By Valerie Volcovici

WASHINGTON (Reuters) – The U.S. Army secretary could make a decision on the final permit needed to complete the controversial Dakota Access Pipeline as soon as Friday, the government’s lawyer told a Washington, D.C., court on Monday.

The Army Corp of Engineers told the court it has submitted its recommendation to Robert Speer, the acting secretary of the Army, on whether it needs to complete a full environmental review before it can grant the final permit allowing work to start on a contested tunnel under a lake. The review was requested in December by former President Barack Obama.

Opponents argue that letting the pipeline cross under Lake Oahe, a reservoir that is the water source for the Standing Rock Sioux Reservation, would damage sacred lands and could leak oil into the tribe’s water supply.

Proponents believe the pipeline is necessary to transport U.S. oil safely and that it would create jobs.

Jan Hasselman, an attorney with Earthjustice, who represents the Standing Rock Sioux, said the tribe will challenge the U.S. government in court if the Army grants the easement. The tribe, along with other Native American groups, environmentalists and other activists, have opposed the $3.8 billion Dakota Access Pipeline led by Energy Transfer Partners LP <ETP.N>.

He said it is unclear whether construction could begin while the decision is challenged or whether the court will grant an injunction blocking the work.

“Our position is the tribe’s treaty rights and the law require the full (Environmental Impact Study) process that the government initiated in December. Issuing the easement without that process will be a serious violation of the law,” Hasselman told Reuters.

A spokesman for the Army was not immediately available to comment. Energy Transfer Partners declined to comment on the legal proceedings.

At the hearing at the D.C. Circuit Court on Monday, lawyers for ETP said the pipeline would become fully operational around 90 days after construction begins. If the easement is granted, oil can start crossing under the lake, a reservoir that is part of the Missouri River, as soon as 60 days after construction starts.

(Additional reporting by Liz Hampton in Houston; Editing by Dan Grebler)