Wednesday, March 21, 2018

Shale Law in the Spotlight: Bayou Bridge Pipeline Project – An Overview of the Current Legal Developments

Written by Chloe Marie – Research Fellow

Recently there has been a lot of attention on the Bayou Bridge pipeline extension project in southern Louisiana, specifically focusing on whether it will adversely impact the Atchafalaya Basin. Litigation challenging construction of the pipeline was successful in briefly halting construction, but a recent ruling, handed down on March 15, 2018, by a federal appeals court, has allowed construction to proceed. This article provides an overview of the legal developments relating to the Bayou Bridge pipeline extension project.

The existing Bayou Bridge pipeline currently transports crude oil from terminal facilities in Nederland, Texas, to terminal facilities and refineries in Lake Charles, Louisiana. The 163-mile extension project carried out by Bayou Bridge Pipeline, LLC, a subsidiary of Energy Transfer Partners, will connect the existing Clifton Ridge Marine terminal on the Calcasieu River in Lake Charles, Louisiana, to existing crude oil terminal facilities near St. James, Louisiana, and refineries located in the Baton Rouge area. Part of the extension project will enter coastal zone in the Gulf Coast of the United States.

This extension project also includes the installation of two pump stations in Jefferson Davis Parish and St. Martin Parish, and would have a maximum capacity of 480,000 barrels of crude oil per day. 
In April 2017, the Louisiana Department of Natural Resources granted a Coastal Use permit authorizing the construction of 16.5 miles of pipelines within the St. James Parish’s Coastal Zone, providing that such construction did not disrupt or destroy black bear habitat or the nesting areas for certain species of birds.

On October 23, 2017, the U.S. Army Corps of Engineers issued a Finding of No Significant Impact (FONSI) concluding that construction of the pipeline extension project would not create significant environmental impacts and thus did not require the preparation of an Environmental Impact Statement.

On December 12, 2017, the Louisiana Department of Environmental Quality issued a Water Quality Certification to Bayou Bridge Pipeline, LLC, and contended that “the Bayou Bridge Pipeline Project, as proposed, is not expected to cause or contribute to violation of the water quality standards as provided for in LAC 33:IX.Chapter 11.”

Two days later, the U.S. Army Corps of Engineers granted permits authorizing the construction and operation of the Bayou Bridge pipeline extension project across 8 federal projects and 14 federal easements in Calcasieu, Jefferson Davis, Acadia, Vermilion, Lafayette, St. Martin, Iberville and Assumption Parishes, Louisiana, pursuant to Section 10 of the Rivers & Harbors Act, Section 404 of the Clean Water Act, and Section 103 of the Marine Protection Research and Sanctuaries Act. 

The project construction was estimated to be completed in the second half of 2018; however, ongoing litigation has had an impact on the construction process. On January 11, 2018, various environmental groups filed a lawsuit (docket no. 3:18-CV-00023) against the U.S. Army Corps of Engineers to halt pipeline construction. In this lawsuit, filed in the U.S. District Court for the Middle District of Louisiana, environmental groups allege that construction of the pipeline extension will likely have significant environmental impacts on the human and natural environment of Louisiana, and they challenge the Corps’ permits allowing construction and operation of the pipeline.

As part of their arguments, the environmental groups state that the Atchafalaya Basin is “one of the nation’s ecological crown jewels and a critical component of the nation’s flood protection system” before pointing out that “with a capacity of 480,000 barrels per day, and in light of its location in rate and unique aquatic environments, even a small leak could have major ecological consequences.”

Shortly after filing the lawsuit, the environmental groups filed a motion on January 29, 2018 seeking a preliminary injunction to stop construction of the pipeline claiming that the Atchafalaya Basin would be irreparably harmed if construction of the project is undertaken or pursued. They argued that oil and gas pipeline development already impacted important portions of the Basins’ wetlands and waterways. The U.S. District Court granted the requested preliminary injunction on February 23, 2018, halting the construction of the extension pipeline project through the Atchafalaya Basin.

Bayou Bridge Pipeline, LLC filed an appeal to the U.S. Court of Appeals for the 5th Circuit (docket no. 18-30257) challenging the Ruling and Order granting motion for preliminary injunction. On the same day, Bayou Bridge Pipeline, LLC, asked the U.S. District Court to stay the preliminary injunction pending appeal. The U.S. District Court denied this request to stay on March 8, 2018.

On March 15, 2018, the U.S. Court of Appeals for the 5th Circuit granted Bridge Pipeline, LLC’s motion for stay of the preliminary injunction pending appeal stating that “rather than granting a preliminary injunction, the district court should have allowed the case to proceed on the merits and sought additional briefing from the Corps on the limited deficiencies noted in its opinion.” Thus, construction of the Bayou pipeline extension project can resume while the underlying litigation continues.

Stay tuned for further legal developments!

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