On April 15, 2020, a federal district court judge in the District of Montana unexpectedly issued an order concluding that the U.S. Army Corps of Engineers’ (Corps) re-issuance of Nationwide Permit (NWP) 12 in 2017 for the Keystone XL Pipeline project was arbitrary and capricious and violated Section 7 of the Endangered Species Act (ESA). NWP 12 authorizes discharges of dredged or fill material into jurisdictional waters as a result of construction, maintenance, repair and removal of utility infrastructure that otherwise would be prohibited by section 404 of the Clean Water Act. The court vacated the NWP 12 and remanded it to the Corps to complete consultations with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service under Section 7 of the ESA. The court also specifically enjoined the Corps from “authorizing any dredge or fill activities” under NWP 12 until the consultation is complete.
A request filed by the Corps on April 27, 2020 for an (1) immediate stay of those portions of the order that vacate NWP 12 and broadly enjoin the Corps from authorizing any dredge or fill activities under the permit or, (2) at a minimum, to limit the application of the ruling to the Keystone XL Pipeline was denied by the court the following day. The federal district court did grant the Corps’ motion for expedited briefing, ordering the completion of the briefing by May 8, 2020. On May 6, 2020, the plaintiffs filed a brief supporting a narrowing of the court’s original ruling, preventing the Corps from approving construction activities associated with new oil and gas pipelines under NWP 12.
On May 11, 2020, the court revised its original ruling in a 34-page order. While the court denied the Corps’ and TC Energy’s motions for partial stay pending appeal, the amended order allows non-pipeline projects, such as communication lines and electric transmission lines to proceed under NWP 12. More specifically, the court continued vacation of NWP 12 as it relates to the construction of new oil and gas pipelines, pending completion of the consultation process and compliance with all environmental statutes and regulations, but ordered that NWP 12 stay in place during remand insofar as it authorizes new non-pipeline construction activities and routine maintenance, inspection and repair activities on existing NWP 12 projects. The court reasoned that narrowing the scope of the vacatur and injunction minimizes “potential disruption to existing projects and smaller-scale projects while ensuring appropriate protection for endangered and threatened species and their critical habitats.”
The Corps and TC Energy have 60 days to appeal to the U.S. Court of Appeals for the Ninth Circuit.