessive Regulation” on Oil Drilling

Perennial has shown strong support for the expansion of the oil and gas industry.

During the time it performed the EA for Dakota Access, the firm advocated for opening up new regions for oil and gas drilling.

Perennial’s Woods wrote in late 2014 to the Bureau of Ocean Energy Management (BOEM) in strong support of oil and gas development in the Chukchi Sea.

Soon after, in 2015, Jonathan Fredland, a Perennial employee and another co-author on the Dakota Access EA, wrote to BOEM on two separate occasions, urging the government to issue new leases for oil and gas drilling in the Gulf of Mexico and the Arctic.

Fredland asked the “agencies to promote responsible arctic energy development by instituting sensible policies that will allow current and future operators the ability to explore and develop the region’s abundant resources.”

In one of the letters, Fredland also railed against what he called “[R]edundant, excessive regulations” that “are not based on the latest science.”

All three letters indicated they were written on behalf of Perennial Environmental Resources.

Perennial’s Woods told DeSmog: “I can adamantly state that there is no influence or bias in Perennial’s work product on this Project [i.e. Dakota Access] or any others. My staff is comprised of scientists from various disciplines and any professional opinions or conclusions we make are based on the best available data. Further, all of our work is conducted in compliance with the applicable regulatory framework for each individual project.”

Asked to respond to Fredland’s letters, Woods replied: “I have no knowledge of this endorsement and generally don’t become involved with what my staff choose to support or oppose on their own time. Again, I can adamantly state that there is no influence or bias in Perennial’s work product on this Project or any others.”

Vicki Granado, a spokesperson for Energy Transfer, said: “Dakota Access has followed all applicable rules and regulations in the permitting and approval of both projects [i.e. Dakota Access and Trunkline conversion], and will continue to do so.”

Eugene Pawlik, a spokesperson for the USACE, referred DeSmog to the section of the EA which delineates USACE’s responsibilities: “It states, ‘This action is being completed in accordance with CEQ regulations in Section 1506.5(a) and 1506.5(b), which allow an applicant to prepare an EA for federal actions. The Corps has independently evaluated and verified the information and analysis undertaken in the EA and takes full responsibility for the scope and content contained herein. Corps offices involved with the preparation and review of this document are provided in Section 9.0 of the EA.’ The CEQ NEPA regulations allow an applicant to prepare EAs for federal actions and it is the subsequent responsibility of the federal agency to evaluate and take responsibility for the content of the EA.”

Perennial’s Owners Partner With Oil-and-Gas Investor

The State of Texas tax records reveal another interesting detail about Perennial. Its two managing partners — David Beckmeyer and Dennis Woods — are also managers with Jeffrey Gunst in another Houston-based business, Awesome-O Properties, an investment company that shares the same downtown Houston address as Perennial Environmental Services.

Gunst is a founding member and principal of Avista Capital Partners, a private equity firm with numerous investments in oil and energy companies.

These include Sidewinder Drilling and Empresa Energy, two companies with operations in the Bakken oil fields. According to State of Texas corporation records, Jeffrey Gunst is also a director of Sidewinder Drilling.

In response, Perennial’s Woods denied any conflict of interest: “Mr. Gunst and I are personal friends and the investment partnership we’re in together is not interrelated with this Project [i.e. Dakota Access] or my firm in any form or fashion. I have no knowledge, involvement, or co-investment in anything Avista is doing and Mr. Gunst has no knowledge, involvement, or co-investment in Perennial. In no way is there any influence on Perennial’s work product from this relationship.”

Jeffrey Gunst also denied any involvement with Perennial. In response to an email from DeSmog, he wrote: “I am personal friends with Dennis Woods and Awesome-O Properties is a small real estate investment partnership. Neither I nor Avista have ever had any involvement with Perennial or Dakota Access Pipeline.”

Fierce Opposition to Dakota Access Continues, Met by Crackdown

In a series of stories, DeSmog has continuously reported on the powerful corporate and political forces linked to the construction of Dakota Access.

Senator John Hoeven (R-ND), who showed support for the pipeline, was revealed to hold investments in oil producing wells in North Dakota.

Republican presidential candidate Donald Trump’s energy advisor, Continental Resource’s CEO Harold Hamm, told investors its Bakken oil is destined for transport through the Dakota Access pipeline.

At the same time, the resistance to the pipeline continues in full swing.

At the center of the struggle are the Standing Rock Sioux, whose protests have mobilized many other activists and native people throughout the world.

In a repressive response, Dakota Access hired private security guards who used attack dogs and pepper spray on protesters, injuring several.

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