On January 13, 2021, the U.S. Army Corps of Engineers (Corps) announced the publication in the Federal Register of a new subset of its more than four dozen Nationwide Permits (NWPs) that authorize specific types of activities under section 404 of the Clean Water Act and section 10 of the Rivers and Harbors Act. Of particular interest to certain industry sectors and stakeholders are changes to NWP 12. If the new subset of NWPs goes into effect on March 15, 2021, as intended, NWP 12 would be modified to authorize only regulated activities associated with construction of oil or natural gas pipelines. This differs from the current version of NWP 12, issued in 2017, which authorizes regulated activities associated with an array of utility lines from telecommunications lines to oil pipelines.
Going forward, electric utility line and telecommunications activities will be addressed using NWP 57, and utility line activities for water and other substances will utilize NWP 58. The Corps’ proposal explained that it would separate out these discrete types of utilities projects to address the differences in how such projects are constructed, the substances they convey, and the different best management practices used to minimize adverse environmental effects. Given the dynamic litigation and policy environment into which the new NWPs have been launched, however, uncertainty may continue to be associated with permitting under this program.
Litigation over NWP 12
On April 15, 2020, the U.S. District Court for the District of Montana invalidated the current (2017) version of NWP 12 because the Corps did not consult with the U.S. Fish and Wildlife Service (USFWS) under section 7 of the Endangered Species Act (ESA) before issuing the permit. In effect, this meant that a project needing this type of permission would have to seek an individual permit from the Corps, a substantially more complex and resource-intensive process. The decision was initially hailed by environmental groups, but many observers feared the court had gone too far in striking NWP 12 for all its many uses (which include electric transmission, water transmission, and broadband internet lines). After further proceedings in front of the district court, the U.S. Court of Appeals for the Ninth Circuit, and the U.S. Supreme Court, the Supreme Court limited the decision to the Keystone XL pipeline—the particular project at the center of the litigation—pending the outcome of the appellate process. The merits of the appeal have not yet been fully briefed to the Ninth Circuit.
The District of Montana challenge to NWP 12 is only one of a line of cases questioning the Corps’ issuance and use of different NWPs under a variety of legal theories. Before NWP 12 became a target because of its use to authorize activities needed for the development of some oil and gas pipelines, litigants targeted such permits as NWP 21 (used to authorize activities related to surface coal mining), NWP 13 (used for bank stabilization activities), and NWP 48 (used for regulated activities incident to shellfish aquaculture activities). The use of NWP 12 likewise has been challenged using other legal theories. Significantly, the rationale behind the Montana decision, if upheld, could threaten the efficient implementation of the NWP program generally because the Corps used the same approach to ESA compliance, which the court found defective, for each of the many NWPs.
Litigation continues, new permits are issued, and the administration changes
Not surprisingly, while the Montana litigation remains on appeal, other litigants have attempted to advance the same type of claim challenging NWP 12 and its use for specific projects in other jurisdictions. Those matters have not yet resulted in any additional rulings undermining the validity of NWP 12, however litigation can be expected to continue.
The Corps’ issuance of a new version of NWP 12, which replaces the version of NWP 12 at issue in the Montana litigation for activities that have not yet received a NWP 12 authorization, further muddles an already complex litigation playing field. While the Corps changed its approach in some respects, the new NWP 12 rests on the ultimate conclusion that consultation under the ESA is not required for the NWP program—the conclusion that the Montana judge held unlawful. So, litigation can be expected to continue in one form or another over both versions of NWP 12.
The change in administration is likely to bring added scrutiny to the pending litigation, which raises key policy issues implicating oil and gas projects, and to NWP 12 in general. Even if the new permit goes into effect on March 15, 2021, opportunities to revisit it—either driven by adverse court decisions or by changing policy preferences—are always available.