The Federal Energy Regulatory Commission (FERC), under new Chairman Neil Chatterjee, wasted no time making clear that it would use the exemption authority given to it recently by a U.S. Court of Appeals in the District of Columbia in order to approve pipeline construction where states balk at issuing decisions on Clean Water Act permits. The Commission’s decision in September may have wider implications, given a number of other pipeline owners arguing that construction is being delayed by balking state agencies.
One of those is the Constitution Pipeline, which in August received a boost from the U.S. Court of Appeals for the Second Circuit – following the DC Appeals Court decision in June – confirming FERC’s authority to make exemption decisions. Constitution had sought the Court’s agreement with the pipeline’s contention that the New York State Department of Environmental Conservation (NYDEC) was “arbitrary and capricious” in delaying a decision on a water quality permit after FERC approved construction in December 2014. The 125-mile Constitution pipeline would move Marcellus shale gas to various parts of New York State.
National Fuel Gas Company has already asked the FERC to exempt its Northern Access Project from needing water quality certification from the NYDEC because of that agency’s failure to act within 12 months. The project is a planned 96-mile pipeline from the Marcellus region to New York State areas.
The failure of the NYDEC to act on schedule was the core of the complaint made by Millennium Pipeline Company LLC, about its 7.8-mile Valley Lateral Project in Orange County, New York, which was approved via a declaratory order the Commission issued on Sept. 15, 2017. Millennium was one of two pipelines that had sought confirmation of FERC’s exemption authority from the DC Appeals Court. Millennium also argued the NYDEC had failed to issue a timely decision – either “for” or “against” – on Millennium’s application for a water quality certification under the Clean Water Act (CWA). The CWA requires state action on a 401 water quality certification within 12 months of receipt of that application.
In issuing its declaratory order, FERC backed Millennium’s contention that its application for a CWA water quality permit was received by the NYDEC on Nov. 23, 2015, when it was first submitted. The NYDEC had argued that it received the application on Aug. 31, 2016, after Millennium had submitted additional information in response to NYDEC’s second Notice of Incomplete Application, sent two months earlier.
FERC said the 12-month clock on water quality certification starts at the point a state “receives” an application. The need for pipeline companies to obtain that certification is waived, according to section 401 of the CWA, when the certifying agency “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.”
NYDEC is reviewing FERC’s decision on Millennium and says it “will consider all legal options to protect public health and the environment.”
In June, the DC Appeals Court told Millennium and Tennessee Gas Pipeline, which was protesting a locality’s failure to issue a Clean Air permit (where the timeline extends to 18 months), to ask FERC for an exemption from the CWA requirement, which it said FERC could issue, despite NYDEC not acting. FERC had not, to that point, ever issued such an exemption for pipeline construction. Its decision to do so on Sept. 15 was precedent setting.
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