Court tosses construction permits for Atlantic Coast Pipeline

Dive Brief:

A federal appeals court on Monday threw out construction certificates for the Atlantic Coast Pipeline, likely halting work on the $6 billion project planned by major Southeastern utilities.
The Federal Energy Regulatory Commission (FERC) approved the project last year, but the Fourth Circuit Court of Appeals ruled that certification was based on a faulty right-of-way permit awarded by the National Park Service for where the pipeline would cross the Blue Ridge Parkway, a road in Virginia that is part of the National Park system.
Continued construction of the line would "violate FERC's certificate of public convenience and necessity," the court warned, and environmental groups pushed FERC to issue a stop-work order for the entire line, as it did last week for the Mountain Valley Pipeline. Developers said they would push NPS to "promptly reissue the permit" to cross the Parkway.

Dive Insight:

Monday's court ruling is a significant setback for developers of the 600-mile Atlantic Coast Pipeline, planned by Dominion Energy, Duke Energy and Southern Co.

Environmental advocates and local landowners argued that the NPS permit to build the pipeline ignored how tree clearing would impact the scenic and conservation goals of the Parkway, a nearly 500-mile road that runs through Virginia and North Carolina.

The court sided with complaints, ruling that NPS decision on Blue Ridge "is not accompanied by any explanation, let alone a satisfactory one."

The ruling means there is "a hole in the 600-mile pipeline now that it has no right to cross," said DJ Gerkin, attorney at the Southern Environmental Law Center, which argued the case. The project is planned to run from West Virginia to deliver gas to customers in Virginia and North Carolina.

In the same decision, the court also detailed its justification for a May ruling that invalidated permits issued by the Fish and Wildlife Service (FWS) for Atlantic Coast because they did not properly assess the impact of the project on five animal species covered by the Endangered Species Act.

Because FERC was not a party to the case, which pitted environmentalists versus NPS and FWS, the court could not order FERC directly to issue a stop-work order for Atlantic Coast (ACP). It did, however, issue a stern warning to the pipeline developers that they should stop building.

"FERC's authorization for ACP to begin construction is conditioned on the existence of valid authorizations from both FWS and NPS," Chief Judge Roger Gregory wrote for the three-judge panel that decided the case. "Absent such authorizations, ACP, should it continue to proceed with construction, would violate FERC's certificate of public convenience and necessity."

With the certificate vacated, "the pipeline cannot exist in its proposed form with its current authorizations," and instead "would have to be re-authorized with a new permit or possibly a new route to proceed," Gregory added in a footnote.

FERC declined to comment on whether it would issue a stop-work order for ACP to accompany the ruling, but pipeline lawyers say one is likely. Late last month, the Fourth Circuit vacated two federal permits for a separate project, the 300-mile Mountain Valley Pipeline, and that decision was followed by a stop-work order late last week.

"FERC issued a stop work order for the whole [Mountain Valley] line after its right-of-way was denied so I expect it could take the same approach here," said Carolyn Elefant, an attorney who often represents landowners in pipeline cases. "The question now is if FERC is going to thumb its nose at the law or if it is going to stop construction of the pipeline."

Dominion, lead developer on the project, said in a statement that it has avoided construction in areas affected by the FWS ruling, but a July FERC decision had allowed it to continue building on other sections.

The company said it would continue to avoid those section of the pipeline route, which it says amount to 20 miles, but did not respond to a request for comment on whether it will continue building on other parts now that its certificates have been thrown out.

"With respect to the National Park Service's approval to cross the Blue Ridge Parkway, the court's opinion confirms the agency's authority to issue the permit but remands the permit to allow the agency to correct certain errors and omissions in the permit record," a company spokesperson said in a statement. "We believe the extensive public record and mitigation requirements already in place provide ample support for the agency to promptly reissue the permit."

If the pipeline developers must face a new decision at FERC, they could face a less sympathetic commission than the one that approved their project last October. Republican Commissioner Robert Powelson is set to step down this month, giving Democrats, who are more critical of pipeline applications, the ability to deadlock commission decisions.