Natural gas pipeline groups call on US Army Corps to break permitting logjam

S&P Global
October 25 2017

Faced with repeated rejections of interstate natural gas pipelines in New York, a key industry trade group is hoping the US Army Corps of Engineers may be able to assist, as well as exploring whether to pursue Clean Water Act changes.

“Unfortunately, we now are seeing the natural gas equivalent of a single state erecting a roadblock on the interstate highway system,” said Jeffrey Bruner, Iroquois Pipeline Operating Company president and the incoming chairman of the board of the Interstate Natural Gas Association of America. “We’ve seen a single state threaten to turn the process for approving interstate natural gas pipelines on its head by that state’s manipulation of delegated authority,” he said, in a briefing for reporters a day before the INGAA board was schedule to vote him in as chair.

The comments come as Williams’ Constitution Pipeline and National Fuel Gas Supply’s and Empire Pipeline’s Northern Access Project have been blocked through water permit denials by New York state regulators, as was a Millennium Pipeline project before recently getting relief from the US Federal Energy Regulatory Commission. 

Industry hopes of further relief in court were dimmed earlier this month when the 2nd US Circuit Court of Appeals declined to rehear a decision upholding New York’s denial of Constitution. Northern Access’ pending 2nd Circuit appeal is slated for oral arguments November 16.

GROUPS BATTLE PROJECTS ON WATER ISSUES

Adding to the industry’s challenges, environmental groups objecting to projects are increasingly turning to state water reviews as an avenue for litigation. On Wednesday, Appalachian Mountain Advocates and others wrote to Virginia’s State Water Control Board to say it cannot approve the Atlantic Coast Pipeline and Mountain Valley Pipeline projects at this time because it lacks adequate information from project sponsors and the Department of Environmental Quality about erosion and sediment controls and stormwater management.

Bruner and INGAA President and CEO Donald Santa emphasized that their member companies need to continue to work with states, and don’t have objections to states imposing conditions to ensure water quality is protected.

“Hopefully, by doing that we can blunt any additional states from taking that course,” of saying “we don’t want to work with you. We don’t want pipelines,” Bruner said. 

”That clearly is a role that has been given to them under the Clean Water Act,” Santa said.

“The problem becomes when acting ostensibly pursuant to the Clean Water Act is really a reason to effectively second-guess FERC’s determination that the facility is in the public convenience and that there’s a need for it.”

Santa laid out several avenues that may be open for the industry, including seeking more guidance from the Corps.

CORPS GUIDANCE COULD CLARIFY TIMING: SANTA

Specifically, he asked whether the Corps could weigh in on the part of the Clean Water Act that says states need to act on Section 401 permits within a reasonable time period, not to exceed a year.

While current Corps regulation referencing a 60-day time period “is probably unrealistic, should the Corps update that guidance but then make it very clear that the state will be held to that,” Santa asked. 

INGAA on October 18 filed a series of recommendations to the Corps. One of those asked the Corps to clarify that while sponsors need to provide “reasonably reliable and accurate information,” 100% of ground surveys do not need to be completed before an application can be processed. Incomplete surveys held up New Jersey’s processing of the PennEast Pipeline project. 

Bruner and Santa also suggested legislation may ultimately be needed to amend the Clean Water Act, although they were not yet sure of details.

The goal would be to “reemphasize what we had thought was the original balance in terms of states having the ability to act within the scope of water quality standards but not having ability via delay either or denial of that certification to effectively override FERC’s determination of [whether] facilities is needed,” Santa said. 

In the near term, Santa also noted that companies facing prolonged delays in state reviews can pursue the path recently taken by Millennium Pipeline, of seeking FERC’s finding that a state has waived its authority through inaction.

Through its recent waiver for Millennium, in the wake of a DC Circuit Court of Appeals case clarifying FERC authority, “FERC made clear that it was ready to step up and fulfill that role,” he said.

Santa described the Millennium case as “pretty straightforward,” and said several others pending “may present more complex facts” for the commission. Constitution and Northern Access are also seeking orders from FERC declaring New York waived its water quality review.

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