THE GULF COAST PIPELINE: A STEALTHY STEP TOWARD THE COMPLETION OF THE KEYSTONE XL PIPELINE PROJECT LINDSAY M. NELSON * I.

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1 THE GULF COAST PIPELINE: A STEALTHY STEP TOWARD THE COMPLETION OF THE KEYSTONE XL PIPELINE PROJECT LINDSAY M. NELSON * I. INTRODUCTION In every generation, there s an overwhelming issue that people may not recognize at the time, but that becomes the issue that is the measure of what you did.... Climate change is the issue we ll get measured by as a country and a generation. If we blow this, it will be because we were very focused on the short term, on our pocketbooks, and we had no broader sense of what we were trying to do and what we were trying to pass on. 1 Oil production and transportation significantly contribute to carbon dioxide emissions and the climate changes that result. 2 The United States is the largest consumer of oil in the world, and almost two-thirds of this oil Copyright 2016, Lindsay M. Nelson. * Juris doctor candidate, Capital University Law School, May Bachelor of Arts in Environmental Studies, Wilkes Honors College at Florida Atlantic University, May I would like to thank my roommate, Taylor, and our newest roommate, Bruce. Thank you both for your positive spirit and friendship through this process. I would also like to thank my family for all of their encouragement (and warm meals). And of course, I could not have written this paper without the knowledge of Professor Dennis Hirsch or the support of the other members of Capital University Law Review. 1 Ryan Lizza, The President and the Pipeline, NEW YORKER (Sept. 16, 2013), (internal quotation marks omitted) (quoting environmentalist Tom Steyer). 2 Oil, DAVID SUZUKI FOUND., (last visited Nov. 11, 2015).

2 430 CAPITAL UNIVERSITY LAW REVIEW [44:429 comes from foreign nations. 3 Today, Alberta, Canada, is home to the thirdlargest crude oil reserve, ranking behind Saudi Arabia and Venezuela. 4 Known as the most controversial oil deposit in the world, the oil sands in Alberta, Canada, are quickly becoming a highly contested political issue in the United States. 5 The Keystone XL Pipeline is a bullet pipeline 6 that is proposed to begin in Alberta and connect to existing pipeline segments spanning the central United States from Nebraska to Oklahoma and to the Gulf Coast Pipeline in the southern United States. 7 The Gulf Coast Pipeline is a 487-mile, $2.3 billion endeavor extending from Cushing, Oklahoma to Nederland, Texas. 8 The purpose of the Gulf Coast Pipeline is to relieve the concentrated supply of crude oil in places like Oklahoma and to prepare for the growing supply of domestic oil. 9 Its construction began after the Tenth Circuit Court of Appeals granted approval in 2013, 10 and delivery to crude oil refineries started on January 22, Currently, the Gulf Coast Pipeline has the capacity to transport 700,000 barrels 12 of oil per day, with the potential to transport as many as 830,000 barrels of oil per day if construction of the Keystone XL Pipeline moves forward. 13 Renowned National Aeronautics and Space Administration climate scientist James Hansen described the Keystone XL Pipeline as [a] fuse to 3 Press Release, TransCanada, Gulf Coast Project Begins Delivering Crude Oil to Nederland, Texas (Jan. 22, 2014), e86f-428c-b13e-2adf4250d471.pdf; Fossil Fuels: Oil, WHAT YOU NEED TO KNOW ABOUT ENERGY, (last visited Nov. 11, 2015). 4 Oil Sands, ALBERTA ENERGY, (last visited Nov. 11, 2015). 5 Lizza, supra note 1. 6 A bullet pipeline is one without any intermittent supply or receipt points. Keystone Pipeline: Connecting North Americans with Energy, STANTEC.COM, /our-work/projects/canada-projects/k/keystone-pipeline.html (last visited Oct. 23, 2015). 7 Lizza, supra note 1. 8 See Press Release, TransCanada, supra note 3. 9 See id. 10 Sierra Club, Inc. v. Bostick, 539 F. App x 885 (10th Cir. 2013). 11 See Press Release, TransCanada, supra note One barrel of oil equals forty-two gallons. See History of the 42-Gallon Oil Barrel, AM. OIL & GAS HIST. SOC Y, (last visited Oct. 23, 2015). 13 See Press Release, TransCanada, supra note 3.

3 2016] THE GULF COAST PIPELINE 431 the biggest carbon bomb on the planet. 14 Furthermore, in 2011, State Department officials determined the Keystone XL Pipeline would have limited adverse environmental impacts. 15 Although the fate of the Keystone XL pipeline hinges on approval from the U.S. Department of State, 16 the Gulf Coast Pipeline is already quietly pumping oil from Oklahoma to Texas. 17 President Obama holds the ultimate authority to allow the Keystone XL Pipeline construction to move forward, and his most recent veto on the bill approving construction 18 reflects the 14 Elizabeth McGowan, NASA s Hansen Explains Decision to Join Keystone Pipeline Protests, INSIDE CLIMATE NEWS (Aug. 29, 2011), / /james-hansen-nasa-climate-change-scientist-keystone-xl-oil-sands-pipelineprotests-mckibben-white-house. Thirty years ago, Hansen was among the first scientists to warn that burning fossil fuels was warming the Earth and would lead to dire consequences. 15 The State Department must comply with federal environmental laws prior to the construction of the Keystone XL Pipeline, one of which includes that the project must have limited adverse environmental impacts. 16 TransCanada, the corporation building the Keystone XL pipeline, must await approval from the U.S. Department of State because the pipeline will cross U.S. international borders. See id. The State Department is required to determine whether the pipeline is in the national interest. Michael D. Shear & Coral Davenport, Obama Vetoes Bill Pushing Pipeline Approval, N.Y. TIMES (Feb. 24, 2015), 17 Steven Mufson, Keystone Pipeline s Southern Leg to Begin Transporting Oil to U.S. Gulf Coast, WASH. POST (Jan. 21, 2014), economy/oil-to-begin-flowing-in-southern-leg-of-keystone-pipeline/2014/01/21/ffe35abc- 82bb-11e3-bbe5-6a2a3141e3a9_story.html. Since 2011, the proposed Keystone pipeline has emerged as a broader symbol of the partisan political clash over energy, climate change, and the economy.... The debate began in [because] the last word on whether the project will go forward ultimately rests with the president. Shear & Davenport, supra note Barack Obama, Veto Message to the Senate: S. I, Keystone XL Pipeline Approval Act, Feb. 24, 2015, Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.

4 432 CAPITAL UNIVERSITY LAW REVIEW [44:429 national concern. 19 The debate over the Keystone XL Pipeline often centers on the relationship between job creation and environmental concerns, with both issues having contested short and long-term challenges. 20 In Obama s 2015 State of the Union address, 21 he encouraged lawmakers to broaden the pipeline debate and form a comprehensive infrastructure plan to set our sights higher than a single oil pipeline. 22 Although the Keystone XL Pipeline awaits presidential approval, in 2013, the Tenth Circuit approved the construction of the Gulf Coast Pipeline by its decision in Sierra Club, Inc. v. Bostick. 23 In its 2 1 decision, the Tenth Circuit held, [T]he threatened environmental injuries [of building the pipeline] were outweighed by the financial harm the injunction would cause TransCanada. 24 Moreover, the court upheld the U.S. Army Corps of Engineers (Corps) 25 approval method of the Gulf Coast Pipeline. 26 The Presidential power to veto legislation is one I take seriously. But I also take seriously my responsibility to the American people. And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest including our security, safety, and environment it has earned my veto. 19 See Shear & Davenport, supra note Jeff Brady & Scott Horsley, What You Need to Know About the Keystone XL Oil Pipeline, NPR.ORG (Nov. 17, 2014), ( The political challenge for Obama is that Democrats are genuinely divided on the issue, with construction unions favoring the project and some environmental activists opposing it. No matter what he decides, some constituents will be unhappy so the president has basically stalled. ); NAT L RES. DEF. FUND, Stop the Keystone XL Pipeline Project, (last visited Nov. 11, 2015). 21 Barack Obama, Remarks by the President in State of the Union Address (Jan. 20, 2015), Sierra Club, Inc. v. Bostick, 539 F. App x 885, 897 (10th Cir. 2013). 24 at The U.S. Army Corps of Engineers is a federal agency under the Department of Defense responsible, among other duties, for permitting projects that may have a nationwide environmental effect. See generally U.S. ARMY CORPS OF ENG RS, (last visited Oct. 23, 2015). 26 See 539 F. App x at 887.

5 2016] THE GULF COAST PIPELINE 433 TransCanada obtained approval for the Gulf Coast Pipeline from the Corps 27 through a method called Nationwide Permit 12, or NWP NWP 12 is a Corps permitting process that can be used for utility projects affecting up to 1/2 acre of streams or wetlands, 29 which avoids the more strenuous and lengthy National Environmental Policy Act (NEPA) 30 permitting process. 31 TransCanada s reliance on NWP 12 treats the Gulf Coast Pipeline project as 2,227 single and complete 32 projects that cross through 2,227 federal waterways rather than one project of national scope, arguably requiring compliance with NEPA. 33 Plaintiff Sierra Club 34 sought a preliminary injunction to prevent TransCanada from beginning construction on the Gulf Coast Pipeline. 35 The defendants included the Corps and its Commanding General and Chief, Thomas Bostick. 36 TransCanada was not a party, but the dispute concerned whether TransCanada s construction of the Gulf Coast Pipeline was a major Federal action 37 that required TransCanada to obtain a comprehensive NEPA analysis for the project. 38 Furthermore, Sierra Club disputed whether the Corps, when it approved TransCanada s project under NWP 12 rather than NEPA, violated NWP 12 by failing to adequately consider the cumulative effect of using NWP 12 to approve 2,227 projects See id. at See U.S. ARMY CORPS OF ENG RS, DECISION DOCUMENT: NATIONWIDE PERMIT 12 (Feb. 13, 2012), [hereinafter NATIONWIDE PERMIT 12]. 29 at National Environmental Policy Act of 1969, 42 U.S.C (2012). The National Environmental Policy Act requires federal agencies to assess the environmental effects of their proposed actions prior to making decisions. United States Environmental Protection Agency, What is the National Environmental Policy Act?, EPA, what-national-environmental-policy-act (last visited Oct. 23, 2015). 31 See generally National Environmental Policy Act, NEPA.GOV, ceq_regulations/regulations.html (last visited Oct. 23, 2015). 32 NATIONWIDE PERMIT 12, supra note 28, at See Sierra Club, Inc. v. Bostick, 539 F. App x 885, (10th Cir. 2013). 34 Sierra Club is the nation s largest grassroots environmental organization. See generally Who We Are, SIERRA CLUB, (last visited Oct. 23, 2015). 35 See 539 F. App x at See id. 37 National Environmental Policy Act, 42 U.S.C (2012). 38 See 539 F. App x at

6 434 CAPITAL UNIVERSITY LAW REVIEW [44:429 This Note analyzes two of the main issues discussed in Sierra Club, Inc. v. Bostick: (1) whether the Corps violated NEPA; 40 and (2) whether the Corps violated NWP 12 by failing to adequately consider the cumulative effect of issuing 2,227 permits for the Gulf Coast Pipeline. 41 Regarding the first issue, the cumulative actions of all federal agencies should be considered to determine whether the project triggered NEPA s requirement of a major Federal action, 42 and precedent states, Federal actions are numerous and necessary to the operation of the pipeline. 43 As to the second issue, because federal law and agency regulations do not specify any requirements for the Corps s verification of a project under NWP 12, 44 the Corps did not act arbitrarily and capriciously and its decision should be upheld. In fact, the United States Supreme Court s landmark decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. 45 requires courts to defer to an administrative agency s reasonable interpretation if that interpretation is permissible under the organic statutory text. 46 The Corps s decision passes Chevron because the statutory language authorizing the Corps s use of NWPs is silent as to specific requirements for verifying a project. 47 Thus, the Corps did not violate NWP 12 under that deferential standard. 48 This Note explains why the Tenth Circuit erred and why Sierra Club, Inc. v. Bostick should have been remanded to the district court because of Sierra Club s likelihood of success on its claim that the approval process violated NEPA See infra Part IV.A, concluding that the Corps violated NEPA a similar conclusion to the dissenting opinion in Sierra Club. See also 539 F. App x at (Martínez, J., dissenting). 41 See infra Part IV.B, concluding the Corps did not violate NWP 12 or the Clean Water Act a similar conclusion to the majority opinion. See also 539 F. App x at National Environmental Policy Act, 42 U.S.C (2012). 43 Spiller v. Walker, No. A 98 CA 255 SS, 1998 U.S. Dist. LEXIS at *52 (W.D. Tex. Aug. 25, 1998). 44 See 40 C.F.R (2013) U.S. 837 (1984). 46 at See 40 C.F.R See infra notes and accompanying text. 49 See infra Part IV.A.

7 2016] THE GULF COAST PIPELINE 435 II. BACKGROUND ON PERMITTING PROCESSES UNDER THE CLEAN WATER ACT Pipeline construction activities in the United States often cross jurisdictional waters, such as streams and wetlands. 50 Crossing national waters triggers the federal Clean Water Act 51, which prohibits the discharge of any pollutant from a point source into navigable waters 52 unless the discharger possesses a valid permit authorizing the release of the pollutant. 53 The terms pollutant, discharge, navigable waters, and point source are defined broadly under the Act, encompassing most structures that emit any type of material into any body of surface water. 54 Therefore, a discharger must almost always obtain a permit for any discharge. 55 Section 404 of the Clean Water Act and the regulations promulgated under the Act require entities to obtain permits from the U.S. Army Corp of Engineers before the dredge and fill activities of pipeline construction can take place. 56 Under section 402, National Pollutant Discharge Elimination System (NPDES), 57 two types of permits are available for an entity discharging a pollutant into navigable waters: individual permits and nationwide permits. 58 Individual permits require a case-by-case evaluation involving extensive administrative proceedings, public notice and comment, and an evaluation of less-damaging alternatives. 59 The Corps promulgates nationwide permits, also known as general permits. 60 Nationwide permits require an entity to follow generalized preset conditions, allowing routine activities in jurisdictional waters that cause only minimal impacts. 61 Nationwide permits are designed to allow certain activities to proceed with very little paperwork. 62 Considered a sensible, streamlined system to regulate minor actions, [and] condemned as a 50 Richard L. Lewis, Environmental Issues in Natural Gas Pipeline Construction, 33 ENERGY & MIN. L. INST. 675, (2012). 51 Federal Water Pollution Control (Clean Water) Act, 33 U.S.C (2012). 52 See id. 1311(a). 53 See id See id See id. 56 Federal Clean Water Act 404, 33 U.S.C , 33 U.S.C C.F.R (b) (2014)

8 436 CAPITAL UNIVERSITY LAW REVIEW [44:429 loophole through which excessive wetland destruction passes unchecked, the nationwide permit system remains controversial. 63 Although certain activities must be permitted individually, certain activities with minimal effects have been streamlined into an expedited nationwide permit program. 64 As the courts expand the scope of activities regulated by the Corps, coverage under a nationwide permit is much less burdensome to obtain. 65 Additionally, Congress declared support of the nationwide permit program and its regulation by the Corps by adding section 404(e), which statutorily authorizes the Corps s issuance of nationwide permits for dredge and fill activities; individual permits for dredge and fill activities were authorized in section 404(a). 66 With the addition of section 404(e), Congress also mandated that the permits were only effective for five years, requiring more frequent renewal. 67 The Corps renewed fifty nationwide permits on March 12, This renewal included NWP 12, which covers construction, maintenance, repair and removal of utility lines... provided the activity does not result in the loss of greater than 1/2 acre of waters of the United States for each single and complete project. 69 The Corps defined NWP 12 to include pipeline[s] for the transportation of gaseous, liquid, liquescent, or slurry substance, as well as any cable, line, or wire Therefore, the 63 Margaret N. Strand & Lawrence R. Liebesman, The Section 404 Nationwide Permit: An Endangered Species?, 14 NAT. RES. & ENV T 29, 29 (1999). 64 Federal Clean Water Act 404, 33 U.S.C (2012). 65 Strand & Liebesman, supra note Reissuance of Nationwide Permits, 77 Fed. Reg. 10,184, 10,185 (Feb. 21, 2012) ( Through the adoption of Section 404(e) of the Clean Water Act in 1977, Congress approved the use of general permits as an important tool to keep the Corps Regulatory Program manageable from a resources and manpower perspective, while protecting the aquatic environment. ). 67 Federal Clean Water Act 404, 33 U.S.C. 1344(e)(2). No general permit issued under this subsection shall be for a period of more than five years after the date of its issuance and such general permit may be revoked or modified by the Secretary if, after opportunity for public hearing, the Secretary determines that the activities authorized by such general permit have an adverse impact on the environment or such activities are more appropriately authorized by individual permits. 68 Lewis, supra note 50, at NATIONWIDE PERMIT 12, supra note 28, at 1. 70

9 2016] THE GULF COAST PIPELINE 437 construction of an oil pipeline may qualify for NWP 12 as long as the construction is single and complete 71 and does not result in a loss greater than 1/2 acre of jurisdictional waters. 72 A single and complete project must represent the total project proposed or accomplished by one owner/developer To qualify as single and complete, the Corps must determine whether the project would be constructed absent the construction of other projects in the project area. 74 This independent utility requirement ensures the Corps can consider the entire scope of the project and understand its cumulative effects on jurisdictional waters. 75 The cumulative effects analysis should focus on specific categories of resources instead of the environmental effects caused by a particular action, and it requires identification of the stressors which cause degradation of those resources, including those caused by actions unrelated to the proposed action. 76 When issuing a nationwide permit for the specific regulated activity, the Corps must also comply with the National Environmental Policy Act C.F.R (i) (2014). 74 Issuance of Nationwide Permits; Notice, 67 Fed. Reg. 2,094 (Jan. 15, 2002). A project is considered to have independent utility if it would be constructed absent the construction of other projects in the project area. Portions of a multi-phase project that depend upon other phrases of the project do not have independent utility. Phases of a project that would be constructed even if the other phases were not built can be considered as separate single and complete projects with independent utility. 75 See id. The Council on Environmental Quality s NEPA regulations define cumulative effects as: [T]he impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non- Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time. 40 C.F.R (2014). 76 NATIONWIDE PERMIT 12, supra note 28, at 23.

10 438 CAPITAL UNIVERSITY LAW REVIEW [44:429 (NEPA). 77 Congress s intent in enacting NEPA is to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man. 78 NEPA imposes procedural requirements mandating agencies to take a hard look 79 at the environmental consequences of an action. 80 This hard look review means if an agency action has adverse environmental effects, the agency must consider these effects and determine if competing policy values outweigh those negative impacts. 81 There are no particular results mandated under NEPA; instead, the role of the courts is to insure that the agency has considered the environmental consequences. 82 The Ninth Circuit noted that a nationwide permit goes through the NEPA process only at the time when the Corps promulgates the nationwide permit, not when the applicant seeks to gain approval of a project under the permit. 83 The Corps studies the general activities that fall under the proposed nationwide permit, rather than making a NEPA determination on each particular project applying for a nationwide permit. 84 Complying with NEPA when the nationwide permit is promulgated ensures that any activity under that nationwide permit will have minimal adverse environmental effects. 85 NEPA requires federal agencies to consider a specific project s environmental consequences through an Environmental Impact Statement if the major Federal action[] significantly affect[s] the quality of the human environment. 86 Sometimes an agency must first conduct an Environmental 77 See National Environmental Policy Act, 42 U.S.C (2012); Sierra Club, Inc. v. Bostick, No. CIV R, 2012 U.S. Dist. LEXIS , at *6 (W.D. Okla. Aug. 5, 2012) U.S.C See, e.g., Marsh v. Oregon Nat. Res. Council, 490 U.S. 360, 374 (1989) ( NEPA does require that agencies take a hard look at the environmental effects of their planned action. ). 80 See, e.g., Nat l Audubon Soc y v. Dep t of the Navy, 422 F.3d. 174, 184 (4th Cir. 2005). 81 See, e.g., id. 82 See, e.g., Strycker s Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227 (1980). 83 See Snoqualmie Valley Pres. Alliance v. U.S. Army Corp. of Eng rs, 683 F.3d 1155, 1158 (9th Cir. 2012) (citing 33 C.F.R (b)(3) (2014)). Contrast a nationwide permit to an individual permit, which must go through NEPA. 84 at at 1160 (citing Federal Clean Water Act 404, 33 U.S.C. 1344(e)(1) (2012)) U.S.C. 4332(C).

11 2016] THE GULF COAST PIPELINE 439 Assessment to determine if the project requires an Environment Impact Statement. 87 The Environmental Assessment must address direct, indirect, and cumulative effects of the proposed activity, as well as alternatives. 88 If the agency determines that its proposed action will not have a significant effect on the environment, then it does not need to prepare an Environmental Impact Statement and can issue a Finding of No Significant Impact. 89 However, if the Environmental Assessment determines the project will meet the significant impact standard, the agency must prepare an Environmental Impact Statement. 90 The Council on Environmental Quality 91 requires an Environmental Impact Statement to focus on reasonably foreseeable impacts, rather than a worst-case analysis. 92 III. DISCUSSION OF THE MAJORITY AND DISSENTING OPINIONS IN SIERRA CLUB, INC. V. BOSTICK After President Obama struck down the first request for the Keystone XL Pipeline in 2011, 93 TransCanada decided to move forward using segmented pipeline projects, one of which is the Gulf Coast Pipeline. 94 The Gulf Coast Pipeline spans from Cushing, Oklahoma to oil refineries on the Gulf Coast near Nederland, Texas. 95 TransCanada s construction of the C.F.R (a)(1) (2014) (b) See also id See id (a)(1). 91 The Council on Environmental Quality works closely with agencies in the development of environmental policies. Council on Environmental Quality About, WHITEHOUSE.GOV, (last visited Nov. 11, 2015). The Council was established as part of the Executive Office by Congress as part of NEPA. Ultimately, the Council advises the President on balancing environmental, economic, and social objectives. 92 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 356 (1989). 93 Barack Obama, Statement by the President on the Keystone XL Pipeline, Jan. 18, 2012, ne-xlpipeline. 94 Sierra Club, Inc. v. Bostick, 539 F. App x 885, (10th Cir. 2013). The Gulf Coast Pipeline is also known as the southern portion of the Keystone XL pipeline. Mufson, supra note Sierra Club, 539 F. App x at 887. The court refers to the route of the pipeline as running from Cushing, Oklahoma to Port Arthur, Texas. But the complaint refers to the route of the pipeline as terminating in Nederland, Texas. Complaint for Declaratory and Injunctive Relief and Petition for Review of Agency Action, Sierra Club, Inc. v. Bostick, No. CIV R, (W.D. Okla. June 29, 2012), 2012 U.S. Dist. LEXIS

12 440 CAPITAL UNIVERSITY LAW REVIEW [44:429 Gulf Coast Pipeline inevitably causes the disturbance of wetlands and thus triggers the Clean Water Act. 96 In complying with the Clean Water Act and prior to construction of the pipeline, TransCanada received verification from the Corps that the Gulf Coast Pipeline project fell within the scope of NWP Nearer to the completion of the Gulf Coast Pipeline, Sierra Club sued the Corps, challenging the Corps s reissuance of NWP and the verification that the Pipeline construction could move forward under it. 99 Sierra Club alleged violations of NEPA; the Clean Water Act; and the Administrative Procedure Act, 100 which governs actions of administrative agencies such as the Corps; and moved for a preliminary injunction to enjoin the Corps s verifications. 101 [A] preliminary injunction is an extraordinary remedy, [and] the right to relief must be clear and unequivocal. 102 After a hearing, the district court determined Sierra Club did not have a likelihood of success on the merits and other equitable factors did not weigh in its favor. 103 The district court denied Sierra Club s motion for a preliminary injunction. 104 Following the district court s decision, Sierra Club filed an interlocutory appeal. 105 The Tenth Circuit used an abuse of discretion standard to review the preliminary injunction denial. 106 Under this standard, a trial court s decision will not be disturbed unless the appellate court determines the district court used arbitrary, capricious, whimsical, or manifestly unreasonable judgment Sierra Club, 2012 U.S. Dist. LEXIS , at * Sierra Club, 539 F. App x at Administrative Procedure Act, 5 U.S.C. 701 (2012) F. App x at 888. A party seeking a preliminary injunction must prove all four of the following equitable factors: (1) it is substantially likely to succeed on the merits; (2) it will suffer irreparable injury if the injunction is denied; (3) its threatened injury outweighs the injury the opposing party will suffer under the injunction; and (4) the injunction would not be adverse to the public interest. Beltronics USA, Inc. v. Midwest Inventory Distrib n, LLC, 562 F.3d 1067, 1070 (10th Cir. 2009) F. App x at 889 (quoting Beltronics USA, Inc., 562 F.3d at 1070). 103 at (quoting Wyoming v. U.S. Dep t of Agric., 661 F.3d 1209, 1227 (10th Cir. 2011)).

13 2016] THE GULF COAST PIPELINE 441 When determining if the district court s decision was an abuse of discretion, the Tenth Circuit only considered the third equitable factor: whether the threatened injury [to Sierra Club] outweighs the injury the opposing party will suffer under the injunction. 108 The district court found that granting the injunction would cause TransCanada to suffer significant harm. 109 At the time of the hearing in August 2012, TransCanada had spent over $500 million on the pipeline, and any more delay could cost the company hundreds of thousands of dollars each day. 110 In comparison, the court was not impressed with Sierra Club s injury: a loss of waters of the United States of less than one acre... over the entire distance of the pipeline. 111 Overall, the district court found that Sierra Club did not show the balance of harms weighed in its favor, and the Tenth Circuit determined Sierra Club failed to demonstrate the district court abused its discretion. 112 Weighing in the Corps s favor, the Administrative Procedure Act only grants jurisdiction for an appellate court to hold unlawful and set aside agency action, findings, and conclusions [if they are] found to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law. 113 The court s review of an agency s action is highly deferential, and the court may not substitute a reasoned basis for an agency s action. 114 Judge Martínez dissented, urging remand of the case to the district court because of flaws in the court s analysis of the sole prong considered for injunctive relief: Sierra Club s likelihood of success on the merits. 115 The 108 at 889 (quoting Awad v. Ziriax, 670 F.3d 1111, 1125 (10th Cir. 2012)). 109 at (quoting Sierra Club, Inc. v. Bostick, No. CIV R, 2012 U.S. Dist. LEXIS , at *24 (W.D. Okla. Aug. 5, 2012)). Appellants have failed to show that this project will have more than a minimal impact on the environment. [T]he Corps s analysis of the Gulf Coast Pipeline... demonstrated the total permanent loss of waters over the entire length of the pipeline would be 0.68 acres and any other water losses would be temporary. at at [W]hen reviewing a district court s balancing of the harms for an abuse of discretion, [the Circuit Court s] charge is only to determine whether the balancing that the district court performed was within the range of permissible choices, not whether our own balancing would lead to a different result. at U.S.C. 706(2)(A) (2012). 114 Sierra Club, 2012 U.S. Dist. LEXIS , at *8. While the Court may not supply a reasoned basis for the agency s action that the agency itself has not given, it may uphold a decision of less than ideal clarity if the agency s path may reasonably be discerned. (citing Motor Vehicle Mfrs. Ass n v. State Farm Mut. Auto Ins. Co, 463 U.S. 29, 43 (1983)) F. App x at 896 (Martínez, J., dissenting).

14 442 CAPITAL UNIVERSITY LAW REVIEW [44:429 dissent argued the Corps violated NEPA by failing to conduct an Environmental Assessment or an Environmental Impact Statement, and the Corps violated the Clean Water Act and the Administrative Procedure Act by failing to consider the cumulative impact of granting 2,227 approvals of TransCanada s NWP 12 applications 116 Sierra Club argued the Corps failed to conduct an Environmental Assessment or Environmental Impact Statement for the Pipeline, which violates the obligations of NEPA. 117 When determining that NEPA obligations only applied at the adoption of a nationwide permit rather than to each specific project, the court relied 118 on Snoqualmie Valley Preservation Alliance v. U. S. Army Corps of Engineers 119, a case involving the issuance of three nationwide permits for a single location. 120 In Snoqualmie Valley, the Corps issued one nationwide permit for the removal of an old dam and the construction of a new dam, a second nationwide permit for a temporary river diversion, and a third nationwide permit for modifications to power plant intakes and powerhouse structures. 121 However, in Sierra Club, Inc. v. Bostick, dissenting Judge Martínez argues the Corps s approval of 2,227 nationwide permits for a single location, rather than three of them, is a significant distinction [that] makes Snoqualmie Valley of little use here. 122 Additionally, Judge Martínez argued that although the issuance of a nationwide permit is not necessarily significant enough to constitute a major Federal action invoking NEPA, some regulations apply when the regulated activity is a link in the overall project. 123 Those regulations require the Corps to consider not only the specific activity requiring a permit but also any other area of the project under the surveillance of the Corps. 124 The applicable regulations cited in the dissent describe two permitting examples. 125 The first example is a fifty-mile electrical transmission cable 116 at at at F.3d 1155 (9th Cir. 2012). 120 at F. App x at 898 (10th Cir. 2013) (Martínez, J., dissenting) (suggesting a consideration of the environmental effects of the entirety of the Pipeline given the sheer volume of the permits granted). 125

15 2016] THE GULF COAST PIPELINE 443 crossing a river which is 1.25 miles wide. 126 In this example, [n]either the origin and destination of the cable nor its route to and from the navigable water, except as the route applies to the location and configuration of the crossing, are within the control or responsibility of the Corps of Engineers. 127 The only matters included in the scope of analysis in this example address the effects of the specific cable crossing. 128 The regulations include a second example that requires consideration of the effects of the entire transmission line, rather than the specific permitted crossing, when the permit is for a major portion of a transportation project. 129 In this case, the Corps s permit involved the origin, the destination, and the route of the project outside the Corps regulatory boundaries. 130 Thus, the scope of analysis would include the entire project. 131 Using the above example, if 30 miles of the 50-mile transmission line crossed wetlands or other waters of the United States, the scope of the analysis should include impacts of the entire 50-mile transmission line. 132 Applying these two contrasting examples, the dissent argued TransCanada s construction of the Gulf Coast Pipeline is more analogous to the latter. 133 Because the Gulf Coast Pipeline crosses waters of the United States almost five times in each mile and the Corps issued over 2,000 permits for water crossings, the scope of the project includes not only the activity that requires a permit but also any other portion of the project within the control or responsibility of... Federal agencies. 134 Judge Martínez stated, [I]t is patently ludicrous for Appellees to characterize the Corps [s] involvement in the subject project as minimal C.F.R. pt. 325, app. B at 446 (2013) Sierra Club, Inc. v. Bostick, 539 F. App x 885, 898 (10th Cir. 2013) (Martínez, J., dissenting). 134 (citing 33 C.F.R. pt. 325, app. B at 442 (2013)). 135 at 899 (disputing that the Corps permitting involve[d] only a link in the Gulf Coast Pipeline ).

16 444 CAPITAL UNIVERSITY LAW REVIEW [44:429 The dissent cites 136 a district court case from Texas, 137 which held the Corps needed to have considered the effect of the entire process in an Environmental Assessment or Environmental Impact Statement for a 900- mile pipeline project. 138 In that case, the plaintiffs, landowners and stateemployed conservationists, sued Longhorn Partners Pipeline, a company that planned to convert a crude oil pipeline to transport refined petroleum products. 139 The court agreed the pipeline was a major Federal action, not necessarily because of the involvement of federal agencies or the federal government, but because a major Federal action encompasses nonfederal actors with effects that may be major and which are potentially subject to Federal control and responsibility. 140 The dissent also cited 141 to the Ninth Circuit, 142 which held that the Corps s responsibilities under NEPA include the consideration of environmental consequences that extend beyond the effects on solely jurisdictional waters. 143 Thus, while it is the development s impact on jurisdictional waters that determines the scope of the Corps permitting authority, it is the impact of the permit on the environment at large that determines the Corps NEPA responsibility. 144 Judge Martínez agreed with the Ninth Circuit s analysis as applied to the Corps s permit approval of TransCanada s project and argued Sierra Club showed a likelihood of success on the merits because of the Corps s failure to conduct an Environmental Assessment or Environmental Impact Statement, in violation of NEPA. 145 The dissent also argued the Corps violated the Clean Water Act and the Administrative Procedure Act by failing to consider the cumulative effect of approving 2,227 uses of NWP 12 for the Pipeline project. 146 Because the Pipeline crosses three of the Corps s districts, TransCanada filed 136 at See Spiller v. Walker, No. A 98 CA 255 SS, 1998 U.S. Dist. LEXIS (W.D. Tex. Aug. 25, 1998). 138 at * at * at *23 (citing Andrus v. Sierra Club, 442 U.S. 347, 361 n.20 (1979)) F. App x at Save Our Sonoran, Inc. v. Flowers, 408 F.3d 1113 (9th Cir. 2005). 143 See id. at F. App x at 899 (Martínez, J., dissenting). 146 at 901.

17 2016] THE GULF COAST PIPELINE 445 preconstruction notifications in each district. 147 The districts followed up with a letter authorizing the project, but NWP 12 requires the verification to include whether each individual crossing satisfies the terms of the nationwide permit, as well as cumulative effects caused by all of the crossings authorized by the nationwide permit. 148 Sierra Club argued that none of the three letters considered the cumulative effects of the entire project; none of the verifications even referenced the sections of the pipeline in the other districts. 149 The Corps responded and argued that it complied with the legal standard of making a determination that all conditions were satisfied. 150 The APA s arbitrary and capricious standard focuses on whether the agency s decision-making process was rational rather than whether the actual decision was rational. 151 However, the reviewing court cannot affirm if the agency did not provide a reasonable explanation for its action or if the administrative record fails to show a reasoned decision-making process. 152 Judge Martínez argued, The letters of approval prepared by each district do not provide a reasoned basis for any cumulative impacts analysis. 153 The Corps tried to rely on post hoc rationalizations by using affidavits presented to the district court, but this information was missing in the administrative agency s record. 154 The Corps s actions should have been reviewed based on the proceedings before the agency at the time the Corps acted. 155 Based on these deficiencies in the record, the dissent s second argument was that [t]he failure to consider the cumulative effects of all water crossings involved in the Gulf Coast Pipeline violate[d] the term of NWP The administrative record did not include communications between 147 at at at 900 (quoting Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1575 (10th Cir. 1994)). 152 (citing Olenhouse, 42 F.3d at 1575) The court noted that tactical litigation maneuvering has been rejected by the Supreme Court. (citing Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 419 (1971)). 155 at 901 (quoting Am. Mining Cong. v. Thomas, 772 F.2d 617, 626 (10th Cir. 1985)). 156

18 446 CAPITAL UNIVERSITY LAW REVIEW [44:429 the districts concerning the cumulative effect of the entire Pipeline. 157 In sum, the Corps did not provide sufficient reasoning that authorizing 2,227 NWP 12 permits would cause minimal cumulative effects. 158 Because the dissent found a likelihood of success on the merits, Justice Martínez argued the case should be remanded to determine if Sierra Club would suffer irreparable injury, [if] the balance of the harms tipped in their favor, and [if] an injunction would not be adverse to public interest. 159 IV. ANALYSIS The majority and dissenting opinions in Sierra Club, Inc. v. Bostick differ on two main issues regarding Sierra Club s likelihood of success on the merits: (1) was the Corps s failure to conduct an Environmental Assessment or Environmental Impact Statement for the Gulf Coast Pipeline a violation of NEPA?; and (2) was the Corps s failure to consider the cumulative effects of issuing the permit 2,227 times a violation of NWP 12, and thus, a violation of the Clean Water Act? 160 The test for injunctive relief requires the moving party to show: (1) [T]he injunction, if issued, would not adversely affect the public interest, (2) irreparable harm would occur unless the injunction issues, (3) the threatened injury outweighs any harm an injunction might cause the opposing party, and (4) the party has a substantial likelihood of success on the merits. 161 Judge Martínez stated in his dissent that he would remand the case to the district court because the only prong of the test for injunctive relief that the (noting that for Sierra Club to succeed on its motion for preliminary injunctive relief, it must satisfy the other three prongs of the standard for injunctive relief). See also Beltronics USA, Inc. v. Midwest Inventory Distrib n, LLC, 562 F.3d 1067, 1070 (10th Cir. 2009). 160 at (Martínez, J., dissenting) ( I believe... the failure to conduct an Environmental Assessment or an Environmental Impact Statement for the Gulf Coast Pipeline violated NEPA, and that the Corps failure to consider the cumulative impact of granting 2,223 approvals of TransCanada s NWP 12 applications violated the CWA and the APA. ). 161 Sierra Club, Inc. v. Bostick, No. CIV R, 2012 U.S. Dist. LEXIS , at *3 4 (W.D. Okla. Aug. 5, 2012).

19 2016] THE GULF COAST PIPELINE 447 district court analyzed in sufficient detail to permit meaningful appellate review was [Sierra Club s] likelihood of success on the merits. 162 As to whether the Corps complied with NEPA, the district court held that because an Environmental Assessment is prepared during the promulgation of a nationwide permit, there is no mandate that the pipeline itself requires an Environmental Assessment or Environmental Impact Statement. 163 The district court noted, and the circuit court agreed, that an Environmental Impact Statement is required when actions proposed by a federal agency could significantly affect the quality of the human environment. 164 In light of that, [t]he Corp[s] considered the potential impact on the environment based on anticipated NWP 12 permit usage during the five year period that this version will be in effect. 165 Conversely, Judge Martínez states, [T]he Corps involvement in the Gulf Coast Pipeline was a major Federal action that required a comprehensive NEPA analysis for the project. 166 The Corps relied on Snoqualmie Valley to argue that its NEPA obligations apply only to the adoption of a [nationwide permit], and not to the verification of the applicability of a [nationwide permit] to a particular project. 167 However, Judge Martínez discredits the Corps s use of Snoqualmie Valley because in that case the Corps issued three nationwide permits for a single location, whereas for the Gulf Coast Pipeline, the Corps approved TransCanada s use of NWP 12 for 2,227 water crossings. 168 A. The Corps Violated NEPA by Failing to Conduct an Environmental Assessment or an Environmental Impact Statement for the Gulf Coast Pipeline. Determining whether the Corps violated NEPA because of its failure to conduct an Environmental Assessment or Environmental Impact Statement F. App x at 896 (Martínez, J., dissenting) U.S. Dist. LEXIS , at *6 (emphasis added). Plaintiffs argue the controversial nature of pipelines warranted an EIS [Environmental Impact Statement], [sic] however, as noted by the Corps, NWP 12 is not itself controversial, [sic] it is used for numerous non-controversial projects. at * at *16 17 (arguing that anticipated environmental effects are considered at the promulgation of the nationwide permit). 165 at * F. App x at 889 (Martínez, J., dissenting). 167 at at 898 ( In my view, this significant distinction makes Snoqualmie Valley of little use here. ).

20 448 CAPITAL UNIVERSITY LAW REVIEW [44:429 for the Gulf Coast Pipeline project depends on the intent behind the language of NEPA section 102: [A]ll agencies of the Federal Government shall... (C) include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official The language of NEPA specifies that a major Federal action must also be coupled with effects that may be major and which are potentially subject to federal control and responsibility. 170 The regulation includes that federal actions do tend to fall within the [a]pproval of specific projects... includ[ing] actions approved by permit. 171 However, although the nationwide permits issued by the Corps for the Gulf Coast Pipeline are federal actions, section of the Code of Federal Regulations states that the term major does not have a meaning independent of significantly, but rather reinforces its meaning. 172 Section defines significantly as considerations of both context and intensity. 173 Therefore, when determining the context and intensity of the project, the Corps must determine the possible effect of the Gulf Coast Pipeline on jurisdictional waters. The Corps must also determine the portions of the Gulf Coast Pipeline where the district engineer has sufficient control and responsibility to warrant Federal review. 174 The Corps has control and responsibility over regions of the project where Federal involvement is sufficient to turn an essentially private action into a Federal action. These are cases where the environmental consequences of the larger project are essentially the products of the Corps permit action. 175 Although not used by the court in Sierra Club, Inc. v. Bostick, other courts use four factors to determine whether the potential environmental consequences on non-jurisdictional areas are such that the Corps has control and responsibility : U.S.C. 4332(2)(C) (2012). Environmental Impact Statement means a detailed written statement as required by section 102(2)(C). 40 C.F.R (2013) C.F.R (b)(4) (noting the statutory language of significantly affecting the quality of the human environment) See 33 C.F.R. pt. 325, app. B at 445 (2013) Save Our Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1121 (9th Cir. 2005). Save Our Sonoran is not factually comparable to Sierra Club, but the determination of control and responsibility is applicable.

21 2016] THE GULF COAST PIPELINE 449 (i) Whether or not the regulated activity comprises merely a link in a corridor type project (e.g., a transportation or utility transmission project). (ii) Whether there are aspects of the upland facility in the immediate vicinity of the regulated activity which affect the location and configuration of the regulated activity. (iii) The extent to which the entire project will be within Corps jurisdiction. (iv) The extent of cumulative Federal control and responsibility. 177 The first and fourth factors weigh in favor of the Corps having control and responsibility, suggesting enough federal involvement to trigger NEPA requirements. The issuance of 2,227 permits comprises more than a link in the entire pipeline. 178 If the 2,227 permits are distributed evenly across the Gulf Coast Pipeline project, the Corps essentially granted a permit five times each mile. 179 A pipeline project is inherently subject to federal control at various times throughout construction and operation. 180 The court in Spiller notes that a common sense analysis would determine if federal involvement is necessary for a pipeline project. 181 The dissent points out a Ninth Circuit holding that states, [W]hile it is the development s impact on jurisdictional waters that determines the scope of the Corps permitting authority, it is the impact of the permit[s] on the environment at large that determines the Corps NEPA responsibility. 182 There is no bright line test to determine what constitutes a major Federal action, and courts have not agreed on the amount of federal involvement necessary to trigger the applicability of NEPA. 183 Moreover, to determine C.F.R. pt. 325, app. B at Sierra Club, Inc. v. Bostick, 539 F. App x 885, 898 (10th Cir. 2013) (Martínez, J., dissenting) Spiller v. Walker, No. A 98 CA 255 SS, 1998 U.S. Dist. LEXIS 18341, at *52 (W.D. Tex. Aug. 4, 1998). 181 at * Sierra Club, 539 F. App x at 899 (Martínez, J., dissenting) (citing Save Our Sonoran, 408 F.3d at 1121). 183 Spiller, 1998 U.S. Dist. LEXIS 18341, at *22 23 (quoting Save Barton Creek Ass n v. Fed. Highway Admin., 950 F.2d 1129, 134 (5th Cir. 1992)).