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NY agency seeks to overturn FERC orders that sidelined it on pipeline permit

A New York state agency, pushed out of a permitting role by the Federal Energy Regulatory Commission after the state agency decided against the Williams Cos. Inc.-led Constitution Pipeline Co. LLC natural gas transportation project, wants its authority back.

The New York State Department of Environmental Conservation filed a petition for review of FERC orders with the U.S. Appeals Court for the 2nd Circuit on Dec. 30, 2019. "The waiver order and the rehearing denial should be set aside in whole as illegal, unreasonable, arbitrary and capricious," the agency said. (U.S. Appeals Court for the 2nd Circuit docket 19-4338)

In August 2019, FERC saved the 650-MMcf/d Constitution pipeline project from development doldrums when the commission waived the New York agency's authority to deny a Clean Water Act Section 401 permit.

The state agency had denied the developer's permit application in April 2016, calling it incomplete, but FERC ruled that the agency exceeded the year provided by the statute to take action on a permit application. FERC had originally denied Constitution's request for a waiver but reconsidered after a January 2019 decision by the U.S. Appeals Court for the District of Columbia Circuit that held states to a strict interpretation of the one-year time limit under the Clean Water Act in a case involving a hydropower project.

On Dec. 12, 2019, a majority of FERC commissioners rejected the New York agency's attempt to get a rehearing on the commission's waiver decision.

No one expected the fight to be over. Analysts have predicted further permitting and legal obstacles for the Constitution project. New York and other states that do not want more gas pipelines within their borders have found their federally delegated authority under the Clean Water Act to be an effective way to stop such projects, even those that have received federal approval through FERC, as Constitution did in December 2014. Environmental groups and other pipeline opponents have supported the states' use of their authority in this way. Republican lawmakers and the gas industry have criticized the practice as obstructionist, and the Trump administration has issued a U.S. Environmental Protection Agency rule that would restrict states' use of the Clean Water Act.

The 124-mile Constitution pipeline would run between Pennsylvania and connections with other pipelines in New York, providing an outlet for Marcellus Shale gas production. In addition to Williams, the project is backed by Duke Energy Corp., WGL Holdings Inc. and Cabot Oil & Gas Corp.