On April 15, 2020, the US District Court for the District of Montana vacated Nationwide Permit 12 (NWP 12) for all utility line activities, following a conclusion that the U.S. Army Corps of Engineers (USACE) violated the Endangered Species Act (ESA) when it re-issued NWP 12 in 2017. While the decision was originally comprehensive and therefore applicable to all potential activities permitted under NWP 12, the decision was subsequently narrowed to include only construction of new oil and gas pipelines. In early July, the US District Court’s ruling was further invalidated by the US Supreme Court, allowing oil and gas projects to move forward except for the notable Keystone XL pipeline project, which faces multiple challenges involving the ESA, the Clean Water Act (CWA), and the National Environmental Policy Act (NEPA).
Some background on NWP 12
Under Section 404(e) of the CWA, USACE can issue general permits to authorize activities that have only minimal individual and cumulative adverse environmental effects. Within general permits, there are 52 nationwide permits that authorize a variety of activities such as residential developments, construction and maintenance of utility lines and road crossings, mining, and stream restoration. Under the Nationwide Permit system, these common activities are afforded a streamlined review and avoid the time consuming and costly process required for an individual permit.
NWP 12 is one of the most commonly utilized nationwide permits and authorizes limited impacts to “waters of the United States” as a result of construction, repair, maintenance, and removal of utility infrastructure. A utility line is broadly defined to include oil and gas pipelines, as well as any cable and transmission lines for electrical energy, telephone, internet, radio, and television.
The decision to vacate NWP 12
At the center of the decision to vacate NWP 12 is the hotly debated Keystone XL pipeline, which gained traction in 2017 and completes the final project phase by linking Canada to Nebraska via Montana. The April 15th ruling states that when reissuing the NWP 12 for the Keystone XL pipeline project, USACE failed to consult with US Fish and Wildlife Service (USFWS) under Section 7 of the ESA and remanded NWP 12 back to the USACE to complete consultation. Since NWP 12 is the main utility line nationwide permit, this ruling jeopardizes the widespread use of nationwide permits for construction, operations, and maintenance of utility lines. Alternatively, project proponents may be required to pursue individual permits that could take years to obtain. On May 11, 2020, the federal courts upheld the ruling to vacate NWP 12, but further narrowed the implications of the April ruling to the construction of new oil and gas pipelines. On July 6th, 2020, the US Supreme Court invalidated the lower court’s ruling, allowing oil and gas projects to move forward. However, the Keystone XL project was specifically excluded and would still be subject to the lengthy environmental review process.
Potential impacts to industry
The NWP 12 is a critical step in allowing infrastructure development projects with relatively small surface impacts to efficiently move forward through the permitting process. The July ruling to reinstate NWP 12 has provided relief to many oil and gas development projects as well as other utility projects that would have potentially been impacted by the lower court’s original decision to vacate NWP12. While this most recent ruling restores the NWP streamlining process for energy companies, the Supreme Court’s stay will remain in place for the Keystone XL pending future decisions of the US Court of Appeals.
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