The U.S. Supreme Court heard arguments from two consolidated cases on Monday, regarding a lower court's decision to reject the U.S. Forest Service's authority to issue a key permit for the 600-mile Atlantic Coast Pipeline.
One extreme-case scenario, Justice Neil Gorsuch warned, is that if the lower court's decision is upheld, more pipelines could inadvertently be "invited" along the Pacific Crest Trail, along the West Coast. The environmental advocates responding in the Supreme Court case and several environmental groups dispute the legal and actionable feasibility of this argument.
The project is owned by two utilities: Duke Energy holds 47% and, after regulators approve its recently announced purchase of Southern Company's 5% stake for $175 million, Dominion Energy will own 53% of the project. The utilities remain hopeful that the Supreme Court will overturn the lower court's decision by early summer, to allow the project to resume construction without the developers having to pursue an alternate path.
The utilities have argued for a capacity need in North Carolina, as the state transitions from coal generation.
The petitioners, the U.S. Forest Service and the Atlantic Coast Pipeline developers, argued a number of unintended consequences could occur if the Fourth Circuit's decision is upheld. The Fourth Circuit ruled that the Forest Service did not have authority to grant developers right-of-way to intersect the Appalachian Trail, which runs from Georgia to Maine, on federal land.
Arguments at the Supreme Court centered over the semantics of what a "trail" is, and how much control of the land that definition entitles the National Park Service versus the Forest Service to have. The Appalachian Trail is under the control of the National Park Service, the U.S. Court of Appeals for the Fourth Circuit determined in a 2018 decision, but if construction for the pipeline would occur 600 feet below the trail, petitioners argue that area is no longer "the trail."
The Forest Service could issue permits for energy development, but the Park Service cannot, under the Mineral Leasing Act, and petitioners argue that the ruling will block energy development along the "ribbons" of trails that extend across states and throughout cities.
Chief Justice John Roberts asked whether the Fourth Circuit's interpretation of the statute would create "an impermeable barrier to any pipeline" trying to cross a national trail. If the Fourth Circuit ruling is upheld, it could impede projects in all areas intersected by Park Service trails, including cities, Paul Clement, the attorney representing the Atlantic Coast Pipeline, said.
The implications of a potential expansion of the Park Service's authority, as presented by attorneys from the Department of Justice and the pipeline developers, are "the nightmare of this case," Justice Sonia Sotomayor said.
However, the extreme scenario of giving the Park Service control over portions of cities is "absolutely incorrect," Michael Kellog, who represented environmental groups, told Roberts. The mining and national trail statutes apply to federal land meant for recreation, but access for energy development could be allowed on trails on state and private land, he said. The Appalachian trail is already crossed by pipelines outside of federal land several times.
Because Park Service and Forest Service land oversight distinctions are so complex, pipeline developers have identified in their briefs a possible way to expose the Pacific Crest Trail for energy development, where it intersects with Western national parks like Sequoia and Yosemite, by upholding the Fourth Circuit ruling. This is another way that, per the pipeline developers, upholding the Fourth Circuit decision would do more harm than intended.
"While you might thwart a pipeline here ... you're going to invite pipelines elsewhere," Gorsuch, told Kellog, referring to the Atlantic Coast Pipeline supporters' brief. "You might tell me nobody is seeking a pipeline there, but that's not a very good answer, is it?"
The respondent, and other environmental attorneys, view that as an extreme and unrealistic scenario. The lower court decision would not create a precedent to allow pipelines to cross the Pacific Crest Trail, because "as a legal matter," that would go against the purposes of the trail, Kellog said. Justice Elena Kagan also agreed that the Appalachian trail would be different from the circumstances of the Pacific Crest Trail, "which is a weirdness of its own."
Is SCOTUS the last stop for ACP?
Even if the Supreme Court rules in favor of the Atlantic Coast Pipeline and the Forest Service in this consolidated case, the issue is very narrow, D.J. Gerken, Southern Environmental Law Center (SELC) program director, told reporters following the hearing. The Fourth Circuit's decision, which developers are seeking to overturn in the Supreme Court, included other aspects that would need to be addressed to fully overturn the decision.
"The issue in front of the Supreme Court is only one of several grounds upon which the Fourth Circuit invalidated the [Forest Service's] permits for Atlantic Coast to cross the Appalachian Trail. Those other grounds survive regardless of what the high court decides," Gillian Giannetti, a Natural Resources Defense Council attorney, told Utility Dive.
However, Duke, remains hopeful following Monday's arguments that the Supreme Court will overturn the lower court's ruling.
"The issue at the heart of the lower court's decision to vacate the U.S. Forest Service's grant of right-of-way is the question of whether the U.S. Forest Service had the authority to approve ACP's crossing beneath the Appalachian Trail," Phil Sgro, Duke Energy spokesperson, told Utility Dive.
In order for the Forest Service to be able to issue a permit, the Supreme Court would need to reverse the Fourth Circuit's ban on the agency's use of the Mineral Leasing Act in this specific case, but it also needs to reissue a permit that rectifies and addresses several concerns regarding the National Environmental Policy Act.
"The grounds upon which the permit was invalidated related to the National Environmental Policy Act were severe and extensive — this is not going to be a simple fix, if it's fixable at all," Giannetti said.
The project has more work laid out for it in order to be fully permitted for construction.
"The permit at the center of this dispute was one of eight that have now been either revoked by federal courts or withdrawn by federal agencies in response to challenges from community groups," Gerken said.
Duke plans to have the other missing permits addressed soon and to resume construction on the pipeline by this summer, which would complete the project by the end of 2021 and place it in service in early 2022, according to the utility. The project was initially intended to be in service by 2018.
"We are still working with agencies to resolve additional permits and opinions that have been remanded or vacated," Sgro said.
The need for natural gas capacity
"At this time, the capacity of the pipeline is more than 90% subscribed, which certainly speaks to the need," Ann Nallo, Dominion spokesperson, told Utility Dive via email, adding that natural gas capacity is needed to support renewable energy in the region's transition away from coal.
North Carolina utilities saw constraints several years ago in natural gas, and areas across Virginia and eastern North Carolina are experiencing chronic shortages because of it, she added. North Carolina is served by a single interstate natural gas transmission line, Duke's Sgro said, adding that "additional capacity is needed to mitigate reliability risks and to serve the more than two million people projected to move to [the state] in the next few years."
"While we are looking regionally at energy needs, ... natural gas is the energy source that [the Energy Information Administration sees] increasing significantly in the coming decades as coal continues to decline," Nallo said.
The pipeline's latest pricetag is approximately $8 billion, Nallo said. SELC's Gerken views that figure as an indictment of how over-budget the program has grown.
"It is now less than 6% complete without an inch of pipeline laid in the state of Virginia and the budget has ballooned [to] over $8 billion," he said.
Meanwhile, Duke announced on Monday the Constitution Pipeline, another natural gas project where the company has a partial stake, has been abandoned due to prolonged legal and regulatory challenges, per Duke spokesperson Tammie McGee.
The nearly $1 billion project was meant to increase natural gas pipeline capacity for lower New York and the New England region, which both face gas constraints.