Speaker 1: If you're a fan of moving fossil fuels from one
Speaker 1: place to another, this was a really, really bad week
Speaker 1: for you. On this episode of Parts Rebellion, we unpacked
Speaker 1: the flood of news from the oil and gas pipeline
Speaker 1: industry and try to figure out what it means. Hello,
Speaker 1: and welcome back yet again to Parts per Billion, the
Speaker 1: environmental podcast from Bloomberg Law. I'm your host, David Schultz.
Speaker 1: So there are slow news weeks, and there are fast
Speaker 1: news weeks, and then there's this week. It's only half over,
Speaker 1: and we've already had three huge developments happen with oil
Speaker 1: and gas pipelines, each of which could have dominated the
Speaker 1: news cycle on their own. Within hours of each other,
Speaker 1: two federal court rulings came down that crippled two of
Speaker 1: the biggest pipelines, the Dakota Access and the Keystone Excel,
Speaker 1: both in the Upper Midwest. But just the day before,
Speaker 1: a big energy partnership announced it would give up its
Speaker 1: plans to build a third big project, the Atlantic Coast Pipeline.
Speaker 1: The purpose of all three of these pipelines is, of course,
Speaker 1: to quickly and efficiently transport lots of oil and natural
Speaker 1: gas from wells to refineries and power plants. You could
Speaker 1: see these pipeline projects as a natural extension of the
Speaker 1: shale boom that transformed the US energy ten or so
Speaker 1: years ago. After all, what good is it to extract
Speaker 1: way more oil and gas out of the ground if
Speaker 1: you can't get it where it needs to go. But
Speaker 1: for pipelines, this week was really bad. Were the timing
Speaker 1: of these three developments coincidental? Maybe, but you could make
Speaker 1: a strong case that there's much larger forces driving this,
Speaker 1: from an aggressive legal strategy by environmentalists to the rock
Speaker 1: bottom fuel prices we're seeing in the time of COVID.
Speaker 1: And here to make that case is a familiar voice
Speaker 1: to listeners of this podcast, Bloomberg Law reporter Ellen M. Gilmer.
Speaker 1: She covered all of this torrent of news, and she
Speaker 1: started off by explaining what happened with the Atlantic Coast Pipeline.
Speaker 1: So the Atlantic Coast Pipeline would deliver natural gas from
Speaker 1: West Virginia, where there's a lot of shale fields where
Speaker 1: they use fracking and horizontal drilling to get gas out,
Speaker 1: and it would deliver gas to Virginia North Carolina. It's
Speaker 1: backed by Dominion Energy and Duke Energy, and it's been
Speaker 1: in the works for oh, probably six or seven years,
Speaker 1: maybe longer well. And the interesting thing is that this
Speaker 1: was supposed to go to cross the Appalachian Trail, a
Speaker 1: famous national park that runs along the Appalachian Mountains, and
Speaker 1: you actually went out there to visit the site where
Speaker 1: we go underneath the trail. That's right. Some people go
Speaker 1: to gyms, we go to the Appalachian Trail. Can you
Speaker 1: talk about why that was significant? So it was significant
Speaker 1: because of you know, you just called the Appalachian Trail
Speaker 1: a national park and it is administered by the National
Speaker 1: Park Service and considered a park unit, but it kind
Speaker 1: of has this unique status and that was really at
Speaker 1: the heart of all of this. There was a lot
Speaker 1: of litigation over whether it could cross under the trail
Speaker 1: and if so, which agency had authority to approve? Boiling
Speaker 1: it down even more is like is the Appalachian Trail
Speaker 1: land and is that land under the National Park Service?
Speaker 1: What is the definition of land? Yeah? Does that mean
Speaker 1: it's it's under the Forest Services jurisdiction. So anyway, it
Speaker 1: was this whole mess that that went all the way
Speaker 1: to the Supreme Court this term, and the Supreme Court
Speaker 1: recently ruled on that case, and it sounds like the
Speaker 1: pipeline companies won. They did. Yeah, the pipeline companies won
Speaker 1: and the Trump administration won in that case, but it
Speaker 1: wasn't enough to save the pipeline, right. That's why I
Speaker 1: was so well, I guess, confused and surprised when I
Speaker 1: saw your story because I thought they just won this
Speaker 1: big case all the way to the Supreme Court, and
Speaker 1: then a few weeks later they cancel the pipeline. They
Speaker 1: were they were fighting to build. What was that about.
Speaker 1: It was pretty crazy to watch with the timing, because
Speaker 1: Atlantic Coast did spend all of this time fighting for
Speaker 1: this pipeline, fighting and court fighting all these various battles
Speaker 1: about land and different permits, and they fought all the
Speaker 1: way up to the Supreme Court. They hired Paul Clement
Speaker 1: to argue their case, one of the best lawyers in
Speaker 1: the business. If that entire trail is construed to be
Speaker 1: National Park Service land that can't have a pipeline go
Speaker 1: through it, I mean, that's a huge barrier to pipelines
Speaker 1: up and down the entire East Coast. And they won.
Speaker 1: But at the end of the day, that was just
Speaker 1: one small permitting issue. I mean obviously it was big
Speaker 1: enough to reach the Supreme Court, but it was just
Speaker 1: one discrete permitting issue among this whole universe of other
Speaker 1: permitting issues. They were facing litigation that's happening. That was
Speaker 1: happening at the same time focusing on other approvals for
Speaker 1: the pipeline. There was some litigation about other pipelines that
Speaker 1: had an effect on their project, and there was just
Speaker 1: so much uncertainty that it was a business decision. At
Speaker 1: the end of the day, it just wasn't worth in
Speaker 1: their view, it was worth a continued investment. Well, speaking
Speaker 1: of other pipelines, let's move to another part of the
Speaker 1: country in another pipeline that is actually already built. This
Speaker 1: is the Dakota Access Pipeline, and there was also news
Speaker 1: this week on that pipeline, actually pretty big news. Tell
Speaker 1: me about, first off, where this pipeline is and what
Speaker 1: it was supposed to do. So, Dakota Access goes from
Speaker 1: North Dakota to Illinois. It moves oil from North Dakota
Speaker 1: shale fields to a big oil hub in Illinois. And
Speaker 1: it's in service. It's built, it's been moving oil for
Speaker 1: three years. But you might remember it was the subject
Speaker 1: of just huge protests. Oh I remember. Yeah, it was
Speaker 1: the end of the Obama administration, and thousands of people
Speaker 1: descended on this area just outside of the Standing Rock
Speaker 1: Indian Reservation in North Dakota to protest this pipeline and
Speaker 1: to demonstrate. They camped out there for months, a lot
Speaker 1: of Indigenous advocates and environmental activists and all different opponents
Speaker 1: to the pipeline. Ultimately, the pipeline was built, but it's
Speaker 1: been it's been in active litigation and then what happened
Speaker 1: this week. So this week, after all of that along
Speaker 1: the way, there have been several court decisions against the pipeline,
Speaker 1: but they haven't gone so far as to shut it down.
Speaker 1: That all changed on Monday when the District Court in
Speaker 1: DC Federal District Court in DC ordered the pipeline to
Speaker 1: shut down, and it gave Decode access thirty days to
Speaker 1: do it thirty days thirty days August fifth. What were
Speaker 1: the grounds that the DC Court used to say why
Speaker 1: this pipeline had to be this already built pipeline had
Speaker 1: to be shut down within thirty days? The judge found,
Speaker 1: And the judge actually reached this conclusion several months ago,
Speaker 1: but was still deciding what the consequences should be So
Speaker 1: the judge found that the Army Corps, which is a
Speaker 1: federal agency that moved a key permit for the pipeline
Speaker 1: to cross a big waterway in North Dakota. The judge
Speaker 1: found that the Army Corps didn't adequately consider all the
Speaker 1: environmental impacts, especially the oil spill risk and how that
Speaker 1: would affect all of the tribes that are downstream. Again,
Speaker 1: this pipeline, it crosses this part of the Missouri River,
Speaker 1: this damned section that's called Lake Owahee. It's it crosses
Speaker 1: about a half a mile north of the Standing Rock
Speaker 1: Indian Reservation. So the Standing Rock Sioux are right there,
Speaker 1: the Cheyenne River Sioux and other Sioux tribes are downstream.
Speaker 1: So they were all in court working to shut down
Speaker 1: the pipeline, arguing that the Army Corps didn't properly consider
Speaker 1: all those potential impacts, and in the end, that's what
Speaker 1: the judge agreed. Now, this is a lower court judge.
Speaker 1: I guess the company could appeal this to the Circuit
Speaker 1: Court or again even the Supreme Court. But do you
Speaker 1: think they'll do that? Absolutely? Yes, And they've been pretty
Speaker 1: outspoken about their plans to do that it's already the
Speaker 1: appeal is already in motion as we as we speak
Speaker 1: here on July eighth. Energy Transfer is the company that's
Speaker 1: behind a code to Access, and it has already launched
Speaker 1: an appeal. It's asking the District Court to freeze its
Speaker 1: decision while that process plays out. So in the next
Speaker 1: couple of weeks, we're going to see just a lot
Speaker 1: of papers flying back and forth in court. And if
Speaker 1: Energy Transfer isn't successful at either of those levels, you're right,
Speaker 1: they could. We could very well see them bringing that
Speaker 1: question up to the Supreme Court to avert a shutdown.
Speaker 1: So and finally we're not done yet. Let's go to
Speaker 1: a third pipeline here the probably this is very arguable,
Speaker 1: but I guess maybe the most famous pipeline Keystone XL.
Speaker 1: There was news on that this week. What happened with
Speaker 1: the Keystone XL pipeline Keystone Excel is a really big one.
Speaker 1: I'm not sure if Keystone Excel or Dacoda Access is
Speaker 1: more widely known. It's a tough call me either. Let's
Speaker 1: call them tied for the most famous pipelines. A lot
Speaker 1: of people who don't aren't in the weeds on pipelines
Speaker 1: the way we are actually just fuse the two pipelines
Speaker 1: together and think they're kind of one project, which is
Speaker 1: understandable to get them mixed up because there's just been
Speaker 1: so much news about both of them over the years.
Speaker 1: So Keystone Excel would move from Canada down into the US,
Speaker 1: crossing through like Montana, Nebraska. So the big difference between
Speaker 1: Dakota Access and Keystone XL is that Keystone Excel is
Speaker 1: not built. It's been stuck in litigation and permitting issues
Speaker 1: for years. The Obama administration decided not to grant a
Speaker 1: permit for the pipeline. The Trump administration changed course. This
Speaker 1: one judge in Montana in March ruled that one of
Speaker 1: the programs that was used, one of the permitting programs
Speaker 1: that was used to approve Keystone XL, wasn't in compliance
Speaker 1: with the Endangered Species Act. So he this judge in
Speaker 1: Montana vacated that whole program, which means he suspended the
Speaker 1: program and said this program can't be used to permit
Speaker 1: Keystone XL or actually any other new oil and gas
Speaker 1: pipeline across the country. So there's an appeal happening in
Speaker 1: the Ninth Circuit right now. And in the meantime, the
Speaker 1: pipeline company TC Energy went up to the Supreme Court
Speaker 1: and said, like, you've got to stop this. All these
Speaker 1: other oil and gas interests also went up to the
Speaker 1: Supreme Court and basically they're just saying, like we need,
Speaker 1: we need to have these permits like that. You can't
Speaker 1: a judge can't vacate an agency's entire permitting regime. Yeah,
Speaker 1: that was essentially the argument. And so Monday night, you know,
Speaker 1: a few hours after this all this Dakota access drama
Speaker 1: happened from the district court, the Supreme Court decided to
Speaker 1: weigh in on Keystone XL and it said Keystone XL's
Speaker 1: permit is still frozen. So that about covers this week's news.
Speaker 1: When we come back, we'll talk with Ellen about well,
Speaker 1: what all this means, why is this happening now, and
Speaker 1: what does COVID have to do with all of this.
Speaker 1: Stay tuned, all right, we're back and we're talking with
Speaker 1: Ellen m gilmour, a Bloomberg LAU reporter, about some major
Speaker 1: setbacks the pipeline industry suffered this week. If you were
Speaker 1: listening closely, you might have noticed a trend. A lot
Speaker 1: of these setbacks were the result of environmentalists suing the
Speaker 1: federal agencies that grant companies permits to build these pipelines.
Speaker 1: Ellen says, that's exactly by design. Litigation against oil and
Speaker 1: gas pipelines pipelines has grown just dramatically in the past
Speaker 1: probably five years. You've seen this really sophisticated, cord needed
Speaker 1: effort by people in the environmental community, but partnering with
Speaker 1: people in the indigenous community and also a lot of
Speaker 1: landowners who are pushing back. You know, we're seeing this
Speaker 1: huge expansion of fossil fuel infrastructure, in part because on
Speaker 1: the natural gas side, because of the shale boom, and
Speaker 1: in part on the oil side as well, and so
Speaker 1: you saw environmentalists realizing that they, you know, had an
Speaker 1: opportunity to stop these projects if they went to court
Speaker 1: to litigate every single permit. So that's kind of what
Speaker 1: they did. That's so interesting. They're not it seems like
Speaker 1: the environmentalists are not attacking the drilling and the fracking
Speaker 1: where it's happening. They're attacking the transporting of that those
Speaker 1: resources from the place where they were drilled to the
Speaker 1: place where they're needed. I guess they're definitely still litigating
Speaker 1: on the actual oil and gas production side, the extraction side. Yeah,
Speaker 1: so they're they're definitely like filing lawsuits to try to
Speaker 1: prevent especially oil and gas development on public lands because
Speaker 1: that's where they really have some permits that they can
Speaker 1: challenge or leasing decisions and things like that. But pipelines
Speaker 1: are where they've they've made really big strides in their
Speaker 1: in their kind of legal strategy over the years. I'll say, yeah,
Speaker 1: so and again just to emphasize, like the Atlantic Coast case,
Speaker 1: they pulled the plug on that pipeline as a business decision,
Speaker 1: So it wasn't directly, uh you know, it wasn't a
Speaker 1: court decision that that shut down that pipeline, but it
Speaker 1: was definitely this huge build up over the years of
Speaker 1: all this different legal uncertainty. Well, that actually perfectly segues
Speaker 1: into my last question, which is we're in a different
Speaker 1: environment now. This is like a new planet that we're
Speaker 1: on post COVID, where the price of fossil fuels is
Speaker 1: at a rock bottom, and it seems like, you know,
Speaker 1: the energy companies were able and maybe willing to fight
Speaker 1: these lawsuits and to wage years long litigation battles when
Speaker 1: the price of oil was pretty high. That's not the
Speaker 1: case anymore. And we saw with the Atlantic Coast pipeline
Speaker 1: that you know, it's just it's a business decision, as
Speaker 1: you said, it's the price is so low that it's
Speaker 1: not worth it to build these pipelines. Do you think
Speaker 1: that that is going to play a bigger factor than
Speaker 1: the litigation itself or do you think it's going to
Speaker 1: be a mix of you know, projects getting tied up
Speaker 1: in litigation plus the market being so depressed. I think
Speaker 1: it's a mix. You still have these giant companies that
Speaker 1: are fully committed to building out their empires and they
Speaker 1: want to move these fossil fuel products. There are companies
Speaker 1: whose whole focus is building midstream infrastructure, and they're not
Speaker 1: just going to go away. They're still going to try
Speaker 1: to do their thing, and in some cases they're going
Speaker 1: to be able to do so successfully. But they just
Speaker 1: are doing it in this new world of increased litigation
Speaker 1: on federal and state permits, and they're going to have to,
Speaker 1: you know, choose their routes carefully and calculate and build
Speaker 1: in extra time, understanding that some permits and stuff may
Speaker 1: end up delayed through courts, and they're going to continue
Speaker 1: to pressure the Trump administration to streamline this permitting process,
Speaker 1: which the Trump administration has already made a lot of
Speaker 1: efforts to do. So they're going to continue to push
Speaker 1: on that while at the same time making sure that
Speaker 1: the agency approvals are supported enough that they are going
Speaker 1: to hold up in court. So it's kind of this
Speaker 1: delicate balance of streamlining the process without streamlining it so
Speaker 1: much that it doesn't hold up in court. That was
Speaker 1: Bloomberg Laws, Ellen M. Gilmer, and that's it for today's
Speaker 1: episode of Parts Pervilion. If you want more environmental news,
Speaker 1: check out our website Newstop Bloomberg environment dot com. That website,
Speaker 1: once again is news dop Bloomberg environment dot Com. Today's
Speaker 1: episode of Pars Rebellion was produced by myself along with
Speaker 1: Josh Block Special Health Today camp from Amma Yukonana. Pars
Speaker 1: Rebellion was created by Jessica Coombs and Rachel Daegel. The
Speaker 1: music for today's episode is a Message by Jazaar and
Speaker 1: back Porch Blues by Richard Myhill getting used under a
Speaker 1: Creative Comments license. Thanks for listening everyone. Hi, I'm Laura
Speaker 1: Carlson and I'm dropping into your feed to tell you
Speaker 1: about Prognosis, a new daily show from Bloomberg. Monday through Friday.
Speaker 1: We'll spend a few minutes with you every afternoon to
Speaker 1: help you understand life in the time of COVID nineteen.
Speaker 1: The show was available on Apple Podcasts, Spotify, or wherever
Speaker 1: you listen. So come back every afternoon for our coverage
Speaker 1: and stay safe.