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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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Speaker 1: and on Bloomberg dot com slash podcasts. Speaking about economic

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Speaker 1: growth and federal deregulation, last year, President Trump discussed his

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Speaker 1: administration's efforts to restart several pipeline projects. We've begun the

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Speaker 1: most far reaching regulatory reform in American history. We've approved

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Speaker 1: long stalled projects like the Keystone Excel and the Dakota

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Speaker 1: Access pipelines. But even though the Trump administration has approved

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Speaker 1: the projects, that doesn't mean they're going forward as lawsuits

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Speaker 1: continue to interfere with their progress. Joining me is Brandon Barnes,

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Speaker 1: Bloomberg Intelligence Senior litigation analyst. Brandon set the stage for us.

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Speaker 1: How many pipeline projects is the Trump administration trying to

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Speaker 1: restart and where has it succeeded? Well, I think that

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Speaker 1: any of the positive vibes that the Trump administration gave

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Speaker 1: to the pipeline companies coming in has sort of receded

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Speaker 1: in a major way from this new obstacle. Of course,

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Speaker 1: they're facing in the courts and through the states. So

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Speaker 1: you know, some of the crude pipes that are big

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Speaker 1: in the news to go to access in Keystone, Keystone

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Speaker 1: still hanging out there waiting. I got a number of

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Speaker 1: pipes in the Northeast which would help alleviate some of

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Speaker 1: the much needed capacity constraints for Marcellis and Utica producers.

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Speaker 1: There's just not enough infrastructure to get the gas out.

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Speaker 1: So it's just sitting there and you've I mean, in

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Speaker 1: the last two years we've been tracking all these these

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Speaker 1: various litigations and across the country, most concentrated in that

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Speaker 1: northeastern area. But there at least six or seven pipelines

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Speaker 1: that have been stymy by these various actions. So you

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Speaker 1: have intervention by the courts, the states, and the Federal

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Speaker 1: Energy Regulatory Commission. It's the role of each. I think

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Speaker 1: that's a very important question to ask because it's largely misunderstood,

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Speaker 1: uh by investors in the general public. So the Federal

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Speaker 1: Energy Regulatory Commission or FIRK as as some call it,

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Speaker 1: um has jurisdiction over natural gas pipelines from tip to tail,

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Speaker 1: so they regulate and approve the sighting or where those

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Speaker 1: the route in the environment. They do the environmental for

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Speaker 1: natural gas pipelines that are moving between states, and those

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Speaker 1: projects can't be built until FIRK says Okay, that's not

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Speaker 1: true for crude pipelines, which are regulated in a different

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Speaker 1: set of laws, and so the federal jurisdiction. FIRK doesn't

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Speaker 1: get involved on the sighting. The Feds get involved only

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Speaker 1: where there's federal jurisdiction incurred. So if they're crossing a

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Speaker 1: navigable water, you may need Army Corps to get involved.

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Speaker 1: That's Dakota access. So I think the biggest area where

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Speaker 1: this federal preemption issue comes into play is on those

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Speaker 1: natural gas pipelines, which are so needed for these producers

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Speaker 1: in the Northeast. UH states very different. They have this

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Speaker 1: state permitting authority that's been they've had for years. It's

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Speaker 1: been delegated, especially on the water side by e p A.

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Speaker 1: FIRK won't allowed projects to be built until they've gotten

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Speaker 1: all of their state permits. So the states sort of

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Speaker 1: had this effective hijack that they can use to take

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Speaker 1: over these projects even though FIRK has federal oversight over everything.

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Speaker 1: So you write that the lawsuits have basically used a

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Speaker 1: shotgun approach. Explain that and how successful or unsuccessful they've been. June,

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Speaker 1: I think it's the it's the case of success. He

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Speaker 1: gets success. So where there is success opposing these projects,

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Speaker 1: those get funded. And we've seen the midstream area these

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Speaker 1: pipelines get funded more and more on the legal side

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Speaker 1: where they've gotten success. So the shotgun approach here is

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Speaker 1: these lawsuits come in a number of different venues. They

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Speaker 1: challenge every single one of the permits. They go to

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Speaker 1: the federal side, they challenge the first certificate, they go

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Speaker 1: to the state side and they challenge the water permits,

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Speaker 1: and they find a way. And the approach has largely

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Speaker 1: been successful, but much more so recently than in the past.

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Speaker 1: And I really do believe that it's it has to

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Speaker 1: do with how much activity and how how much force

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Speaker 1: they're throwing. It's almost like blunt force they're throwing out

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Speaker 1: through the courts. Is that environmental groups that are challenging

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Speaker 1: these pipelines. Certainly your traditional opponents of pipelines are the

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Speaker 1: environmental groups, and they are very much involved. They have

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Speaker 1: they have all of the expertise and experience needed in

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Speaker 1: the courts to bring these very nuanced challenges to projects,

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Speaker 1: but also there's a very strong element of nimby, you know,

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Speaker 1: not in my backyard. That has always been a problem

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Speaker 1: for energy projects and pipelines in particular, and it certainly

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Speaker 1: doesn't help when you have explosions or leaks or something

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Speaker 1: like that hitting the news. That that really, if you

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Speaker 1: know pipeline is going through your backyard, you may want

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Speaker 1: to oppose it, and you're gonna be very anxious to

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Speaker 1: get involved. Speaking about FIRK, you describe how a federal

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Speaker 1: court decision has influenced FIRK and changed it. Perhaps, Yeah,

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Speaker 1: I think, uh, And the one I'm referring to is

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Speaker 1: is related to the Southeast Market pipeline, which involves the

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Speaker 1: Sable Trail pipeline UM and that was a sort of

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Speaker 1: a c change if you're following this, where the federal court,

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Speaker 1: the d C. Circuit said, Firk, you didn't consider end

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Speaker 1: use greenhouse gas emissions when you did your environmental review,

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Speaker 1: which is a real change from what we've seen when

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Speaker 1: they've when challenge has been brought to l en G

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Speaker 1: projects or pipelines Firk. You know, they just regulate the pipeline.

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Speaker 1: They're supposed to look at the pipeline and not necessarily

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Speaker 1: how the gas at the end is going to be

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Speaker 1: used and what those that emissions O file or what

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Speaker 1: the potential environmental impact is going to look like. So

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Speaker 1: this is dramatically expanding the scope of Firk's review and

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Speaker 1: by doing so, expanding the ability for opponents to challenge

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Speaker 1: these projects and potentially forced for to do a re

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Speaker 1: review or maybe change the calculus for whether that projects

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Speaker 1: actually beneficial or worth doing and therefore should get approved

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Speaker 1: at all. And how have the commissioners reacted? For the

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Speaker 1: most part, in the past, we've seen commissioners sort of

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Speaker 1: be on the same page, but starting when Norman Bay left,

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Speaker 1: back when Trump was elected, and since then, as as

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Speaker 1: Commissioner Glick has been involved, you've seen a movement where

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Speaker 1: the Democrats um CHERYLA. Fleur Commissioner Glick have been using

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Speaker 1: the certificates or the approvals for these pipelines is a

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Speaker 1: way too descent against maybe we don't need all these projects,

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Speaker 1: maybe we should include greenhouse gas emissions in a different

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Speaker 1: And I think in response to that, FIRK has really

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Speaker 1: taken up the mantle of looking at this process and

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Speaker 1: they are currently reconsidering their policy on approving pipelines. So

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Speaker 1: some more to more to be found about a minute here, Brandon.

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Speaker 1: One state that is mentioned over and over again and

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Speaker 1: your analysis is New York State. Is that a state

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Speaker 1: that's particularly difficult. It is the toughest of the nuts

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Speaker 1: to crack for pipelines. New York will continue to be

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Speaker 1: the gateway that remains closed for pipes trying to get

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Speaker 1: from Marcelis, you know, Pennsylvania into and through New York

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Speaker 1: and into the New England states. That has just been

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Speaker 1: a place of of you just cannot find any development

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Speaker 1: and projects continue to be stopped by the state and

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Speaker 1: the courts back in them. Well, your your your analysis

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Speaker 1: is so thorough and you've covered every case. It's just amazing.

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Speaker 1: Thanks so much, Brandon. That's Brandon Barnes. He's Bloomberg Intelligence

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Speaker 1: Senior litigation Analyst. Thanks for listening to the Bloomberg Launp podcast.

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Speaker 1: You can subscribe and listen to the show on Apple Podcasts, SoundCloud,

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Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.

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Speaker 1: This is Bloomberg