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Supreme Court Upholds Ruling Blocking Permit for Keystone XL but Allows Nationwide Permit 12 to be Used for Other Oil & Gas Projects
Practical Law Legal Update w-026-3940 (Approx. 3 pages)
Supreme Court Upholds Ruling Blocking Permit for Keystone XL but Allows Nationwide Permit 12 to be Used for Other Oil & Gas Projects
by Practical Law Finance
| Published on 07 Jul 2020 • USA (National/Federal) |
The US Supreme Court issued an opinion lifting a stay on the use of the Nationwide Permit 12 for the environmental review of oil and gas projects except for the Keystone XL Pipeline project.
On July 6, 2020, the US Supreme Court issued an opinion partially staying a decision by the US District Court for the District of Montana (District Court) that had enjoined the Army Corps of Engineers (Corps) from using the Nationwide Permit 12 (NWP 12) for new oil and gas projects until the Corps completes a more thorough review of the impact of these projects under the Endangered Species Act ( (S.Ct. July 6, 2020)). The stay does not apply, however, to the Keystone XL pipeline.
Background
This case has a complicated history. On:
- April 15, 2020, the District Court held that the NWP 12 issued to TC Energy's Keystone XL oil pipeline violated the Endangered Species Act (ESA) (16 U.S.C. §§ 1531-1544) and vacated the permit pending completion of a consultation process (see Legal Update, District Court of Montana Vacates Army Corps Nationwide Permit 12 for Keystone XL Pipeline).
- May 11, 2020, the District Court amended its ruling and allowed the Corps to use the NWP 12 to facilitate the environmental review and permitting of non-oil and gas pipeline projects. The Corps remained enjoined from authorizing dredge or fill activities under NWP 12 for the construction of oil and gas pipelines, including the Keystone XL pipeline and several natural gas pipeline projects (see Legal Update, District Court of Montana Amends Order Vacating the Army Corps Nationwide Permit 12 for the Keystone XL Pipeline But New Oil and Gas Pipeline Projects Still Potentially Delayed).
- May 14, 2020, the US Court of Appeals for the Ninth Circuit (Ninth Circuit) issued an order denying a request from the Trump Administration to stay the District Court decision (see Legal Update, Ninth Circuit Denies Stay of Ruling Vacating the Nationwide Permit 12 for the Keystone XL Pipeline Project).
- May 28, 2020, the Appeals Court issued an order rejecting another request to stay the District Court decision.
Under the Supreme Court decision, the stay applies pending disposition of the appeal in the Ninth Circuit.
Practical Implications
The decision was welcome news to oil and gas project developers that rely on the NWP 12 permit to facilitate the environmental review of their projects. It is a blow to the Keystone XL pipeline project which needs the permit to continue building the pipeline. TC Energy has announced that it remains committed to the project. This is the second major blow to an energy project being pushed by the Trump Administration as part of its energy policy (see Practice Note, Trump Administration Energy and Climate Change Policies and Regulations: 2017 and 2018 Tracker). On July 6, 2020, a court ordered the shutdown of the Dakota Access Pipeline (see Legal Update, Standing Rock Sioux Tribe v. US Army Corps of Eng'rs: District Court Orders Temporary Shutdown of Dakota Access Pipeline).