FERC to Constitution Pipeline: A Year Means A Year, You Shoulda Fought

DRBC fracking ban - Tom Shepstone ReportsTom Shepstone
Shepstone Management Company, Inc.


Sadly, FERC has once again refused to help Constitution Pipeline avoid the consequences of letting itself be double-crossed by Gov. Andrew Corruptocrat.

FERC, in a decision released yesterday, has denied the Constitution Pipeline. This time it was the rejection  of an excellently drafted request for a rehearing on the basis that the New York State DEC’s two refiling requests were nothing but a ruse to delay and ultimately deny the project. The DEC, which does nothing significant that is not at the direction of Governor Corruptocrat, clearly manipulated the Constitution Pipeline folks. FERC, though, which knows exactly what DEC is doing, wasn’t sympathetic. It’s effectively said “you should have known better.” And, unfortunately, who can blame them? Everyone who’s done business in or within New York knows everything is political and nothing is not corrupt. Everyone but the naive well-meaning people at the Constitution Pipeline, that is.

Constitution Pipeline

The heart of the decision follows:

Constitution repeats a series of arguments from its petition for declaratory order to the effect that New York DEC admitted that Constitution’s second withdrawal and Third Application were an “unwarranted fiction” to extend the time for review of the application beyond the time allowed under any interpretation of Section 401. Constitution contends that the maximum reasonable period of time for New York DEC’s decision expired on May 9, 2015, one year after receipt of the Second Application and eleven months before New York DEC’s denial on April 22, 2016. Constitution asserts that the Commission’s interpretation of Section 401 allows state agencies to skirt hard choices and engage in legalistic gamesmanship by insisting that applicants reapply by simply resubmitting their existing applications, thus “fostering a regulatory scheme that is detrimental to the public interest.”

As we explained in the Declaratory Order, a comparison of the contents of Constitution’s Second Application and Third Application is not material to our analysis. The statute speaks solely to a state’s action or inaction on an application, not to the repeated withdrawal and resubmission of applications.41 We reaffirm our conclusion that once an application for a Section 401 water quality certification is withdrawn, no matter how formulaic or perfunctory the process of withdrawal and resubmission is, the refiling of an application restarts the one-year waiver period under Section 401(a)(1). In the Declaratory Order, we noted our continuing concern that when states and project sponsors engage in repeated withdrawal and refiling of applications for water quality certifications, they act, in many cases, contrary to the public interest and to the spirit of the Clean Water Act by failing to provide reasonably expeditious state decisions. Even so, we did not conclude that the practice violates the letter of the statute.

We explained in the Declaratory Order that the Commission’s interpretation of Section 401 strikes the appropriate balance between the interests of the applicant and the certifying agency.45 An applicant is guaranteed an avenue for recourse after a year of inaction by filing a petition for a waiver determination before the Commission (as did the applicant in Millennium Pipeline Company, L.L.C.), or after a denial by filing a petition for review in the court of appeals. A state certifying agency remains free to deny the request for certification within one year if the agency determines that an applicant has failed to fully comply with the state’s filing or informational requirements. These options do not preclude a state from assisting applicants with revising their submissions, do not harm the process of public notice and comment, and do not increase an applicant’s incentive to litigate.

Because Constitution’s withdrawal and resubmission of its application presented New York DEC with new deadlines, we deny the company’s claim that the receipt of the initial application should be an anchor point for setting the state’s review deadline regardless of Constitutions decision to repeatedly withdraw and refile its application.

As good as the Constitution Pipeline filings were, they were not good enough to overcome FERC’s view it should have known better than attempt to play softball with New York. The between the lines message from FERC is simply this — “you shoulda fought.” FERC is telling the Constitution Pipeline and other pipeline companies they needed to play hardball and fight like Millennium.They needed to challeng DEC in court at the first opportunity and/or force decisions within the one-year deadline they could immediately be appealed to what are, one hopes, non-political courts.

That the Constitution Pipeline was conned is obvious from a Jim Willis guest post published here in early 2015. Jim included these excerpts from a quarterly analyst call (MDN is always the place to go for this kind of detail) about the progress of the pipeline:

I think everybody is aware that sometime ago we got our FERC certificate for this project, but as Alan pointed out, some of the permitting had been delegated to the state of New York. We have most everything we need other than the New York DEC final permit on this project. We do have all of our land and right-of-way now secured.

We are what I would call in the final throes of working through some final details on some wetlands issues, and the New York DEC I feel like it really rolled up their sleeves and is working with us very closely on trying to get the remaining questions answered and we’re very optimistic that we’re going to be getting a permit here in the next couple of months and I believe there is also core engineer permit that would follow that, but that’s more of a sequencing issue than an issue where we expect any type of dispute or anything like that…

This latest re-filing that we did with New York DEC was merely procedural–in fact the year prior we had done the exact same thing but we basically canceled and re-filed with all the existing information that we’ve been building up in the project. And in fact the New York DEC came out and said, they required to have this open comments period, but they said look we’ve already commented. We got your comment, we’re going to be using and considering all the previous comments that have been supplied. So the additional 14 day period would be for if there are any new comments that hadn’t already been covered by the previous comment period than those would come in. But I think all of that’s has been run down to ground pretty sufficiently and I don’t really see that as introducing any new risk into the timeline that we see before us now.

Reading that response now, over three years later, makes anyone who worked hard to bring about the much-needed Constitution Pipeline want to cry. So much naïveté and, of course, no good deed goes unpunished.

There are still options, though, beginning with resubmission of the application and a fight to finish between a now-educated Constitution Pipeline outfit and a dirty DEC sooner rather than later. The FERC decision also offers a not so subtle message to the President and Congress that New York State is gaming the system and needs to be throttled. Let’s hope something happens on that front as well. It’s time.

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3 thoughts on “FERC to Constitution Pipeline: A Year Means A Year, You Shoulda Fought

  1. Fail to bother PAYING for the trees that you destroyed at gunpoint, and expect your oddly-named “Constitution” Pipeline to STAY on the ash heap of history.

  2. Tom; When our existing undersized and rusting infrastructure breaks down some winter month – every nearby maple tree will be a target for fuel to heat. There is very very limited redundancy. The above referenced maples were already in their final years. I really cant see the logic in your reference. Lets focus on the necessities – Food, Shelter, Work, Healthcare – all of which will prosper with the Constitution Pipeline. Wind Turbines & Solar will produce less than 50% of what they are rated for since New York climate conditions are not supportive of either. So basically the ROI is NEVER.

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