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Pipeline Faces Climate, Justice Battles After High Court Ruling

June 18, 2020, 10:01 AM

Lawyers trying to put the brakes on the Atlantic Coast pipeline are refocusing their efforts on environmental justice, climate, and other issues after the U.S. Supreme Court blessed a key permit for the natural gas project.

The justices on June 15 approved the $8 billion pipeline’s route beneath the iconic Appalachian Trail, an important victory for backers Dominion Energy Inc. and Duke Energy Corp.

But the conclusion of the case restarts long-idled litigation over greenhouse gas emissions and highlights how the pipeline affects the land and people it’s planned to pass en route from West Virginia to Virginia and North Carolina.

The Supreme Court’s decision will likely cause “dominoes to fall,” with agencies issuing a slew of pending permits, Bloomberg Intelligence analyst Brandon Barnes said. But many of those are saddled with their own potential legal vulnerabilities and are expected to fuel litigation well into 2021.

Among the unresolved permitting issues: Wildlife officials are studying effects on endangered species and forestland; water crossing permits are in legal limbo; Virginia regulators are reviewing environmental justice impacts; and groups are fighting energy regulators’ pipeline stamp of approval in court.

No Longer ‘Stuck on Pause’

Lawsuits taking aim at the Federal Energy Regulatory Commission’s approval of the Atlantic Coast pipeline have been on hold pending the outcome of the Supreme Court case.

Now that the justices have resolved the Appalachian Trail issue, a high-stakes debate over FERC’s climate analysis, among other issues, comes back to life.

“We really have just been stuck on pause for a while,” said Jason Schwartz, who is legal director for New York University’s Institute for Policy Integrity and tracks climate change issues in court.

Several issues are at play in the challenge to FERC’s approval, but Schwartz is focused on one that has bounced through the U.S. Court of Appeals for the District of Columbia Circuit for years: the social cost of carbon, a tool used to calculate the on-the-ground costs of increased greenhouse gas emissions.

FERC has resisted using the tool when analyzing pipeline impacts, saying it’s too imprecise to produce useful data. Environmental advocates say it’s a necessary step toward understanding a project’s impacts.

The D.C. Circuit has touched on the issue in previous cases but hasn’t fully grappled with it, Schwartz said. The Atlantic Coast pipeline gives the court another chance.

“We’re very eager for the D.C. Circuit to weigh in on this issue because we do think the Atlantic Coast case still presents a really clear example of when an agency could have very easily applied the social cost of carbon to help inform its decision,” he said.

Sierra Club senior attorney Nathan Matthews, who represents environmental groups in the case, stressed that the case involves a host of additional arguments, including whether FERC properly determined the pipeline was needed in the first place.

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.

Environmental Justice Review

Virginia officials’ ongoing environmental justice review for the pipeline’s route presents another hurdle for Atlantic Coast.

Dominion submitted additional analysis to the Virginia Department of Environmental Quality this spring after the U.S. Court of Appeals for the Fourth Circuit rejected a permit issued for a pipeline compressor station.

The court said state environmental regulators failed to consider alternative fuels for the station or the project’s potential impact to the nearby, primarily Black neighborhood of Union Hill in Buckingham County. The site planned to use gas-fired turbines, which cause local air pollution.

Dominion representative Ann Nallo said the supplemental analysis confirms the station as designed won’t pose a health risk for any area residents and won’t disproportionately impact environmental justice communities.

Greg Buppert, a senior attorney at the Southern Environmental Law Center, which represented groups challenging the station approvals, said it’s “shocking” that Dominion is still pushing for a gas-fired compressor station instead of one powered by electric motors.

The company’s effort reflects how Dominion has approached the pipeline project from the beginning, Buppert said.

“The company has tried to put its head down and blaze forward despite these risks and obstacles,” he said. “In our view, it hasn’t been meaningfully entertaining alternatives that avoid these risks.”

Other Pending Approvals

Atlantic Coast still needs federal approval for crossings of certain wetlands and waterways along its route. But the streamlined Army Corps of Engineers program on which the project would typically rely is suspended due to unrelated litigation involving the Keystone XL oil pipeline. If courts don’t revive the program soon, Atlantic Coast can pursue lengthier individual permitting processes.

Federal judges have twice struck down Endangered Species Act reviews for Atlantic Coast. The U.S. Fish and Wildlife Service is expected to issue a new study soon. The rusty patched bumble bee and other endangered animals live along the pipeline’s path.

While the Supreme Court upheld the U.S. Forest Service’s approval of the Appalachian Trail crossing, the agency is still working on a new environmental review ordered by the Fourth Circuit to support other approvals under the agency’s jurisdiction.

Pipeline opponents also have called on FERC to conduct a fresh environmental review of the full project’s impacts, saying the agency’s 2017 study is now out of date.

The D.C. Circuit case is Atlantic Coast Pipeline v. FERC, D.C. Cir., No. 18-1224. The Fourth Circuit case is Friends of Buckingham v. State Air Pollution Control, 4th Cir., No. 19-1152.

—With assistance from Alexandra Yetter.

To contact the reporters on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com; Maya Earls in Washington at mearls@bloomberglaw.com

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

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