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US court ruling sparks tussle over impact on construction of Atlantic Coast gas pipe project

Washington (Platts)--16 May 2018 447 pm EDT/2047 GMT


Following an appeals court decision late Tuesday vacating a US Fish and Wildlife Service authorization for the Atlantic Coast Pipeline, the next battleground is emerging over the extent to which construction can move forward on the 600-mile natural gas pipeline project.

The Southern Environmental Law Center, which represented the environmental litigants, told the US Federal Energy Regulatory Commission in a filing posted Wednesday that the agency must halt all on-the-ground construction and stop all notices to proceed.

But lead developer Dominion Energy, in a statement late Tuesday, said it remained confident in project approvals and asserted the project "will continue to move forward with construction as scheduled" while limited areas are affected by the order.

Backed by a mix of regional end-users and power generators, Atlantic Coast is slated to deliver an additional 1.5 Bcf/d of shale gas into the Mid-Atlantic region. Its roughly 600-mile path would run from West Virginia through Virginia and on to eastern North Carolina.

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The US 4th Circuit Court of Appeals in Richmond, Virginia, late Tuesday struck the USFWS "incidental take" statement for the project, a document that estimates the likely harm to endangered or threatened species resulting from the project. In a brief order just days after oral argument, the court said the environmental groups had argued that the agency failed to set clear limits on "take," as required by the Endangered Species Act.

Take refers to activities that harm, kill or otherwise harass a species.

The court promised to explain its reasoning more fully in a forthcoming opinion, but it concluded for now that "limits set by the agency are so indeterminate that they undermine the incidental take statements enforcement and monitoring function" under the act.

DOMINION: RULING AFFECTS 'SMALL PORTION' OF ROUTE


"The decision only impacts activities directly covered by the incidental take statement in certain defined areas along the route," Dominion said in Tuesday's statement, promising to comply as required while continuing construction in other areas.

Dominion on Wednesday elaborated on why it believes the impact will be limited.

"We can say that the impact of the ... ruling is on a small portion of the 600-mile route and there will be no impact in North Carolina," Dominion spokeswoman Jen Kostyniuk said in an email. "Through our project planning, we purposefully avoided areas of endangered species which is why the impact of this ruling is relatively limited."

The company's next steps will be consulting with FWS, which it expects will revise the incidental take statement "to provide limits that are more specific," she said.

Dominion said it has not revised its end of 2019 completion date. "While we do not have a specific date of when the revised Incidental Take Statement will be prepared, ACP has conducted extensive survey work for all six species over the past four years and there is a robust record on which to resolve this matter in an expedited manner," Kostnyuik said.

GROUPS SEE BROADER HALT REQUIRED


Environmental litigants are making the case that a broader geographical scope of the project must be halted.

SELC in its filing to FERC said the incidental take statement is a required component of formal consultation under the ESA. Because the court vacated the statement, the group said consultation is not complete and construction cannot begin as specified by a condition of FERC's certificate order.

"Therefore, the commission must halt all on-the-ground construction activities and revoke or suspend all notices to proceed for the Atlantic Coast Pipeline until consultation has been reinitiated and completed and the defects of the Incidental Take Statement are remedied," it told FERC.

SELC also contended that court action requires a halt to implementation of the US Forest Service's record or decision and special use permit for the project and also affects permits issued by the US Army Corps of Engineers.

DJ Gerken, a managing attorney with SELC, said authorizations for the project make explicit that they must have a biological opinion and incidental take statement in place. "Depending on the court's reasoning, it may well be that the root problem requires revisiting the biological opinion," as well, he said. Countering the notion that a narrow area is affected, he suggested that habitat of one of the relevant species, the Indiana bat, is a "significant stretch" of the construction areas.

FERC said only it is reviewing the court order and "will determine what steps, if any, are appropriate." FWS said it is in the "process of determining our next steps."

The court has not yet issued the mandate in the ruling, meaning the order does not immediately go into effect. At issue in the case are requirements under the ESA for incidental take statements to have clear, enforceable limits on take of protected species.

The SELC, arguing on behalf of Defenders of Wildlife, Sierra club and Virginia Wilderness Committee, contended that although FWS previously set "clear numerical limits on the take of these same species by similar projects in the same geographic area, it declined to set enforceable limits here."

"Instead, FWS erroneously limited take to an undefined 'small percent' of an unknown whole -- a standard so vague that it effectively grants the pipeline an unlimited license to take protected species, in violation of the Endangered Species Act," it said in an opening brief.

By contrast, the Interior Department argued that for five hard-to-detect species, FWS reasonably found it was impractical to express the amount of anticipated take numerically. Instead it said FWS "reasonably used narrowly drawn areas of impacted species habitat" to monitor incidental take.

The five species at issue are the Indiana bat and the northern long-eared bat, a species of mussel known as clubshell, the rusty patch bumble bee, and a freshwater crustacean called the Madison Cove isopod.

ClearView Energy Partners in an alert suggested there is a "high probability" FERC will suspend construction in areas where the route crosses the Jefferson National Forest and the habitat of relevant endangered species, while FWS revises the incidental take statement.

--Maya Weber, maya.weber@spglobal.com

--Edited by Valarie Jackson, newsdesk@spglobal.com



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