WEBVTT - Trump Pipeline Efforts Likely to Face Future Delays

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Speaking about economic

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<v Speaker 1>growth and federal deregulation, last year, President Trump discussed his

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

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<v Speaker 1>most far reaching regulatory reform in American history. We've approved

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<v Speaker 1>long stalled projects like the Keystone Excel and the Dakota

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<v Speaker 1>Access pipelines. But even though the Trump administration has approved

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

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<v Speaker 1>continue to interfere with their progress. Joining me is Brandon Barnes,

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<v Speaker 1>Bloomberg Intelligence Senior litigation analyst. Brandon set the stage for us.

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<v Speaker 1>How many pipeline projects is the Trump administration trying to

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<v Speaker 1>restart and where has it succeeded? Well, I think that

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<v Speaker 1>any of the positive vibes that the Trump administration gave

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<v Speaker 1>to the pipeline companies coming in has sort of receded

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<v Speaker 1>in a major way from this new obstacle. Of course,

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<v Speaker 1>they're facing in the courts and through the states. So

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<v Speaker 1>you know, some of the crude pipes that are big

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<v Speaker 1>in the news to go to access in Keystone, Keystone

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<v Speaker 1>still hanging out there waiting. I got a number of

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<v Speaker 1>pipes in the Northeast which would help alleviate some of

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<v Speaker 1>the much needed capacity constraints for Marcellis and Utica producers.

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<v Speaker 1>There's just not enough infrastructure to get the gas out.

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

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<v Speaker 1>the last two years we've been tracking all these these

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<v Speaker 1>various litigations and across the country, most concentrated in that

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<v Speaker 1>northeastern area. But there at least six or seven pipelines

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<v Speaker 1>that have been stymy by these various actions. So you

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<v Speaker 1>have intervention by the courts, the states, and the Federal

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<v Speaker 1>Energy Regulatory Commission. It's the role of each. I think

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

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<v Speaker 1>uh by investors in the general public. So the Federal

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<v Speaker 1>Energy Regulatory Commission or FIRK as as some call it,

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<v Speaker 1>um has jurisdiction over natural gas pipelines from tip to tail,

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<v Speaker 1>so they regulate and approve the sighting or where those

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<v Speaker 1>the route in the environment. They do the environmental for

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<v Speaker 1>natural gas pipelines that are moving between states, and those

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

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<v Speaker 1>true for crude pipelines, which are regulated in a different

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

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<v Speaker 1>get involved on the sighting. The Feds get involved only

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

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<v Speaker 1>navigable water, you may need Army Corps to get involved.

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<v Speaker 1>That's Dakota access. So I think the biggest area where

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<v Speaker 1>this federal preemption issue comes into play is on those

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<v Speaker 1>natural gas pipelines, which are so needed for these producers

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<v Speaker 1>in the Northeast. UH states very different. They have this

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

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<v Speaker 1>been delegated, especially on the water side by e p A.

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<v Speaker 1>FIRK won't allowed projects to be built until they've gotten

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<v Speaker 1>all of their state permits. So the states sort of

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<v Speaker 1>had this effective hijack that they can use to take

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<v Speaker 1>over these projects even though FIRK has federal oversight over everything.

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<v Speaker 1>So you write that the lawsuits have basically used a

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

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<v Speaker 1>I think it's the it's the case of success. He

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<v Speaker 1>gets success. So where there is success opposing these projects,

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<v Speaker 1>those get funded. And we've seen the midstream area these

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<v Speaker 1>pipelines get funded more and more on the legal side

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<v Speaker 1>where they've gotten success. So the shotgun approach here is

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<v Speaker 1>these lawsuits come in a number of different venues. They

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<v Speaker 1>challenge every single one of the permits. They go to

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<v Speaker 1>the federal side, they challenge the first certificate, they go

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<v Speaker 1>to the state side and they challenge the water permits,

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<v Speaker 1>and they find a way. And the approach has largely

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<v Speaker 1>been successful, but much more so recently than in the past.

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<v Speaker 1>And I really do believe that it's it has to

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<v Speaker 1>do with how much activity and how how much force

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<v Speaker 1>they're throwing. It's almost like blunt force they're throwing out

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<v Speaker 1>through the courts. Is that environmental groups that are challenging

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<v Speaker 1>these pipelines. Certainly your traditional opponents of pipelines are the

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<v Speaker 1>environmental groups, and they are very much involved. They have

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<v Speaker 1>they have all of the expertise and experience needed in

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<v Speaker 1>the courts to bring these very nuanced challenges to projects,

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

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<v Speaker 1>not in my backyard. That has always been a problem

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<v Speaker 1>for energy projects and pipelines in particular, and it certainly

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<v Speaker 1>doesn't help when you have explosions or leaks or something

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<v Speaker 1>like that hitting the news. That that really, if you

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<v Speaker 1>know pipeline is going through your backyard, you may want

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<v Speaker 1>to oppose it, and you're gonna be very anxious to

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<v Speaker 1>get involved. Speaking about FIRK, you describe how a federal

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<v Speaker 1>court decision has influenced FIRK and changed it. Perhaps, Yeah,

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<v Speaker 1>I think, uh, And the one I'm referring to is

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<v Speaker 1>is related to the Southeast Market pipeline, which involves the

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<v Speaker 1>Sable Trail pipeline UM and that was a sort of

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

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

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<v Speaker 1>use greenhouse gas emissions when you did your environmental review,

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<v Speaker 1>which is a real change from what we've seen when

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<v Speaker 1>they've when challenge has been brought to l en G

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<v Speaker 1>projects or pipelines Firk. You know, they just regulate the pipeline.

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<v Speaker 1>They're supposed to look at the pipeline and not necessarily

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<v Speaker 1>how the gas at the end is going to be

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<v Speaker 1>used and what those that emissions O file or what

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<v Speaker 1>the potential environmental impact is going to look like. So

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<v Speaker 1>this is dramatically expanding the scope of Firk's review and

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<v Speaker 1>by doing so, expanding the ability for opponents to challenge

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<v Speaker 1>these projects and potentially forced for to do a re

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<v Speaker 1>review or maybe change the calculus for whether that projects

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<v Speaker 1>actually beneficial or worth doing and therefore should get approved

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<v Speaker 1>at all. And how have the commissioners reacted? For the

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<v Speaker 1>most part, in the past, we've seen commissioners sort of

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<v Speaker 1>be on the same page, but starting when Norman Bay left,

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<v Speaker 1>back when Trump was elected, and since then, as as

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<v Speaker 1>Commissioner Glick has been involved, you've seen a movement where

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<v Speaker 1>the Democrats um CHERYLA. Fleur Commissioner Glick have been using

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<v Speaker 1>the certificates or the approvals for these pipelines is a

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

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<v Speaker 1>maybe we should include greenhouse gas emissions in a different

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<v Speaker 1>And I think in response to that, FIRK has really

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<v Speaker 1>taken up the mantle of looking at this process and

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<v Speaker 1>they are currently reconsidering their policy on approving pipelines. So

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<v Speaker 1>some more to more to be found about a minute here, Brandon.

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<v Speaker 1>One state that is mentioned over and over again and

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<v Speaker 1>your analysis is New York State. Is that a state

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<v Speaker 1>that's particularly difficult. It is the toughest of the nuts

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<v Speaker 1>to crack for pipelines. New York will continue to be

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<v Speaker 1>the gateway that remains closed for pipes trying to get

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<v Speaker 1>from Marcelis, you know, Pennsylvania into and through New York

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<v Speaker 1>and into the New England states. That has just been

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<v Speaker 1>a place of of you just cannot find any development

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<v Speaker 1>and projects continue to be stopped by the state and

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<v Speaker 1>the courts back in them. Well, your your your analysis

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

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<v Speaker 1>Thanks so much, Brandon. That's Brandon Barnes. He's Bloomberg Intelligence

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<v Speaker 1>Senior litigation Analyst. Thanks for listening to the Bloomberg Launp podcast.

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<v Speaker 1>You can subscribe and listen to the show on Apple Podcasts, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcast. I'm June Brosso.

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<v Speaker 1>This is Bloomberg