When is a 'Permit' a Permit? It's a Question for the Supreme Court to Answer

Amid flagging congressional efforts to streamline federal permitting processes for energy projects, a disturbing trend is now developing in the federal courts move aggressively to not just slow the process but to also use novel new reasons to cancel permits that have already been issued.

One prominent example relates to an August decision by a district court judge that could, if upheld, shut down all drilling in the Gulf of Mexico. Federal Judge Deborah Boardman struck down a 2020 environmental assessment by the National Marine Fisheries Service assessing risks posed by oil drilling to endangered species.

Normally, federal judges have in the past remanded the assessments to the agency for reconsideration in such decisions. But Judge Boardman took things further by vacating the assessment, a move that could halt the issuance of new drilling permits and put existing permits in legal jeopardy as well.

On August 6, the DC Circuit Court of Appeals took the extraordinary step of vacating a permit issued more than year ago by the Federal Energy Regulatory Commission (FERC) enabling LNG developer NextDecade to move ahead with construction of its planned Rio Grande LNG project near Brownsville, Texas. The Sierra Club, a plaintiff in the case, said it is the first time such a permit for an LNG project has been vacated by a federal court.