Tom Shepstone
Natural Gas NOW

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States such as Ohio and New York, have been playing political games with FERC water rules and others hope to do so but the courts are catching up with them.

When I say FERC water rules, what I’m referring to is Section 401 of the Clean Water Act, which governs how states are to carry out their water quality certification responsibilities. The law basically provides that any FERC pipeline project involving water discharges (and all do) must receive certification from the state in which the discharge will originate that it complies with the state’s water quality standards. Section 401 specifically states:

If the State, interstate agency, or Administrator, as the case may be, fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived with respect to such Federal application.”

If the states don’t act accordingly, FERC can declare waivers have occurred and essentially take over those responsibilities. Ohio, like New York, has been playing games with the one-year deadline by blackmailing applicants into withdrawing and resubmitting such that applicant can be delayed for a long, long time and delay kills projects. The Federal courts are onto this game, as I noted here and here, and now at least one state court in Ohio is as well.

It’s unusual for a state court to get involved with FERC water rules, but this is case where a Federal court judge remanded a case to the Stark County, Ohio, Court of Common Pleas because it involved water quality regulations the Feds had given the state the authority to implement. The Federal judge, in fact, said the federal court “cannot exercise jurisdiction without disrupting the division of labor between the state of Ohio and the federal government.”

Stark County Courthouse

Therefore, it fell to Stark County Judge Kristin G. Farmer to analyze and rule on on this case involving the Rover Pipeline in Ohio, but with lots of lessons for pipeline developers in New York and New Jersey. Ohio accused the Rover Pipeline owners and contractors of causing pollution during construction and here are the relevant parts of Judge Farmer’s decision (emphasis added):

More specifically, the State of Ohio’s complaint alleges the following…

Defendant Rover Pipeline LLC engaged in activities without effective certification. Plaintiff alleges that the Defendant engaged in activity from February 24, 2017 through May 15, 2017, without the state 401 water quality certification…

While, as previously noted, the Natural Gas Act gives deference to the Clean Water Act, such deference is not unlimited. Notably, the Natural Gas Act designates FERC as the lead agency for the coordination of all federal permits (which would include any permit required under the Clean Water Act), special use authorizations, certifications, opinions, or other approvals regarding the construction of a natural gas pipeline.

Further, the Act requires all federal and state agencies considering an aspect of an application for the construction of a natural gas pipeline to cooperate with FERC and comply with the deadlines established by FERC…

In its motion, Rover asserts that the State of Ohio failed to “act” on its request for a 401 certification within the one-year period provided in said section, As such, Rover argues that the State of Ohio waived any limitations on a discharge certification. The State of Ohio argues that it did “act” upon such request within one year, Moreover, the State of Ohio asserts that any such waiver applies only to Count 7 of the complaint and does not affect the other claims.

On November 16, 2015, the State of Ohio received a 401 Certification request from Rover. As such, the State of Ohio had until November 16, 2016, to “act” on such request pursuant to Section 401 of the Clean Water Act. However, the State of Ohio did not “act” on the initial 401 Certificate request. Rather, the State of Ohio required Rover to resubmit its request on February 23, 2017, and the State granted the revised request on February 24, 2017, again without ever acting on the initial request filed November 16, 2015.

The Court finds the language of Section 401 to be clear and unambiguous in regard to the timeframe for acting upon a 401 Certification. Further, as noted by the Court in N.Y. State Dep’t of Envtl. Conservation, the one-year requirement is a ”bright-line” rule. The Court finds that, in order to assert its rights under the Clean Water Act, the State of Ohio was required to “act,” i.e., grant or deny, upon Rover’s November 16, 2015, 401 Certification request on or before November 16, 2016. Its failure to do so, resulted in a waiver of rights.

The Court does not find that the “resubmission” of Rover’s request on February 23, 2017, acts to save the State of Ohio from such waiver. Although the State of Ohio timely acted upon the resubmitted request, such action, which occurred outside of the one-year period for the initial submission, does not negate the waiver that resulted from the failure to act on or before November 16, 2015. Simply put, because the State of Ohio did not grant or deny the November 16, 2015, 401 Certification request on or before November 16, 2016, it waived its rights pursuant to the Clean Water Act, regardless of any subsequent action…

Section 401 gave the State of Ohio the opportunity, within one year of Rover’s request for certification, to set forth such limitations and requirements. The failure by the State of Ohio to do so, as set forth above, waived its authority to enforce the same,

This Court finds that the State of Ohio cannot, through the instant litigation, assert rights given to it under the Clean Water Act which it waived by failing to act within the specified time provided by the Clean Water Act. Because the Court finds that such waiver is dispositive of all claims in the Third Amended Complaint, the Court will not address the merits of the defendants’ remaining arguments for dismissal…

For the reasons set forth herein, as well as those set forth in the motions to dismiss, the Court finds that the State of Ohio failed to act upon rights specifically given to it pursuant to the Clean Water Act within the Act’s specified period of time. As such, the Court finds that it lacks jurisdiction over this matter, and further finds that the State of Ohio can prove no set of facts entitling it to its requested relief, As such, the Third Amended Complaint filed by the State of Ohio is, hereby, DISMISSED.

The clear writing of this judge leaves no doubt as to what Ohio (and New York) was doing (or what New Jersey will probably try). It was playing political games and it got caught. As one honest member of Andrew Cuomo’s DEC staff said in 2015:

“If we are to use that authority arbitrarily or to withhold these certifications where we should be granting them, what then can happen … is there is an opportunity for the federal government to just take that process over from us and then we no longer have that authority,” Snyder said at a roundtable discussion on climate change Monday sponsored by the state Assembly. “So that’s the position we’re in. We look at it really carefully. We have people going out in the field, every stream crossing, every wetland to make sure these are being done using the best techniques to protect our resources. But we have limited authority over that broader energy question of whether the pipeline is needed.”

If only Governor Cuomo understood this, you might be saying. But, that ignores reality. He has always understood. He just doesn’t care. The point is to be seen opposing the pipeline and if FERC overrules, well, so much the better. That’s the political game and it’s now being called to an end by the courts. Ohio and New York are getting their just desserts. But, is New Jersey paying attention? Let’s hope so.