US court upholds New York ‘veto' over pipeline: Update
Washington, 18 August (Argus) — New York acted within its authority when it rejected a water permit needed to build the 628mn cf/d (18mn m³/d) Constitution natural gas pipeline, a federal appeals court ruled today.
The 2nd US Circuit Court of Appeals said the record "amply shows" that the pipeline's developer refused to provide information the state requested on ways to avoid impairing water quality during construction and operation of the $683mn project. New York had asked the developer to review alternative routes and the feasibility of using "trenchless" construction at some stream crossings, but the court said the developer never adequately answered those requests.
"We conclude that the denial of the [water] certification after Constitution refused to provide relevant information, despite repeated [state] requests, was not arbitrary or capricious," the court wrote in a 27-page ruling.
The ruling represents another setback for the $683mn project, which US midstream company Williams proposed as a way to transport shale gas about 121 miles (195km) from Pennsylvania to New York. Pipeline construction has been held up because the New York State Department of Environmental Conservation last year denied the project a water permit because it said Williams never provided sufficient information.
Williams said while it would have "preferred an immediate path to construction" of the 121-mile pipeline, it was pleased the court also found the DC Circuit Court of Appeals had jurisdiction over the company's claim that New York regulators had waited too long to deny the permit.
The DC Circuit in a recent case outlined a pathway where FERC could find a state had waived its water permitting authority, if it exceeded a one-year deadline to act.
Williams chief executive Alan Armstrong, on a 3 August earnings call, said the company was working with "staff in the White House to move things along" with the Constitution pipeline. Armstrong downplayed the likelihood of success in court and said he was "more optimistic" about pursuing the FERC pathway. The company says it is "weighing all options."
The case has implications for the natural gas sector as a whole, which has been seeking to limit the ability of states to use permitting authority under the Clean Water Act as an effective veto on pipelines approved by the US Federal Energy Regulatory Commission (FERC). New York this year also blocked the 500mn cf/d Northern Access natural gas pipeline based on similar concerns over water quality.
New York attorney general Eric Schneiderman said the decision marked a "major win" for the state and its ability to protect its water quality. The New York State Department of Environmental Conservation member Basil Seggos said he hoped the ruling sends a "loud message that New York will not rubber stamp any project that fails to protect public health and the environment."