On April 15, 2013, the Vermont Natural Resources Board (Board) issued a jurisdictional opinion that Act 250, the State’s land use permitting statute, would apply to flow reversal projects for transport of Canadian tar sands oil. The opinion was the result of a petition by several environmental groups seeking review of a possible reversal of a Portland-Montreal Pipeline (PMPL) crude line to carry Canadian tar sands oil through Vermont. The Board held that such projects would trigger Act 250 review and approval, because reversal would involve a “physical change” to the pre-existing line due to equipment changes (valves, pump stations, etc.), as well as a change in the material being transported (dilbit vs. crude). In addition, the Board held that the change in product would present the potential for “significant adverse impact”, due to the unique environmental characteristics of dilbit compared to conventional crude. The Board’s decision is notable for several reasons. Even though PMPL had not announced firm plans to proceed with the reversal project, the Board based the ripeness of its jurisdictional analysis on general media statements by PMPL. The opinion may be open to even broader interpretation. The Board’s “physical change” analysis could serve as a basis to apply Act 250 to reversal projects that do not involve a change in product (e.g., due to equipment changes or other physical modifications). Similarly, the Board’s “significant adverse impact” analysis could apply Act 250 to any project involving transportation of dilbit, regardless of flow direction. This opinion underscores the increasing use of local and federal environmental and land use statutes (including NEPA) by public policy groups and state regulators to advance opposition and oversight of certain pipeline projects, particularly those involving Canadian tar sands. This tension between local and federal regulatory authorities could lead to preemption arguments in certain cases (an issue that the opinion itself recognizes). Click here for a copy of the Board’s Opinion.