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Supreme Court to hear natural gas pipeline case – At stake? ‘How interstate natural-gas pipelines have been built for 80 years’

Supreme Court unleashing power over pipelines, natural gas

By Amy Harder

A decade of battles against pipelines proposed to crisscross the country is arriving at the Supreme Court.

Driving the news: The court ruled last week on the first such high-profile case, and two other actions also on pipelines are pending before the justices in decisions whose impacts could be far-reaching.

The big picture: These court battles represent the culmination of fights over fossil-fuel infrastructure of all kinds — beginning with the Keystone XL pipeline — as a proxy for a larger debate about climate change and energy.

  • Over this same period, oil and natural gas production has boomed in the U.S. Natural gas has become the dominant electricity source, driving a buildout of pipelines and power plants.
  • Environmentalists, together with local government officials and other advocates, have been fighting these projects through courts and permitting processes in the absence of the federal government taking action on climate policy.

“The game for environment groups is fairly simple. Use every tool to drag the project into the courts, raise the cost as much as you can, hope for an economic downturn and hope the developer throws in the towel.”

— Rob Rains, senior energy analyst, Washington Analysis

Where it stands: The three actions at issue turn on the fine print of different legal details, but they all deal with the same underlying debate about to what degree oil and natural gas pipelines should be constructed.

Here’s my attempt to break down thousands of pages of legal arguments into fewer than 200 words:

  • The Supreme Court ruled last week in favor of a 600-mile natural-gas pipeline proposed to go under the Appalachian Trail in rural Virginia (many pipelines already do). That decision also removed a hurdle for another 300-mile pipeline and could prompt development on other ecologically important lands, environmentalists say.
  • The Supreme Court will consider on Thursday whether it will grant or deny review, or seek the input of the Justice Department, on another pipeline case involving eminent domain and states’ constitutional rights. If the justices take it and reaffirm a lower court’s ruling, that could, in effect, give states veto power to block natural-gas pipelines.
  • The Supreme Court is also expected to decide in the coming weeks whether to grant the Trump administration’s request last week to stay a lower court’s ruling on the still-unresolved Keystone project, which also resulted in permitting delays of numerous other pipelines.

By the numbers: The time it takes to develop pipelines has been increasing over the last decade largely in response to more opposition, which in turn increases projects’ costs, according to analysis by energy analytics firm LawIQ.

  • Before 2013, it took a little under 2.5 years from application filing to construction completion.
  • Since 2013, that average has increased to nearly three years.
  • However, for the two pipeline projects at issue in last week’s Supreme Court case — the Atlantic Coast Pipeline and Mountain Valley Pipeline — they’re both already taking longer than four years and still have outstanding permits despite the court action. (The Keystone review has been going for 12 years!)
  • This data is only for pipelines that haven’t been canceled. If a permit is denied, a project tends to be shelved eventually, according to Rains at Washington Analysis.
Reproduced from LawIQ; Chart: Axios Visuals
Reproduced from LawIQ; Chart: Axios Visuals

The intrigue: The eminent domain case could create the biggest precedent for fighting pipelines going forward.

  • A federal appeals court ruled in September that developers of the 120-mile PennEast Pipeline from Pennsylvania to New Jersey couldn’t use federal law, per the 11th Amendment protecting states’ rights, to seize land controlled by the state to build the project.
  • The court said its conclusion could likely upend how interstate natural-gas pipelines have been built for 80 years. “But that is what the Eleventh Amendment demands,” the court wrote in its September 2019 decision.

But, but, but: “What the industry is struggling with at this point is whether all of these projects are even needed anymore,” said Gary Kruse, managing director of research at LawIQ.

  • Other than seasonal shortages in the Northeast, “most of the rest of the country is probably properly supplied with pipeline capacity right now,” Kruse said.
  • recent report by the environmental think tank Rocky Mountain Institute went a step further to say that natural-gas pipelines — and the power plants they serve — will be more expensive compared to renewable energy in the coming decade.

The bottom line: If President Trump loses reelection, expect Joe Biden to be increasingly hostile to fossil-fuel projects. But ultimately, it’s still a fight that’ll play out in the courts.

  • “I expect it to be a bit of a wild west for a while as the courts, agencies and the parties involved try to work through all of these emerging issues at once,” says Gillian Giannetti, staff attorney with the Natural Resources Defense Council.