Editor & Publisher, Marcellus Drilling News (MDN)
Did Andrew Cuomo, by giving the NRDC gang everything it wanted, cleverly remove his own DEC from any future role in pipeline obstruction or did he simply receive his just desserts?
An Appeals Court decision issued Friday has (in our opinion) huge ramifications for New York State and the Dept. of Environmental Conservation (DEC) that has been corrupted by political influence from Gov. Andrew Cuomo. It also has ramifications in other states with overactive environmental agencies too. It is hard for us to overstate how important we think this decision is.
The NY DEC has been corrupted and politicized by one of the most corrupt governors New York has ever had: Andrew Cuomo. The Cuomo DEC has unilaterally decided not to issue 401 water crossing permits for several federally-authorized pipeline projects, including Williams’ Constitution Pipeline, NFG’s Northern Access Pipeline, and a teeny tiny 9-mile pipeline Millennium wants to build from their main pipeline to an under-construction natgas-fired electric plant in Orange County, NY, called the Valley Lateral Project. Millennium took the bull by the horns early on, when it was apparent the DEC was following the same pattern of delay and then deny, suing the DEC.
On Friday, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the lawsuit by Millennium, which at first blush may seem like a blow. But it was the reasoning and opinion of the judges in dismissing the case that may change everything in New York. The judges said there is no case because if, as Millennium says, the DEC is denying the water permits, FERC itself has the power to jump back in and simply override NY DEC and issue the permits. This is a bombshell decision. That is, it’s a bombshell if FERC (with a soon-to-be-in-place quorum) exercises its constitutional authority.
If FERC decides to overrule the NY DEC and grant the Section 401 Water Quality Certification for the project, the DEC will be effectively neutered. It is (for Cuomo and his cronies) a worst-case scenario. This decision also means that if the New Jersey Dept. of Environmental Protection tries (as appears may happen) to deny the PennEast Pipeline its 401 permit, PennEast has a solid case for overruling them too. Same for the Virginia Dept. of Environmental Quality with the Atlantic Coast Pipeline and Mountain Valley Pipeline projects. The U.S. Court of Appeals has just put state agencies on notice that they are not the last word in federally-authorized projects. FERC is the last word, plain and simple.
Here’s the good news about Millennium’s Valley Lateral Project, from NGI’s Daily Gas Price Index:
A federal appeals court on Friday declined a request by Millennium Pipeline Co. LLC to compel regulators in New York State to expedite a critical water quality permit for a natural gas pipeline expansion, suggesting the pipeline could bypass the state agency and go directly to FERC which already has approved the project.
In a unanimous decision, the U.S. Court of Appeals for the District of Columbia Circuit dismissed Millennium’s petition to review the permitting process for its proposed Valley Lateral. At issue is an ongoing delay by the New York State Department of Environmental Conservation (DEC) to issue a Section 401 Water Quality Certification for the project.
“Even if the DEC has unlawfully delayed acting on Millennium’s application, its inaction would operate as a waiver, enabling Millennium to bypass the DEC and proceed to obtain approval from FERC,” wrote Circuit Court Judge Sri Srinivasan. “The DEC’s delay, then, causes Millennium no cognizable injury. Millennium therefore lacks standing to proceed with its petition.”
From the court decision issued Friday, quoting federal law:
To prevent state agencies from indefinitely delaying issuance of a federal permit, Congress gave States only one year to act on a “request for certification” under the Clean Water Act. Alcoa Power Generating Inc. v. FERC, 643 F.3d 963, 972 (D.C. Cir. 2011) (quoting 33 U.S.C. § 1341(a)(1)). That deadline is established by section 401 of the Act, which requires a State to grant or deny the certificate “within a reasonable period of time (which shall not exceed one year) after receipt of [a] request.” Id. If the State fails to act within that period, the Act’s “certification requirements” are deemed “waived,” such that the pipeline no longer needs a water quality certificate to begin construction.
New York has taken more than a year, ergo, they have officially waived their right to grant the certificate, ergo, FERC can now (with a quorum) simply grant it and construction can begin.
We’re not lawyers, but perhaps there’s another way to interpret this: Since FERC has already approved the project, and the DEC has now waived its right to grant the 401 certificate, Millennium can simply start building–TODAY–with no 401 certificate. No certificate is required since it has been waived, right? Same for the Constitution Pipeline. Same for the Northern Access Pipeline. Why not? (However, it would probably be best to get a 401 from FERC first, just to be safe.)
Again, we find this a very exciting development. It is something we’ve warned the NY DEC about for years: that they may well lose their ability to have a say in federal pipeline projects. It looks like that is now a reality, thanks to the DC Court of Appeals.
Here is a full copy of the earth-shattering court decision from Friday.
Editor’s Note: I don’t know how Jim is always so ahead of the curve on this sort of news but he always is. That alone is reason enough to subscribe to MDN (see link below). Please do so! Let me add another perspective as well. Jim articulates the view this decision is a huge potential loss for Cuomo, contrary to the conventional wisdom that the state won the case. Jim is absolutely correct insofar as he goes with this, but Governor Corruptocrat is nothing if not Machiavellian. There is no doubt, moreover, that this decision offers some beautiful Machiavellian rewards for Cuomo.
If FERC ends up taking away his 401 water quality certification authority, he will have simultaneously appeased the NRDC gang behind all those DEC pipeline decisions (the gang runs DEC for all practical purposes using their influence with the Governor) while also clearing the way for the pipelines needed to deliver the natural gas on which his energy policies depend in the real world. He will have also established green credentials for a White House run, while actually delivering real energy. It’s a win all the way around for Andy; a unique brand of corrupt special interest politics combined with the street smarts of a capo and a student of the dark political arts.