Last week, the D.C. District Court issued a decision in Sierra Club v. U.S. Army Corps of Engineers, No. 13-cv-1239, denying the plaintiffs’ request to preliminarily enjoin Enbridge’s construction of the Flanagan South Pipeline, a privately owned domestic oil pipeline, while the court resolves the Sierra Club’s challenges to the pipeline under the National Environmental Protection Act (“NEPA”) and the Clean Water Act (“CWA”).  The plaintiffs contend that federal agencies’ participation in various aspects of the pipeline’s construction gave rise to a statutory obligation to perform an in-depth environmental review of the entire pipeline before any construction could commence.  The court found that “Plaintiffs have significantly overstated the breadth of federal involvement in the pipeline project and have failed to establish sufficiently that applicable federal statutes and regulations would require the extensive environmental review process that Plaintiffs seek.”  Op. at 2.

The decision is important because it establishes that a certain amount of federal involvement in the development of a domestic oil pipeline does not result in a “major Federal action[]” that would trigger environmental review obligations pursuant to NEPA, 42 U.S.C. § 4332(2)(C).  Generally, construction of a domestic oil pipeline on private land requires no federal authorization because, as the court noted, the federal government does not have permitting authority over domestic pipelines.  Op. at 4 (“Congress has not authorized the federal government to oversee construction of a domestic oil pipeline”).  The extent of the federal government’s NEPA obligations are less clear, however, when a pipeline traverses federal lands, Indian lands, or waters of the United States.  Approximately 28 miles of the Flanagan South pipeline falls under federal jurisdiction.  The remainder, over 560 miles, will run through private land.  Where the pipeline crosses federal waters, Indian lands, and federal land, Enbridge needs to obtain easements, verification of compliance with Nationwide Permit 12 under the CWA, and assurance that the pipeline will not jeopardize species protected by the Endangered Species Act.  According to the plaintiffs, this requires the relevant federal agencies to prepare a NEPA review on the entire pipeline before any construction can begin.

The court disagreed with the plaintiffs, finding that the plaintiffs “significantly overstated the degree of federal involvement in the FS Pipeline in an attempt to shoehorn this essentially private project into the NEPA statute.”  Id. at 39.  In support of its holding, the court distinguished a situation “where there is some federal involvement necessary in a piece of a project” from one where “federal action is a legal condition precedent to accomplishment of an entire nonfederal project.”  Id. at 41 (citation omitted).  In the latter category, the court stated that NEPA generally applies.  In the former category, “the inquiry into the scope of NEPA review turns on the degree of federal ‘control and responsibility’ of a given project as a matter of fact.”  Id.  The court determined that federal action was not a legal condition precedent to construction of the pipeline because there is no comprehensive federal permitting system governing domestic oil pipelines.  Id.  Thus, the court looked to the nature of the federal involvement.

The court held that the plaintiffs were not likely to be successful in showing there was sufficient federal control over the pipeline to trigger NEPA, as required to obtain a preliminary injunction.  In support of this decision, the court noted NEPA analysis was not required where the pipeline crossed federal waters because construction was verified under Nationwide Permit 12.  Id. at 42.  Additionally, the court reasoned that the pipeline’s use of 1.3 miles of federal land and 13.8 miles of land subject to the jurisdiction of the Bureau of Indian Affairs were “minor pieces of federal involvement in a nearly 600-mile pipeline,” and therefore “[fell] short of imbuing the federal government with ‘control and responsibility’ over the pipeline as a whole.”  Id.  Finally, the court cautioned that it was wary of transforming NEPA “into a statute that requires federal oversight of all domestic oil pipelines” in light of the fact that “Congress has not yet seen fit to enact an environmental statute that federalizes the construction of private, domestic oil pipelines[.]”  Id. at 47.

Though this opinion only rules on a motion for a preliminary injunction, its holding is certain to inform future cases involving NEPA challenges to domestic pipelines.

Sierra Club v. U.S. Army Corps of Engineers – opinion