Charleston, SC and Delaware Attorney General the Latest to Join Climate Litigation Movement

Just one week after Hoboken, New Jersey filed a lawsuit against a number of energy manufacturers in the fossil fuel space, Charleston, South Carolina and Delaware Attorney General Kathy Jennings have sued some thirty companies for damages the plaintiffs claim are due to their municipalities from climate change effect induced by the companies’ business operations.

As said on these pages, climate change litigation continues to become the de facto political tactic for municipalities and elected officials to wave their environmental flags without seriously pursuing solutions to what are shared global climate challenges.

Much like the many lawsuits to come before them (well over twenty at the time of writing), Charleston and Delaware make an inauspicious case. Both cases suggests that the companies named in the suit are responsible for propagating a “campaign of deceit” about the impact of fossil fuels on the environment. They have also looped in the American Petroleum Institute into the lawsuits, claiming the advocacy group was central to muzzling and misrepresenting the effects of emissions.

Moreover, Delaware’s suit relies on the same law firm, Sher Edling that is behind the Hawaii lawsuit and a number of others. There is little question that the firm is keen to pitch municipalities on climate litigation and the huge payday so that they themselves can receive a commission for their services. These suits remain without merit but come with significant consequences should a friendly judge side with a plaintiff. Not only will this restrict the supply of energy for Americans countrywide, raising prices in the process, but they would undermine the very companies that are working towards better energy efficiencies and emissions reductions; litigators don’t want climate solution – which should be set through the legislature, not the courts – they want to villainize the American energy industry in the name of environmentalism.

Hoboken, New Jersey Latest Municipality to Join Climate Litigation Fiasco

On September 2nd Hoboken, New Jersey became the latest municipality to join a growing list of state and local governments to sue a number of energy manufacturers, seeking hundreds of millions of dollars in damages to overcome and adapt to the effects of climate change the lawsuit alleges the plaintiffs are responsible for.

Hoboken’s lawsuit takes an all of the above approach to climate litigation and lumps in the typical politically charged language to claim that industry members have colluded with the American Petroleum Institute, an interest group, in a “greenwashing” campaign to mislead the public about the effects of using fossil fuels for energy generation.

It is becoming clearer with each lawsuit that climate litigation is a political strategy more interested in promoting the issue and apparent “evil” of fossil fuels than finding solutions to global climate challenges. This is obvious given the massive research and development into efficiencies gains and carbon capture technologies.

With a number of climate litigation cases outstanding the November election will undoubtedly have an effect on their popularity but the Supreme Court should be keen to settle this issue in the near-term.

Political Gamesmanship Comes to Minnesota

Yesterday Minnesota threw itself into contention for needless energy disputes with an appeal of Enbridge’s Line 3 project by the Minnesota Department of Commerce. The appeal alleges that the state’s Public Utilities Commission wrongly granted a certificate of need to Enbridge for the Line 3 replacement project because Enbridge didn’t submit a long-term demand forecast model for review.

Never mind that the Line 3 replacement project would replace a pipeline installed in the 1960s (and bring with it significant technical advantages) after nearly 7 years of review and consideration of the plan. Or that the state is an important corridor for crude oil, with about 30% of imports flowing through the state.  

As Enbridge stated: “Line 3 Replacement Project (L3RP) has undergone six years of process, more than 70 public meetings, numerous comment periods, and a 13,500-page Environmental Impact Statement (EIS). The project’s EIS, Certificate of Need and Route Permit were all recently reaffirmed by the PUC based on the substantial evidence in the record that this project is needed.”

Despite the extensive, years-long review and signoff by all necessary regulators Governor Walz said that “When it comes to any project that impacts our environment and our economy, we must follow the process, the law, and the science.” One should rightfully wonder what is left to uncover after 7 years of review, or consider the possibility that Governor Walz is just keen to deliver a victory to environmentalists (at the expense of Minnesotans).

In the meantime, Minnesota’s Department of Commerce and Walz Administration is going to forgo some $2.6 billion in private investment and an estimated 4,200 union jobs to needlessly politicize the project and tie it up in court once more.

It is hard to imagine that such a clear pathway to interfering with the success of an energy infrastructure project like Line 3 would be obtainable if not for the many other instances across the country of activists leaning on the courts. Recent court battles over Dakota Access, Atlantic Coast, and others have made it clear that litigation continues to be effective at dragging projects toward abandonment.

To get ahead of this growing trend there must be considerations made to balance the democratization of infrastructure projects and legitimate concerns to be hashed out in court. The consequences of continued litigation against fossil fuel projects like the Line 3 pipeline will eventually hand away the many advantages the United States enjoys thanks to its energy security.

Politics Continues to Interfere With Infrastructure, Now in New Hampshire

Earlier this week E&E News reported that Liberty Utilities Company of New Hampshire has cancelled a natural gas project, the Granite Bridge Pipeline, following a three year battle over the project that looped in two gubernatorial candidates.

The 16 inch pipeline was planned to run about 30 miles, moving natural gas from Essex to Manchester, New Hampshire, and was intended to help alleviate gaps in winter heating capacity across the state. Estimates suggest that as many as half a million New Hampshire residents – mind you there are a little over 1.33 million residents statewide – rely on heating oil or propane to heat their homes.

All signs pointed to the Granite Bridge Pipeline being a valuable and needed project for the state. Sadly, it was caught in the politicking of the state when the benefits of energy infrastructure should be entirely nonpartisan. Further, the project would’ve been a $340 million investment in the state’s economy and many supply chains associated with infrastructure projects.

In 2018 the project enjoyed support from 22 of New Hampshire’s 24 State Senators but became a diverging fulcrum for Democratic gubernatorial primary race between state Senate Majority Leader Dan Feltes and Andru Volinksy, a member of the Executive Council of New Hampshire, with the former supporting the project on grounds of expanding service to low-income residents and the latter opposed over environmental concerns.

It is disappointing to see energy infrastructure projects fall victim to political battles, especially at the expense of the public. Fortunately, New Hampshire residents will go to the ballot box well before the New Hampshire winter sets in.

Trump Administration’s NEPA Update Immediately Litigated Against

Fourteen days after the Trump Administration finalized (see nearby) modernizing updates to the National Environmental Policy Act (NEPA) – streamlining the permitting and approval process for federally-regulated infrastructure projects like pipelines, highways, renewable energy, broadband deployment, and dams – a coalition of groups have filed two lawsuits challenging the process the Administration took to update the regulation E&E News reported.

A short honeymoon, indeed. However, this should come as little surprise to those loosely aware of the changes the Trump Administration has made to the existing regulatory landscape. Environmentalists continue to turn to the courts to immediately contest.

An interesting aspect of this barrage of lawsuits is the central claim suggesting that the White House Council on Environmental Quality (CEQ) “cut every corner” in the rulemaking according to the complaint filed by 17 environmental groups. The reality is that the CEQ reviewed over a million comments submitted by the public on a rule that was in the public purview for months of assessment and contemplation.

What is so telling about the lawsuits is that these groups continue to take issue with procedure – already a weak contention – instead of the language in the rulemaking.

Commentary in an E&E News piece breaking news of the lawsuit suggests that the administration has disrupted “…one of our nation’s most significant environmental laws — a law that has been in place for over fifty years with regulations that have remained unchanged for decades — the government’s responsibility to follow procedure is at its highest,” yet the precise issue at hand was that NEPA had not been updated in five decades and had since become a burden to so many.

The White House CEQ studied infrastructure projects reviewed by NEPA over a decade in the 21st century. What the CEQ found was blatant evidence that the review process was flawed, costly, and often detrimental to the success of projects. Key findings include:

  • The average length of final EISs was 661 pages and the median document length was 447 pages (Figure 3). 7 One quarter of the final EISs were 286 pages or shorter (i.e., the 25th percentile) and one quarter were 748 pages or longer (i.e., the 75th percentile).
  • According to the most recent data,6 the average (i.e., mean) time to complete an EIS, from notice of intent (NOI) to record of decision (ROD), was 4.5 years and the median was 3.5 years (Figure 1). One quarter of the EISs took less than 2.2 years, and one quarter took more than 6 years.

Proposed rules put forth by the Administration would set presumptive time and page limits for most projects, with exceptions for projects of certain sizes and scope that may require further review.

NEPA’s growing inefficiencies as a regulation since being signed into law in 1970 by President Nixon has hurt American infrastructure. These extensive review timelines too often introduce uncertainty to projects that then disrupt planning and hiring, ultimately driving up costs and even cancelling projects (including government projects, supported by taxpayer dollars).

The NEPA update has garnered praise from both sides of the aisle, but it is typical of environmentalists to again turn to the courts to litigate any and every regulatory change the Administration makes. Similar to the downfalls of NEPA, environmentalists would love to draw out long legal battles to keep the rule from being implemented for as long as possible.

Energy Infrastructure Opposition Tactics Reach New Venue: the Federal Budget

There is no shortage of creativity among pipeline and energy infrastructure opponents seeking to develop new, legally untested means to slow or shutter energy infrastructure build out. It should surprise few that the latest bold attempt comes courtesy of Representative Alexandria Ocasio-Cortez.

As reported by The Hill, AOC slipped language through a proposed amendment into the federal budget that would restrict the U.S. Army Corps of Engineers from using “the discharge of dredged or fill material resulting from an activity to construct a pipeline for the transportation of oil or gas.” Convenient. The Huffington Post suggested that this could keep the Corps from repairing or working on as many as 8,000 pipelines in the country.

Circumvention, rather than counter-proposals or debate, has become the de facto brand of politics for pipeline opponents. AOC’s latest attempt just seems to be the next progression in that trend, which is surprising given the recent successes environmentalists have celebrated in the courts.

There are undoubtedly questions of constitutionality in play here as one can see plainly that AOC’s amendment has nothing to do with appropriations. But it is a wonder that she and other Green New Deal compatriots didn’t try to pull the strings of the federal purse and squeeze the Army Corps of Engineers financially, not to give away ideas.

Further, this reeks of regulatory interference and would certainly hinder the ability of the Corps to properly do its job, which has helped lead the United States to a position of global energy hegemony.

The country stands to benefit from a robust and spirited debate about energy infrastructure but moves like these needlessly politicize regulators that have served supporters and opponents of pipelines well for decades. Regulators, as with the courts, are intentionally nonpolitical bodies and pulling them into the gridlock of Congress comes at the expense of every American.

Dakota Access Legal Filings Roll In

The latest legal developments for the Dakota Access pipeline – an operations shutdown order for the duration of a prescribed U.S. Army Corps of Engineers environmental impact statement on the project by Judge Boasberg recently blocked by the D.C. U.S. Court of Appeals – has spurred a number of interested parties and elected officials to submit amicus briefs to the court in support of the Dakota Access pipeline. Below are some of the briefs filed thus far available in hyperlink:

Boasberg Delivers Blow to DAPL Pipeline, Energy Infrastructure At Large

Earlier today U.S. District Court Judge James Boasberg of Washington, D.C. ruled against the Dakota Access pipeline and U.S. Army Corps. of Engineers, ordering the pipeline to shut down operations by August 5th until another environmental impact statement (EIS) is completed. Earliest estimates suggest that said EIS could take up to 13 months.

Specifically, Judge Boasberg determined that the U.S. Army Corps. of Engineers improperly granted Dakota Access developer Energy Transfer a key environmental permit. The project has operated safely since coming online three years ago.

As many know, Dakota Access is the lone, direct pipeline from North Dakota’s Bakken oil formation to a distribution hub. Dakota Access’ primary offtake is the Patoka, Illinois Energy Terminal. Further, Dakota Access has become something of a bellwether in the energy infrastructure space for modern pipeline technology and the litigious and permitting complications that frequently disrupt projects. Today’s ruling, and the recent Atlantic Coast pipeline abandonment, will undoubtedly unsettle developers nationwide about the role of judicial figures, regulators, and activism in the success of a project.

Judge Boasberg’s decision raises many questions for observers of the industry and on its face seems to be a deferment to environmentalists and activists that have harassed Energy Transfer since the project was first proposed.

On its face it seems ridiculous to shut down the pipeline, especially given the consequences for many employees, businesses, supply chains, and contracts involved in the operation of a pipeline of Dakota Access’ size. Boasberg touched on this: “The Court does not reach its decision with blithe disregard for the lives it will affect. It readily acknowledges that, even with the currently low demand for oil, shutting down the pipeline will cause significant disruption to DAPL, the North Dakota oil industry, and potentially other states,” and he is correct, many will be worse off because of this shutdown and its cloudy timeline forecast.

Further, many should question the fairness of the ruling. At its heart the case was brought forward by activists looking for a chink in the pipeline’s armor and found it in what could be construed as a misstep in issuing permits for the project. Boasberg’s decision grants the plaintiffs something that can only be a slight step down from their ultimate victory (a permanent closure) by granting a temporary closure conditioned on the findings of the EIs.

Why does there seem not to be any consideration for allowing its operation to continue while the Army Corps conducts its second review?

The next steps in the DAPL battle seem to have been laid out. As Energy Transfer has stated, the company intends to explore all legal options to stay or appeal the ruling. There is certain possibility this makes its way to the Supreme Court, which has as recently as this year helped sift through permitting and jurisdictional issues regarding energy infrastructure. GAIN Gavel is hopeful for a successful appeals campaign for Energy Transfer. DAPL is an important component of the nation’s energy successes and if completely shuttered the project will come to set a dangerous blueprint for activism targeting other projects nationwide.

SCOTUS Delivers Win for Atlantic Coast Pipeline

As GAIN Gavel has been keen to acknowledge, courts are increasingly becoming a venue for anti – infrastructure types to air out their grievances in hopes of a favorable judge and subsequent ruling that will stall or halt projects altogether. The Atlantic Coast pipeline was subject to litigation from its earliest proposals and became one of the first cases to reach the Supreme Court.

In a 7 – 2 decision the Supreme Court ruled that the Appalachian Trail is not a barrier to natural gas pipelines despite arguments from plaintiffs contending that because the trail is administered by the National Park Service it counts as Park System lands, meaning no federal agency would have the authority to permit the pipeline crossing the Appalachian Trail. This case made its way to the high court after an appellate decision against the pipeline.

Justice Clarence Thomas delivered the Court’s opinion and as the Wall Street Journal Editorial Board noted “made short work of the argument in U.S. Forest Service v. Cowpasture River Preservation Association. ‘If a rancher granted a neighbor an easement across his land for a horse trail,’ he wrote, nobody would think ‘that the rancher had ceded his own right to use his land in other ways, including by running a water line underneath the trail.’ The same principle applies when the Forest Service grants a ‘right-of-way’ under the Trails Act of 1968.”

Justice Thomas also added that “Sometimes a complicated regulatory scheme may cause us to miss the forest for the trees, but at bottom, these cases boil down to a simple proposition: A trail is a trail, and land is land,” this – of course – is a correct analysis. The many layers of jurisdictions and agency roles mean that those opposed to a project can find opportunities for litigation aplenty. More than anything this speaks to the need for regulatory reform.

The Atlantic Coast pipeline is not out of the woods yet though. A number of permits and reviews are still outstanding, including a draft supplemental environment impact statement that the Forest Service is expected to issue alongside some permits. Other permits are still under review with the Fish and Wildlife Service; these could also potentially be litigated against to further delay the pipeline.

As we have written before, the litigious environment surrounding energy infrastructure projects is a detriment to the success of the industry and many benefits it affords Americans nationwide. The Supreme Court’s decision is a small victory for energy infrastructure but the trend of projects having to be settled in court remains a negative.

EPA’s Cost – Benefit Analysis Reforms Welcome

The Environmental Protection Agency (EPA) is one of the largest and most broad reaching bureaucracies in the country, responsible for reviewing, monitoring, and enforcing regulations that are supposed to protect citizens and the environment. With all these responsibilities it is no surprise that energy infrastructure deals intimately with the EPA and for companies it is important that they know the regulator is transparent, fair, and consistent. Proposals from agency lead Andrew Wheeler are helping codify those practices through new cost – benefit analysis directives.

Following Executive Order 13777, signed by President Trump in March 2017, Andrew Wheeler outlined reforms to the EPA’s cost – benefit analysis structures being used by various divisions. In short, feedback from a variety of stakeholders showed that the EPA’s procedures for determining the costs and benefits of regulations was wildly inconsistent and often overestimated benefits while underestimating costs. A better and more uniform methodology could help curtail these issues, and to the benefit of the taxpayer.

Review of the EPA shows the agency to be responsible for nearly 70% of costs for all significant federal regulations. Further, estimates suggest that federal regulations cost the American economy as much as $1.9 trillion a year. Imagine the economic potential that the EPA could free up by improving its analyses by a mere 10 or 20%? Energy infrastructure companies could divert compliance costs to new project, new hires, or to increase wages that would then be spent into the economy at large.

Wheeler’s reforms will help hone the regulator by bettering the agency’s decision making project to stick to its promise of imposing regulations with benefits exceeding costs, not the other way around. This has been a long sought after policy goals in Washington, too. Presidents Reagan, Clinton, and Obama all signed executive orders advocating for regulators to implement regulations more beneficial than costly.

There is little doubt that Wheeler’s reform efforts will continue to be needlessly politicized in the press as this becomes a larger and more prescient issue but the meat of the issue here is quite clear: regulators will benefit from playing from the same sheet of music during decision making processes. The EPA should move forward with these reforms and lead the way in regulating properly.