American Oil and Gas Reporter - April 2021 - 13

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IndustryDigest
Federal Appeals Court
Upholds Certification For
Northern Access Pipeline
NEW YORK-The Northern Access
Pipeline in late March won a legal
victory that brought its construction a
step closer to reality. It happened when
a three-judge panel of the U.S. Court of
Appeals for the Second Circuit rejected
a petition for review by New York
regulators and an anti-development
group that sought to vacate a pair of
orders by the Federal Energy
Regulatory Commission.
The ruling also carries implications
for state regulators who attempt to elide
statutory limits on the amount of time
they have to exercise their authority.
The proposed project, which is a
96-mile pipeline that would connect
Western Pennsylvania natural gas
fields to upstate New York, has
become one of many interstate
midstream projects hydrocarbon
opponents have sought to stymie, press
accounts note.
According to court documents, the
key question at stake in New York State
Department of Environmental
Conservation and Sierra Club v.
Federal Energy Regulatory
Commission, National Fuel Gas
Supply Corp. and Empire Pipeline Inc.
centered on state regulators' one-year
deadline for issuing or denying Clean
Water Act Section 401 certification.
Complicating the matter, however, was
an extension to which the Department
of Environmental Conservation and
National Fuel agreed. The court notes
that DEC received National Fuel's
initial application on March 2, 2016,
with the department requesting
additional information in August and
October of that year.
" In an attempt to finesse the one-year
deadline, the DEC entered into an
agreement dated Jan. 20, 2017, 'revising
the date . . . on which the application
was deemed received to April 8, 2016.'
The agreement had the effect of
extending the deadline for the DEC to
issue or deny water quality certification
for 36 days, " the ruling states.
It goes on to note that DEC denied
National Fuel's application on April 7,
2017, but FERC countered that the
department waived its Section 401
authority when it missed the one-year
deadline, which the commission held

could not be extended by private
agreement.
According to the court, " Section
401's one-year deadline is mandatory
in a sense that it does not merely 'spur'
the agency to action, but it bars
untimely action by depriving the
agency of its authority after the
prescribed time limit. "
Although DEC had argued in a
different case that the permitting
stopwatch should only start at the point
in which an application was deemed
complete, the court rejected that claim
and said that since Section 401 makes
no such distinction, " it cannot be
interpreted to require a 'complete'
application because that approach
would allow a state agency not only to
dictate when the review process can
begin, but also to delay it indefinitely. "
The court went on to suggest that,
" However sincere the DEC's desire
might have been to review the
application as thoroughly and efficiently
as possible by giving itself 36 more
days, and however modest and
reasonable that extension may have
been, allowing the state to dictate the
beginning of the review by agreement
would 'blur the bright-line rule into a
subjective standard.' "
National Fuel is " very pleased " with
the ruling, and " has committed to meet
or exceed all safety codes and
environmental protective measures in
the construction and operation of this
project, " press accounts quote a
company spokesperson. " With these
measures in place, the project will not
put at risk or endanger any water
resources or surrounding
environments. " ❒

State's Rejection Of
MVP Southgate Project
Falls Short, Court Says
RICHMOND, VA.-North Carolina
regulators did not perform all their due
diligence when they denied Clean Water
Act Section 401 certification to a
project that seeks to extend the still
incomplete Mountain Valley Pipeline,
ruled a three-judge panel of the U.S.
Court of Appeals for the Second Circuit.
Court documents note that the MVP
Southgate Project involves constructing
a natural gas pipeline 75 miles from
Chatham, Va., to Graham, N.C.

According to the opinion penned by
Chief Judge Roger Gregory " the
department's denial is consistent with
the state's regulations and the CWA.
Nevertheless, the department did not
adequately explain its decision in light
of the administrative record. Thus, we
grant the petition, vacate the denial, and
remand to the agency for additional
explanation. "
Considering the litigation that
threatened MVP's completion, the
North Carolina Department of
Environmental Quality had expressed
skepticism about greenlighting
Southgate construction, press accounts
indicate, quoting a hearing officer's
warning that if the main line was not
constructed, the extension would
constitute " a pipeline from nowhere to
nowhere, incapable of carrying any
natural gas. "
However, in the time since, media
reports note, MVP has regained two of
three required permits and is taking
steps to steer around legal problems
associated with the third certification.
" Until the mainline project was
complete-a milestone stalled by
litigation-the hearing officer found
that the Southgate project's
construction would produce
unnecessary harm to the state's
waters, " the court ruling observes.
" 'Prior to incurring any impacts to
North Carolina natural resources,' the
hearing officer wrote, the department
should require 'a level of certainty
regarding the completion of the MVP
mainline pipeline.' "
The court remanded the permitting
decision to the department and held
that it must address the hearing
officer's findings because the agency
failed to reasonably reflect on some
data in the record and grapple with
contrary evidence.
Moreover, the ruling faulted the
department's lack of explanation for
why it opted to deny certification
instead of making it contingent on
MVP's completion. It concedes that
DEQ may have had fair reasons for
denying the certification, but notes that
" the department did not offer those
rationales in its decision; its denial letter
did not explain at all why it chose
outright denial over conditional
certification . . . Given a choice between
two options, the department had the
obligation to explain why it chose one
over the other. " ❒
APRIL 2021 13
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