Judge Requires More Review for Pipelines

TUESDAY, MAY 26, 2020

Earlier this month, Montana federal Chief U.S. District Judge Brian Morris announced that he was upholding a previous April ruling, which cancels an environmental permit for the Keystone XL pipeline.

According to reports, the ruling also has the potential to cause delays for other oil and natural gas projects as well.

Keystone XL Pipeline History

In 2011, the $5.2 billion pipeline began flowing crude oil through seven U.S. states, where it will eventually work in tandem with the $8 billion Keystone XL Pipeline. The Keystone Pipeline as a whole is reported to handle up to 23 million gallons of crude oil daily.

In 2017, President Donald J. Trump’s administration reversed his predecessor’s decision on the construction of the Keystone XL pipeline, allowing the 1,179-mile oil pipeline to move forward again. Keystone XL, a project of TransCanada, is part of the larger Keystone system and plans to transport oil from Hardisty, Alberta, in the western Canadian oil sands, to Steele City, Nebraska.

In April 2018, TransCanada revealed that approximately 9,700 barrels of oil spilled on farmland in Marshall County, South Dakota, on Nov. 16, 2017—considerably more than the 5,000 barrels the company originally estimated were lost.

Preliminary reports indicated that the leak may have come as a result of damage to either the pipeline itself or its protective coating, caused during construction 10 years ago. The Aberdeen News noted that if the current estimate is correct, that spill is the seventh largest in the U.S. since 2010.

By July, officials confirmed at least one section of the pipeline north of Britton, South Dakota, was being dug up for inspection. A year later, a federal report indicated that improper coatings were likely used on the pipeline. The Pipeline and Hazardous Material Safety Administration issued a notice of probable violation to pipeline owner TC Oil Operations, also known as TC Energy, in mid-June.

Another incident occurred this past November, causing over 380,000 gallons of oil to leak from the Keystone Pipeline, a total amounting to 9,120 barrels of crude oil. Sections of Keystone pipeline were shut down in response to the leak, which impacted a wetland area and, at the time, an estimated 2,500 square yards of land. TC Energy, formerly known as TransCanada, said that air quality, wildlife and environment monitoring was being conducted.

While the cause of the leak underwent investigation, North Dakota regulators also noted that drinking water supplies went unaffected, and TC Energy reported that the spill had been contained, and that it was using backhoes and vacuum trucks to recover the spilled oil.

The pipeline officially returned to service on Nov. 10, after receiving approval for a repair and restart plan by the U.S. Pipeline and Hazardous Materials Safety Administration.

However, at the end of the same month, North Dakota environmental scientist Bill Suess, the estimated amount of land affected by the oil spill had risen nearly 10 times the original estimate, although the amount of oil leaked remained the same.

During collection, the contaminated soil was stockpiled and taken to a landfill in Sawyer, North Dakota.

Earlier this year in January, TC announced through a status report filing at the U.S. District Court in Montana that the company would kick off pre-construction efforts as early as February.

“This is very good news for Canada as a country,” said Tristan Goodman, President of the Explorers and Producers Association of Canada, which represents small- to mid-sized oil and gas producers. “It’s extremely good for Alberta and Saskatchewan, where a lot of the oil for this is coming from.”

In March, TC announced that it had officially began preliminary work for pipeline construction slated to take place along the border’s crossing into Montana. Groundbreaking for the project was expected to commence in April.

However, on April 15, Judge Morris ruled that the Corps had failed to adequately consider effects on endangered species such as pallid sturgeon, a massive, dinosaur-like fish that lives in rivers the pipeline would cross.

According to the Natural Resources Defense Council, the decision arrived as a result of a lawsuit that challenged the Corps’ failure to adequately analyze the effects of pipelines authorized under Nationwide Permit 12.

What’s Happening Now

In Morris’ ruling, construction on the Keystone XL pipeline has again been delayed, in addition to some other potential oil and gas projects.

While, the ruling doesn’t block the construction of Keystone XL or other pipelines specifically, it does cancel Nationwide Permit 12, which allows dredging work on pipelines across bodies of water.

When asked to reconsider his April ruling, Morris agreed to limit the scope, but according to the Associated Press, had stopped short of a full reversal. His reasoning was pointed to the Corps’ “serious error” in failing to adequately consult with wildlife agencies prior to reauthorizing the permit program in 2017.

“The need to protect endangered species and critical habitat from harm until the Corps completes programmatic consultation outweighs any disruption or permitting delays that would result from this partial vacatur,” Morris wrote.

While attorney Jared Margolis with the Center for Biological Diversity and other environmentalists were reportedly pleased with the decision, utility officials have announced that they intend to appeal. Among them, TC spokesman Terry Cunha reported that the company would promptly file with the U.S. Court of Appeals for the Ninth Circuit.

“We look forward to a resolution that allows us to advance our construction in 2020 without any further delay,” said Cunha.

The Corps and TC have 60 days from the ruling to send in their appeals.


Tagged categories: Environmental Control; Environmental Controls; Environmental Protection; Government contracts; Laws and litigation; NA; North America; Oil and Gas; Ongoing projects; Pipelines; Project Management; U.S. Army Corps of Engineers

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