Yesterday, a federal appeals court in Virginia throughout a permit for the Atlantic Coast Pipeline to cross two national forests, including the Appalachian Trail, and criticize the U. S. Forest Service for granting a permit. But on the same day, a federal appeals court in d C seemed poised to reject environmentalist arguments that the Federal Energy Regulatory Commission was wrong when it granted a permit for a gas pipeline
expansion project in northeastern Pennsylvania. There's a lot of litigation across the country over pipelines with environmentalists trying a shotgun approach? Are they winning? Here to tell us, as Brandon Barnes Bloomberg Intelligence senior litigation analyst who knows all there is to know about pipeline litigation, So Brandon, tell us first about this shotgun approach and whether it's a deliberate strategy
that environmentalists have agreed to. Well, I think if you take a look at how things have developed over the last two three years in terms of the amount of litigation that's been filed and the various venues that it's being filed in, coupled with the nuanced approach to each one of these. These are highly technical arguments being filed by environmentalist It seems obvious that there's a new scattershot approach.
We're going to file a lawsuit in a number of different courts, We're going to use a number of different permits as our fodder, and we'll find a way to win. It certainly increased the chances that one of those grabs the attention of a court and they stop a pipeline or a project or something. And it's working. And so I think this is a case of success begetting success. Let's talk about where it worked first. So in the
Atlantic Coast pipeline. With that the fourth Circuit and Richmond criticized the Forest Service for abdicating its responsibility to preserve national forest resources, and they quoted Dr Seuss in doing so. I like that. They said, the Forest Services trusted to speak for the trees, for the trees have no tongues. So tell us what that was about. Well, this court has on three occasions come back at Atlantic Coast through the permitting of various federal agencies and stop the project.
And so this is just sort of the tail end of that process. Uh, this by itself, isn't that material. We're only talking about twenty one miles of pipeline. But if you couple that with the two other permits that span a larger amount of construction and other areas in West Virginia and Virginia and potentially North Carolina, this is a real problem for this project. It's really causing a
lot of delays here. So are courts in certain states or federal courts in certain areas more inclined to side with environmentalists or is it just a case by case basis. You know, I would have said no. You know, I'm a lawyer. I believe in the sanctity of of these courts and and the judges. But the trend, at least from my perspective, is that this fourth Circuit is certainly finding some common ground with the arguments that the environmentalists
are putting forward. I don't think the d C Circuit necessarily has gone that far, but they definitely have had some decisions that are new and and potentially open up new avenues for these opponents. So is the recent DC case an anomaly then? I I don't think so, only because that's just another facet of this sort of shotgun
of touch, let's try and challenge. And you're talking about the Ryan project with Morgan, you know, relatively small, hundred thirty seven three million dollar project, but it's important for the expansion of that that line in that system. That was another way of challenging the potential for that project to go through that could if it had been successful, or if it could be successful because that's been decided
flow through to much bigger projects. So when you talk about the bigger picture, our environmentalists ahead or the builders. These days, the environmentals are far ahead. The in the last two years is the delays that have mounted on these projects is incredible. They're incredible. It's if you look at the two Thousteen period for pipeline projects, the average time for them to get federal certification and then start building was under four hundred days. It was it was
less than a year. But in seventeen period that is jacked up over six hundred days. And so you're talking about more than a half a year edition in a pretty short amount of time. And a lot of that is due to the regulatory pressures at the state level
and in the courts. So how much money is that costing if you know generally, well, it's that's actually a difficult question to answer because a lot of these projects kind of once they're done, you don't really see the companies coming out and tell you what the cost was or or the it's an incremental change over time. But we took a look at a bunch of the bigger pipelines that recently have been changing their cost estimates because
of these delays. And if you look at the average on a quarter by quarter basis, if they delay by a quarter, it's about a hundred seventy million dollars. So is that stopping any new pipelines? Yes, yes, I think. And that's where we get into a little bit more of a of a geographical situation. So New York has in the last three years done a very good job of stopping projects from being built. Look at Constitution Pipeline,
look at Northern Access. They have found a lot of difficult to getting through and some of these projects probably won't get built as a result. But and that sort of started to extend to other states. You see that New Jersey with Penn East and some of the other project. Virginia's change their permitting scheme midstream for a lot of these projects and adding delay after delay, and it's it's sometimes it's death by a thousand cuts, and sometimes it's
a complete stop. Are there states where it's easier the permitting process is easier, easier, or at least more efficient. We know that looking at the process. So if we took a look at the time period after the federal government says yes it's okay you can build, all right, yes it's okay you can do this project, and take that time to the end where they're allowed to start building, that's usually the most sensitive time period for the states to kind of intervene and use their permitting process to
slow things down. That time period if you're going through Ohio and Texas is far shorter less than sixty days typically on average, then if you're going through New York, which is more than two hundred days. So the difference is substantial, and I think projects know that. If you look at where new projects are being proposed, there's only one project that's been proposed through New York since January. I'm interested in who is bringing these lawsuits? We say environmentalists.
Are they national environmental groups? Are they local environmental groups? Is there any thread. Traditionally you would have said, Okay, these are this is a very local Pipelines are local. Pipeline issues are local. It's not in my backyard or nimby issue. But since I think Keystone, certainly after Dakota Acts s you had a much stronger environmental movement from
the national groups, Sierra Club, Environmental Defense Fund, UM. They're all taking advantage of the success that they've had in the courts or at the local state agency level, and I think that they're just spreading that across to all sorts of other projects. It's a fascinating area. Actually, thanks so much, Brandon. That's Brandon Barnes. He it's Bloomberg Intelligence senior litigation analyst.