(Corrects price of project to $750 million from $175 million in 12th paragraph)
By Liz Hampton
Feb 23 (Reuters) - A federal judge in Louisiana on Friday revoked a permit for Energy Transfer Partners’ Bayou Bridge crude oil pipeline, halting work on a portion of the project following protests by local and environmental groups.
The decision by U.S. District Judge Shelly Dick in Baton Rouge underscores the growing clashes between energy pipeline operators expanding operations to accommodate new oil and gas flows from U.S. shale fields and environmentalists concerned about spills and other hazards.
Energy Transfer Partners declined to comment, saying it would wait to review the judge’s opinion, which was not included with the order.
Friday’s ruling granting a preliminary injunction requires the U.S. Army Corps of Engineers to revisit its approval of the pipeline’s construction through the Atchafalaya Basin, according to the decision.
Energy Transfer Partners has suffered construction delays and court challenges to several other projects, including its Dakota Access crude pipeline and Rover natural gas line, which recently restarted construction in Ohio after regulators halted work following a drilling fluids spill.
Environmentalists and local Louisiana fisherman filed the lawsuit against the U.S. Army Corps of Engineers, challenging its permit and citing risks to the environment, health and local economy.
The pipeline route passes through the Atchafalaya Basin of southern Louisiana, a nearly 1 million-acre patch of swampland that is a critical component of the state’s flood protection system and a source of livelihood for the commercial fishing industry, according to the lawsuit.
The groups argued that construction dredging in the swamp will contribute to so-called spoil banks, which build up inside the swamp and alter its water flows, disrupting ecosystems and making the area more prone to floods.
Plaintiffs include the Atchafalaya Basinkeeper group, Louisiana Crawfish Producers Association-West, Gulf Restoration Network, Waterkeeper Alliance and Sierra Club.
“The court’s ruling recognizes the serious threat this pipeline poses to the Atchafalaya Basin, one of our country’s ecological and cultural crown jewels,” said Jan Hasselman, an attorney representing the plaintiffs.
Construction on the $750 million, 162-mile pipeline has already begun. The line would transport crude from Lake Charles to St. James, Louisiana, connecting to an existing line that originates in Nederland, Texas. The project is 60 percent owned by Energy Transfer with the remainder owned by refiner Phillips 66 N>.
Once complete, the Bayou Bridge system will have capacity to transport up to 480,000 barrels of oil per day to refineries along the Mississippi River. It is projected to start service by the second half of 2018.
The line also would move oil from Texas and as far as North Dakota, through connections with Energy Transfer’s Dakota Access, to Gulf Coast refiners. Louisiana is home to around 3.5 million barrels per day of refining capacity, according to the U.S. Energy Information Administration.
Energy Transfer’s 1,172-mile (1,885-km) Dakota Access crude pipeline was thrust into the spotlight following massive protests near its construction site in North Dakota. Although protesters were able to temporarily halt construction, it began service in mid-2017.
The case is Atchafalaya Basinkeeper et al vs U.S. Army Corps of Engineers, U.S. District Court, Baton Rouge, No 3:18-cv-00023-SDD-EWD (Reporting by Liz Hampton; Editing by Gary McWilliams and Leslie Adler)