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Group Takes Fight Over Barrier Reef Pipeline Funding to Ninth Circuit

An environmental advocate’s attorney urged a Ninth Circuit panel on Monday to revive a lawsuit challenging the U.S. government's funding of a natural gas project that opponents say threatens one of the world's greatest natural wonders, the Great Barrier Reef in Australia.

SAN FRANCISCO (CN) – An environmental advocate’s attorney urged a Ninth Circuit panel on Monday to revive a lawsuit challenging the U.S. government's funding of a natural gas project that opponents say threatens one of the world's greatest natural wonders, the Great Barrier Reef in Australia.

Center for Biological Diversity attorney Brendan Cummings asked a three-judge panel to reverse a lower court finding that three environmental groups lack standing to sue the U.S. government's Export-Import Bank for providing $4.8 billion in loans for two natural gas projects on the coast of Australia.

Cummings said the bank could have imposed stricter conditions on its $2.95 and $1.8 billion loans to guarantee greater protections for the 1,600-mile-long reef and endangered species that live there.

"We're talking about $3 billion of financing, the second largest loan in the bank's history," Cummings told the panel. "That gives them substantial influence to add some environmental terms."

But U.S. Justice Department attorney Eric Grant argued the case is moot because the loan money has already been doled out, and one of the loans has been repaid in full.

"One of these two loans was fully repaid to the bank three months ago," Grant said. "We're facing a situation now where the bank no longer has any power or influence to impose the kinds of conditions the plaintiffs want."

Grant contended the environmental groups can only offer speculation by claiming the bank could have imposed stricter conditions or denied funding for the projects altogether if it had conducted more thorough environmental reviews.

But even if the bank had taken those steps, mega-corporations like ConocoPhillips and Royal Dutch Shell could have easily found funding elsewhere, Grant argued.

The bank's two loans made up 10 percent and 9.5 percent of funding for the two projects, which will cost an estimated $58 billion combined, according to the U.S. government.

"Plaintiffs have never suggested particular conditions that would have made a difference without causing the borrowers to refuse the funding and continue the project without Export-Import Bank funding," Grant said.

To establish standing in a suit involving third parties, like corporations receiving loans from the bank, plaintiffs must show it is "likely" and not merely "speculative" that the alleged injury will be "redressed by a favorable decision" of the court, according to the 1992 Supreme Court ruling Lujan v. Defenders of Wildlife, cited in the U.S. government's brief.

The Center for Biological Diversity, Pacific Environment and Turtle Island Restoration Network sued the Export-Import Bank in 2012, claiming it failed to conduct mandatory environmental reviews before issuing loans in violation of the Endangered Species Act and National Historic Preservation Act.

The 1,600-mile-long Great Barrier Reef runs along the coast of Queensland, Australia, from 10 to 90 miles offshore. It is longer than the Great Wall of China, and is the only living thing on Earth that can be seen from space.

More than 400 species of coral inhabit the reef, as do at least 1,500 species of tropical fish, more than 200 species of birds and dozens of species of reptiles, including crocodiles and sea turtles. Humpback whiles migrate to the reef from the Antarctic to breed.

The UNESCO World Heritage Committee listed the Great Barrier Reef as a world heritage site in 1981.

The Australia Pacific Liquefied Natural Gas Project and the Queensland Curtis Liquefied Natural Gas Project – collectively amounting to up to 16,000 on-land well and 510 miles of pipeline to the coast – will be located partially within the boundaries of the heritage site, and within the habitats of threatened and endangered species.

The plaintiffs claim the project threatens the habitat of threatened green sea turtles, loggerhead sea turtles, saltwater crocodiles and dugongs, which are related to manatees and have been listed as endangered since the 1970s.

Cummings argued Monday that for procedural injuries – such as failing to conduct mandatory environmental reviews – a lower bar is required to show that a court can remedy such injuries.

"It's a lower burden, but it's still not a free pass," said U.S. District Judge James Gritzner of the Southern District of Iowa, sitting on the panel by designation.

Gritzner asked how the Export-Import Bank could have imposed stricter conditions on the project than those already required by the government of Australia.

Cummings replied that to establish standing for an alleged procedural injury, the plaintiffs need only show the bank could have wielded greater influence over the project.

At the end of Monday's hearing, Cummings told the panel that even if it finds the case moot, it should still vacate the lower court’s ruling that the plaintiffs lack standing to sue. Allowing that judgment to stand could have "preclusive effects" on future lawsuits, Cummings said.

After 35 minutes of debate, the panel took the arguments under submission.

Circuit Judges Mary Murguia and Ronald Gould joined Gritzner on the panel.

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Categories / Appeals, Energy, Environment, Financial, International

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