A federal court order temporarily blocking construction of the Bayou Bridge pipeline is limited to the Atchafalaya Basin, and work can continue elsewhere along the length of the 163-mile crude oil line, a judge ordered this week.
U.S. District Judge Shelly Dick clarified her Friday order stopping work with a 60-page ruling released Tuesday night, finding that environmental groups made enough of a case so far to suggest the pipeline poses permanent and irreparable risks to the basin's hydrology and environment, including to 1,000-year-old cypress in the path of the line.
"The Court finds the temporary delay in reaping economic benefits does not outweigh the permanent harm to the environment that has been established as a result of the pipeline construction," Dick wrote.
In part of her analysis, Dick faulted the U.S. Army Corps of Engineers for failing to consider the cumulative impact of other pipelines already built in the basin, calling it "myopic," and criticized the Corps' lack of an explanation about how the required wetlands mitigation would compensate for the permanent loss of the swamp forests.
The Sierra Club, Atchafalaya Basinkeeper, Gulf Restoration Civil Action Network, Waterkeeper Alliance and the Louisiana Crawfish Producers Association sued the Corps in January seeking to block a key permit for the pipeline issued Dec. 14, arguing the Corps' analysis of the environmental and economic impacts was insufficient.
Jan Hasselman, staff attorney with Earthjustice representing the plaintiffs, said the ruling confirmed that Corps "can't just keep issuing more permits for pipelines in the Atchafalaya, and ignoring the fact that they are routinely violated."
"After decades of noncompliance with the law — which has devastated the Basin — there is a glimmer of hope that the oil and gas industry will start being held accountable," he wrote in a statement Wednesday.
A spokeswoman for Energy Transfer Partners, the majority stakeholder in the pipeline, disputed the judge's findings that the Corps "did not properly consider the limited impacts of construction" in the basin.
"In fact, the Corps issued two comprehensive environmental assessments, both of which had a 'Finding of No Significant Impact' to the Basin," spokeswoman Alexis Daniel wrote. "We intend to seek immediate relief from this decision in the appropriate courts."
The company's lawyers told the judge Monday they will appeal the ruling to the 5th U.S. Circuit Court of Appeals.
The pipeline will be built between Lake Charles and the west bank of St. James Parish near the Mississippi River and is expected to handle up to 480,000 barrels per day once finished.
The $700 million line is a joint venture of Energy Transfer and Phillips 66 and will provide a downstream link for existing pipelines that carry oil from the nation's midsection to oil tank farms in St. James and refineries on the Gulf Coast. The future pipeline — work had begun in January after final permits were issued — would link with an existing pipeline that extends from Lake Charles west to Nederland, Texas.
Dick had issued a preliminary injunction Friday. But her initial order did not specify its breadth, leaving the plaintiffs and Bayou Bridge Pipeline LLC, the corporate entity building the pipeline, to argue about the order's implications amid a protest Monday in Assumption Parish by environmentalists that temporarily disrupted work being done outside the basin.
The extensive written reasons issued Tuesday eliminates any further doubt: Bayou Bridge Pipeline can't work in the basin until the merits of the environmentalists' lawsuit are decided, possibly months from now.
At the same time, Dick wrote that the limitation of her order to the basin ameliorates the effect of the work stoppage by allowing construction to continue on the rest of the project. She also found that Bayou Bridge's claims of economic losses of $950,000 per day, or $25 million per month, if work is stopped in the basin were not supported "by specific details or analysis justifying the vast amounts presented."
The findings about the economic costs of a delay and Bayou Bridge's ability to continue work outside the basin factored into her decision to require that the environmental groups put up a $10,000 bond while the case is pending.
Bayou Bridge had sought a $500 million bond based on the large economic loss estimates, but Dick found the far lesser amount reasonable given that most of the plaintiffs are nonprofit groups.
To issue this kind of temporary order before a trial, Dick had to consider several factors: the risk of irreparable harm, the "substantial likelihood" of the plaintiffs' eventual success on the merits, whether the harm to the environment outweighs the injury to the defendants and whether the order will be a disservice to the public interest.
In weighing whether the plaintiffs would succeed in their case, Dick rejected their claims that the Corps did not adequately consider the risk of oil spills or provide sufficient public notice.
But she faulted the Corps for "rote" adherence to wetlands mitigation policies not supported in the law. She also found the agency failed to offer assurances that the mitigation would compensate for the nearly 600 acres of wetlands affected, including the 142 acres of swamps that would be permanently damaged.
Dick noted that the U.S. Fish and Wildlife Service, state Department of Wildlife and Fisheries and the state Department of Natural Resources had objected to running the line through forested swamps that federal and state agencies have been trying to restore or wanted the line deeper underground than planned to maintain the area's hydrology.
Wetlands mitigation is a key feature of the Corps' process under Section 404 of the U.S. Clean Water Act allowing the destruction or alteration of wetlands. The Corps often makes applicants buy land or credits from mitigation banks — large swamp and marsh areas — to offset the impact of wetland losses from construction.
But the environmental groups had argued that the Corps' rigid way of handling wetlands mitigation led to the purchase of credits miles away from the affected swamps. The Corps countered it has a preference for wetlands mitigation but limited options from which to choose.
Dick found that the Corps failed to explain how the purchase of mitigation credits outside the basin and the purchase of far more credits for a different variety of swamp forests than the acres of cypress forests that will be lost is appropriate compensation.
Even though the Corps acknowledged the new pipeline would contribute to the cumulative impact of existing pipelines and spoil banks, the judge added, the Corps and Bayou Bridge failed to consider the issue and said they didn't need to. A spokesman for the Corps declined to comment Wednesday on the judge's order because the litigation remains pending.