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Environment & Energy Report

Pipeline Backers Optimistic After Supreme Court Hearing (1)

Feb. 24, 2020, 7:39 PMUpdated: Feb. 24, 2020, 9:29 PM

The Atlantic Coast pipeline appears likely to clear a major legal hurdle after a majority of Supreme Court justices seemed to lean in favor of allowing the project to cross the Appalachian Trail.

The high court heard oral arguments Monday in the high-stakes debate over the $8 billion natural gas project, which is planned to pass beneath part of the iconic trail in the George Washington National Forest in central Virginia.

Chief Justice John Roberts embraced Atlantic Coast’s key argument toward the end of the hour-long courtroom debate when he concluded the 2,200-mile trail “really does erect an impermeable barrier” to delivering gas to the East Coast if the court adopts environmentalists’ interpretation of federal law.

“The only interesting thing here is how badly the environmentalists are going to lose, and how broadly,” said Mayer Brown attorney Timothy S. Bishop, who often represents industry parties in environmental litigation.

Dominion Energy Inc., which is backing the pipeline alongside Duke Energy Corp., struck an optimistic chord after arguments.

“We believe we’ve made a strong case, and we look forward to the Supreme Court’s ruling in the coming months,” spokeswoman Ann Nallo said in a statement, adding that developers hope to have Atlantic Coast in service by early 2022.

The Supreme Court’s decision, expected by June, will affect both the management of the Appalachian Trail and the future of the Atlantic Coast pipeline, which was proposed more than six years ago to deliver gas from shale fields in West Virginia to customers in Virginia and North Carolina.

Still, Atlantic Coast would still have to secure multiple other permits—some of which were struck down in related litigation—before it could continue construction.

6-3 in Pipeline’s Favor?

Legal experts and energy industry analysts who attended arguments also viewed the Supreme Court arguments as favorable to Atlantic Coast.

“The environmental groups are now facing an uphill battle,” University of Richmond law professor Noah Sachs said. “Most of the questioning, I thought it was hostile to their position.”

Sachs noted that the court’s conservative wing, plus Justice Stephen Breyer, seemed to coalesce around two potential routes for resolving the case—one broad and one narrow—and could end up issuing a fractured set of opinions.

“From our perspective, the court was receptive to the Forest Service and Atlantic Coast’s argument that the assignment of the Appalachian Trail to the Park Service does not preclude siting on Forest Service land,” ClearView Energy Partners managing partner Christine Tezak said.

Bloomberg Intelligence analyst Brandon Barnes predicted a 6-3 or 7-2 Supreme Court vote in favor of the pipeline, based on several justices’ apparent reluctance to interpret federal laws in a way that could hamstring development.

He noted that Breyer seemed open to at least a narrow ruling in Atlantic Coast’s favor, focusing on the fact that the proposed pipeline crossing would be hundreds of feet below the trail, with an underground passage starting and ending on private land out of hikers’ view.

Barnes noted, however, that a Supreme Court win for Atlantic Coast is just one hurdle the company must cross before continuing construction.

“There’s so much left for them to do to get this thing going,” he said.

Narrow Grounds

It’s also unclear whether the court will decide the case on broad or narrow grounds. During arguments, Justice Samuel Alito suggested a narrow option: deeming the trail under National Park Service control on the surface, but not the subsurface, where the pipeline would burrow underground.

Under that approach, Atlantic Coast would win, but the court wouldn’t have to unpack more complicated questions of whether the trail is “land” under the relevant statutes.

Attorney Michael K. Kellogg, representing the conservation groups, called the idea an “easy out” that doesn’t work because federal laws give the National Park Service explicit authority over rights of way under the trail.

“So we know that on federal land, Congress gave one agency the authority the make these decisions,” Southern Environmental Law Center attorney D.J. Gerken, who also represents the environmental coalition, said after arguments.

Natural Resources Defense Council attorney Gillian Giannetti, who signed on to an amicus brief supporting the coalition, said the complex statutory issues “can strain the brain” and are hard to unpack during the Supreme Court’s in-person arguments. But, she added, the justices will likely get a clearer understanding when they take another look at the written briefs.

Long Legal Fight

The Forest Service approved the crossing in 2017, sparking a court battle with conservation groups that said the agency lacked authority to make the decision. The Appalachian Trail is considered parkland under the jurisdiction of the National Park Service, not the Forest Service, they said. What’s more, federal law bars pipeline crossings on national parkland without congressional approval.

The U.S. Court of Appeals for the Fourth Circuit sided with the groups and scrapped the Forest Service’s approval of the trail crossing.

Environmental lawyers say the interpretation doesn’t block all pipelines across the Appalachian Trail—just where the trail passes over federal lands, about half of its length. Pipelines can intersect via state land, private land, and old easements.

The Appalachian Trail Conservancy, a nonprofit focused on the trail, took a unique position in the case, submitting a brief that supported neither side. Leaders of the group question the need for the Atlantic Coast pipeline but say the particular design of the proposed trail crossing is fine. They’re worried a win for the environmental coalition will upset the careful delegation of management responsibilities for the footpath.

“I do appreciate that they specifically saw that in this particular question there are huge potential further consequences on all levels,” President and CEO Sandra Marra said after arguments.

‘Metaphysical’ Arguments

Justices from the court’s liberal wing pounced early on arguments that the Appalachian Trail doesn’t qualify as “land” subject to National Park Service control.

“It’s a difficult distinction to wrap one’s head around,” Justice Elena Kagan told the government’s lawyer, adding that the notion that the trail isn’t land created “strange locutions” in the government’s legal briefs.

Kirkland & Ellis LLP attorney Paul Clement, representing Atlantic Coast, retorted later that the argument isn’t “as metaphysical as you think.”

“The philosophers at the Park Service and the Forest Service haven’t had any problem with this for 50 years,” Clement, a former U.S. solicitor general, told the justices. “They have dealt with the reality that the trail is, in an administrative sense, under the Park Service, but on a day-to-day basis, the lands stay where they are.”

Assistant to the Solicitor General Anthony A. Yang represented the federal government in Monday’s arguments.

The Sierra Club is among the groups opposing the pipeline in court. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

The case is U.S. Forest Serv. v. Cowpasture River Pres. Ass’n, U.S., No. 18-1584, oral arguments 2/24/20.

(Updated with additional reporting throughout.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com

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