Pipeline opponents face high legal hurdles challenging Trump

[January 25, 2017]  By Joseph Ax

NEW YORK (Reuters) - Opponents of two controversial oil pipelines face a long and difficult legal path if the U.S. government approves their construction, experts said after the Trump administration issued orders on Tuesday intended to advance the Keystone XL and Dakota Access projects.

U.S. President Donald Trump issued a pair of memoranda to several agencies paving the way to revive Keystone XL, which would bring oil from Canada, and Dakota Access, a nearly completed pipeline which had sought to build under a lake near a Native American reservation in North Dakota. Both projects stalled under former President Barack Obama.

"Presidents are by and large entitled to take their agencies in a different direction and serve their policy goals," said Wayne D'Angelo, an energy and environmental lawyer with Kelley Drye & Warren in Washington.

Nevertheless, several groups immediately said they would challenge in court any attempt to resume the projects, which have become hot-button political issues at the intersection of environmentalism, Native American tribal rights and energy needs.

The two pipelines could present different legal obstacles for environmentalists and other groups intent on halting them.

As a cross-border project, the $8 billion Keystone XL requires a presidential permit to proceed. Obama denied such a permit to pipeline operator TransCanada Corp in 2015, arguing it would undermine the United States' ability to act as a world leader on climate change policy.

Trump's Keystone order on Wednesday invited TransCanada to re-apply.

Presidential authority to grant such permits is generally accepted by the courts, said James Rubin, an energy and environmental attorney at Dorsey & Whitney in Washington.

Even with presidential approval, TransCanada would need permits from other government agencies, including the U.S. Department of the Interior and the U.S. Army Corps of Engineers, to navigate federal waters and lands. Any of those permits could be legally challenged by opponents as improperly issued.

But courts would not review whether the government's decisions were correct. Instead, they would consider whether the conclusions were "arbitrary and capricious" or inconsistent with the evidence before the agencies.

"If the agency issuing the permit has taken all the right steps and made a reasonable determination, it's hard to overturn them," Rubin said. "The court can't tell an agency what to do. It can only make sure that it did it right. It's a review of the process, not the substance."

In the case of the 1,179-mile (1,900-km) Keystone XL pipeline, the U.S. government previously completed an environmental impact statement that concluded the pipeline would have no significant effect on climate change, making it more difficult for a legal challenge to succeed, D'Angelo said.

A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota November 14, 2014. REUTERS/Andrew Cullen/File Photo

Energy Transfer Partners LP's Dakota project, meanwhile, was halted in December when the Army Corps denied an easement to tunnel under a section of the Missouri River after weeks of protests by the Standing Rock Sioux tribe and its supporters.

Trump's Dakota order on Tuesday did not instruct the corps to change its position. But the president ordered the agency to consider "whether to rescind or modify" its December determination.

If the corps abruptly reverses its decision, opponents could argue the agency had no justification for changing course in the absence of any new evidence. Earthjustice, the nonprofit that has led legal challenges to the Dakota project, said it would fight any attempt by the corps to step back from its December decision.

"If the corps issues the easement, it will violate its own prior findings, and we will likely seek court review of that decision," the group said in a statement.

But D'Angelo pointed out that the corps' December decision was itself a reversal of one in July granting the easement before the protests became widespread. Courts have traditionally taken into account that new presidential administrations may bring different priorities to executive agencies.

"I don't know anyone in the world that believes that the late-breaking changes on those projects were anything but political," he said.

The Standing Rock Sioux are also suing the government for not consulting with the tribe before approving the route. Last year, a judge denied the tribe's request for an injunction stopping the work, a signal the judge did not view its claim as likely to succeed.

(Reporting by Joseph Ax; Editing by Anthony Lin and Lisa Shumaker)

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