National Environmental Policy Act (NEPA) challenges to pipeline projects and other natural gas infrastructure have become a commonplace tool in recent years for environmental groups seeking to defeat or delay midstream projects. As direct litigation attacks on upstream drilling have been largely unsuccessful to halt that activity, the litigation tactics of naysayers has shifted to the midstream sector.
Beyond the well-publicized Keystone XL pipeline litigation, other cases have sprung up throughout the United States in recent years challenging pipeline projects. For example, in November 2011, the Sierra Club and Earthjustice challenged the Federal Energy Regulatory Commission’s issuance of a certificate of public convenience to the Central New York Oil and Gas Co., alleging that FERC should have prepared an environmental impact statement considering the cumulative impacts from “shale gas development.” Instead, FERC issued a less-detailed environmental assessment (EA), finding that the project would not constitute major federal action that would significantly affect the quality of the human environment. In February 2012, the U.S. Court of Appeals for the Second Circuit issued a stay of FERC’s order, finding that FERC violated NEPA by dismissing the impacts of shale gas development as too speculative to consider in its assessment. The Second Circuit lifted the stay 11 days later after additional briefing, finding that FERC had given careful consideration to the cumulative impacts for the project in the environmental assessment. Our take: While the environmental groups did not succeed in stopping the pipeline, this case underscores the aggressive challenges imposed on pipeline projects affiliated with shale development.
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