American Oil and Gas Reporter - July 2020 - 23

Legal Battles Over Pipelines
Deluge U.S. Legal System
With Questions Of Authority
We are in the midst of a flood! Not literally, but there are
overwhelming legal and regulatory issues involving water and
industry: the scope of Section 401 permits allowing for pipeline
stream crossings, the use of Nationwide Permit 12, and the
legal challenges to the Navigable Waters Protection Rule
(NWPR), defining the scope of Waters of the United States.
Pipeline permitting requires companies to obtain water
crossing permits from affected states. Some states, notably
New York and Washington, used the permits, granted under
Section 401 of the Clean Water Act, as a tool to block fossil fuel
infrastructure development. New York's refusal to grant a 401
permit to Constitution Pipeline resulted in the project's demise
after an eight-year battle.
As part of its efforts to promote American energy development,
the Trump administration issued Executive Order 13868 in
April 2019, which directs the U.S. Environmental Protection
Agency to review Section 401 and EPA's related regulations
and guidance to determine whether the agency's policies should
be updated or clarified. In response, EPA announced a final rule
on June 1, 2020. EPA Administrator Andrew Wheeler stated,
"EPA is returning the (CWA) certification process under Section
401 to its original purpose, which is to review potential impacts
that discharges from federally permitted projects may have on
water resources, not to indefinitely delay or block critically important infrastructure."
The final rule clarifies that states are to review only a project's
impact on water quality in Section 401 permit applications and
specifies that statutory and regulatory timelines for review and
action be taken within one year of the certification request.
Related to the Section 401 permitting process is the use of
NWP 12, a general CWA permit authorizing discharges with
minimal impacts to jurisdictional waters from "utility line activities." These permits are required for installing electric transmission and collection lines such as telephone, cable television
and Internet cables, as well as for oil and natural gas pipelines.
In a case before the Montana Federal District Court, petitioners
challenged the permits granted by the Army Corps of Engineers
to the Keystone XL Pipeline. In particular, petitioners opposed
the Corps' reissuance of NWP 12 in 2017, arguing that this
reissuance violated the Endangered Species Act.
In an April decision, a Montana Circuit Court judge agreed
with petitioners but went further than requested by vacating
NWP 12 and enjoining the Corps from authorizing any dredge
and fill activities under NWP 12 until it complies with the ESA
and other applicable laws, including the National Environmental
Policy Act and the CWA. This decision would have affected construction of broadband, electric, water and sewer utility lines, as
well as "maintenance, inspection, and repair activities" on existing
lines. Subsequently, the circuit judge limited the April ruling's
application to the construction of new oil and gas pipelines.
The immediate impact of this court case can be seen in a
lawsuit in Texas against KinderMorgan's Permian Highway
Pipeline, filed within weeks of the Montana ruling. In it, the

"Pipeline permitting requires companies
to obtain water crossing permits from
affected states. Some states, notably New
York and Washington, sued the permits,
granted under Section 401 of the Clean
Water Act, as a tool to block fossil fuel
infrastructure development.

Sierra Club argues that the Corps' issuance of NWP 12 has
been vacated. The U.S. Solicitor General, on behalf of the
Corps, filed in mid-June with the U.S. Supreme Court for a stay
of the Montana ruling, arguing that the Montana court "had not
warrant to set aside NWP 12 with respect to Keystone XL, let
alone for the construction of all new oil and gas pipelines
anywhere in the country." The filing is pending before the
Supreme Court.
More broadly, the scope of "navigable waters" remains in
doubt, with multiple lawsuits likely to be filed against the
federal rule that was published on April 21. As EPA describes,
"This final rule implements the overall objective of the (CWA)
to restore and maintain the integrity of the nation's waters by
maintaining federal authority over those waters that Congress
determined should be regulated by the federal government."
However, that view is not universally held. Separate requests
for preliminary injunctions and stays of the NWPR were filed
in the Northern District of California and the District of
Colorado. On June 19, the courts issued divergent opinions.
The California court denied the request for stay on the grounds
that the petition by 17 states was unlikely to succeed on the
merits. In Colorado, the court granted the state's request for a
stay, limited to Colorado. In all other states, the final rule took
effect on June 22, but more litigation is a certainty.
While the oil and gas industry clearly is the target of efforts
to impose more restrictive permitting and interpretation of the
CWA's scope, other industries also are affected. Homebuilders,
farmers and utilities all would face impediments with limits on
NWP 12 and attempts to expand the definition of "navigable
waters." Industry remains on a flood watch.
r

SUSAN GINSBERG is vice

president of crude oil and natural gas regulatory affairs for the
Independent Petroleum Association of America. She covers
legislation and regulation, focusing on the CFTC and FERC.
Her experience in natural gas
regulatory affairs spans more
than three decades.
JULY 2020 23

American Oil and Gas Reporter - July 2020

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