• June 18, 2019

    Progress on Keystone XL and other Efforts to Improve Infrastructure Permitting

    Matthew Koch

Two recent developments highlight some of the progress being made in the never ending battle to build much needed energy infrastructure in our country.

What is new with Keystone XL? 

A federal appeals court lifted a judge’s injunction that blocked construction of the Keystone XL (KXL) oil pipeline from Canada to the U.S.  This eliminated one of the last biggest hurdles to building the project, although environmental groups vow to keep fighting.

Recent History: Last fall, a federal District Court judge in Montana issued a permanent order blocking construction of KXL after agreeing with opponents claim that the State Department hadn’t fully studied that environmental impacts of the project when granting a 2017 cross-border construction permit.

In response, last April President Trump revoked the 2017 permit and issued a new cross-border permit that doesn’t require environmental review. The 9th Circuit Court of Appeals judges recently agreed that the new permit nullifies the opposition’s legal challenge over the lack of environmental analysis and lifted the injunction.

Where It Stands: TC Energy (formerly TransCanada) is closer to building KXL and will continue with pre-construction activities, including applying for other construction permits. They also await a final decision from the Nebraska Supreme Court on a challenge to the state’s approval of an alternative KXL route through their state.

Despite 10-years of consideration, compromises and planning, and multiple environmental reviews concluding that Keystone XL has minimal risk to the environment, opponents vow to continue to carry-on their fight to delay and stop the pipeline. As KXL gets closer to construction, expect more lawsuits and even more extreme measures by KXL opponents hoping to block or continue delaying the project.

Reducing Permitting Abuse Will Help Get Pipelines Built

In another significant step, the Environmental Protection Agency (EPA) issued new guidance on how federal agencies, state and tribes should process and issue Clean Water Act Section 401 (CWA 401) certifications, one of many construction permits that interstate infrastructure projects may need to be built.

Why This Is Important: The CWA 401 permitting process has become a key tool in the activism toolbox for stopping or delaying energy infrastructure projects.

Under CWA 401, states have the authority to manage the permit process and grant permits for infrastructure projects if they comply with certain state and federal water quality standards. As highlighted in the Global Energy Institute’s Keep It In the Ground report, several states are using the CWA 401 process to create obstacles, extreme delays, and even to block the development of energy infrastructure, including interstate natural gas pipelines, often for environmental issues other than water quality.

In fact, in an April letter to EPA, state Chambers of Commerce concerned about the impact of CWA 401 abuse on the construction of new energy infrastructure called on the Administration to address problems with the CWA 401 process.

Benefits of the New Guidance: The EPA’s common sense guidance and recommendations aim to improve certainty for companies looking to build infrastructure and reduce the impact of Keep It In the Ground opposition to energy projects.

One of the many benefits is a deadline of one-year from receipt of a permit request for states to act, as Congress intended in the Clean Water Act (CWA), thereby eliminating lengthy often-unnecessary delays on permit decisions and projects. It also reaffirms that Congress intended that the scope of the CWA 401 permit review and any projects conditions be limited to CWA water quality impacts and compliance requirements, ensuring that states can’t use CWA 401 to reject pipelines for reasons other than water quality.

President Trump’s April Executive Order on infrastructure permitting directs EPA to take more formal, rulemaking action on CWA 401 and other infrastructure challenges and final action is anticipated in 2020.  Congressional action on CWA 401 would provide a more enduring solution to CWA 401 problems, but in the meantime, the new EPA guidance will have a lasting impact and will provide much needed assistance to businesses, communities and all Americans hoping to realize the advantages of America’s energy renaissance.