Pipeline construction is no easy feat. Pipelines are highly engineered pieces of industrial property and subject to rigorous safety and environmental standards.
Commercial viability aside, the path from project conception to operation can take years with operators subject to a litany of regulations that must be addressed in order to enter service. Pipeline projects have never been without controversy, particularly from adjacent landowners with rights-of-way along their properties. However, it has only been in the last decade or so that individual pipeline projects became the subject of national debate, rallying support or opposition from persons living hundreds of miles away.
Now, it is common for a pipeline project to be the subject line of political fundraising emails as a way to galvanize support for a particular candidate or political party. This politicization can extend a project’s construction timeline with extensive litigation over the propriety of its permits and authorizations.
The politicization of infrastructure is not surprising, as communities that have not experienced greenfield pipeline construction in 50-plus years are confronted with the question of how to source their energy. On one end of the spectrum are communities excited to safely harness abundant domestic fuel sources. On the other end, environmental groups and local landowners wage a campaign against their extraction and fossil fuels in general. These groups view pipelines not as transporters of a commodity that heats our homes and runs our businesses, but as a conduit for climate-changing greenhouse gas emissions.
Lawsuits now greet almost every planned interstate pipeline, and some state governments have vowed to block them altogether.
A friendlier federal government is not a project panacea, even with President Trump’s promises to speed interstate pipeline approvals. The administration’s élan, in the form of several Executive Orders, may exceed its practical abilities. Agency permitting decisions are ultimately constrained by statutes that can be changed only by Congress.
Moreover, there are decades of court rulings that outline project environmental reviews, which are unlikely to change, absent a Supreme Court decision. The result is a strange dichotomy.
Although pipeline companies may find allies in federal permitting agencies, such alliances may not guarantee a successful project. Permits and approvals may come more quickly, but they may be ephemeral victories if court challenges send the federal agencies—and pipeline construction schedules—back to the drawing board.
Thus, a supportive agency decision rendered too soon or without adequate record support may work against pipeline developers if not handled properly. In the case of a challenged permit, it is the issuing agency, not the pipeline company, which controls the permit’s defense. While the pipeline company can, and should, intervene in support of the agency, it is the agency’s decisions, legal theories, and factual record under review. And, each agency authorization provides an opportunity for a court challenge and project delay.
One recent example of a pipeline project delayed due to legal challenges to its underlying federal permits is the Mountain Valley Pipeline (MVP). MVP exemplifies the complex regulatory pathway a pipeline faces. Like every other interstate pipeline project, it requires a large number of authorizations to begin construction. As a natural gas pipeline, this includes a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC).
FERC conditions its certificates upon the pipeline obtaining all other necessary permits and authorizations. Hence, although FERC approved MVP’s proposed route, MVP also requires a right-of-way and temporary use permit from the U.S. Bureau of Land Management because the route traverses 3.6 miles of the Jefferson National Forest in Virginia. Issuing these permits requires another agency, the U.S. Forest Service, to amend its Resource Management Plan, which sets out what can or cannot go on in the Jefferson National Forest. The route also necessitates the crossing of several rivers and streams in Virginia and West Virginia.
Another federal agency, the U.S. Army Corps of Engineers, must authorize these crossings.
Importantly, legal challenges to MVP’s FERC certificate failed and FERC overcame allegations that it did not sufficiently consider the project’s environmental impacts. However, the other permitting agencies have not fared as well.
A federal court vacated the Bureau of Land Management’s and Forest Service’s permitting decisions. The court determined that the law required the Bureau of Land Management to study potential alternative pipeline routes through the Jefferson National Forest, such as a route that could follow an existing right-of-way. Because it did not do this, the court threw out the right-of-way grant and temporary use permit.
As for the Forest Service, the court noted the agency’s critical statements concerning the pipeline’s construction plans and potential impacts to soil erosion, which it had made during the Obama administration[MSOffice1] . The court faulted the agency, under President Trump, for failing to explain how its prior concerns were resolved. It also rejected the Forest Service’s theory of why the pipeline was exempt from regulations requiring a separate environmental analysis on the pipeline’s impacts to soil and riparian areas.
Separately, environmental groups challenged the Corps of Engineers’ authorization allowing MVP to use Nationwide Permit 12, a general permit, in West Virginia. The permit required MVP to observe certain West Virginia regulations for stream crossings. When environmental groups pointed out that the pipeline could not cross four major rivers within 72 hours, as West Virginia regulations required, the Corps deleted that condition from the permit. Environmental groups sued, and a court easily found that the Corps could not allow MVP to ignore valid state regulations.
None of these court decisions will necessarily prevent MVP from ultimately achieving final construction and operation. However, each involves federal agency decisions reversed or remanded due to a “paperwork” violation that presumably could have been avoided had the agencies provided more detailed explanations.
For example, the court suggests that the Forest Service would have prevailed had it better explained why the pipeline’s existing erosion control measures were adequate and had the agency performed some additional environmental analysis. Presumably, this could have been accomplished with a few additional weeks of work and a few pages of text. Similarly, the court may have upheld the Bureau of Land Management’s decision had it spent more time considering some alternative routes and better explained the reasoning behind its decision.
While the deficiencies can be cured, the months lost litigating these issues cannot be regained, and pipeline completion is delayed.
Even the Corps, which arguably faced the most serious problem of the agencies, may have avoided a court loss by taking additional time prior to issuing its permit. After the court’s decision, West Virginia promptly changed its regulations to allow more than 72 hours for major stream crossings if the pipeline uses certain construction methods. Had the Corps worked with West Virginia before authorizing the nationwide permit, those stream crossings may have been completed by now. Instead, the agency now must respond to the court’s decision and likely will be back in court when environmental groups inevitably challenge any new determinations.
These analyses are not Monday morning quarterbacking of a pipeline project that diligently pursued every authorization it required to proceed. Nor are they criticisms of the agencies’ arguments before the court. Rather, they highlight the agencies’ incentives. While it is appropriate for executive agencies to respond, to varying degrees, to a President’s goals of faster project permitting, pleasing a particular politician or constituency is not the end goal. Instead, the agencies’ arguments are meant to preserve their own authority to exercise discretion.
Rather than add additional pages of analysis, the Forest Service chose to dispute the meaning of “directly related,” a term used in one of its regulations. Guarding the Forest Service’s right to decide which environmental standards are “directly related” to a Resource Management Plan is more important to the Forest Service than any pipeline project. This also may be why the Bureau of Land Management disputed the meaning of “to the extent practical,” an ill-defined standard governing when the agency must analyze alternative pipeline routes, and the Corps claimed that it could override state law conditions.
In each case, the agencies asserted that courts should defer to the agencies’ will—a priority as old as the administrative state itself and devoutly protected by all federal agencies regardless of who is president.
For a pipeline company, an agency’s decision to avoid weeks, or even months, of additional permitting analysis as part of its exercise of discretion is not necessarily a welcome one if it will leave a permit more exposed to challenges. A pipeline may want to do more to bolster its permits. FERC’s environmental reviews about pipeline greenhouse gas emissions provide one example of how a pipeline company can protect itself.
Currently, a slim majority of FERC commissioners insist that additional analyses of upstream emissions (from hydraulic fracturing) and downstream emissions (from the sources that combust it) are too speculative to be necessary. Recent legal guidance from the Trump administration supports this viewpoint as does some legal precedent.
However, environmental groups have repeatedly challenged this policy and will continue to do so. And, two recent court decisions strongly hint that FERC must dive deeper, making it perilous for a pipeline company to rely on FERC’s existing policy.
A pipeline may be better served to develop upstream and downstream emissions data, insert it into the record, and work with FERC to explain why that data can be considered without undermining its overall policy. Otherwise, the company risks project delay if the court vacates the agency decision for failure to perform the analyses.
When it comes to pipeline litigation, developers must understand that every project is the opposition’s next test case. Opponents will take what worked in the past and replicate it or take what did not and tweak it.
The underlying thread in much of the pipeline litigation is whether the agency had sufficient information to support its decision. A project’s best defense in litigation, therefore, is good data and a willingness to share it with the public and the permitting agency to bolster its decision-making. This can include conducting studies that the agency is resisting and providing additional factual material for the administrative record.
Data is also a project’s best offense when the pipeline is the litigant. It can be used to undermine an implacable agency that slow-walks a project.
With data, the right balance must be struck. Pipeline opponents will always demand more information and study as a delay tactic to sink a project.
However, good legal counsel can advise the company on which demands are merely make-work and which may be necessary under the applicable laws. More importantly, good counsel can push back against an agency willing to take risks with somebody else’s multimillion-dollar project in order to press institutional prerogatives.
Emily P. Mallen and Jim Wedeking are lawyers in the Washington, D.C., office of Sidley Austin LLP. Mallen counsels natural gas and oil pipeline clients on regulatory and other matters, and Wedeking represents energy companies and other clients in environmental lawsuits.
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