Keystone XL & NWP 12 Ruling Paralyzes Infrastructure Permit Process

Law360 recently published a co-authored analysis from GAIN strategic advisor and former Army Corps commander Col. Tom Magness and former Oklahoma Corporation Commission chairman Patrice Douglas regarding the impact of the Keystone XL ruling and its setback for American energy infrastructure development.

In addition to pulling permits for Keystone XL – claiming the U.S. Army Corps of Engineers did not adequately consider the potential effects of the project on endangered species in water bodies the pipeline would cross – the ruling also indefinitely suspended the Corps’ ability to authorize any dredge or fill activities under Nationwide Permit 12 (NWP 12). NWP 12 is used to streamline permitting for projects like pipelines, transmission lines and cables that traverse federally regulated waterways. Magness and Douglas write:

The Corps joined with other federal officials in emphasizing the widespread ramifications of the ruling, arguing in a recent filing that the “Court’s remedies have nationwide effect, are extremely disruptive, and are contrary to the public interest.” On May 11, Judge Morris upheld his ruling, but narrowed its purview to allow the Corps to authorize “non-pipeline construction activities and routine maintenance, inspection, and repair activities on existing NWP 12 projects.” The Corps filed notice two days later seeking to appeal the order.

While narrowing the scope of the ruling was a step in the right direction, the effect of the ruling halts fossil fuel projects under NWP 12 alleging “the threat of such destruction from oil and gas pipelines proves substantial.” From a decade-long permitting process being nullified to a district judge making nationwide energy policy, this ruling presents multiple layers of concern that will surely have infrastructure developers thinking twice.

The Army Corps of Engineers is a nonpartisan organization of career professionals who focus on the facts and scientific findings, not politics. As the authors write:

Keystone XL was permitted only after nearly a decade of thorough planning and vetting that included careful consideration to ensure each of the many permitting criteria were met. In order to proceed with this project, Army Corps professionals worked with applicants to ensure minimal cumulative adverse impacts to the aquatic environment — a key requirement of NWP 12.

Despite the decade of rigorous review, Judge Morris’ ruling introduces a new level of uncertainty in an already uncertain environment, for an industry that has been ravaged by the coronavirus pandemic and an ill-timed global oil price war.

Rather than second-guessing the dedicated professionals that have been tasked with studying and permitting our nation’s infrastructure, it is critical that we extend our full trust to these regulators. Regulatory consistency is essential.

Magness and Douglas emphasize that such a ruling will surely thwart investment and hinder development for decades to come, and consumers will ultimately pay the price. This anti-energy playbook has become all too common – from courtroom challenges to vigilante protests. The piece also points out that similar challenges have arisen with the Dakota Access Pipeline, noting:

Despite nearly three years of safe operation, the court ordered the Army Corps to conduct further environmental review. Activists now call for the pipeline to be shut down until the additional review is completed, which will likely take several years.

As the authors conclude, now is not the time to gamble with our nation’s energy infrastructure:

Now more than ever before, policymakers, regulators and even our judges have a duty to provide consistent and transparent processes that ensure infrastructure development has a meaningful path forward.