Big Pipeline Projects Get Rapid Fire Bad News

news weeks, and then there's this week. It's only half over, and we've already had three huge developments happen with oil and gas pipelines, each of which could have dominated the news cycle on their own. Within hours of each other, two federal court rulings came down that crippled two of the biggest pipelines, the Dakota Access and the Keystone Excel,

both in the Upper Midwest. But just the day before, a big energy partnership announced it would give up its plans to build a third big project, the Atlantic Coast Pipeline. The purpose of all three of these pipelines is, of course, to quickly and efficiently transport lots of oil and natural gas from wells to refineries and power plants. You could see these pipeline projects as a natural extension of the shale boom that transformed the US energy ten or so

years ago. After all, what good is it to extract way more oil and gas out of the ground if you can't get it where it needs to go. But for pipelines, this week was really bad. Were the timing of these three developments coincidental? Maybe, but you could make a strong case that there's much larger forces driving this, from an aggressive legal strategy by environmentalists to the rock bottom fuel prices we're seeing in the time of COVID.

And here to make that case is a familiar voice to listeners of this podcast, Bloomberg Law reporter Ellen M. Gilmer. She covered all of this torrent of news, and she started off by explaining what happened with the Atlantic Coast Pipeline. So the Atlantic Coast Pipeline would deliver natural gas from West Virginia, where there's a lot of shale fields where they use fracking and horizontal drilling to get gas out,

and it would deliver gas to Virginia North Carolina. It's backed by Dominion Energy and Duke Energy, and it's been in the works for oh, probably six or seven years, maybe longer well. And the interesting thing is that this was supposed to go to cross the Appalachian Trail, a famous national park that runs along the Appalachian Mountains, and you actually went out there to visit the site where we go underneath the trail. That's right. Some people go

to gyms, we go to the Appalachian Trail. Can you talk about why that was significant? So it was significant because of you know, you just called the Appalachian Trail a national park and it is administered by the National Park Service and considered a park unit, but it kind of has this unique status and that was really at the heart of all of this. There was a lot of litigation over whether it could cross under the trail

and if so, which agency had authority to approve? Boiling it down even more is like is the Appalachian Trail land and is that land under the National Park Service? What is the definition of land? Yeah? Does that mean it's it's under the Forest Services jurisdiction. So anyway, it was this whole mess that that went all the way to the Supreme Court this term, and the Supreme Court recently ruled on that case, and it sounds like the

pipeline companies won. They did. Yeah, the pipeline companies won and the Trump administration won in that case, but it wasn't enough to save the pipeline, right. That's why I was so well, I guess, confused and surprised when I saw your story because I thought they just won this big case all the way to the Supreme Court, and then a few weeks later they cancel the pipeline. They were they were fighting to build. What was that about.

It was pretty crazy to watch with the timing, because Atlantic Coast did spend all of this time fighting for this pipeline, fighting and court fighting all these various battles about land and different permits, and they fought all the way up to the Supreme Court. They hired Paul Clement to argue their case, one of the best lawyers in

the business. If that entire trail is construed to be National Park Service land that can't have a pipeline go through it, I mean, that's a huge barrier to pipelines up and down the entire East Coast. And they won. But at the end of the day, that was just one small permitting issue. I mean obviously it was big enough to reach the Supreme Court, but it was just one discrete permitting issue among this whole universe of other

permitting issues. They were facing litigation that's happening. That was happening at the same time focusing on other approvals for the pipeline. There was some litigation about other pipelines that had an effect on their project, and there was just so much uncertainty that it was a business decision. At the end of the day, it just wasn't worth in their view, it was worth a continued investment. Well, speaking of other pipelines, let's move to another part of the

country in another pipeline that is actually already built. This is the Dakota Access Pipeline, and there was also news this week on that pipeline, actually pretty big news. Tell me about, first off, where this pipeline is and what it was supposed to do. So, Dakota Access goes from North Dakota to Illinois. It moves oil from North Dakota shale fields to a big oil hub in Illinois. And it's in service. It's built, it's been moving oil for three years. But you might remember it was the subject

of just huge protests. Oh I remember. Yeah, it was the end of the Obama administration, and thousands of people descended on this area just outside of the Standing Rock Indian Reservation in North Dakota to protest this pipeline and to demonstrate. They camped out there for months, a lot of Indigenous advocates and environmental activists and all different opponents to the pipeline. Ultimately, the pipeline was built, but it's been it's been in active litigation and then what happened

this week. So this week, after all of that along the way, there have been several court decisions against the pipeline, but they haven't gone so far as to shut it down. That all changed on Monday when the District Court in DC Federal District Court in DC ordered the pipeline to shut down, and it gave Decode access thirty days to do it thirty days thirty days August fifth. What were the grounds that the DC Court used to say why this pipeline had to be this already built pipeline had

to be shut down within thirty days? The judge found, And the judge actually reached this conclusion several months ago, but was still deciding what the consequences should be So the judge found that the Army Corps, which is a federal agency that moved a key permit for the pipeline to cross a big waterway in North Dakota. The judge found that the Army Corps didn't adequately consider all the environmental impacts, especially the oil spill risk and how that

would affect all of the tribes that are downstream. Again, this pipeline, it crosses this part of the Missouri River, this damned section that's called Lake Owahee. It's it crosses about a half a mile north of the Standing Rock Indian Reservation. So the Standing Rock Sioux are right there, the Cheyenne River Sioux and other Sioux tribes are downstream.

So they were all in court working to shut down the pipeline, arguing that the Army Corps didn't properly consider all those potential impacts, and in the end, that's what the judge agreed. Now, this is a lower court judge. I guess the company could appeal this to the Circuit Court or again even the Supreme Court. But do you think they'll do that? Absolutely? Yes, And they've been pretty outspoken about their plans to do that it's already the appeal is already in motion as we as we speak

here on July eighth. Energy Transfer is the company that's behind a code to Access, and it has already launched an appeal. It's asking the District Court to freeze its decision while that process plays out. So in the next couple of weeks, we're going to see just a lot of papers flying back and forth in court. And if Energy Transfer isn't successful at either of those levels, you're right, they could. We could very well see them bringing that question up to the Supreme Court to avert a shutdown.

So and finally we're not done yet. Let's go to a third pipeline here the probably this is very arguable, but I guess maybe the most famous pipeline Keystone XL. There was news on that this week. What happened with the Keystone XL pipeline Keystone Excel is a really big one. I'm not sure if Keystone Excel or Dacoda Access is more widely known. It's a tough call me either. Let's

call them tied for the most famous pipelines. A lot of people who don't aren't in the weeds on pipelines the way we are actually just fuse the two pipelines together and think they're kind of one project, which is understandable to get them mixed up because there's just been so much news about both of them over the years. So Keystone Excel would move from Canada down into the US,

crossing through like Montana, Nebraska. So the big difference between Dakota Access and Keystone XL is that Keystone Excel is not built. It's been stuck in litigation and permitting issues for years. The Obama administration decided not to grant a permit for the pipeline. The Trump administration changed course. This one judge in Montana in March ruled that one of the programs that was used, one of the permitting programs that was used to approve Keystone XL, wasn't in compliance

with the Endangered Species Act. So he this judge in Montana vacated that whole program, which means he suspended the program and said this program can't be used to permit Keystone XL or actually any other new oil and gas pipeline across the country. So there's an appeal happening in the Ninth Circuit right now. And in the meantime, the pipeline company TC Energy went up to the Supreme Court

and said, like, you've got to stop this. All these other oil and gas interests also went up to the Supreme Court and basically they're just saying, like we need, we need to have these permits like that. You can't a judge can't vacate an agency's entire permitting regime. Yeah,

that was essentially the argument. And so Monday night, you know, a few hours after this all this Dakota access drama happened from the district court, the Supreme Court decided to weigh in on Keystone XL and it said Keystone XL's permit is still frozen. So that about covers this week's news. When we come back, we'll talk with Ellen about well, what all this means, why is this happening now, and what does COVID have to do with all of this.

Stay tuned, all right, we're back and we're talking with Ellen m gilmour, a Bloomberg LAU reporter, about some major setbacks the pipeline industry suffered this week. If you were listening closely, you might have noticed a trend. A lot of these setbacks were the result of environmentalists suing the federal agencies that grant companies permits to build these pipelines.

Ellen says, that's exactly by design. Litigation against oil and gas pipelines pipelines has grown just dramatically in the past probably five years. You've seen this really sophisticated, cord needed effort by people in the environmental community, but partnering with people in the indigenous community and also a lot of

landowners who are pushing back. You know, we're seeing this huge expansion of fossil fuel infrastructure, in part because on the natural gas side, because of the shale boom, and in part on the oil side as well, and so you saw environmentalists realizing that they, you know, had an opportunity to stop these projects if they went to court to litigate every single permit. So that's kind of what

they did. That's so interesting. They're not it seems like the environmentalists are not attacking the drilling and the fracking where it's happening. They're attacking the transporting of that those resources from the place where they were drilled to the place where they're needed. I guess they're definitely still litigating

on the actual oil and gas production side, the extraction side. Yeah, so they're they're definitely like filing lawsuits to try to prevent especially oil and gas development on public lands because that's where they really have some permits that they can challenge or leasing decisions and things like that. But pipelines are where they've they've made really big strides in their

in their kind of legal strategy over the years. I'll say, yeah, so and again just to emphasize, like the Atlantic Coast case, they pulled the plug on that pipeline as a business decision, So it wasn't directly, uh you know, it wasn't a court decision that that shut down that pipeline, but it was definitely this huge build up over the years of all this different legal uncertainty. Well, that actually perfectly segues into my last question, which is we're in a different

environment now. This is like a new planet that we're on post COVID, where the price of fossil fuels is at a rock bottom, and it seems like, you know, the energy companies were able and maybe willing to fight these lawsuits and to wage years long litigation battles when the price of oil was pretty high. That's not the case anymore. And we saw with the Atlantic Coast pipeline that you know, it's just it's a business decision, as you said, it's the price is so low that it's

not worth it to build these pipelines. Do you think that that is going to play a bigger factor than the litigation itself or do you think it's going to be a mix of you know, projects getting tied up in litigation plus the market being so depressed. I think it's a mix. You still have these giant companies that are fully committed to building out their empires and they

want to move these fossil fuel products. There are companies whose whole focus is building midstream infrastructure, and they're not just going to go away. They're still going to try to do their thing, and in some cases they're going

to be able to do so successfully. But they just are doing it in this new world of increased litigation on federal and state permits, and they're going to have to, you know, choose their routes carefully and calculate and build in extra time, understanding that some permits and stuff may end up delayed through courts, and they're going to continue to pressure the Trump administration to streamline this permitting process, which the Trump administration has already made a lot of

efforts to do. So they're going to continue to push on that while at the same time making sure that the agency approvals are supported enough that they are going to hold up in court. So it's kind of this delicate balance of streamlining the process without streamlining it so much that it doesn't hold up in court. That was Bloomberg Laws, Ellen M. Gilmer, and that's it for today's episode of Parts Pervilion. If you want more environmental news,

check out our website Newstop Bloomberg environment dot com. That website, once again is news dop Bloomberg environment dot Com. Today's episode of Pars Rebellion was produced by myself along with Josh Block Special Health Today camp from Amma Yukonana. Pars Rebellion was created by Jessica Coombs and Rachel Daegel. The music for today's episode is a Message by Jazaar and back Porch Blues by Richard Myhill getting used under a

Creative Comments license. Thanks for listening everyone. Hi, I'm Laura Carlson and I'm dropping into your feed to tell you about Prognosis, a new daily show from Bloomberg. Monday through Friday. We'll spend a few minutes with you every afternoon to help you understand life in the time of COVID nineteen. The show was available on Apple Podcasts, Spotify, or wherever you listen. So come back every afternoon for our coverage and stay safe.