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US agency to ask high court to free Atlantic Coast pipeline from legal obstacle

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US agency to ask high court to free Atlantic Coast pipeline from legal obstacle

The U.S. Justice Department plans to ask the U.S. Supreme Court to remove a legal obstacle for the 600-mile, 1.5-Bcf/d Atlantic Coast natural gas pipeline and has received an extension until June 25 to file a petition.

At issue is one of the major holdups for the Dominion Energy Inc.-led Atlantic Coast Pipeline LLC project designed to ship Appalachian shale gas to mid-Atlantic markets. In December 2018, judges on the U.S. Court of Appeals for the 4th Circuit invalidated U.S. Forest Service authorizations for the project to cross the Appalachian National Scenic Trail, and in February the full court upheld that decision. After the second decision went against Dominion, it said it would take the case to the Supreme Court.

The federal government's decision to pursue an appeal, confirmed in a recent Supreme Court filing, added weight to the pipeline developers' bid to get the high court to hear the case. The Supreme Court may be more likely to consider the case if the petition comes from the Justice Department, said Christi Tezak, managing director at research firm ClearView Energy Partners LLC, in a May 22 email.

"It is their judgment in applying the relevant laws that is at issue here," Tezak said.

The Supreme Court granted the requests from the government and from Atlantic Coast Pipeline to extend the appeals deadline until June 25.

The U.S. Solicitor General on May 13 authorized the filing of a petition of writ of certiorari to the Supreme Court "in light of the importance of issues concerning the Forest Service's granting of rights-of-way and other permits for lands that are traversed by the Appalachian Trail and other national trails," it told the court in a May 15 filing.

More time was needed because the attorneys involved have been heavily engaged with a press of other matters before the high court, the solicitor said.

Views on appeal

Analysts with Height Securities LLC suggested that at the high court, "the odds [for the pipeline] remain very low given the 4th Circuit declined to rehear the case in February." The Supreme Court would likely decide whether to hear the case in the fourth quarter, they said in a research note.

In its filing with the Supreme Court, Atlantic Coast Pipeline highlighted what it contends are the implications of the 4th Circuit finding that the Forest Service lacked authority to grant right of way to pipelines crossing the Appalachian Trail under the Mineral Leasing Act. If that decision stands, only an act of the U.S. Congress would allow a pipeline to cross under the trail, it said.

"Although more than 50 such rights-of-way already exist, the 4th Circuit held that the entirety of the 2,200-mile trail — which includes vast amounts of United States Forest Service Land — is National Park Service land for which no rights-of-way may be granted under the Mineral Leasing Act," the pipeline company said.

Ongoing litigation

Environmental litigants have called the pipeline's arguments overblown, but they have not yet fully laid out a more recent response because the 4th Circuit did not seek their answer before declining to rehear the matter.

Environmental groups have targeted most of Atlantic Coast's major permits with litigation. The 4th Circuit also invalidated permissions to cross two national forests, saying the Forest Service pursued a preordained decision and reverse-engineered the record of decision to justify the outcome. Also holding up the project is a 4th Circuit stay pending litigation over species protections and the need to reinstate U.S. Army Corps water crossing permits.

The pipeline project, which ground to a halt due to legal issues, would put in place one of several pieces of gas transportation infrastructure designed to boost takeaway capacity from the U.S. Northeast gas-producing region. In addition to Dominion, the project is backed by Duke Energy Corp. and Southern Co.