Unpacking the Recent Federal Court Rulings Turning Pipeline Development on its Head

Federal regulators have halted construction of two major natural gas pipelines that cross through Appalachia this month, following several federal court decisions.

The Federal Energy Regulatory Commission (FERC) halted the Atlantic Coast Pipeline on Friday, Aug. 10. The agency issued a similar stop-work order earlier this month for the 303-mile Mountain Valley Pipeline. Both orders followed decisions issued by the 4th U.S. Circuit Court of Appeals, a federal appeals court based in Richmond, Virginia.

Since getting the green light from FERC last year, developers of both the Atlantic Coast Pipeline (ACP) and Mountain Valley Pipeline (MVP) have found themselves spending a lot of time in the courtroom battling more than a dozen lawsuits from pipeline opponents.

The litigation touches on everything from landowner rights to the validity of permits issued by an alphabet soup amalgamation of state and federal agencies.

The decisions out of the 4th Circuit, which has been especially prolific this summer, cover a lot of ground and have not exclusively been in the favor of pipeline opponents. Still, some experts and court watchers say the court’s decisions may be fundamentally shifting both the ways in which future natural gas pipeline projects will be proposed and the opposition strategy for environmental groups and landowners.

“I think the ground is shifting for opponents of natural gas pipelines in that they’ve seen some of these really specific challenges to federal review processes pay off,” said Ellen M. Gilmer, a legal reporter with E&E News who has been closely following the court rulings out of the 4th Circuit. “[Pipeline developers] know now that they’re going to be facing huge pushback in court.”

Mark “Buzz” Belleville, director of the Natural Resource Law Center at the Appalachian School of Law, said he sees the spate of lawsuits and 4th Circuit court decisions as proxies for a larger problem: no federal agency is taking a comprehensive view on how the build-out of natural gas pipeline infrastructure across the mid-Atlantic region and Appalachia should take place.

Credit Shayla Klein / West Virginia Public Broadcasting
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West Virginia Public Broadcasting

Once built, both the MVP and ACP are expected to transport billions of cubic feet of natural gas from the Utica and Marcellus shale formations to markets — both residential and export — on the East Coast and in the Gulf states.

“Most rational people realize we have to figure out how to get gas out of the Utica and Marcellus, but we can’t do it all,” he said.

These are nearly a dozen major proposed pipeline projects that would cross Appalachia awaiting FERC approval. Some may overlap. For example, portions of the Mountain Valley and Atlantic Coast pipelines run within hundreds of feet of one another. Belleville said federal regulators don’t have a mechanism to consider whether that made sense, or if another solution was possible, but they could if they created a regional, or programmatic, plan for pipeline buildout.

“Nobody — no president, no executive agency — is stepping back and saying, ‘big picture, where do we want to put these pipelines, what do we want to do here?’ ” he said.  

Belleville added that until a regional review is conducted, pipeline project developers will likely have to continue to contend with an all-out deluge of lawsuits filed by those who oppose the development.

Delays could have major financial effects for pipeline developers.

EQT Midstream Partners, which is the lead developer of the $3.5 billion MVP, said it would have to push back the project’s completion date by at least eight months if the 4th Circuit ruled the pipeline must halt water crossings in West Virginia.

“Under the most optimistic scenario, MVP would incur more than $600 million in incremental expense due to the suspension of construction in these areas until December 1, 2018,” MVP wrote in a court filing.

On June 21, the court invalidated a water crossings permit issued by the U.S. Army Corps of Engineers and halted all construction in streams and wetlands in West Virginia. A month later, the court vacated two more of the MVP’s federal permits. These were related to construction within the Jefferson National Forest. FERC ordered all construction to halt following that ruling, at least temporarily.

A spokeswoman for the pipeline did not respond to a request for comment as to whether this has affected the project’s completion date.

A New Opposition Playbook

For environmental and conservation groups that continue to fight these and other pipelines, the court decisions coming out of the 4th Circuit do provide a roadmap for what works, said Nathan Matthews, a senior attorney with the Sierra Club. He argued the ACP case that challenged the project’s Incidental Take permit and National Park Service approval of the pipeline’s construction under the Blue Ridge Parkway. The court this month invalidated both permits, which triggered FERC to issue a stop-work order.

Credit Steve Helber / Associated Press file photo
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Associated Press file photo

He said this ruling and others by the 4th Circuit that have sided with arguments made by environmental groups affirm “these pipelines have serious impacts that can’t be papered over.”

Matthews said in the case of the ACP and MVP, opponents did not limit their legal challenges to FERC.

“Going wide and engaging in every federal approval is one [strategy] that other pipeline opponents should emulate,” he said.

He acknowledged every pipeline fight will be different. For example, not every pipeline crosses a national forest like the MVP and only some projects will potentially affect endangered species like the ACP.

“But having the broad community opposition and the folks that are engaged at all levels and pursuing all of those in court, if necessary, I think is the way that these pipeline challenges need to proceed going forward,” he said. “Our wins here show that that strategy has paid off.”

Another lesson Appalachian pipeline opponents may be teaching others is that collaboration between grassroots organization can be powerful. In a brief published last week, Nicholas Stump, a faculty member with the George R. Farmer Jr. Library at the West Virginia University College of Law, noted the collaborative effort between grassroots groups is a central tenant of many environmental actions undertaken in the region. It has also has played a big role in the ability of smaller organizations to mount legal challenges against the MVP and ACP.

“Appalachian grassroots organizations are deeply involved in these recent MVP victories, as such organizations served as environmental plaintiffs in these actions,” Stump wrote, adding later, “Thus, Appalachian grassroots organizations occupy a central role in such legal-institutional efforts.”

Still, not all legal challenges by pipeline opposition groups have been successful.

In late July, the 4th Circuit ruled against a group of landowners who challenged FERC’s eminent domain process. On Aug. 1, the court ruled against environmental groups who challenged state water quality permits issued by state agencies in Virginia for the MVP.  

Gilmer, with E&E News, said the future of pipeline battles going forward depends, in part, on how environmentalists define success.

“If success means they shut down a pipeline, I don’t think the rulings that we have seen so far from federal courts suggest so far that this is likely to happen extremely soon,” she said.

In the stop-work orders FERC issued to both the ACP and MVP, the agency noted it ultimately expects new federal permits that had been vacated by the 4th Circuit to be reissued. Both MVP and ACP pipeline developers expressed confidence they could quickly sort out the permitting issues.

But FERC also said it could not predict how quickly that might happen. Delays could add millions of dollars to the final cost of these pipelines.

“As we have seen in court, they are able to slow down construction, temporarily halt construction, force agencies to take a closer look,” Gilmer said of lawsuits brought by opposition groups. “In that way, they are really pushing that issue forward.”

Feds Halt Construction of Atlantic Coast Pipeline

Federal regulators halted all construction of the 604-mile, interstate Atlantic Coast Pipeline (ACP) following a federal court’s ruling this week that invalidated two major federal permits.

The Friday evening decision comes just a week after regulators issued a similar stop work order for another major interstate natural gas project, the Mountain Valley Pipeline.

On Aug. 6, the U.S. 4th Circuit Court of Appeals ruled the National Park Service (NPS) acted in an “arbitrary and capricious” manner when it granted the ACP pipeline a right-of-way permit to cross under the Blue Ridge Parkway. The court also said the U.S. Fish and Wildlife Service did not do enough analysis to ensure the protections of five endangered or threatened species and vacated the pipeline’s “Incidental Take Permit.”

In a letter to pipeline officials, the Federal Energy Regulatory Commission (FERC) said without these permits, construction of the ACP could not continue.

“In light of this development, Atlantic Coast Pipeline, LLC (Atlantic) has not obtained the rights-of-way and temporary use permits from the NPS needed for ACP to cross certain federally owned lands and lacks an Incidental Take Statement for the project,” the letter states.

The move comes a week after FERC issued a stop work order for the 300-mile Mountain Valley Pipeline. In that case, the 4th Circuit invalidated two federal permits authorizing construction inside Jefferson National Forest because the Bureau of Land Management and U.S. Forest Service did not conduct enough environmental analysis. FERC said until those approvals are re-issued, construction must stop.

In the letter sent to ACP officials, the agency noted the Park Service and the Fish and Wildlife Service would most likely issue new permits, but FERC could not predict when that may happen.

“Should NPS authorize an alternative crossing location, Atlantic may need to revise substantial portions of the ACP route across non-federal or federal lands, possibly requiring further authorizations and environmental review,” the agency said. “Accordingly, allowing continued construction poses the risk of expending substantial resources and substantially disturbing the environment by constructing facilities that ultimately might have to be relocated or abandoned.”

The ACP is a project of Dominion Energy. The $5.5 billion pipeline would transport natural gas from central West Virginia to the eastern portions of Virginia and North Carolina.

ACP spokesman Aaron Ruby said in an emailed statement that pipeline developers were already working closely with federal agencies and were confident the issues could be resolved quickly.

“The Atlantic Coast Pipeline has been the most thoroughly reviewed infrastructure project in the history of our region,” he said. “The recent action by the courts and FERC are further evidence of this unprecedented scrutiny and the high standard that is being applied to this project.”

The company has five days to submit a stabilization plan to FERC that indicates what measure the project intends to take to ensure that construction already in progress does not become an environmental liability.

The agency on Friday also decided not to rehear challenges brought by environmental groups to its initial certificate of the pipeline, opening to door for continued legal challenges regarding the “public need” for the project.

Court Hears Arguments in West Virginia Stream Cleanup Case

A federal appeals court was urged Tuesday to overturn a ruling by a judge who found that the state of West Virginia has abandoned its responsibility to write cleanup plans for streams harmed by pollution from mountaintop-removal coal mining.

The judge’s 2017 ruling said the state Department of Environmental Protection has dragged its feet for years on plans required under the federal Clean Water Act.

In arguments before a three-judge panel of the 4th U.S. Circuit Court of Appeals, a Justice Department lawyer representing the U.S. Environmental Protection Agency said West Virginia intends to draft the cleanup plans, but has been working to satisfy a 2012 state law that requires broadening the way it determines the biological health of streams.

“This is a hard issue. This is a new issue,” said attorney James Maysonett of the Justice Department’s Environment & Natural Resources Division. “West Virginia has a schedule to get this done.”

Derek Teaney, senior attorney for Appalachian Mountain Advocates, said the law does not require the state to develop the new assessment tool before it submits cleanup plans for the streams affected by pollution from mining.

The group sued the U.S. Department of Environmental Protection on behalf of the Sierra Club, the Ohio Valley Environmental Coalition, the West Virginia Highlands Conservancy and the West Virginia Rivers Coalition.

“We are trying to compel agency action,” Teaney said.

In court documents, the group contends that the state has refused to develop “total maximum daily loads,” which are plans for restoring impaired waters that identify the maximum amount of a pollutant a stream can receive while still meeting water-quality standards.

The streams have been designated as “biologically impaired” because of diminished levels of aquatic life. The environmental groups say the state Department of Environmental Protection has identified the cause of the diminished aquatic life in nearly 200 of those streams to toxicity related to mining pollution.

The Clean Water Act requires states to develop the plans for any stream that does not meet water-quality standards. If a state doesn’t develop a satisfactory plan, the law requires the U.S. Environmental Protection Agency to step in and come up with a plan.

The 4th Circuit did not indicate when it will issue its ruling.
 

Blankenship Conviction Affirmed, Will Finish 1-Year Sentence

A panel of appellate judges has affirmed a ruling that sent former Massey Energy CEO Don Blankenship to prison.  The decision means he’ll serve out the remainder of his one-year prison term in a California penitentiary. 

The U.S. 4th Circuit Court of Appeals ruled Thursday morning that “the district court committed no reversible error.”

Blankenship was convicted of conspiring to willfully violate federal mine safety laws in December of 2015 and was later sentenced to a year in federal prison and a $250,000 fine. His attorneys appealed the conviction.

Lead defense attorney Bill Taylor argued that District Judge Irene Berger had erred when instructing the jury on the definition of “willfulness” and the government’s burden of proof after the 8-week trial.

Taylor also told a three-judge panel of the court in Richmond during an October hearing that not allowing him to re-cross examine a witness was also grounds for overturning the conviction.

The court, however, disagreed in a 34-page ruling.

Blankenship began serving his sentence in May 2016. His charges stemmed from a 2010 explosion at the Upper Big Branch coal mine in Montcoal, West Virginia, that killed 29 men.

Blankenship was not charged with their deaths, but with promoting a culture of disregard for mine safety laws. The government pointed to years of high numbers of violations, and memos and recorded phone calls of Blankenship as proof. 

While Appealing Year of Prison, Ex-Coal CEO Pays $250,000 Fine

While he appeals a decision that served him a one-year prison sentence, former coal company executive Don Blankenship has paid his $250,000 fine.

According to a U.S. District Court filing, the wealthy ex-Massey Energy CEO paid the fine in Charleston on Friday, plus a $25 court fee.

Blankenship was sentenced Wednesday to the maximum prison time and fine for conspiring to willfully violate mine safety standards at Upper Big Branch Mine.

The southern West Virginia coal mine exploded in 2010 and killed 29 men.

A jury convicted him of the misdemeanor Dec. 3.

He filed his notice of appeal Thursday to the U.S. 4th Circuit Court of Appeals.

Judge Irene Berger declined to let Blankenship stay free on a $1 million bond while he appeals the case.

 

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