SCOTUS Denies Request To Allow KXL To Proceed

In their continued attempt to keep the Keystone XL Pipeline project moving forward after years of delays, the Trump administration did not get the ruling they expected from the United States Supreme Court. On July 6, the U.S. Supreme Court declined the request from TC Energy and the Trump administration to allow Keystone XL to proceed under Nationwide Permit (NWP) 12 however allowed other pipelines to continue using the Permit as the full appeal process moves forward.

The appeal to the U.S. Supreme Court started as a result of Federal Judge Brian Morris nullifying the Army Corps of Engineers Permit to dredge and fill across 200 streams and rivers along the portion of the pipeline that runs through the United States in April. Judge Morris stated the permit did not follow rules under the National Environmental Protection Act (NEPA) and the Endangered Species Act and remanded the Corps of Engineers to become compliant with the two acts. In May, the United States Court of Appeals for the Ninth Circuit left in place Judge Morris’ decision, while the Army Corps had pushed to allow approval for the construction to continue as the appeal is heard. The judgement by Judge Morris applied not only to the Keystone XL project but also to other pipeline projects across the United States, which was expected to add as much as $2 billion in expenses to the other projects.

Judge Morris stated in his ruling that the government cannot delegate its duties under the Endangered Species Act to permittees, nor rely on project level review as the nationwide permit does. The U.S. Army Corps of Engineers has been using NWP since the 1970s in order to authorize dredge and fill activities for a wide variety of infrastructure projects that cross water bodies or wetlands. Instead of using individual permits, the agency makes sure the plans meet certain criteria and then adds specific conditions as needed.

Upon hearing the decision, the Army Corps pushed to allow the pipeline construction under the permit to continue during its appeal of the ruling in the Ninth Circuit Court, however the court rejected the request. The Trump administration and industry attorneys however argued the permit program was functioning properly when the permit was canceled due to Judge Morris ruling. In order to move forward on not only the Keystone XL project but provide a voice to the other projects affected, U.S. Solicitor General Noel Francisco on June 15 asked the U.S. Supreme Court to block Judge Morris’ ruling and let the permit program to operate.

The decision made by the U.S. Supreme Court to place the ruling as the permit applies to other projects on hold was welcome news after a devastating week for the oil and gas industry. On July 5, it was announced the $8 billion Atlantic Coast gas pipeline project in the southeast was canceled due to the NWP 12 ruling, as cited by Duke Energy and Dominion Energy. On July 6, it was also announced a ruling was made to shut down the Dakota Access oil pipeline in North Dakota.

Media statements by industry groups praised the Supreme Court’s reinstatement of NWP 12, however stressed the need for how it should apply to the Keystone XL pipeline project as well.

“This is a significant step towards restoring more certainty for energy companies, but declining to revive the permit for Keystone XL is short-sighted, as the project has already been throughly reviewed for well over a decade,” stated American Petroleum Institute’s Chief Legal Officer and Senior Vice President Paul G. Afonso. “As this case moves forward, we will urge the U.S. Court of Appeals for the Ninth Circuit to reinstate the permit for all pipeline projects including Keystone XL.”

The U.S. Supreme Court’s decision to uphold Judge Morris’ ruling is the latest setback for the Keystone XL project which has had many legal actions taken against it since President Trump has taken office. Upon taking office, President Trump pushed for federal permits that had been canceled, denied or delayed during the previous administration to move forward which caused continued legal issues. The project appeared to have good news when in March of 2019, President Trump overcame injunctions issued by Judge Morris by reworking administrative rules and issued a permit to cross the border. Additional roadblocks however are in the way to completing the Keystone XL project including other legal battles, the current state of the oil market as well as a recent commitment by President Trump’s challenger Joe Biden in the 2020 presidency race to rescind the pipeline’s permit should he be elected president.