A federal appeals court in New York rejected Constitution Pipeline Co. LLC’s request to overturn the New York State Department of Environmental Conservation’s (DEC) denial of a water quality permit for the interstate natural gas pipeline project (OGJ Online, Apr. 25, 2016).
DEC’s decision was within its statutory authority and the agency’s actions were not arbitrary or capricious, the US Appeals Court for New York’s Second Circuit said in its Aug. 18 ruling. The court also refused to rule on the lawsuit’s argument that the state agency did not meet the deadline to complete its review because the court lacks jurisdiction over that challenge.
Constitution sued in federal court 3 weeks after DEC rejected its water quality permit application (OGJ Online, May 17, 2016). It contended, among other things, that the state agency’s decision was an impermissible challenge to the Certificate of Public Convenience which the US Federal Energy Regulatory Commission issued for the project in December 2014.
Relevant federal standards under the 1938 Natural Gas Act and the 1972 Clean Water Act entitle DEC “to conduct its own review of the Constitution project’s likely effects on New York water bodies and whether those effects would 19 comply with the state’s water quality standards,” Senior Judge Amalya L. Kearse wrote in the federal appeals court’s decision.
“We disagree that [DEC’s] action was preempted,” she added.
The court’s decision also rejected Constitution’s contention that the state agency’s ruling was arbitrary and capricious because the court accepted DEC’s argument that the pipeline project’s sponsors did not supply several necessary supporting documents about the pipeline’s potential environmental impacts.
Constitution said it provided sufficient information with information about trenchless crossing methods for streams less than 30 ft wide, but the court found this inadequate because it was not an accepted industry standard.
“In order to show that an agency’s decision—or its request for additional information as to alternative methods—is arbitrary and capricious, it is not enough that the regulated industry has eschewed a given [technology],” Kearse said. “Industry preferences do not circumscribe environmental relevance.”
In an Aug. 18 statement following the court’s decision, Constitution said the ruling recognized the US Circuit Court for the District of Columbia’s jurisdiction in the matter, and that court recently acknowledged FERC’s authority to make the ultimate decision under the Natural Gas Act.
“While we would have preferred an immediate path to construction, we are pleased with the [New York federal appeals] court’s resolution of this jurisdictional issue,” the statement said.
The project is owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co., and WGL Holdings Inc. DEC’s water quality permit rejection affected 98 miles of the proposed 121-mile gas pipeline from Marcellus shale production sites in Pennsylvania to markets in the US Northeast.
Contact Nick Snow at [email protected].