Rock Products

JUL 2017

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50 • ROCK products • July 2017 LAW Ali Nelson is senior counsel at Husch Blackwell LLP. As a member of the firm's Energy & Natural Resources team, she has experience advising companies in con- nection with mining and mineral extraction, regulated transmission projects, coal-fired power plants, and renewable and clean energy projects. Ali.Nelson@huschblack-, 303-749-7263. On June 14, 2017, Judge James Boasberg of the U.S. District Court for the District of Columbia entered an order ruling that the U.S. Army Corps of Engineers improperly granted an easement authorizing the construction of the Dakota Access Pipeline (DAPL). The oil and gas industry has been closely following the dispute over the pipeline, given that it presents issues not uncommon to construction of any major pipeline. But the aggregates industry should also take heed of the les- sons that can be learned from the contentious approval of the pipeline and the subsequent lawsuits challenging it. Background The DAPL runs 1,168 miles from North Dakota through South Dakota and Iowa to Illinois. Because it was largely constructed on private property, the pipeline required few permits authorizing its construction. In fact, as of July 2016, only one permit was needed to construct the pipeline in its proposed route: an easement from the Corps authorizing the pipeline to cross federal land on either side of the Missouri River at the Lake Oahe reservoir. Initially, the Corps granted the easement, but the high-profile nature of the dispute prompted President Obama to request that the Corps review the easement. Ultimately, the Corps announced in December 2016 that it would conduct a full environmental review of the pipeline and therefore would not grant the easement until the assessment was complete. However, once Donald Trump assumed office, he issued a memorandum directing the Corps to expedite review and approval of the pipeline, considering prior reviews and determinations as satisfying the requirements of the National Environmental Policy Act (NEPA). Then, in February, the Corps granted the pipeline an easement allowing it to cross approx- imately 0.21 miles of federally-owned property at Lake Oahe. The Standing Rock Sioux Tribe filed several lawsuits against the Corps, each alleging different violations of law, including: 1. Grading and clearing land for the pipeline threatened sites of cultural and historical significance and the Corps failed to engage in tribal consultation as required by the National Historic Preservation Act. 2. Allowing the presence of oil in the pipeline under Lake Oahe would desecrate sacred waters and infringe on the free exercise of religious beliefs in violation of the Religious Freedom Restoration Act. 3. The Corps' issuance of permits to construct and operate Why Should You Care About the Dakota Access Pipeline? The Aggregates Industry Should Take Heed Of The Lessons That Can Be Learned From The Contentious Approval Of The Pipeline. By Ali Nelson the pipeline under Lake Oahe failed to comply with the procedural requirements of NEPA. The Tribe's arguments regarding the National Historic Pres- ervation Act and the Religious Freedom Restoration Act failed, but the court found that the NEPA argument "meets with some degree of success" and it held that "Although the Corps substantially complied with NEPA in many areas, the court agrees that it did not adequately consider the impacts of an oil spill on fishing rights, hunting rights, or environmen- tal justice, or the degree to which the pipeline's effects are likely to be highly controversial." It further held that to remedy the violations, the Corps would have to reconsider those sections of its environmental anal- ysis upon remand by the court. The court also requested additional briefing and a status conference addressing whether to enjoin the pipeline's operations until the Corps' reconsideration is completed. Lessons Learned 1. Politics Matter. The the DAPL did not get approved while Obama was in office, but was approved shortly after Trump's inauguration. And although the President himself cannot issue or deny a permit, he can direct agencies to reconsider certain issues and can greatly influence an agency's decisions. As Trump has said, "Nobody thought any politician would have the guts to approve that final leg. And I just closed my eyes and said: Do it." The influence of the different adminis- trations is evident in the outcome. 2. But Procedure Matters More. Federal courts have noted that NEPA "ensures that the agency will inform with public that it has indeed considered environmental concerns in its decision-making process," but "does not mandate particular consequences." In other words, NEPA requires federal agen- cies to consider the environmental impacts of their actions,

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