Federal court vacates NYSDEC’s pipeline certificate denial

A federal appeals court vacated the New York State Department of Environmental Conservation’s (NYSDEP) denial of a water-quality certificate to the proposed Northern Access natural gas pipeline project on Feb. 5. The US Court of Appeals for the Second Circuit remanded the matter back to the state agency with instructions to more clearly articulate its basis for denial.

Feb 6th, 2019

A federal appeals court vacated the New York State Department of Environmental Conservation’s (NYSDEP) denial of a water-quality certificate to the proposed Northern Access natural gas pipeline project on Feb. 5. The US Court of Appeals for the Second Circuit remanded the matter back to the state agency with instructions to more clearly articulate its basis for denial.

Sponsors National Fuel Gas Co. and Empire Pipeline Inc. applied for a NYSDEC certification under Section 401 of the federal Clean Water Act on Mar. 2, 2016. The agency denied the application on Apr. 7, 2017 after the US Federal Energy Regulatory Commission issued the project a certificate of public convenience and Pennsylvania’s Department of Environmental Protection issued it a state water quality certification.

The sponsors sued in federal court to overturn the New York agency’s action. FERC later ruled that NYSDEC waived its authority to deny the permit because it did not act within a year of receiving the interstate natural gas pipeline sponsors’ application for it (OGJ Online, Aug. 7, 2017).

“Today's court decision continues the momentum for this project,” a National Fuel Gas spokeswoman said on Feb. 5. “As FERC stated in its Aug. 6 order, [NYSDEC] waived the ability to issue or deny a Clean Water Act Section 401 permit for the Northern Access project. The Second Circuit also has now made it clear that New York's denial of the permit application failed to provide factual justification for their decision.”

She said, “In spite of thousands of pages of technical analysis, months of collaboration and compromise and a proven track record of responsible development, New York attempted, without basis in fact, to raise the hurdle for pipeline construction to a level that is not clearly defined and is inconsistent with the standards applied to all other public infrastructure projects.”

There was no statement about the court’s decision at NYSDEC’s web site.

Trade associations respond

The executive director of the American Petroleum Institute’s affiliate in Albany applauded the federal court’s decision. “Today’s decision by the Second Circuit Court of Appeals is good news for infrastructure projects across the state,” said Karen Moreau of API-New York.

The US Environmental Protection Agency provides guidance on how states should grant Section 401 permits under the Clean Water Act, but [NYSDEC] interpreted that guidance to allow it to arbitrarily block projects, Moreau said. “The court’s decision that the NYSDEC failed to provide factual justification for their denial of Northern Fuel’s Northern Access water quality permit emphasizes why this guidance should be clarified by the EPA.”

An official at the Natural Gas Supply Association in Washington applauded the court’s finding. “As stated by the court, NYSDEC’s denial failed to make ‘any rational connection between facts found and choices made,’” NGSA Executive Vice-Pres. Patricia W. Jagtiani said.

“State denials of 401 water certifications must be closely scrutinized to ensure that states are sticking to the facts instead of using their certificates as a tactic simply to limit infrastructure,” Jagtiani said. “It’s unfortunate that [NYSDEC’s] actions delayed a pipeline that would provide economic growth to New York’s citizens and businesses, while depriving other states reliable access to natural gas supplies that are needed for clean electricity, winter heating and industrial manufacturing.”

Several other national oil and gas association officials have criticized NYSDEC’s apparent use of federally granted authority to block an interstate natural gas pipeline. “If these states acted pursuant to state law that would be one thing. However, they’re acting under the federal Clean Water Act. We think they’re violating the concept of cooperative federalism,” Interstate Natural Gas Association of America Pres. Donald F. Santa told OGJ on Jan. 15.

“What’s going on in New York is particularly egregious,” NGSA Pres. Dena Wiggins said on Jan. 17. “People elect lawmakers to represent their interest, but when [NYSDEC} used its authority under the CWA to stop an interstate pipeline, it affected consumers in other states.”

Contact Nick Snow at nicks@pennwell.com.

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