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Environment & Energy Report

Fast-Track Permits Stay Blocked for Keystone XL, Other Pipes (1)

May 28, 2020, 7:02 PMUpdated: May 28, 2020, 8:22 PM

The Ninth Circuit delivered a major blow to the energy industry Thursday, refusing to freeze a lower court’s decision to block a streamlined permit for Keystone XL and other pipelines.

The Trump administration and energy industry players lost their bid to sideline the ruling, which bars the Army Corps of Engineers from using a fast-track water permitting approach for new oil and gas lines.

The U.S. Court of Appeals for the Ninth Circuit said the government and energy companies “have not demonstrated a sufficient likelihood of success on the merits and probability of irreparable harm to warrant a stay pending appeal.”

Barring any Ninth Circuit reconsideration or a successful petition to the Supreme Court, the decision means the streamlined permitting process will remain off-limits for new pipelines while the parties file briefs and argue the broader appeal to the Ninth Circuit—a process that takes months.

Reviewing Impacts

Keystone XL backer TC Energy said it’s disappointed with the ruling, “which creates unnecessary harm to vital energy infrastructure projects across the U.S., inevitably delaying or eliminating thousands of high-paying job opportunities for skilled American workers this year.”

“While we will take some time to review impacts to our 2020 construction scope,” spokesman Terry Cunha said in an email, “TC Energy and the Government of Alberta remain committed to the future of Keystone XL.

Alberta has a financial stake in the Canada-U.S. oil pipeline.

An Interstate Natural Gas Association of America spokesman said the group is “considering our options to resolve this matter.”

Environmental groups that brought the underlying legal challenge cheered the Ninth Circuit’s move.

“it would have been unconscionable to allow this pipeline to be built through rivers, streams, and wetlands while it remains tied up in court,” Sierra Club attorney Doug Hayes said.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

Streamlined Process

Pipeline builders rely on the streamlined Nationwide Permit 12 to avoid more time-consuming and expensive individual permitting processes.

Under the recent decision from the U.S. District Court for the District of Montana, the general permit is off-limits for new oil and gas pipelines, though the Army Corps can continue using it for electric transmission lines, cables, and routine work on existing projects.

Pipeline construction work across the country faces delays because of the district court’s decision.

The case is N. Plains Res. Council v. Army Corps of Engineers, 9th Cir., No. 20-35412, 5/28/20.

(Adds comment from TC Energy, INGAA, and the Sierra Club beginning in fifth paragraph.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Rebecca Baker at rbaker@bloombergindustry.com

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