American Oil and Gas Reporter - August 2019 - 18

IndustryDigest
Consent Decree Dodges
Question Of Designating
ESA Critical Habitat
NEW ORLEANS-The question of
whether the government can set aside
private land in Louisiana as critical
habitat for the dusky gopher frog, miles
from where the endangered species
actually lives, ended in July with more
of a whimper than a bang, according to
a report from the Independent
Petroleum Association of America.
IPAA says the U.S. District Court for
the Eastern District of Louisiana in New
Orleans approved a consent decree in
which the U.S. Fish & Wildlife Service
agreed to drop the critical habitat
designation for the Louisiana land.
According to court documents, the
case-Weyerhaeuser Co. v. U.S. Fish &
Wildlife Service-began in June 2012
when USFWS designated 1,500 acres in
Louisiana (Unit 1) as critical habitat
under Section 4(b)(3)(A) of the
Endangered Species Act because the
land contained ephemeral ponds perfect
for the frog's recovery.
The property owners challenged the
designation, but lost first in the Eastern
District of Louisiana in August 2014
and then in the U.S. Court of Appeals
for the 5th Circuit in June 2016 and
again in February 2017.
The plaintiffs argued the habitat
designation was an overreach because
their property would not support the
frog without extensive and costly
modifications, published reports recall.
IPAA had worried the designation "has
no basis in law, and may threaten
economic development activities and
job creation across the country" (AOGR,
March 2017, pg. 20).
Indeed, in a dissent from the 5th
Circuit's majority decision in 2016,
Judge Priscilla Owen argued, "If the
ESA permitted the actions taken by the
government . . . vast portions of the
United States could be designated as
'critical habitat' because it is
theoretically possible . . . that land
could be modified to sustain the
introduction or reintroduction of an
endangered species."
In November 2018, the U.S.
Supreme Court overturned the critical
habitat designation and remanded the
case to the 5th Circuit to consider the
meaning of habitat under the ESA. The
5th Circuit then sent the case to the
18 THE AMERICAN OIL & GAS REPORTER

Eastern District of Louisiana, court
documents note.
However, the court dodged that order
by approving the consent decree
between the USFWS and the plaintiffs
"without determination of any issue of
fact or law."
"No part of this consent decree shall
have precedential value in any litigation
or in representations before any court or
forum . . . as it relates to the June 2012
final rule and the vacating of the
designation of Unit 1 (as critical
habitat)," wrote Judge Martin Feldman
for the majority.
However, an analysis published by
E&E Environment does point out what
it calls "a more decisive victory for
landowners on a secondary issue:
whether USFWS's economic analysis is
subject to judicial review."
E&E Environment explains USFWS
had argued its cost/benefit analysis
supporting its refusal to exclude the
1,500 Louisiana acres was not subject to
judicial review. The Supreme Court
ruled that it was. ❒

North Dakota, Montana
Fight Washington Law
On Oil Vapor Pressure
BISMARCK, N.D.-North Dakota
and Montana are petitioning the U.S.
Department of Transportation to
overturn a law passed by the state of
Washington that prohibits the unloading
of crude oil at the state's refineries with
a vapor pressure greater than 9.0 psi.
The attorneys general of the two
states argue U.S. laws pre-empt
Washington's in two respects: it is an
obstacle to federal hazardous material
transportation legal and regulatory
regimes, and it is not substantively the
same as federal regulations governing
the classification and handling of crude
oil in transportation.
Washington Governor Jay Inslee
signed SB 5579 on May 5. The bill,
introduced by Senator Andy Billig, DSpokane, prohibits Washington facilities
from loading or unloading crude oil into
or from a rail tank car, or storing crude
oil produced in the Bakken, unless it
meets the vapor pressure requirement.
The bill also requires facilities to
provide the state with information on
the crude oil they receive (AOGR, May
2019, pg. 33).

Calling Washington's actions a "de
facto ban on Bakken crude," the two
states are asking the Pipeline and
Hazardous Materials Safety
Administration, which holds authority
over interstate rail transportation issues,
to declare SB 5579 pre-empted by
federal law.
North Dakota says it ships 166,700
barrels of Bakken crude to Washington
refineries every day, about 10% of the
state's overall daily production, with
60 percent of all crude leaving the state
by rail.
"Washington's new law was
designed to target Bakken oil precisely,"
the petition states. "The shale
revolution-and in particular the
extraction of crude oil from the
Bakken-has driven the overall uptick in
transport of crude oil by rail.
Washington's vapor-pressure limit is to
target Bakken crude because Bakken
crude has higher vapor pressure than
some other petroleum crude oils.
Washington's new requirements also are
impossible to satisfy-at least, not
without creating a sprawling new rail,
road and facility infrastructure in North
Dakota, all to treat Bakken crude to
Washington's satisfaction."
The two states note that in addition
to negatively impacting their oil and gas
industries, Washington's law will reduce
revenues from North Dakota's oil
extraction tax that funds the state's
education system and drinking water
infrastructure development, as well as
Montana's taxes on oil production.
"The impacts will be felt well
beyond North Dakota and Montana as
well: Washington's law sets a troubling
precedent where one state with access
to particular transportation routes can
dictate national and foreign energy
policy by restricting or removing other
states' ability to move their natural
resources and other hazardous
materials," the petition warns. ❒

Health Organizations
Challenge ACE Rule
WASHINGTON-Two health groups
are taking the Trump administration to
court over its Affordable Clean Energy
(ACE) rule.
The American Lung Association and
the American Public Health Association
filed a lawsuit July 8 in the U.S. Court
American Oil and Gas Reporter - August 2019

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