Construction of the Atlantic Coast Pipeline has hit a new roadblock in the Blue Ridge Mountains at a critical crossing beneath a scenic national parkway.

A three-judge panel of the 4th U.S. Circuit Court of Appeals on Monday tossed out two federal permits issued for the $5.5 billion, 600-mile natural gas pipeline, including one the National Park Service granted for the pipeline to cross under the Blue Ridge Parkway between Augusta and Nelson counties.

The panel, in an opinion written by Chief Judge Roger L. Gregory, also said construction of the project cannot proceed without a valid and enforceable permit from the U.S. Fish and Wildlife Service for the “incidental taking” of five threatened or endangered species in its path.

Without valid permits from the two federal agencies, the Atlantic Coast Pipeline, “should it continue to proceed with construction,” would violate its permit for the project from the Federal Energy Regulatory Commission, the appeals court panel said in a footnote in the 62-page decision.

Judges James A. Wynn Jr. and Stephanie D. Thacker, also of the appeals court, joined the opinion.

Environmental organizations that brought the two cases covered by the opinion called on the FERC to halt construction of the pipeline along its entire length through three states, as the commission did last week with the Mountain Valley Pipeline after the 4th Circuit vacated a U.S. Forest Service permit for that project to cross a section of national forest.

“What is clear from today, there is a 600-mile pipeline with a hole in the middle,” said DJ Gerken, an attorney for the Southern Environmental Law Center in Asheville, N.C., who argued the two cases for Defenders of Wildlife, the Sierra Club and the Virginia Wilderness Committee.

“What they should be doing right now is rethinking the whole project,” Gerken said of the Atlantic Coast Pipeline LLC, led by Dominion Energy. “They should at least be rethinking a new route.”

Dominion took a completely different view of the panel’s decision and expressed confidence that the two agencies can quickly reinstate the permits to satisfy the court’s concerns in both cases.

“We believe the court’s concerns can be promptly addressed through additional review by the agencies without causing unnecessary delay to the project,” spokesman Aaron Ruby said in a written statement on Monday. “In the meantime, we will continue making progress with construction in West Virginia and North Carolina.”

The court’s ruling on the “incidental taking” of threatened or endangered species expands on its decision in May to vacate the Fish and Wildlife permit for construction that would harm habitat for the clubshell mussel, the rusty-patched bumblebee, the Madison Cave isopod, the Indiana bat and the Northern long-eared bat.

But the pipeline company repeated its argument that the ruling halts only work on about 80 miles of the project in Virginia and 20 miles in West Virginia until the federal agency corrects its permit to make it enforceable under the decision.

“We have avoided these areas since the court’s initial ruling on May 15, and we will continue avoiding them until the agency issues a revised Incidental Take Statement,” he said.

FERC spokeswoman Tamara Young-Allen declined to comment on what action the commission might take because of the ruling.

“It is FERC policy not to comment on court proceedings nor speculate on future actions of the commission,” Young-Allen said.

Construction of the project has not begun in Virginia because the State Water Control Board conditioned a water-quality permit on review and approval of plans to control erosion and sedimentation in waterways — the same issue at stake in the appeals court’s decision last week on the Forest Service permit for the Mountain Valley Pipeline to cross a section of the Jefferson National Forest.

The Richmond-based appeals court will hear arguments on Sept. 28 in another lawsuit filed by the Southern Environmental Law Center on behalf of environmental organizations that challenges the Forest Service’s review of erosion and sediment control plans for the Atlantic Coast Pipeline.

The lawsuit also challenges the Forest Service’s approval of the project’s plan to drill through the Blue Ridge Mountains beneath the Appalachian Trail without express authority from Congress.

The opinion that the 4th Circuit panel issued on Monday stopped short of resolving whether the National Park Service has the authority to grant a right of way for the pipeline to cross under the Blue Ridge Parkway, a national scenic byway that links the Shenandoah and Great Smoky national parks.

“We assume for the purposes of this case that the [National Park Service] has the requisite statutory authority but because NPS does not explain how the pipeline crossing is not inconsistent with the purposes of the Parkway and the overall National Park System, the permit decision is arbitrary and capricious,” Gregory wrote.

The panel rejected an argument by the environmental organizations that the Mineral Leasing Act precludes pipeline construction across the park service land, but said it did not need to determine whether a provision of the Blue Ridge Parkway Organic Act allowed the agency to grant the right of way.

The law does not expressly give the agency that authority, the panel said. “However, the absence of an explicit delegation is not conclusive and, at this juncture, we need not decide whether [the act] explicitly confers on the agency the power ‘to stand in the shoes of Congress.’”

Dominion and its three partner energy companies in the project rerouted the pipeline to cross the Blue Ridge near Reed’s Gap, exiting a mountain tunnel across from the entrance to Wintergreen Resort, in order to avoid the need for congressional approval to cross beneath the Appalachian Trail, which runs beside the parkway there.

However, the appeals court panel said the park service had failed to show the pipeline’s construction is consistent with the purposes of the parkway and the National Park System, which Congress has defined as conservation of scenic, wildlife, natural and historic resources.

“Thus, unlike other federal lands, such as the national forests, the National Park System’s sole mission is conservation,” said the panel, adding that the act “forbids [the park service] from authorizing any right of way that is not consistent with those parkway purposes.”

While the park service argued that the pipeline would pass through the mountain 700 feet below the parkway, the court noted that its cleared right of way would harm the scenic view from the roadway, specifically at Three Ridges Overlook in Lyndhurst on the Augusta-Nelson line.

It also said the park service had failed to determine whether the proposed horizontal directional drilling through the mountain “will remain consistent with park purposes should the proposed drilling method fail.” If that happened, the project would resort to a backup plan, “which is expected to intensify the disruptive effects of the pipeline and impact additional observation areas,” the court said.

Ruby, at Dominion, said the ruling sends the permit back to the agency “to correct certain errors and omissions in the permit record.”

“We believe the extensive public record and mitigation requirements already in place provide ample support for the agency to promptly reissue the permit,” he said.

But Gerken, who argued the case for the environmental groups, said the panel’s ruling sets a high standard for the park service to meet in allowing the pipeline to pass under the parkway.

“This is not what the Blue Ridge Parkway is for,” he said. “It’s not for industrial crossings.”

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