A united Federal Energy Regulatory Commission found that a New York agency had waived its Clean Water Act authority over the Constitution Pipeline Co. LLC when it improperly extended a statutory deadline, removing a permitting obstacle that has held up the 650-MMcf/d natural gas pipeline project for over three years.
"This ruling has brought a project on life support some hope, even if further decisions are still needed," energy policy expert Rob Rains said in an Aug. 28 email. Rains is an analyst at Washington Analysis LLC.
Another analyst, Sandhill Strategy LLC co-founder Katie Bays, called the FERC decision a "slow, sweet victory for [Williams Cos. Inc.'s] Constitution Pipeline," but also pointed to further permitting and legal hurdles. The Constitution pipeline project, which is also backed by Duke Energy Corp., WGL Holdings Inc. and Cabot Oil & Gas Corp., would put in place a 124-mile gas transportation project between Pennsylvania's Marcellus Shale and pipeline connections in New York.
In an order issued late on Aug. 28, all four FERC commissioners concluded that the New York State Department of Environmental Conservation had waived its authority under Section 401 of the Clean Water Act to issue water quality certification for the proposed Constitution pipeline project. Informed by a recent decision from the U.S. Appeals Court for the District of Columbia Circuit, the decision reversed a January 2018 declaratory order from the commission that had ruled the state agency had not waived its authority. In a separate case, the D.C. Circuit had found that states cannot ask energy project developers to withdraw and resubmit their Section 401 permit applications to extend a one-year deadline under the Clean Water Act, which is what the New York agency did before denying the Constitution water permit in April 2016.
"FERC's surprise unanimous decision this evening determining that New York officials waived [their] authority to review and deny Constitution Pipeline a Clean Water Act Section 401 water quality certification greatly improves the chances that the project eventually goes forward, although other hurdles remain," Rains said.
Rains expected FERC, which refused New York's request for a stay pending an appeal, to issue a tolling order that would push off the commission's final decision on any appeal over its decision. The parties in the case, including the New York agency and the Sierra Club, cannot bring an appeal to the federal courts until FERC issues such a final decision. Rains said the appeal might reach the D.C. Circuit in the first half of 2020.
FERC has issued construction authorizations to pipeline companies while appeals go forward. However, Rains noted that before construction can begin on Constitution pipeline, the U.S. Army Corps of Engineers would have to provide the developer with a Clean Water Act Section 404 erosion and sedimentation permit. The Army Corps has not always moved quickly on permits for other pipeline projects, Rains said.
Williams was not immediately available for comment.
After initially denying Constitution's request for a waiver of New York's Clean Water Act permitting authority, FERC reopened the case after a D.C. Circuit decision in February on a hydropower project that ruled that states cannot use water quality certificates to hold up federal hydropower licenses, which had parallels to the interplay between FERC and states on the Natural Gas Act certificates the commission issues for pipeline projects.
In a note to clients, consulting firm ClearView Energy Partners LLC said it had expected FERC would grant the waiver after the D.C. Circuit's decision in the hydropower case. But the firm was uncertain whether the commissioners would come together on the decision.
"In part, we did not know whether the commission might be deadlocked 2-2 on the matter, slowing the release of the waiver we considered likely," the firm said in the Aug. 28 note. "[The] unanimous vote indicates that was not the case. No commissioner offered a separate concurrence to the order as of this writing." (FERC docket CP18-5)
The current lineup of four commissioners, two Republicans and two Democrats, has not often ruled as one body on decisions on natural gas infrastructure. The commissioners have frequently separated on party lines over the FERC analysis of climate impacts from such projects.
