On April 15, 2020, the U.S. District Court for the District of Montana issued a ruling that could have sweeping effects for energy and development projects nationally. The court ruled that the U.S. Army Corp of Engineers (USACE) violated provisions of the Endangered Species Act (ESA) when it approved Nationwide Permit (NWP 12) in 2017. The permit was obtained by TC Energy to facilitate the progress of the Keystone XL oil-sands pipeline project, but this ruling will create greater obstacles for the large-scale project and pipeline projects nationally. The Court vacated NWP 12 in its entirety and ordered the Corp to undergo a programmatic review of the permits’ potential impacts on endangered species as required by the ESA.
NWP 12 is a five-year general permit that allows oil and gas pipelines, electrical transmission lines, and telephone, television, and internet cables to cross or discharge dredged or fill material into federally regulated wetlands and waterways without an extensive and lengthy review process. NWP allows for up to ½ acre loss of wetlands or Waters of the United States. If a project would result in less than 1/10th acre of wetland loss, an application (PCN = Preconstruction Notice) to the Corps is not required. Nationwide permits authorized by Section 404(e) of the Clean Water Act (CWA) and Section 10 of the Rivers and Harbors of 1899 (RHA) are often used to streamline projects that pose minimal individual and cumulative adverse environmental effects. There are over fifty NWPs that authorize specific activities. When NWPs were reissued in 2017, a programmatic review of compliance with the ESA was not performed for any NWP. Instead, a set of general conditions (GC) apply to all NWPs. GC 18 requires each project authorized under NWP 12, or any other NWP, to avoid any impact to federally-listed threatened or endangered species, or critical habitat, without consultation under the ESA.
In addition to halting the construction of Keystone XL across much of its route, thousands of development projects nationwide that rely on NWP 12 might now be facing regulatory limbo. The Corp will currently be unable to streamline other linear utility projects through this permitting process until ESA consultation is complete. Those seeking permitting to move forward with construction may have to postpone their activities or pursue separate authorization under the more complex and time-intensive CWA 404 Individual Permit.
At this time, it is uncertain exactly how applicable projects will be affected following the consultation process. Pipeline and other utility developers may now have to reassess permitting options for current and future projects designed with NWP 12 authorization in mind because that NWP was vacated nationwide. Some projects may be covered under a separate NWP under Section 404(e), potentially require further interagency consultation, reevaluation of pipeline and cable routes and project timelines long-term. Although this ruling applies only to NWP 12, none of the other 50 plus NWPs underwent programmatic ESA review. It is likely that other challenges will be filed to argue that the ruling of the U.S. District Court for the District of Montana should apply to all NWPs, which could stop or delay Section 404 permitting for a wide variety of projects that affect wetlands and Waters of the US – development, mining, navigation, transportation, energy, etc.
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