American Oil and Gas Reporter - June 2017 - 23

New York An Example
Of How Delegating Authority
"DEC's decisions would seem more sincere withCan Hurt Fossil Fuels
The push for more and improved infrastructure is far from
universal. Those opposed to fossil fuel development make their
case in the media, to Congress and before regulatory agencies.
Some agencies, such as the U.S. Environmental Protection
Agency under the Obama Administration, exercised authority
with an ear toward this "keep it in the ground" agenda. Other
independent agencies, such as the Federal Energy Regulatory
Commission, conducted business in accordance with pertinent
laws to regulate the interstate transmission of electricity, natural
gas and oil; as well as review proposals to build liquefied
natural gas terminals and interstate natural gas pipelines. Despite
efforts to bring politics into FERC's deliberations process, the
commission has remained largely apolitical. If only we could
say the same for certain states and their regulatory agencies.
The state of New York continues with its efforts to thwart fossil
energy development, transportation and consumption.
New York's Department of Environmental Conservation
twice has pre-empted construction of interstate pipelines that
FERC has approved. In the first case, involving Constitution
Pipeline, DEC denied in April 2016 a Clean Water Act Section
401 Water Quality Certification (WQC) needed to construct the
124-mile new interstate pipeline that would have delivered
Marcellus supply to markets in the Northeast. DEC claimed
that Constitution sponsors had failed to provide depth analysis
about the pipeline's burial to mitigate the project's environmental
impacts. Pipeline sponsors appealed DEC's decision to the
U.S. Court of Appeals for the 2nd Circuit, which may have
issued its decision by publication time.
In April 2017, DEC again thwarted a FERC-approved
pipeline when it denied the WQC for Northern Access. DEC
did not claim that it lacked information, but based its decision
on "the project's failure to avoid adverse impacts to wetlands,
streams and fish and other wildlife habitat." As with Constitution,
Northern Access sponsors have appealed the DEC's decision to
the 2nd Circuit.
State governments possess the right to regulate under major
environmental laws, such as the Clean Water Act. This delegation
of authority to the states was upended during the Obama Administration, when EPA attempted to federalize enforcement of
many environmental laws, primarily in the effort to fight fossil
fuel development. EPA Secretary Scott Pruitt has advocated
delegation, both as Oklahoma Attorney General and now at
EPA. This may prove a double-edged sword in states such as
New York.
DEC's decisions would seem more sincere without the consistent efforts within New York state government to block
fossil fuel development. Governor Andrew Cuomo officially
banned hydraulic fracturing in his state in June 2015. The announcement, after completion of a seven-year study, was viewed
by many as a decision finalized long before the study was
finished and with consideration for Governor Cuomo's eyes on
higher political office.
Then, in December 2015, the New York State Office of the

out the consistent efforts within New York state

government to block fossil fuel development.

Attorney General filed a petition with the U.S. Department of
Transportation's Pipeline Hazardous Materials and Safety Administration that proposed amendments to regulations for transporting crude oil by rail. The petition proposed a requirement
for all crude oil transported by rail to have a Reid vapor
pressure (RVP) of less than 9.0 pounds per square inch,
purportedly to reduce the risk of death or damage in an accident.
Comments on the petition, which became an Advance Notice
of Proposed Rulemaking, were filed on May 19. Filings from
the American Petroleum Institute and the Independent Petroleum
Association of America point out that safety is not contingent
upon RVP and that DOT, along with the U.S. Department of
Energy, commissioned a study on this issue before the New
York AG filed his petition.
Continuing with this pattern, the New York Public Service
Commission indirectly attacked natural gas when it adopted a
program that effectively will subsidize some uneconomic nuclear
plants to the detriment of competitive generators, such as those
supplied by natural gas. The legitimacy of New York's Zero
Emissions Credits (ZECs) was argued before the U.S. District
Court for the Southern Region of New York on March 29,
2017, with ZECs the topic of this column in December 2016.
While the ZECs may discourage gas-fired generators in
New York, utilities still can access gas supplies through existing
pipelines and LNG shipments, albeit with dramatic price swings
during times of peak demand. But New York need not be
burdened by market-based decisions that can ensure long-term
deliverability and a more stable pricing outlook. Many remember
the old ad slogan, "I ♥ NY." Based on a string of decisions
from a variety of state agencies, it is clear that NY does not
love fossil fuels.
r

SUSAN GINSBERG is vice

president of crude oil and natural gas regulatory affairs for
the Independent Petroleum
Association of America. She
covers legislation and regulation, focusing on the CFTC
and FERC. Her experience in
natural gas regulatory affairs
spans 25 years.
JUNE 2017 23

American Oil and Gas Reporter - June 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - June 2017