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Supreme Court won't hear pitch that N.Y. overstepped in Constitution pipeline denial

Washington — The US Supreme Court has turned aside another attempt by Williams torevive the 121-mile, 650 MMcf/d Constitution Pipeline project, decliningto take up a case in which the natural gas industry had argued that NewYork was usurping federal authority.

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The project has been stalled since April 2016 when the New York StateDepartment of Environmental Conservation rejected a water qualitycertification, finding the pipeline developer failed to supply pertinentinformation about the feasibility of trenchless stream crossings.

Designed to transport up to 650 MMcf/d of Northeast Pennsylvaniaproduction to interconnects with Iroquois Gas Transmission and TennesseeGas Pipeline in upstate New York, the project would allow for additionaltakeaway capacity out of the constrained northeast Pennsylvaniaproduction region in addition to potentially displacing imports fromEastern Canada into New York.

Williams has doggedly pursued a variety of avenues in an attempt tooverturn the state denial, including a petition at the 2nd US CircuitCourt of Appeals, a failed federal district court suit and a request thatthe US Federal Energy Regulatory Commission find the state water qualityreview waived. FERC recently denied that request as well.

WILLIAMS TO CONTINUE SEEKING RELIEF AT FERC

Williams said it was disappointed that the high court won't consider itsappeal of the 2nd Circuit ruling, but it said it would continue pressingits case for rehearing at FERC.

The attempt at the Supreme Court to appeal the 2nd Circuit decisionupholding New York drew support from trade groups, including the NationalAssociation of Manufacturers, the Interstate Natural Gas Association ofAmerica, the Natural Gas Supply Association, the American PetroleumInstitute and the American Fuel & Petrochemical Manufacturers, whichfiled a joint amicus brief.

The industry has increasingly raised alarms that New York has been actingas a veto on federal pipeline permitting decisions. They argued that ifleft un-reviewed, the 2nd Circuit decision would give states a roadmapfor blocking construction of FERC-approved pipelines and deprive statesand the nation of the benefits of the centralized process set out in theNatural Gas Act. Moneen Nasmith, staff attorney with Earthjustice, which argued on behalfof environmental intervenors, said her group was happy but not surprised"by the recognition by the court that the petition had no merits."

ENVIRONMENTALIST CHEERS WIN FOR STATE AUTHORITY

"We're definitely elated that the court agreed to allow the 2nd Circuit'sdecision to stand and that the state's authority to say no to athoroughly deficient application will remain in place," she said Monday.Industry statements about the degree to which the decision would stopnatural gas development from going forward are "wildly exaggerated," shesaid, adding the decision was important in preserving the status quo ofallowing states to exercise independent authority to determine if aproject complies with the Clean Water Act.

In the decision in question, the 2nd US Circuit Court of Appeal in August2017 found there was nothing in the record to show NYSDEC had receivedthe information from Constitution it had "consistently and explicitly"sought over the course of several years (Constitution Pipeline v. NYSDEC;16-1568).

It also upheld New York's ability to apply state water quality standardsin reviewing the permit application, and found that consideration ofroute alternatives that would lessen impact on state waterbodies is"plainly within the state's authority."

Williams in its Supreme Court petition focused on the aspect of thedecision that related to alternative routes. It argued the state's denialof the CWA Section 401 water quality permit on the basis of receivinginadequate information about alternative routes exceeded its limitedauthority and interfered with FERC's exclusive jurisdiction, particularlyas the state was seeking to apply state water quality standards.

Environmental groups emphasized that the decision was not based on asingle finding that state agencies may consider alternative routes.Rather, they argued that the 2nd Circuit based its decision on a thoroughreview of a detailed record and found Constitution failed to providemultiple categories of information the state needed.

Williams spokesman Christopher Stockton said, "While we are disappointedin the Supreme Court's decision not to hear our case, we are still fullycommitted to pursuing our primary avenue of relief, which is the pendingrehearing request with [FERC] of its order denying our petition fordeclaratory order that New York failed to act within 'a reasonable periodof time' on Constitution's Section 401 application and any necessaryappeal to the D.C. Circuit."

He argued the project is "much-needed energy infrastructure designed tobring natural gas to a region of the country that this past winterexperienced the highest natural gas prices in the world."

Cathy Landry, a spokeswoman for INGAA, said it may not be possible toread much into the Supreme Court denying the writ of certiorari, sincethe high court hears very few cases.

"Since the denial was without a statement, it's impossible to know whythe Supreme Court decided not to hear the case," she said.

"There's no precedent established by this," added Howard Nelson ofGreenberg Traurig, agreeing that "there's any number of reasons theSupreme Court decides to grant cert." The 2nd Circuit's focus oninformation New York said was lacking "takes it one further step removedfrom the issue on the merits [of] whether a state can require anexamination of alternatives that FERC didn't," he said. -- Maya Weber, maya.weber@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com