Unusual SCOTUS Case May Help LNG Opponents

Stumptown Earth First! banner on Burnside Bridge (over Willamette in Portland) (April 1, 2008).

In a ruling earlier this week which may give some support to LNG terminal opponents in Oregon, the US Supreme Court sided with the State of Delaware. DE had refused to permit a four mile long liquid natural gas (LNG) terminal proposed by energy giant BP on the New Jersey side of the Delaware River. The terminal would receive 150 or more ships yearly, each carrying a large cargo of super-chilled fuel. The case was unusual in several ways, and may have limited impact in other disputes.

The decision showed an odd split among the justices. The usually pro-business Justices, Roberts and Kennedy, joined an opinion by Ruth Bader Ginsberg which upheld the states’ right to control “extraordinary” development. At oral argument, it seemed the pro-big-business tilt of the current court would help the New Jersey/BP claims because questioning was dominated by skeptical inquiries of DE's lawyers by Justices Alito and Scalia (the Court’s two New Jersey-born justices).

In the end only”Scalito”dissented. Justice Beyer did not participate as he owns up to $50,000 in BP stock.

There are three LNG import terminal proposals at some stage in Oregon: Bradwood Landing LNG, located at River Mile 38 east of Astoria on the Columbia River; Oregon LNG, located at the Skipanon peninsula on the Columbia River near Warrenton and Jordan Cove LNG, located on the North Spit of Coos Bay. New York State will soon decide the fate of a proposed for a quarter-mile-long LNG storage barge in Long Island Sound. Exxon has announced plans for a floating terminal 20 miles off the New Jersey coast. Numerous other LNG projects are in the planning stages along the West Coast.

The case involved unusual facts and it was one of those rare cases which go directly to the Supreme Court. The colonial-era deed creating the state of Delaware made all of the lands under the Delaware River, from shoreline to shoreline at low water mark, part of Delaware. In 1905 the states signed an agreement allowing New Jersey to construct river piers from its bank even though such piers would have footings in the Delaware-owned river bottom.

In 2005 DE refused permits for the 2,000-foot pier that the LNG plant would require for supertankers to unload. The meaning of the 1905 agreement became crucial. The case went directly to the US Supreme Court under its “original jurisdiction” under Article III of the Constitution, which grants it power to decide suits between states. Only 134 such cases have been filed in the Court’s history.

A special master sorted out the facts for the Court, which does does not usually decide evidentiary matters, and he made a “recommendation,” which the majority adopted. The facts played the decisive role in Justice Ginsberg’s opinion that the size and scope of the project was so extraordinary that the 1905 agreement did not apply to stop Delaware’s objections.

Decisions in other LNG siting and permitting cases may also depend on highly specific factual records, so the extent of this precedent is hard to predict.