American Oil and Gas Reporter - October 2017 - 25

Courtrooms The Venue
Where Many Policy Questions
Receive Final Resolution
Following the election of President Donald Trump, many in
the oil and natural gas industry eagerly anticipated an administration with policies more supportive of American energy development. While that scenario is bearing out, the volume of
litigation to block administrative efforts grows exponentially.
The promise of November's election faces delay and possibly
defeat for our industry unless we can bolster reasonable regulations and fight back against the seemingly endless lawsuits from
groups that want fossil fuels to remain in the ground.
Environmental groups are planning significant legal challenges. According to a recent fundraising letter from the Natural
Resources Defense Council, "We must be fully prepared to
wage scores of expensive courtroom battles simultaneously.
At the current pace, I expect our docket will rapidly expand to
more than 100 active cases in the first year of the Trump Presidency" (emphasis in original).
To place the enormity of this litigation-centered plan in context, NRDC's 2016 operating expenses were $136 million.
Moreover, NRDC is merely one environmental group, so the litigation onslaught can be multiplied to include lawsuits from the
Sierra Club, WildEarth Guardians, EarthJustice, Center for Biological Diversity, Environmental Defense Fund and more.
These legal challenges will determine what species are listed
for federal protection under the Endangered Species Act. As
noted in earlier columns, environmental groups have been successful in abusing the ESA by inundating the U.S. Fish and
Wildlife Service with petitions for listing various species. Petitioners sue when the USFWS fails to complete the necessary
analysis within the mandated time frame. Ensuing settlements
expand ESA listings well beyond the species that warrant federal
protections.
Taking a page from the environmentalists' playbook, the Independent Petroleum Association of America, in conjunction
with American Stewards of Liberty and the Osage Producers Association, sued USFWS in the U.S. District Court for Eastern
Oklahoma on Sept. 21 about the service's missed deadline for
response to a delisting petition of the American burying beetle,
which has a range that can impact oil and gas activities.
USFWS had 12 months to decide after it received the delisting, which was filed in August 2015. With the service in clear
violation of ESA requirements, IPAA and the other groups
served a notice of intent to sue in February 2017 and, as a result
of the service's continued inaction, filed the lawsuit. The implications are significant. The state of Oklahoma has spent more
than $6.5 million in beetle conservation efforts during the past
20 years. As IPAA notes, "The beetle's listing has been met with
criticism for failing to provide the science-based evidence that
ESA listings warrant . . . It is time for the USFWS to act on the
American burying beetle."
In addition to the ESA, pipeline infrastructure continues to
be a target for legal challenges that ultimately are designed to
stifle natural gas development. A recent decision involving the
Federal Energy Regulatory Commission gives the industry some

"The implications are significant. The
state of Oklahoma has spent more than
$6.5 million in beetle conservation efforts during the past 20 years.

hope because it demonstrates FERC's commitment to taking decisive action to ensure the development of infrastructure that will
get natural gas to the markets where it is needed.
The case involved an application by Millennium Pipeline
Company LLC for authorization from the New York State Department of Environmental Conservation for a water quality certification under section 401 of the Clean Water Act, authority
delegated to the state by the federal government. States with delegated Section 401 authority have begun trying to use it as a
means to stop pipelines, despite FERC authorization. DEC denied a 401 permit for the Constitution Pipeline in April 2016 and
for National Fuel Gas Company's Northern Access Pipeline in
April 2017.
The agency has one year in which to act on the application.
In Millennium's case, DEC did not act within the year but argued
that it had not waived its right to issue the permit because it had
sought additional information to supplement the original application. The DEC held that the one-year clock did not start until
the agency deemed the application complete. Millennium petitioned the U.S. Court of Appeals for the District of Columbia
Circuit after the DEC did not meet the one-year deadline. In a
June 2017 decision, the court dismissed Millennium's petition
on the grounds that FERC was the proper venue. In July, Millennium filed a request to proceed with construction of the Valley Lateral Project on the grounds that DEC had waived its
authority.
FERC, acting with a quorum of three commissioners, issued
a unanimous ruling on Sept. 15, finding the DEC's failure to act
within the one-year timeframe resulted in waiver of its authority
to issue or deny the 401 permit. Of course, FERC's declaratory
order is not the end of Millennium's story, as more litigation will
ensue. However, FERC's ruling is a good ending to an important
chapter.

SUSAN GINSBERG is vice

president of crude oil and natural gas regulatory affairs for
the Independent Petroleum Association of America. She covers legislation and regulation,
focusing on the CFTC and
FERC. Her experience in natural gas regulatory affairs
spans 25 years.
OCTOBER 2017 25

American Oil and Gas Reporter - October 2017

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