Tar Sands Litigation
In the United States, there are currently three major tar sands pipeline projects, in varying stages of approval or development: Keystone, Keystone XL, and Alberta Clipper.
Keystone XL Pipeline
Alberta Clipper Pipeline
There are currently three major refinery projects undergoing permitting: BP Whiting, Hyperion, and MHA Nation's.
BP Whiting Refinery
MHA Nation's Refinery
Other Tar Sands Issues
In June 2009, TransCanada became the sole owner of the Keystone Pipeline System after buying out ConocoPhillips' remaining investment in the project. The project is a 2,148 mile tar sands crude oil pipeline running from Hardisty, Alberta through the Dakotas, Nebraska, across Kansas and Missouri and then into Illinois, with a spur into Oklahoma. The new pipeline will be 30 inches in diameter to Illinois and 36 inches from the Nebraska/Kansas border to Cushing, Oklahoma. The pipeline is designed to carry 435,000 barrels per day of tar sands crude to U.S. refineries, and later expanding to 590,000 barrels per day. The U.S. portion of the pipeline is being constructed in two phases. Construction of the first phase began in May 2008 and is projected to be completed in November 2009. The second phase, the Cushing extension, is projected to begin in 2009 and have an in-service date by end of 2010. The project is estimated to cost $5.2 billion.
The Department of State issued a "Presidential Permit" for the pipeline crossing of the U.S. border in March 2008. See documents here.
The U.S. Department of Transportation also issued a "special permit" relaxing pipeline construction standards for the Keystone pipeline. NRDC and the Sierra Club recently submitted a letter to DOT protesting their lack of environmental review for the "special permit" and pipeline management and emergency response plans needed for the project. See documents here.
Natural Resources Defense Council and Plains Justice, representing Dakota Resource Council and Dakota Rural Action, had filed suit challenging the Environmental Impact Statement that underlies the pipeline's Presidential Permit. Summary judgment was briefed and the Defendant's motion to dismiss was granted on September 30, 2009. Another NEPA, NHPA and Treaty/Trust claims lawsuit brought by the Sisseton-Wahpeton Oyate et al. against the State Department and Keystone Pipeline was also dismissed. See documents here. See documents here.
TransCanada is required to obtain a variety of federal and state permits for the Keystone I pipeline. See documents here.
Keystone XL Pipeline
Also known as the Keystone Gulf Coast Expansion Project, this project involves the construction of 1,980-mile, 36-inch diameter tar sands crude oil pipeline that would begin at Hardisty, Alberta and extend southeast through Saskatchewan, Montana, South Dakota and Nebraska. It would incorporate a portion of the Keystone Pipeline and deliver tar sands crude to existing terminals in Nederland, Texas to serve the Port Arthur, Texas oil market, with a 50-mile spur supplying the Houston, Texas oil market. The U.S. portion of the pipeline is being constructed in two phases. Depending on the speed of regulatory approvals construction of the first phase, the Gulf Coast Extension, is expected to begin mid 2010, but could start as late as 2011. The project is planned for completion by 2011 if approvals are issued as expected. The second phase, the Steele City expansion, is projected to begin in 2011 and have an in-service date between 2012 and 2013. The U.S. portion of the project is estimated to cost $7 billion with financing provided by Citigroup Global Markets Inc., Greenwich Capital Markets Inc., J.P. Morgan Securities Inc., and Bank of America Securities LLC.
TransCanada is seeking a Presidential Permit from the U.S. Department of State for the pipeline's border crossing which initiated a "scoping" process pursuant to the National Environmental Policy Act. In April 2010 the State Department released the Draft Environmental Impact Statement on the project. A coalition of groups submitted extensive comments on the NEPA scoping process and on the DEIS. In July 2010, EPA submitted comments on the project insisting that the DEIS is "woefully deficient" because "the Draft IES does not provide the scope or detail of analysis necessary to fully inform decision makers and the public, and we recommend that additional information and analysis be provided”. As of October 2010, the project is indefinitely delayed. The coalition is also requesting that the State Department issue a supplemental EIS. See documents here.
TransCanada was also seeking a "special permit" from the U.S. Department of Transportation to operate the pipeline at higher pressures than allowed by current pipeline safety regulations. The Sierra Club and Plains Justice filed written objections to the waiver of pipeline standards, as did the Western Organization of Resource Councils. TransCanada withdrew its application for the special permit in August 2010. A broad coalition of groups also submitted letters to DOT protesting the pipeline management and emergency response plans needed for the project. See documents here.
Various approvals from certain states through which the pipeline would pass are also required. The first of these approvals is a Certificate of Compliance under the state of Montana's Major Facility Siting Act. The Sierra Club, Plains Justice, Western Organization of Resource Councils and Northern Plains Resource Council have all submitted comments on the state process, including TransCanada's MFSA application. On February 1, 2010, the Montana Public Service Commission issued a memo from its legal staff, directing TransCanada to apply to the PSC for common carrier status. The following process may lead the MPSC to determine the necessity for access points to the pipeline within Montana. See documents here.
TransCanada applied to the South Dakota Public Utilities Commission for authority to run the pipeline through the state in March 2009. The Commission granted with conditions a draft permit on February 18, 2010 for TransCanada to construct the Keystone XL pipeline. Plains Justice, WORC, Dakota Rural Action and the Sierra Club are participating in the SDPUC process. See documents here .
To see technical attachments to the SDPUC application, click here.
TransCanada must also obtain a variety of federal and state permits for the Keystone XL pipeline. See documents here.
Alberta Clipper Pipeline
This pipeline expansion is a project of Enbridge Pipelines Inc., a Canadian company, and will be comprised of two parts: the Alberta Clipper Pipeline and the Southern Lights Diluent Pipeline. The 36-inch diameter Alberta Clipper Pipeline will carry up to 450,000 barrels of tar sands crude oil daily from Western Canada to refineries in the U.S. In the U.S., the Alberta Clipper Pipeline will extend 326 miles from the U.S.-Canadian border near Neche, North Dakota across northern Minnesota to an Enbridge terminal in Superior, Wisconsin. The Southern Lights portion of the project will carry diluent (a chemical thinner to facilitate tar sands crude oil flow) from Chicago-area refineries back to the tar sands extraction sites. It will consist of a new 20-inch pipeline extending 188 miles from Superior Wisconsin to an Enbridge terminal in Clearbrook, Minnesota, where it will connect with an existing pipeline that will be reversed to continue supply of the diluent to Canada. Construction of the pipeline began August 2009 and is projected to have an in-service date of early 2010. The U.S. portion of the project is estimated to cost $1.2 billion, with two-thirds of it being financed by Calgary-based Enbridge Inc., and the other third being financed by Houston-based Enbridge Energy Partners. Sierra Club is tracking the progress of the Alberta Clipper through the status of U.S. permits and construction schedules. Several Canadian groups are heavily involved with this dirty tar sands project on the other side of the border. Some of them include Sierra Club Canada, Greenpeace Canada, and Environmental Defence Canada.
On August 20, 2009, the Department of State issued a "Presidential Permit" and approved the final environmental impact statement for the Alberta Clipper Pipeline Project. See documents here.
In response, on September 3, 2009, the Sierra Club, Indigenous Environmental Network, Minnesota Center for Environmental Advocacy, and National Wildlife Federation filed a lawsuit challenging the pipeline in the U.S. District Court for Northern California. The coalition's temporary restraining order was denied and the State Department's motion to transfer the case was granted, both without hearings. The case was transferred to Minnesota where the coalition's preliminary injunction hearing took place in November and a hearing on the Defendant's motion to dismiss was held later in December. The memorandum opinion and order on the coalition's motion for preliminary injunction was issued in February 2010 and ultimately denied granting the PI. In February 2010, another memorandum opinion and order was issued on the Defendants' motion to dismiss which granted in part and denied in part Plaintiffs' claims. The order on summary judgment was finally issued in October 2010 and unfortunately denied the Coalition's motion. See documents here.
The Minnesota Center for Environmental Advocacy has litigated the Minnesota state approvals for the pipelines before the state Public Utilities Commission and is now in state court challenging the PUC's approval of the pipeline. See documents here.
A coalition of groups submitted a letter to the U.S. Department of Transportation protesting the lack of environmental review on the Pipeline Management and Emergency Response Plans needed for the project. The Pipeline and Hazardous Materials Safety Administration handles the formulation of these plans, and responded to the coalition's letter on August 10, 2009. See documents here.
On June 19, 2009, the Wisconsin Department of Natural Resources issued a Dredging, Grading, and Bridge/Water Quality Control Permit for the Alberta Clipper Pipeline. See documents here.
Enbridge Pipelines Inc. is required to obtain a number of federal and state permits for the Alberta Clipper Pipeline. See documents here.
BP Whiting Refinery
BP proposes to expand its Whiting, Indiana oil refinery to allow the refinery to process additional quantities of Canadian Extra Heavy Crude Oil ("CXHO") extracted from the Canadian tar sands. The Refinery is located in Whiting, Indiana. Whiting is in Lake County, part of the densely-populated Northern Indiana-Northern Illinois region, and is adjacent to southeast Michigan. As a result, the Project will have air quality impacts for three states and the vast population that resides in the area. The Refinery also is located in a nonattainment area for PM2.5 and ozone, and thus the Project will worsen already harmful air pollution levels. The Project also will emit large amounts of carbon dioxide (CO2) and other greenhouse gases, which contribute to global climate change.
Three separate legal challenges have been filed in opposition to the refinery expansion.
First, the Sierra Club, Environmental Law & Policy Center, Natural Resources Defense Council, Environmental Integrity Project and additional
parties filed an appeal of the air pollution permit granted to BP by the Indiana Department of Environmental Management. The appeal is in the
pre-he#229 phase, with the he#229 scheduled for November 2009. See documents here.
Second, Natural Resources Defense Council filed a citizen suit in federal court asserting that BP constructed a portion of the expansion project before receiving the required permits. In June 2009, the Court dismissed part of the lawsuit, but the claim that construction started before the state granted a permit is currently pending. See documents here.
Third, the Sierra Club, Hoosier Environmental Council, Environmental Law & Policy Center, Save the Dunes, Natural Resources Defense Council and additional parties filed a petition to the U.S. EPA requesting that the agency object to issuance of the Title V operating permit for the refinery. On October 16, 2009 the EPA responded to that petition by issuing a decision objecting to the issuance of the permit. The decision will require the Indiana Department of Environmental Management to address additional sources of refinery emissions in the permit and then submit that assessment to the EPA within 90 days. See documents here.
The "Hyperion Energy Center" is a Greenfield tar sands refinery project proposed by financier A.J. Huddleston of Dallas. It would be located near Vermillion in rural South Dakota on prime agricultural land. If it proceeds, it will be the largest refinery and electric generating plant ever built in South Dakota, and one of the largest in the United States. As planned, the HEC will include a 400,000 barrel per day refinery and an approximately 200 MW integrated gasification combined cycle power plant.
Local residents waged a hard fought zoning contest against the project and narrowly lost a county election. Local groups Save Union County and Citizens Opposed to Oil Pollution, joined by the Sierra Club's Living River Group, challenged the air quality permit for the proposed refinery in front of the South Dakota Board of Minerals and Environment. He#229s were held in May and June of 2009. Unfortunately, on August 20, 2009, the South Dakota Board of Minerals and Environment approved Hyperion's application for a Prevention of Significant Deterioration (PSD) pre-construction air quality permit. The Sierra Club, Save Union County and Citizens Opposed to Oil Pollution appealed that decision in January 2010. On January 28, 2010 the Clay Rural Water System Board of Directors unanimously denied Hyperion's request for a long term-agreement to use 9-12 million gallons of water per day at their proposed tar sands oil refinery. In April 2010, representatives for the Hyperion Energy Center claimed that delays in permitting, along with the weakened economy, has pushed the project timeline back and caused them to postpone buying land for the project. See documents here.
Hyperion Refining, LLC is required to obtain a federal permit and several state permits for the Hyperion Energy Center. See documents here.
MHA Nation's Refinery
The Mandan, Hidatsa and Arikara Nation is proposing to build a new tar sands refinery on the Fort Berthold Indian Reservation near Makoti, North Dakota. The project is estimated to cost around $250 million, spanning 190 acres and would be supplied by the Alberta Clipper pipeline. The FEIS was issued in August 2009 and the EPA and BIA are expected to issue their Record of Decision around November 2009. This is the first time a refinery is not required to obtain a PSD air permit or preconstruction permit. NRDC, EIP and the MHA Nations have all submitted comments on the FEIS. See documents here.
On June 18, 2010 the Sierra Club and Southern Alliance for Clean Energy filed a complaint against the U.S. Department of Defense for its contracting for fuel containing tar sands in violation of the Energy Independence and Security Act of 2007 (EISA). Section 526 of the Act prohibits any federal agency from entering into contracts for the purchase of fuels produced from nonconventional petroleum sources, unless the contracts specify that the "lifecycle greenhouse gas emissions associated with the production and combustion of the fuel supplied under the contract must, on an ongoing basis, be less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources." Because the life cycle greenhouse gas emissions of tar sands oil are greater than conventional oil, the lawsuit contends that the Department of Defense must stop entering into those contracts or require the fuel obtained meet this limit on global-warming causing greenhouse gases.
In September 2010, the American Petroleum Institute, the National Petrochemical and Refiners Association and the U.S. Chamber of Commerce filed a Motion to Intervene in the case, which was granted. In November, both Defendants filed motions to have the case transferred to the Eastern District of Virginia, which was granted in January 2011. The coalition filed its Motion for Summary Judgment in February 2011 and is now awaiting the court’s decision. Please check back with us for further developments. See documents here.