1 00:00:00,120 --> 00:00:03,400 Speaker 1: Yesterday, a federal appeals court in Virginia throughout a permit 2 00:00:03,440 --> 00:00:06,840 Speaker 1: for the Atlantic Coast Pipeline to cross two national forests, 3 00:00:06,840 --> 00:00:10,320 Speaker 1: including the Appalachian Trail, and criticize the U. S. Forest 4 00:00:10,360 --> 00:00:13,160 Speaker 1: Service for granting a permit. But on the same day, 5 00:00:13,160 --> 00:00:15,600 Speaker 1: a federal appeals court in d C seemed poised to 6 00:00:15,640 --> 00:00:20,079 Speaker 1: reject environmentalist arguments that the Federal Energy Regulatory Commission was 7 00:00:20,120 --> 00:00:23,239 Speaker 1: wrong when it granted a permit for a gas pipeline 8 00:00:23,239 --> 00:00:27,200 Speaker 1: expansion project in northeastern Pennsylvania. There's a lot of litigation 9 00:00:27,240 --> 00:00:31,800 Speaker 1: across the country over pipelines with environmentalists trying a shotgun approach? 10 00:00:32,000 --> 00:00:34,479 Speaker 1: Are they winning? Here to tell us, as Brandon Barnes 11 00:00:34,479 --> 00:00:37,960 Speaker 1: Bloomberg Intelligence senior litigation analyst who knows all there is 12 00:00:38,000 --> 00:00:42,360 Speaker 1: to know about pipeline litigation, So Brandon, tell us first 13 00:00:42,360 --> 00:00:46,040 Speaker 1: about this shotgun approach and whether it's a deliberate strategy 14 00:00:46,120 --> 00:00:49,800 Speaker 1: that environmentalists have agreed to. Well, I think if you 15 00:00:49,880 --> 00:00:52,320 Speaker 1: take a look at how things have developed over the 16 00:00:52,400 --> 00:00:56,280 Speaker 1: last two three years in terms of the amount of 17 00:00:56,320 --> 00:00:59,000 Speaker 1: litigation that's been filed and the various venues that it's 18 00:00:59,040 --> 00:01:03,200 Speaker 1: being filed in, coupled with the nuanced approach to each 19 00:01:03,200 --> 00:01:05,559 Speaker 1: one of these. These are highly technical arguments being filed 20 00:01:05,560 --> 00:01:12,319 Speaker 1: by environmentalist It seems obvious that there's a new scattershot approach. 21 00:01:12,400 --> 00:01:14,720 Speaker 1: We're going to file a lawsuit in a number of 22 00:01:14,760 --> 00:01:17,160 Speaker 1: different courts, We're going to use a number of different 23 00:01:17,160 --> 00:01:19,680 Speaker 1: permits as our fodder, and we'll find a way to win. 24 00:01:19,760 --> 00:01:22,600 Speaker 1: It certainly increased the chances that one of those grabs 25 00:01:23,000 --> 00:01:25,120 Speaker 1: the attention of a court and they stop a pipeline 26 00:01:25,560 --> 00:01:29,000 Speaker 1: or a project or something. And it's working. And so 27 00:01:29,040 --> 00:01:31,360 Speaker 1: I think this is a case of success begetting success. 28 00:01:31,800 --> 00:01:34,280 Speaker 1: Let's talk about where it worked first. So in the 29 00:01:34,360 --> 00:01:38,040 Speaker 1: Atlantic Coast pipeline. With that the fourth Circuit and Richmond 30 00:01:38,080 --> 00:01:42,360 Speaker 1: criticized the Forest Service for abdicating its responsibility to preserve 31 00:01:42,560 --> 00:01:47,600 Speaker 1: national forest resources, and they quoted Dr Seuss in doing so. 32 00:01:47,640 --> 00:01:50,720 Speaker 1: I like that. They said, the Forest Services trusted to 33 00:01:50,800 --> 00:01:53,600 Speaker 1: speak for the trees, for the trees have no tongues. 34 00:01:54,160 --> 00:01:57,760 Speaker 1: So tell us what that was about. Well, this court 35 00:01:58,080 --> 00:02:02,920 Speaker 1: has on three occasions come back at Atlantic Coast through 36 00:02:03,040 --> 00:02:07,000 Speaker 1: the permitting of various federal agencies and stop the project. 37 00:02:07,040 --> 00:02:09,280 Speaker 1: And so this is just sort of the tail end 38 00:02:09,480 --> 00:02:13,480 Speaker 1: of that process. Uh, this by itself, isn't that material. 39 00:02:13,520 --> 00:02:15,960 Speaker 1: We're only talking about twenty one miles of pipeline. But 40 00:02:16,080 --> 00:02:18,720 Speaker 1: if you couple that with the two other permits that 41 00:02:19,200 --> 00:02:23,440 Speaker 1: span a larger amount of construction and other areas in 42 00:02:23,480 --> 00:02:26,959 Speaker 1: West Virginia and Virginia and potentially North Carolina, this is 43 00:02:27,000 --> 00:02:30,120 Speaker 1: a real problem for this project. It's really causing a 44 00:02:30,120 --> 00:02:34,520 Speaker 1: lot of delays here. So are courts in certain states 45 00:02:34,600 --> 00:02:38,840 Speaker 1: or federal courts in certain areas more inclined to side 46 00:02:38,840 --> 00:02:41,919 Speaker 1: with environmentalists or is it just a case by case basis. 47 00:02:42,040 --> 00:02:44,520 Speaker 1: You know, I would have said no. You know, I'm 48 00:02:44,560 --> 00:02:47,359 Speaker 1: a lawyer. I believe in the sanctity of of these 49 00:02:47,400 --> 00:02:51,400 Speaker 1: courts and and the judges. But the trend, at least 50 00:02:51,400 --> 00:02:54,639 Speaker 1: from my perspective, is that this fourth Circuit is certainly 51 00:02:55,639 --> 00:02:59,400 Speaker 1: finding some common ground with the arguments that the environmentalists 52 00:02:59,400 --> 00:03:02,040 Speaker 1: are putting forward. I don't think the d C Circuit 53 00:03:02,080 --> 00:03:06,840 Speaker 1: necessarily has gone that far, but they definitely have had 54 00:03:06,880 --> 00:03:11,000 Speaker 1: some decisions that are new and and potentially open up 55 00:03:11,200 --> 00:03:15,440 Speaker 1: new avenues for these opponents. So is the recent DC 56 00:03:15,520 --> 00:03:20,040 Speaker 1: case an anomaly then? I I don't think so, only 57 00:03:20,120 --> 00:03:23,960 Speaker 1: because that's just another facet of this sort of shotgun 58 00:03:24,000 --> 00:03:26,360 Speaker 1: of touch, let's try and challenge. And you're talking about 59 00:03:26,360 --> 00:03:29,880 Speaker 1: the Ryan project with Morgan, you know, relatively small, hundred 60 00:03:30,720 --> 00:03:34,640 Speaker 1: thirty seven three million dollar project, but it's important for 61 00:03:34,720 --> 00:03:38,440 Speaker 1: the expansion of that that line in that system. That 62 00:03:38,720 --> 00:03:41,560 Speaker 1: was another way of challenging the potential for that project 63 00:03:41,640 --> 00:03:44,040 Speaker 1: to go through that could if it had been successful, 64 00:03:44,320 --> 00:03:46,440 Speaker 1: or if it could be successful because that's been decided 65 00:03:46,720 --> 00:03:49,760 Speaker 1: flow through to much bigger projects. So when you talk 66 00:03:49,800 --> 00:03:54,840 Speaker 1: about the bigger picture, our environmentalists ahead or the builders. 67 00:03:55,160 --> 00:03:58,760 Speaker 1: These days, the environmentals are far ahead. The in the 68 00:03:58,840 --> 00:04:01,880 Speaker 1: last two years is the delays that have mounted on 69 00:04:01,920 --> 00:04:06,080 Speaker 1: these projects is incredible. They're incredible. It's if you look 70 00:04:06,120 --> 00:04:10,160 Speaker 1: at the two Thousteen period for pipeline projects, the average 71 00:04:10,160 --> 00:04:13,280 Speaker 1: time for them to get federal certification and then start 72 00:04:13,320 --> 00:04:16,280 Speaker 1: building was under four hundred days. It was it was 73 00:04:16,360 --> 00:04:20,440 Speaker 1: less than a year. But in seventeen period that is 74 00:04:20,520 --> 00:04:23,000 Speaker 1: jacked up over six hundred days. And so you're talking 75 00:04:23,000 --> 00:04:25,400 Speaker 1: about more than a half a year edition in a 76 00:04:25,400 --> 00:04:27,600 Speaker 1: pretty short amount of time. And a lot of that 77 00:04:27,680 --> 00:04:29,880 Speaker 1: is due to the regulatory pressures at the state level 78 00:04:30,040 --> 00:04:33,200 Speaker 1: and in the courts. So how much money is that 79 00:04:33,320 --> 00:04:37,520 Speaker 1: costing if you know generally, well, it's that's actually a 80 00:04:37,600 --> 00:04:40,120 Speaker 1: difficult question to answer because a lot of these projects 81 00:04:40,240 --> 00:04:42,880 Speaker 1: kind of once they're done, you don't really see the 82 00:04:42,920 --> 00:04:45,080 Speaker 1: companies coming out and tell you what the cost was 83 00:04:45,279 --> 00:04:47,919 Speaker 1: or or the it's an incremental change over time. But 84 00:04:48,000 --> 00:04:49,520 Speaker 1: we took a look at a bunch of the bigger 85 00:04:49,560 --> 00:04:53,279 Speaker 1: pipelines that recently have been changing their cost estimates because 86 00:04:53,279 --> 00:04:55,040 Speaker 1: of these delays. And if you look at the average 87 00:04:55,520 --> 00:04:58,360 Speaker 1: on a quarter by quarter basis, if they delay by 88 00:04:58,360 --> 00:05:02,800 Speaker 1: a quarter, it's about a hundred seventy million dollars. So 89 00:05:02,960 --> 00:05:07,360 Speaker 1: is that stopping any new pipelines? Yes, yes, I think. 90 00:05:07,640 --> 00:05:09,280 Speaker 1: And that's where we get into a little bit more 91 00:05:09,320 --> 00:05:13,960 Speaker 1: of a of a geographical situation. So New York has 92 00:05:14,080 --> 00:05:17,160 Speaker 1: in the last three years done a very good job 93 00:05:17,240 --> 00:05:20,800 Speaker 1: of stopping projects from being built. Look at Constitution Pipeline, 94 00:05:21,240 --> 00:05:24,960 Speaker 1: look at Northern Access. They have found a lot of 95 00:05:24,960 --> 00:05:27,039 Speaker 1: difficult to getting through and some of these projects probably 96 00:05:27,080 --> 00:05:29,800 Speaker 1: won't get built as a result. But and that sort 97 00:05:29,800 --> 00:05:31,520 Speaker 1: of started to extend to other states. You see that 98 00:05:31,520 --> 00:05:33,760 Speaker 1: New Jersey with Penn East and some of the other project. 99 00:05:33,839 --> 00:05:36,760 Speaker 1: Virginia's change their permitting scheme midstream for a lot of 100 00:05:36,760 --> 00:05:39,880 Speaker 1: these projects and adding delay after delay, and it's it's 101 00:05:39,920 --> 00:05:41,960 Speaker 1: sometimes it's death by a thousand cuts, and sometimes it's 102 00:05:41,960 --> 00:05:45,599 Speaker 1: a complete stop. Are there states where it's easier the 103 00:05:45,640 --> 00:05:50,680 Speaker 1: permitting process is easier, easier, or at least more efficient. 104 00:05:51,400 --> 00:05:53,960 Speaker 1: We know that looking at the process. So if we 105 00:05:54,000 --> 00:05:56,719 Speaker 1: took a look at the time period after the federal 106 00:05:56,760 --> 00:05:58,839 Speaker 1: government says yes it's okay you can build, all right, 107 00:05:59,080 --> 00:06:01,800 Speaker 1: yes it's okay you can do this project, and take 108 00:06:01,960 --> 00:06:05,120 Speaker 1: that time to the end where they're allowed to start building, 109 00:06:05,440 --> 00:06:08,320 Speaker 1: that's usually the most sensitive time period for the states 110 00:06:08,440 --> 00:06:12,200 Speaker 1: to kind of intervene and use their permitting process to 111 00:06:12,200 --> 00:06:15,040 Speaker 1: slow things down. That time period if you're going through 112 00:06:15,040 --> 00:06:18,640 Speaker 1: Ohio and Texas is far shorter less than sixty days 113 00:06:18,680 --> 00:06:21,240 Speaker 1: typically on average, then if you're going through New York, 114 00:06:21,279 --> 00:06:24,000 Speaker 1: which is more than two hundred days. So the difference 115 00:06:24,240 --> 00:06:27,520 Speaker 1: is substantial, and I think projects know that. If you 116 00:06:27,560 --> 00:06:30,800 Speaker 1: look at where new projects are being proposed, there's only 117 00:06:30,800 --> 00:06:33,960 Speaker 1: one project that's been proposed through New York since January. 118 00:06:35,839 --> 00:06:39,600 Speaker 1: I'm interested in who is bringing these lawsuits? We say environmentalists. 119 00:06:39,839 --> 00:06:44,360 Speaker 1: Are they national environmental groups? Are they local environmental groups? 120 00:06:44,600 --> 00:06:49,080 Speaker 1: Is there any thread. Traditionally you would have said, Okay, 121 00:06:49,120 --> 00:06:51,400 Speaker 1: these are this is a very local Pipelines are local. 122 00:06:51,520 --> 00:06:54,000 Speaker 1: Pipeline issues are local. It's not in my backyard or 123 00:06:54,120 --> 00:06:59,640 Speaker 1: nimby issue. But since I think Keystone, certainly after Dakota 124 00:06:59,680 --> 00:07:05,039 Speaker 1: Acts s you had a much stronger environmental movement from 125 00:07:05,160 --> 00:07:11,040 Speaker 1: the national groups, Sierra Club, Environmental Defense Fund, UM. They're 126 00:07:11,080 --> 00:07:13,760 Speaker 1: all taking advantage of the success that they've had in 127 00:07:13,760 --> 00:07:17,040 Speaker 1: the courts or at the local state agency level, and 128 00:07:17,080 --> 00:07:19,160 Speaker 1: I think that they're just spreading that across to all 129 00:07:19,160 --> 00:07:23,960 Speaker 1: sorts of other projects. It's a fascinating area. Actually, thanks 130 00:07:23,960 --> 00:07:27,280 Speaker 1: so much, Brandon. That's Brandon Barnes. He it's Bloomberg Intelligence 131 00:07:27,320 --> 00:07:28,920 Speaker 1: senior litigation analyst.