WEBVTT - Environmentalists Ahead in Pipeline Litigation 0:00:00.120 --> 0:00:03.400 Yesterday, a federal appeals court in Virginia throughout a permit 0:00:03.440 --> 0:00:06.840 for the Atlantic Coast Pipeline to cross two national forests, 0:00:06.840 --> 0:00:10.320 including the Appalachian Trail, and criticize the U. S. Forest 0:00:10.360 --> 0:00:13.160 Service for granting a permit. But on the same day, 0:00:13.160 --> 0:00:15.600 a federal appeals court in d C seemed poised to 0:00:15.640 --> 0:00:20.079 reject environmentalist arguments that the Federal Energy Regulatory Commission was 0:00:20.120 --> 0:00:23.239 wrong when it granted a permit for a gas pipeline 0:00:23.239 --> 0:00:27.200 expansion project in northeastern Pennsylvania. There's a lot of litigation 0:00:27.240 --> 0:00:31.800 across the country over pipelines with environmentalists trying a shotgun approach? 0:00:32.000 --> 0:00:34.479 Are they winning? Here to tell us, as Brandon Barnes 0:00:34.479 --> 0:00:37.960 Bloomberg Intelligence senior litigation analyst who knows all there is 0:00:38.000 --> 0:00:42.360 to know about pipeline litigation, So Brandon, tell us first 0:00:42.360 --> 0:00:46.040 about this shotgun approach and whether it's a deliberate strategy 0:00:46.120 --> 0:00:49.800 that environmentalists have agreed to. Well, I think if you 0:00:49.880 --> 0:00:52.320 take a look at how things have developed over the 0:00:52.400 --> 0:00:56.280 last two three years in terms of the amount of 0:00:56.320 --> 0:00:59.000 litigation that's been filed and the various venues that it's 0:00:59.040 --> 0:01:03.200 being filed in, coupled with the nuanced approach to each 0:01:03.200 --> 0:01:05.559 one of these. These are highly technical arguments being filed 0:01:05.560 --> 0:01:12.319 by environmentalist It seems obvious that there's a new scattershot approach. 0:01:12.400 --> 0:01:14.720 We're going to file a lawsuit in a number of 0:01:14.760 --> 0:01:17.160 different courts, We're going to use a number of different 0:01:17.160 --> 0:01:19.680 permits as our fodder, and we'll find a way to win. 0:01:19.760 --> 0:01:22.600 It certainly increased the chances that one of those grabs 0:01:23.000 --> 0:01:25.120 the attention of a court and they stop a pipeline 0:01:25.560 --> 0:01:29.000 or a project or something. And it's working. And so 0:01:29.040 --> 0:01:31.360 I think this is a case of success begetting success. 0:01:31.800 --> 0:01:34.280 Let's talk about where it worked first. So in the 0:01:34.360 --> 0:01:38.040 Atlantic Coast pipeline. With that the fourth Circuit and Richmond 0:01:38.080 --> 0:01:42.360 criticized the Forest Service for abdicating its responsibility to preserve 0:01:42.560 --> 0:01:47.600 national forest resources, and they quoted Dr Seuss in doing so. 0:01:47.640 --> 0:01:50.720 I like that. They said, the Forest Services trusted to 0:01:50.800 --> 0:01:53.600 speak for the trees, for the trees have no tongues. 0:01:54.160 --> 0:01:57.760 So tell us what that was about. Well, this court 0:01:58.080 --> 0:02:02.920 has on three occasions come back at Atlantic Coast through 0:02:03.040 --> 0:02:07.000 the permitting of various federal agencies and stop the project. 0:02:07.040 --> 0:02:09.280 And so this is just sort of the tail end 0:02:09.480 --> 0:02:13.480 of that process. Uh, this by itself, isn't that material. 0:02:13.520 --> 0:02:15.960 We're only talking about twenty one miles of pipeline. But 0:02:16.080 --> 0:02:18.720 if you couple that with the two other permits that 0:02:19.200 --> 0:02:23.440 span a larger amount of construction and other areas in 0:02:23.480 --> 0:02:26.959 West Virginia and Virginia and potentially North Carolina, this is 0:02:27.000 --> 0:02:30.120 a real problem for this project. It's really causing a 0:02:30.120 --> 0:02:34.520 lot of delays here. So are courts in certain states 0:02:34.600 --> 0:02:38.840 or federal courts in certain areas more inclined to side 0:02:38.840 --> 0:02:41.919 with environmentalists or is it just a case by case basis. 0:02:42.040 --> 0:02:44.520 You know, I would have said no. You know, I'm 0:02:44.560 --> 0:02:47.359 a lawyer. I believe in the sanctity of of these 0:02:47.400 --> 0:02:51.400 courts and and the judges. But the trend, at least 0:02:51.400 --> 0:02:54.639 from my perspective, is that this fourth Circuit is certainly 0:02:55.639 --> 0:02:59.400 finding some common ground with the arguments that the environmentalists 0:02:59.400 --> 0:03:02.040 are putting forward. I don't think the d C Circuit 0:03:02.080 --> 0:03:06.840 necessarily has gone that far, but they definitely have had 0:03:06.880 --> 0:03:11.000 some decisions that are new and and potentially open up 0:03:11.200 --> 0:03:15.440 new avenues for these opponents. So is the recent DC 0:03:15.520 --> 0:03:20.040 case an anomaly then? I I don't think so, only 0:03:20.120 --> 0:03:23.960 because that's just another facet of this sort of shotgun 0:03:24.000 --> 0:03:26.360 of touch, let's try and challenge. And you're talking about 0:03:26.360 --> 0:03:29.880 the Ryan project with Morgan, you know, relatively small, hundred 0:03:30.720 --> 0:03:34.640 thirty seven three million dollar project, but it's important for 0:03:34.720 --> 0:03:38.440 the expansion of that that line in that system. That 0:03:38.720 --> 0:03:41.560 was another way of challenging the potential for that project 0:03:41.640 --> 0:03:44.040 to go through that could if it had been successful, 0:03:44.320 --> 0:03:46.440 or if it could be successful because that's been decided 0:03:46.720 --> 0:03:49.760 flow through to much bigger projects. So when you talk 0:03:49.800 --> 0:03:54.840 about the bigger picture, our environmentalists ahead or the builders. 0:03:55.160 --> 0:03:58.760 These days, the environmentals are far ahead. The in the 0:03:58.840 --> 0:04:01.880 last two years is the delays that have mounted on 0:04:01.920 --> 0:04:06.080 these projects is incredible. They're incredible. It's if you look 0:04:06.120 --> 0:04:10.160 at the two Thousteen period for pipeline projects, the average 0:04:10.160 --> 0:04:13.280 time for them to get federal certification and then start 0:04:13.320 --> 0:04:16.280 building was under four hundred days. It was it was 0:04:16.360 --> 0:04:20.440 less than a year. But in seventeen period that is 0:04:20.520 --> 0:04:23.000 jacked up over six hundred days. And so you're talking 0:04:23.000 --> 0:04:25.400 about more than a half a year edition in a 0:04:25.400 --> 0:04:27.600 pretty short amount of time. And a lot of that 0:04:27.680 --> 0:04:29.880 is due to the regulatory pressures at the state level 0:04:30.040 --> 0:04:33.200 and in the courts. So how much money is that 0:04:33.320 --> 0:04:37.520 costing if you know generally, well, it's that's actually a 0:04:37.600 --> 0:04:40.120 difficult question to answer because a lot of these projects 0:04:40.240 --> 0:04:42.880 kind of once they're done, you don't really see the 0:04:42.920 --> 0:04:45.080 companies coming out and tell you what the cost was 0:04:45.279 --> 0:04:47.919 or or the it's an incremental change over time. But 0:04:48.000 --> 0:04:49.520 we took a look at a bunch of the bigger 0:04:49.560 --> 0:04:53.279 pipelines that recently have been changing their cost estimates because 0:04:53.279 --> 0:04:55.040 of these delays. And if you look at the average 0:04:55.520 --> 0:04:58.360 on a quarter by quarter basis, if they delay by 0:04:58.360 --> 0:05:02.800 a quarter, it's about a hundred seventy million dollars. So 0:05:02.960 --> 0:05:07.360 is that stopping any new pipelines? Yes, yes, I think. 0:05:07.640 --> 0:05:09.280 And that's where we get into a little bit more 0:05:09.320 --> 0:05:13.960 of a of a geographical situation. So New York has 0:05:14.080 --> 0:05:17.160 in the last three years done a very good job 0:05:17.240 --> 0:05:20.800 of stopping projects from being built. Look at Constitution Pipeline, 0:05:21.240 --> 0:05:24.960 look at Northern Access. They have found a lot of 0:05:24.960 --> 0:05:27.039 difficult to getting through and some of these projects probably 0:05:27.080 --> 0:05:29.800 won't get built as a result. But and that sort 0:05:29.800 --> 0:05:31.520 of started to extend to other states. You see that 0:05:31.520 --> 0:05:33.760 New Jersey with Penn East and some of the other project. 0:05:33.839 --> 0:05:36.760 Virginia's change their permitting scheme midstream for a lot of 0:05:36.760 --> 0:05:39.880 these projects and adding delay after delay, and it's it's 0:05:39.920 --> 0:05:41.960 sometimes it's death by a thousand cuts, and sometimes it's 0:05:41.960 --> 0:05:45.599 a complete stop. Are there states where it's easier the 0:05:45.640 --> 0:05:50.680 permitting process is easier, easier, or at least more efficient. 0:05:51.400 --> 0:05:53.960 We know that looking at the process. So if we 0:05:54.000 --> 0:05:56.719 took a look at the time period after the federal 0:05:56.760 --> 0:05:58.839 government says yes it's okay you can build, all right, 0:05:59.080 --> 0:06:01.800 yes it's okay you can do this project, and take 0:06:01.960 --> 0:06:05.120 that time to the end where they're allowed to start building, 0:06:05.440 --> 0:06:08.320 that's usually the most sensitive time period for the states 0:06:08.440 --> 0:06:12.200 to kind of intervene and use their permitting process to 0:06:12.200 --> 0:06:15.040 slow things down. That time period if you're going through 0:06:15.040 --> 0:06:18.640 Ohio and Texas is far shorter less than sixty days 0:06:18.680 --> 0:06:21.240 typically on average, then if you're going through New York, 0:06:21.279 --> 0:06:24.000 which is more than two hundred days. So the difference 0:06:24.240 --> 0:06:27.520 is substantial, and I think projects know that. If you 0:06:27.560 --> 0:06:30.800 look at where new projects are being proposed, there's only 0:06:30.800 --> 0:06:33.960 one project that's been proposed through New York since January. 0:06:35.839 --> 0:06:39.600 I'm interested in who is bringing these lawsuits? We say environmentalists. 0:06:39.839 --> 0:06:44.360 Are they national environmental groups? Are they local environmental groups? 0:06:44.600 --> 0:06:49.080 Is there any thread. Traditionally you would have said, Okay, 0:06:49.120 --> 0:06:51.400 these are this is a very local Pipelines are local. 0:06:51.520 --> 0:06:54.000 Pipeline issues are local. It's not in my backyard or 0:06:54.120 --> 0:06:59.640 nimby issue. But since I think Keystone, certainly after Dakota 0:06:59.680 --> 0:07:05.039 Acts s you had a much stronger environmental movement from 0:07:05.160 --> 0:07:11.040 the national groups, Sierra Club, Environmental Defense Fund, UM. They're 0:07:11.080 --> 0:07:13.760 all taking advantage of the success that they've had in 0:07:13.760 --> 0:07:17.040 the courts or at the local state agency level, and 0:07:17.080 --> 0:07:19.160 I think that they're just spreading that across to all 0:07:19.160 --> 0:07:23.960 sorts of other projects. It's a fascinating area. Actually, thanks 0:07:23.960 --> 0:07:27.280 so much, Brandon. That's Brandon Barnes. He it's Bloomberg Intelligence 0:07:27.320 --> 0:07:28.920 senior litigation analyst.