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Dominion’s Atlantic Coast Pipeline Gets Supreme Court Hearing (2)

Oct. 4, 2019, 1:31 PMUpdated: Oct. 4, 2019, 9:18 PM

The U.S. Supreme Court will consider jump-starting Dominion Energy Inc.’s proposed $7.5 billion Atlantic Coast Pipeline, agreeing to rule on a key permit that would let the natural-gas line cross under the Appalachian Trail.

A federal appeals court threw out the permit, saying the U.S. Forest Service lacked the authority to approve the right-of-way. Lawyers for the pipeline and the Trump administration say the lower court ruling threatens the 600-mile (965 kilometer) project’s viability.

The appeals court “has effectively erected a 2,200-mile barrier severing the eastern seaboard from oil and gas sources west of the Appalachian Trail,” Atlantic Coast Pipeline LLC argued in its appeal. The case will also affect EQM Midstream Partners LP’s planned $4.6 billion Mountain Valley gas pipeline from West Virginia to Virginia.

The justices will hear arguments in early 2020 and rule by early July.

The decision to hear the case is a boost for a project that has been beset by years of delays and cost overruns. The pipeline is one of a series of oil and gas projects that have stalled amid staunch opposition from environmentalists and landowners.

‘Clear Path Forward’

Dominion is celebrating the Supreme Court’s decision to review the case, calling it “a clear path forward to resolve this important issue.”

“We are confident in our arguments, and those of the Solicitor General, and are hopeful the Supreme Court will overturn the Fourth Circuit’s decision and uphold the longstanding precedent allowing pipeline crossings of the Appalachian Trail,” Atlantic Coast spokesman Aaron Ruby said in a statement.

Attorney General Patrick Morrisey (R) of West Virginia, where the pipeline’s path begins, also praised the news, saying in a statement that “it signals the court recognizes the profound importance of this case as a matter of federal law and economic impact to Appalachia and the nation as a whole.”

The environmental groups challenging the permit, led by the Cowpasture River Preservation Association, urged the Supreme Court not to hear the case, saying the companies were exaggerating the impact of the Fourth Circuit ruling.

The groups pointed to statements by Dominion officials expressing confidence they could work around the decision—and proceed with the pipeline—even if the Supreme Court didn’t intervene. Mountain Valley has said it’s exploring a land swap to get around the legal hurdles.

Southern Environmental Law Center attorney D.J. Gerken, who represents the environmental groups, said his clients are ready to make their case to the Supreme Court.

“We still are very confident in the correctness of the Fourth Circuit’s decision,” he said in an Oct. 4 interview. “It was based on a clear record where all the agencies agreed that this land is part of the Park System, and no federal agency can do what the Forest Service did.”

Dominion is developing the pipeline with Duke Energy Corp. and Southern Co. Atlantic Coast would carry as much as 1.5 billion cubic feet of natural gas per day from the Marcellus shale basin in West Virginia to customers in North Carolina and Virginia. The pipeline company says it will save consumers $377 million a year.

Under the original proposal, a 0.1-mile segment would cross under the hiking trail at a depth of more than 600 feet. The exit and entry points wouldn’t be visible from the trail, according to the Trump administration.

The Fourth Circuit said the U.S. Mineral Leasing Act doesn’t let the Forest Service authorize that segment. The law excludes land that’s part of the National Park System from the Forest Service’s jurisdiction. The environmental groups say that was the right conclusion.

“Because ACP seeks to cross the trail on an area of federal land in the National Park System, the MLA provides no authority for that right-of-way,” the groups argued.

The Trump administration says that, while the National Park Service manages the Appalachian Trial, the underlying land for the proposed pipeline is part of a national forest -- putting it within the Forest Service’s purview. U.S. Solicitor General Noel Francisco told the justices the lower court ruling would upend a long-settled understanding of the Forest Service’s authority.

The ruling “casts doubt on the Forest Service’s previously unquestioned authority to grant permits and other types of land use authorizations for power lines, communications sites, water facilities, and roads that cross the Appalachian Trail within national forests,” the administration argued.

Gerken, the SELC lawyer, noted that Atlantic Coast faces other legal hurdles, regardless of the outcome of the Supreme Court case. In related litigation, federal judges have ordered the Forest Service to address inadequacies in its environmental analysis for the pipeline. The agency hasn’t completed the new review yet, and pipeline construction is on hold.

“We remain confident we can resolve the ACP’s other permitting issues to enable resumption of partial construction in a timely manner,” Atlantic Coast said Oct. 4.

56 Pipelines

The Appalachian Trail, which runs from Maine to Georgia, was completed in 1937. It’s the world’s longest hiking-only footpath, according to the Appalachian Trail Conservancy, based in Harpers Ferry, West Virginia, which works to protect and maintain the trail.

Atlantic Coast says 56 pipelines already cross the trail, some of them on Forest Service land.

“The Appalachian Trail has never been understood to constitute an impediment to pipeline construction,” Atlantic Coast argued.

But the environmental groups say none of those were authorized under similar circumstances. Some are on state or private land, while others predate the congressional designation of the Appalachian Trail, the groups say.

“In the 51 years since Congress designated the Appalachian Trail, the Forest Service had never granted a new right-of-way to an oil or gas pipeline to cross the trail in a national forest,” the groups argued.

Related Case

The D.C. Circuit canceled upcoming oral arguments in another Atlantic Coast pipeline case in light of the Supreme Court’s decision to take up the Appalachian Trail dispute.

The appeals court on Oct. 4 froze proceedings in Atlantic Coast Pipeline v. Federal Energy Regulatory Commission. The case involves whether FERC adequately considered the natural gas project’s contribution to climate change. Environmental groups have for years pushed the agency to use a tool called the “social cost of carbon” to measure the real-world costs of greenhouse gas emissions.

The D.C. Circuit case also features claims that FERC didn’t properly consider the project’s impacts on poor and minority communities, and impacts on forests and waterways along its route.

The litigation is now on hold until after the Supreme Court resolves the Appalachian Trail case—a decision likely to come down next spring or summer. The D.C. Circuit noted, however, that the parties are free to ask the court to freeze construction should any project work start up in the meantime.

The Sierra Club is one of several environmental groups involved in the case. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Environment is operated by entities controlled by Michael Bloomberg.

The Supreme Court cases are U.S. Forest Serv. v. Cowpasture River Pres. Ass’n, 18-1584, and Atlantic Coast Pipeline v. Cowpasture River Pres. Ass’n, 18-1587. The D.C. Circuit case is Atlantic Coast Pipeline v. FERC, D.C. Cir., No. 18-1224.

© 2019 Bloomberg L.P. All rights reserved. Used with permission.

To contact the reporters on this story: To contact the reporter on this story:
Greg Stohr (Bloomberg News) in Washington at gstohr@bloomberg.net; Ellen M. Gilmer (Bloomberg Environment) in Washington at egilmer@bloombergenvironment.com

To contact the editors responsible for this story: Joe Sobczyk (Bloomberg News) at jsobczyk@bloomberg.net; Anna Yukhananov (Bloomberg Environment) at ayukhananov@bloombergenvironment.com