Natural Gas NOW
Return to sanity? A DC Circuit Court of Appeals last week in a hydroelectric case from out West may have opened a new door for the Constitution Pipeline.
The DC Circuit of Appeals is often referred to as the second most important court in the nation after the Supreme Court. This is because it handles appeals of many decisions by Federal agencies headquartered in Washington. That’s why what happened last week with the appeal of a FERC water quality certification in a hydroelectric case is so important. The decision was brought to my attention by Robert Nolan, one of our most alert readers and guest bloggers. He monitors several legal blogs for cases bearing on natural gas issues and this time he’s come up with what could be the big one for the Constitution Pipeline.
The case, Hoopa Valley Tribe v. FERC, was only decided on January 25th and has huge implications for the Constitution Pipeline because it involves a similar case of a state effectively forcing an applicant for water quality certification to withdraw and resubmit applications as a delaying tactic.
A nice analysis of the decision by the legal firm of Hunton Andrews Kurth LLP may be found here and offers the following (emphasis added):
The US Court of Appeals for the DC Circuit has ruled that a state waives its CWA § 401 authority when, pursuant to a written agreement, an applicant repeatedly withdraws and resubmits its request for water quality certification in order to restart the one-year waiver clock. Hoopa Valley Tribe v. FERC, No. 14-1271 (D.C. Cir. Jan. 25, 2019).
According to the Court’s opinion, this sort of arrangement serves to circumvent the Federal Energy Regulatory Commission’s (FERC) “congressionally granted authority over the licensing, conditioning, and developing of [the] project,” and “if allowed, the withdrawal-and-resubmission scheme could be used to indefinitely delay federal licensing proceedings and undermine FERC’s jurisdiction to regulate such matters.”
The Court’s strict adherence to the one-year deadline has significant implications for both the hydroelectric and interstate natural gas pipeline industries. For example, over 15 other hydroelectric projects have been delayed by pending water quality certifications, with an average delay over seven years. This decision could provide the impetus to resolve such delays.
Furthermore, the Court addresses one of the key issues that arises in disputes over the development of interstate natural gas pipelines. Ambiguity over when the statutory one-year deadline begins and ends, and whether withdrawal and resubmission of a request restarts the clock, has caused substantial delays. Such delays have produced significant capacity constraints across the northeast, causing natural gas prices to skyrocket during cold spells.
For example, on January 18, 2019, a large utility announced a moratorium on new natural gas connections in parts of Westchester County, NY. The Hoopa Valley decision, however, makes clear for the first time that a scheme to withdraw and resubmit the same request over an extended period of time constitutes waiver. Moreover, the court clarifies that “while a full year is the absolute maximum, it does not preclude a finding of waiver prior to the passage of a full year.”
Such statements suggest a potential reversal in the ongoing controversy over the New York Department of Environmental Conservation’s (NYDEC) April 2016 denial of water quality certification for the Constitution Pipeline. After unsuccessful challenges in various venues, Constitution petitioned the DC Circuit for review of FERC’s finding that NYDEC did not waive its CWA § 401 authority.
In November 2018, in response to FERC’s motion, the DC Circuit agreed to hold the Constitution case in abeyance until it reached a decision in Hoopa Valley “because it raises common questions of law.”
While the facts between the two cases are somewhat different… by granting FERC’s request to hold the case in abeyance, the DC Circuit, at a minimum, recognized the legal similarity between the two cases. If the Court determines that the same legal rationale should apply to Constitution’s facts, then we are likely to see a similar outcome and a finding that NYDEC waived its authority.
Wow! Is sanity about to return? Is Andrew Cuomo going to get slapped down? Or is it a case of his Machiavellian politics working out just as he intended? My theory is that he has always hoped some agency or court would overrule him, allowing him to look like a fractivist hero while still getting the gas. It doesn’t really matter as long as the Constitution Pipeline gets built and now we have an excellent chance.