Last August the Federal Energy Regulatory Commission (FERC) issued a decision overruling the New York Dept. of Environmental Conservation (DEC) to allow National Fuel Gas Company’s Northern Access Pipeline project to proceed (see Big News: FERC Overrules NY DEC to Approve Northern Access Pipe). The DEC subsequently asked FERC to reconsider the decision. FERC did, and ruled on Tuesday that they were right the first time–the DEC forfeited the right to issue permits for the project by taking too long.
NFG’s $500 million Northern Access Pipeline project includes building 97 miles of new pipeline along a power line corridor from northwestern Pennsylvania up to Erie County, NY. The project also calls for 3 miles of new pipeline further up, in Niagara County, along with a new compressor station in the Town of Pendleton. Although FERC granted permission to build it in February 2017 (see NFG’s Northern Access Pipe in NY/PA Gets FERC Approval), NY DEC arbitrarily and capriciously tried to block it by refusing to issue a federal water/stream crossing permit (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit).
FERC’s stated reason for overruling the DEC last August was because the DEC took longer than the one year they have under law to issue their rejection, therefore, FERC itself will issue the water permits. The DEC challenged that decision and asked FERC to “rehear” or reconsider its decision. On Tuesday FERC told the DEC not only was the original decision correct based on the merits, but the recent Hoopa Valley court case decision by the D.C. Circuit Court of Appeals reinforces that they were right last year.
Although the Hoopa Valley case did not involve NY nor even pipelines, the principle and precedent of the case applies to both NY and pipelines. The Hoopa Valley case decision says that states cannot ask project builders to withdraw applications for water crossing permits in order to “restart the clock” ticking. Which is what happened with the Northern Access project. Water crossing applications must be ruled on by a state in one year, according to federal law. The court found pressuring applicants to withdraw and resubmit applications, thereby restarting the clock for an additional one year, violates the spirit and letter of the law.
The NY DEC has just been neutered by FERC. When it comes to issuing (or rather denying) water permits, DEC now sings soprano.
Note also that the radical Sierra Club was also part of the challenge–and equally slapped down by FERC.
The Federal Energy Regulatory Commission relied on a recent D.C. Circuit decision Tuesday when it upheld its conclusion that New York state environmental regulators waived their authority to deny a Clean Water Act permit for a $455 million natural gas pipeline project by blowing a one-year deadline.
FERC, which said in August that the New York State Department of Environmental Conservation missed a one-year statutory deadline to issue a water quality permit under Section 401 of the CWA for National Fuel Gas Supply Corp.’s Northern Access 2016 project, rejected arguments from NYSDEC that its April 2017 denial of a permit was timely because the company agreed to extend the one-year deadline. FERC had said the one-year clock ran out in March 2017.
FERC said in an order Tuesday that the Section 401 deadline can’t be waived by an agreement and pointed to the D.C. Circuit’s Jan. 25 decision in Hoopa Valley Tribe v. FERC et al . In that ruling, which vacated FERC orders over the relicensing of the Klamath Hydroelectric Project, the appeals court concluded that the Section 401 one-year clock doesn’t reset with withdrawn and resubmitted applications that are essentially unchanged and that an agreement between California and Oregon on one side and Klamath owner PacifiCorp on the other to delay water quality certification undermines the purpose of the one-year statutory limit.
“Hoopa Valley Tribe held that such an agreement results in a refusal and failure to act,” FERC said in its order. “Similarly, we find that the lack of action by the March 2, 2017, deadline here constituted a failure and refusal to act as contemplated by section 401. Therefore, New York DEC waived its authority to issue a water quality certification.”
FERC acknowledged that it had previously allowed a Section 401 permit applicant to withdraw and resubmit its application, but it said the D.C. Circuit’s decision in Hoopa Valley Tribe casts doubt on whether withdrawal-and-resubmission arrangements are still viable.
“At a minimum, we take the reasoning in Hoopa Valley Tribe — disapproval of an agreement to withdraw and resubmit as a failure and refusal to act resulting in a scheme that thwarts a Congressionally-imposed statutory limit — to apply equally to the facts here,” FERC said in its order. “We find that the statute prohibits state agencies and applicants from entering into written agreements to delay water quality certifications, an interpretation consistent with Hoopa Valley Tribe.”
FERC approved the Northern Access 2016 Project, which would carry fracked gas from Pennsylvania to Canada via New York, in February 2017. Two months later, NYSDEC opted not to greenlight the project, saying National Fuel’s application for a water quality certification as well as for stream and wetlands disturbance permits failed to comply with water regulations aimed at protecting wetlands and wildlife.
But in its August order refusing to reconsider its approval of the project, FERC said NYSDEC blew a one-year deadline that started running after National Fuel filed its original permit application in March 2016.
In February, the Second Circuit overturned NYSDEC’s denial of the Section 401 permit for the Northern Access project, saying the agency didn’t adequately explain how the pipeline would violate state environmental standards.
National Fuel spokeswoman Karen Merkel said the company is working on securing the remaining federal authorizations it needs for the project, which it hopes to have up and running by 2022.
“We remain committed to the project and intend to request a Notice to Proceed from FERC once all necessary authorizations are secured,” Merkel told Law360 Wednesday.
NYSDEC said in a Wednesday statement that it “vehemently disagrees with FERC’s decision.”
“While DEC is reviewing FERC’s misguided decision, the agency is considering all options, and will continue to vigorously defend our decision and our authority to protect New York State’s water quality resources.”
When FERC originally ruled that NYSDEC had waived its Section 401 authority, the agency said it would launch an appeal with the Second Circuit if the agency didn’t reverse its decision upon rehearing.
The case is National Fuel Gas Supply Corp. et al., case number CP15-115, before the Federal Energy Regulatory Commission.*
*Law360 (Apr 3, 2019) – FERC Won’t Reconsider NY Pipeline Authority Ruling
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