Two notable developments in the past few weeks signal potential changes ahead to the policies and timeframes for pipeline approvals, particularly natural gas pipelines under Federal Energy Regulatory Commission (“FERC” or the “Commission”) oversight. These developments reflect both the increased public scrutiny of the pipeline approval process seen in recent years and the emphasis placed by the current administration on expediting review and approval of major infrastructure projects, two factors that are in some tension with each other. Continue Reading Recent Developments Signal Changes for Content and Timing of Pipeline Reviews
This week, the U.S. District Court for the Middle District of Louisiana granted a preliminary injunction, halting construction of the $750 million Bayou Bridge Pipeline. Judge Shelly D. Dick concluded that the U.S. Army Corps of Engineers, in authorizing the project, did not provide sufficient explanation for how the proposed off-site mitigation would compensate for the loss of wetlands impacted by construction. In addition, the Court found the Corps’ environmental analysis failed to sufficiently consider and address historical impacts to wetlands from similarly situated pipelines. Thus, the Court held that these deficiencies likely violated the National Environmental Policy Act (NEPA) and ordered the 162-mile oil pipeline to halt construction within the Atchafalaya Basin, a large wetland habitat for a variety of fish and wildlife species and a critical component of regulating flooding and stream recharge in the region. As we recently saw with the D.C. Circuit’s decision to vacate authorizations for the Sabal Trail Pipeline, this is another example of courts and environmental organizations relying on errors in a federal agency’s NEPA analysis to justify enjoining pipeline construction or operations. Continue Reading Federal District Court Halts Construction of Louisiana Pipeline Due to Corps’ Failure to Explain Off-Site Mitigation
Federal agencies that authorize or permit large infrastructure projects, like interstate natural gas pipelines, are often subject to the requirements of the National Environmental Policy Act (NEPA), and environmental organizations frequently rely on NEPA to challenge a project. The D.C. Circuit recently struck down a decision by the Federal Energy Regulatory Commission (FERC) to approve the construction and operation of three interstate natural gas pipelines because the Court found defects in FERC’s NEPA analysis. The court’s decision to vacate FERC’s authorization now threatens to shut down the pipelines, including the Sabal Trail pipeline currently supplying natural gas to newly constructed power plants in Florida.
Once large infrastructure projects, such as oil and natural gas pipelines, receive federal government approval, they are often the target of legal challenges from opposition groups. Opponents repeatedly argue that the environmental review, pursuant to the National Environmental Policy Act (NEPA), was insufficient. If a court finds deficiencies in the government’s NEPA analysis, can a court halt construction or cease operations even after years of project design, permit approvals at all levels of government, and tens of millions of dollars in investment? This question was at the heart of the ongoing litigation involving the controversial Dakota Access Pipeline (DAPL), and, on October 11, Judge James Boasberg determined “no,” the court would not shut down the pipeline. This case is important precedent for projects being challenged under NEPA. The same issue is at play in the Sabal Trail case currently under review by the US Court of Appeals for the DC Circuit. See Sierra Club, et al. v. FERC, No. 16-1329 (D.C. Cir. filed Sept. 21, 2016).
Despite oil already flowing through the pipeline, federal litigation involving the controversial Dakota Access Pipeline (DAPL) took another turn last week when partial summary judgment was granted to tribes challenging the adequacy of the US Army Corps of Engineers’ review of DAPL under the National Environmental Policy Act (NEPA) and other statutes. Two tribes, the Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe, filed suit in July 2016 attempting to block construction of the last remaining segment and operation of DAPL. As sometimes is the case, agency approvals came faster than the court’s opinion, and without a stay of proceedings DAPL began operating in early June 2017. Having granted partial summary judgment, the court did not require pipeline operations to cease, instead delaying the question of an appropriate remedy until after further briefing by the parties.
The question of whether Presidential Permit authority is constitutional and/or subject to judicial review has been and continues to be an unsettled issue. A little more than a month after the State Department’s November 2015 denial of TransCanada’s application for a Presidential Permit to construct its Keystone XL pipeline project, the United States District Court for the District of Minnesota ruled in White Earth Nation et al. v. Kerry et al. that State Department Presidential Permitting decisions are Presidential in nature and are therefore not subject to judicial review. Approximately one month later, in January 2016, TransCanada filed two separate actions to challenge the Obama administration’s rejection of its application for a Presidential Permit for the Keystone XL pipeline. The first action was filed in federal district court in Texas to challenge the denial of the Keystone Presidential Permit, and the second is a Notice of Intent to submit a claim to arbitration under Chapter 11 of the North American Free Trade Agreement (NAFTA).
FERC recently published a revised draft Guidance Manual for Environmental Report Preparation for review and public comment. The revised Guidance Manual updates FERC’s 2002 guidance manual on environmental report preparation for projects seeking FERC authorization under the Natural Gas Act (NGA), supplementing the previous guidance as well as adding new sections explaining requirements for environmental report preparation. This substantial enhancement of the Commission’s 2002 guidance likely reflects increased scrutiny by environmental groups and others of FERC’s compliance with its NEPA obligations in authorizing natural gas and LNG projects.
On September 29, 2015, the D.C. Circuit Court of Appeals ruled that the National Environmental Policy Act (NEPA) did not require federal agencies authorizing portions of an interstate oil pipeline project to conduct a “whole-pipeline” environmental review. The case, Sierra Club v. U.S. Army Corps of Engineers, et al., clarifies the appropriate scope of NEPA review for oil pipeline construction projects where federal involvement is limited to granting authorizations for discrete aspects of the project.
Despite veto threats from the Obama Administration, H.R. 3301, the “North American Energy Infrastructure Act”, passed in the U.S. House of Representatives by a vote of 238 to 173 on June 24, 2014. The purpose of the bill (subject of a prior post) is to eliminate the Presidential permitting process for cross-border pipelines and electric transmission facilities. For oil pipelines and electric transmission lines, the bill would only require a “certificate of crossing” for the construction, connection, operation or maintenance of the cross-border segment of a proposed project. The certificate would be issued by the State Department (for oil pipelines) or by the Department of Energy (for electric transmission lines). These Departments would be required to issue certificates of crossing within 120 days of completion of review of the proposed “cross-border segment” under the National Environmental Policy Act (NEPA), unless they find that the project is not in the national public interest. For natural gas pipeline projects, a certificate of crossing would not be required, as the bill leaves in place the current authorization process of the Natural Gas Act, under which FERC approves siting, construction or operation of natural gas pipeline facilities, and the import or export of natural gas. The bill would, however, eliminate the Presidential Permit requirement for natural gas pipeline projects.
In a decision that may affect how impacts of related pipeline construction projects are analyzed, the D.C. Circuit Court of Appeals recently remanded an environmental assessment (EA) prepared by FERC under the National Environmental Policy Act (NEPA). Delaware Riverkeeper Network et al. v. FERC, D.C. Cir. No 13-101 (June 6, 2014). The Court held that the Commission violated NEPA by improperly considering the project’s environmental impacts in isolation from three inter-related projects undertaken or proposed by the same operator on the same pipeline within a short period of time. The Court remanded the case to FERC for further consideration of the cumulative environmental impacts of the four related natural gas pipeline construction projects.