Bloomberg BNA

Midwest Keystone Segment a Private Project, Not Subject to NEPA, Federal Court Rules


Source: Bloomberg BNA

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The federal government is not required to conduct an environmental impact review of a nearly 600-mile segment of the Keystone pipeline because it is being constructed almost entirely on private land by a private company, a federal judge ruled in dismissing a lawsuit by environmental groups.

The Sierra Club and the National Wildlife Federation argued that the Army Corps of Engineers violated the National Environmental Policy Act and other laws by not analyzing the environmental impacts of a 589-mile segment of the oil sands pipeline known as the Flanagan South (FS) Pipeline being constructed by a subsidiary of Enbridge Inc.

'Plaintiffs are wrong to insist that any federal agency had an obligation under NEPA or any other statute to conduct an environmental review of the impact of the entire FS Pipeline before Enbridge broke ground on the project, given that the Federal Defendants have permitting authority over only small segments of this private pipeline project and none of the defendant agencies, alone or in combination, have authority to oversee or control the vast portions of the FS Pipeline that traverse private land,' Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia wrote in the decision.

In addition to NEPA, the environmental groups argued in a six-count complaint that the federal government was also in violation of the Clean Water Act and the Administrative Procedure Act.

'Minimal' Impacts

The $5.4 billion, 1,200-mile Keystone pipeline, first proposed by TransCanada Corp. in 2008, would carry crude oil produced from tar sands in Alberta, Canada, to an existing segment of pipeline in Steele City, Neb., and ultimately to refiners along the Gulf Coast.

Enbridge has secured 96 percent of the land rights from more than 1,700 landowners for the construction of the Oklahoma and Illinois section in question, Jackson wrote in the decision.

Approximately 27 miles of the 589-mile segment of the pipeline traverses federal land and waterways, Jackson wrote, and the Corps of Engineers has approved nearly 14 miles of water crossings, 'which incorporate extensive mitigation measures' pursuant to the National Permitting System 'that pertains to construction projects that are likely to have 'minimal' separate or cumulative adverse effects on the environment.'

'The record evidence establishes that the FS Pipeline is not itself an 'action' of the federal government-no matter how earnestly Plaintiffs contend that it is,' Jackson wrote, adding that NEPA is not 'a mechanism for instituting federal evaluation and oversight of a private construction project that Congress has not seen fit to authorize the federal government to regulate.'

The State Department, which has a role in the permitting process for the Keystone pipeline because it crosses an international boundary, found in a final environmental impact statement released in January that 'approval or denial of any one crude oil transport project, including [Keystone XL], is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the U.S.'

A final recommendation to President Barack Obama from the department on whether to approve the project is still pending.

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