Last month, we wrote about a recent decision from the US District Court for the District of Montana vacating Nationwide Permit (“NWP”) 12, the general permit issued by the Army Corps of Engineers (“Corps”) for pipelines and other utility projects. On May 11, the court narrowed the scope of the decision, vacating and enjoining the use of NWP 12 only as it relates to the construction of new oil and gas pipelines. The Corps has appealed the decision to the Ninth Circuit.

As we previously reported, in an April 15 decision, the US District Court for the District of Montana held that the reissuance of NWP 12 violated the Endangered Species Act (“ESA”) because the Corps did not undergo the necessary consultation under Section 7 of the ESA. The court vacated NWP 12 and enjoined the Corps from authorizing any dredge or fill activities under NWP 12 pending completion of the ESA consultation. The decision had the potential to have broad implications – it effectively enjoined all current and future pipeline, electrical transmission, and renewable energy projects that had planned to rely on the use of NWP 12 until the ESA consultation is complete.

The parties responded quickly to the district court’s order. The Corps filed a motion with the district court for a partial stay pending appeal, and both plaintiffs and defendants suggested that the court narrow the scope of the remedy. On May 11, the court denied the Corps’ motion for a stay pending appeal, but narrowed the scope of the vacatur and injunction. Under the court’s May 11 order, NWP 12 is vacated only as it relates to the construction of new oil and gas pipelines. NWP 12 remains in place insofar as it authorizes non-pipeline construction activities and routine maintenance, inspection, and repair on existing NWP 12 projects. Moreover, the Corps is enjoined from authorizing any dredge or fill activities for the construction of new oil and gas pipelines under NWP 12, but may authorize dredge or fill activities for non-pipeline construction activities and routine maintenance, inspection, and repair on existing NWP 12 projects.

On May 13, the Corps made an emergency motion to the Ninth Circuit, asking it to impose an immediate administrative stay and set an expedited briefing schedule for the emergency motion for a stay. The Ninth Circuit rejected the request for an immediate stay, but granted the expedited briefing schedule. The motion will be fully briefed on May 22, 2020.

These developments do not change the impact of the district court’s April 15 decision on new oil and gas pipeline projects that had intended to rely on NWP 12 – those projects must now identify an alternate means of Clean Water Act compliance, unless and until the Ninth Circuit holds otherwise or the Corps completes ESA consultation. However, under the district court’s May 11 order, other utility projects, such as renewable energy generation projects and other non-pipeline projects, may proceed in reliance on NWP 12 pending the appeal to the Ninth Circuit  – albeit under a cloud of uncertainty about whether future litigation could challenge the continued viability of NWP 12 more generally and other NWPs on the same basis as the court found to require nullification of NWP 12 for certain projects.

SPR will continue to monitor NWP developments, and will report on the Ninth Circuit’s decision.