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New York AG, Constitution Backers Trade Legal Blows Over Marcellus Pipe Project

The battle over the proposed Constitution Pipeline into New York State got rougher on Monday after the state's attorney general (AG) asked FERC to investigate the pipeline for allegedly cutting trees and taking other unauthorized actions for the project.

At the same time, Constitution Pipeline LLC said it has appealed a decision by the New York Department of Environmental Conservation (DEC) to deny a critical water quality permit, and also filed a lawsuit against New York State in federal court over the issue.

AG Eric Schneiderman filed a complaint with the Federal Energy Regulatory Commission and petitioned the agency to impose a stay on the certificates of public convenience and necessity it issued in December 2014 for the project [CP13-499], which would transport Marcellus Shale gas to markets in New York and New England (see Shale DailyDec. 3, 2014). He alleged that Constitution Pipeline began cutting trees and performed other construction-related activities in the state without prior approval from regulators.

"Absolutely no proposed pipeline project construction can begin until all required state and federal approvals are issued," Schneiderman said. "My office has found compelling evidence that Constitution not only ignored widespread, unpermitted construction along its pipeline right-of-way [ROW] corridor, but even authorized, encouraged, or condoned it. Constitution also did not report this activity to FERC or to the state.

"FERC must take strong enforcement action against Constitution to ensure that pipeline companies know they can't simply thumb their nose at laws that protect New York's landowners, communities, and environment."

Constitution is owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. Inc. and WGL Holdings Inc. The approximately 124-mile, 30-inch diameter pipeline would transport Marcellus gas produced in northeast Pennsylvania to Schoharie County, NY, where it would connect with two existing interstate pipelines: Iroquois Gas Transmission and Tennessee Gas Pipeline. It would provide 650,000 Dth/d of takeaway capacity.

Constitution and Leatherstocking Gas Co. LLC have also announced plans to install four delivery taps along the proposed pipeline's route (see Shale Daily, March 19, 2014).

According to an affidavit filed Monday by Kathleen Coppersmith, a senior investigator with the AG's office, in early March Schneiderman's office "received credible evidence that clear cutting and other activities had been undertaken on the pipeline ROW in New York without FERC's approval and without a water quality certification from DEC." She consequently interviewed landowners along the 100-mile route the proposed pipeline would take through Broome, Delaware and Schoharie counties, and made several observations, including:

  • Many acres of the flagged pipeline ROW have been clear cut, selectively cut or otherwise disturbed by road building and work area construction;
  • Clear cutting has been performed near and along the banks of streams, and in one instance a stream was partially blocked by tree and brush debris in the water; and
  • Evidence showed heavy machinery and equipment left deep ruts and disturbed land in stream and wetland areas.

Coppersmith also alleged that Constitution representatives did not tell landowners that FERC had denied the company permission to begin tree clearing activities in New York. She also alleged the company "threatened and coerced a landowner into entering into a ROW agreement" by threatening to take his house through eminent domain.

“Constitution received the complaint late Friday and is undertaking a careful review of the allegations made by the New York AG,” Williams spokesman Tom Droege told NGI’s Shale Daily on Monday. “Constitution intends to vigorously defend its actions in connection with the project as such actions were conducted within the bounds of applicable laws and regulations.

“Constitution did not cut any trees in New York without permits, as FERC confirmed after it conducted an investigation of reports that trees were being cut. Constitution never advised nor encouraged landowners to cut trees on their properties. Landowners retain the right to use their properties after Constitution obtains easements, and Constitution only obtains the right to construct and operate its facilities.”

In a separate announcement Monday, Constitution’s backers said they had filed an appeal with the U.S. Circuit Court of Appeals for the Second Circuit over the DEC’s refusal to issue a Section 401 Water Quality Certification under the federal Clean Water Act. The company also said it filed an action in U.S. District Court for the Northern District of New York, where it is seeking a declaration that the state’s permitting authority on environmental matter is preempted by federal law.

“Upon its review of the evidence, we believe the court will agree that this permit denial was arbitrary and unjustified and improperly relies on the same failed arguments that the DEC made during the FERC certificate proceeding regarding the pipeline route and stream crossings,” the companies backing the Constitution project said. “The DEC’s allegation that it did not receive the necessary information is inaccurate as demonstrated by extensive and comprehensive technical materials submitted by Constitution for the record.

“We believe this allegation was intended to distract stakeholders from the application of a fair technical and regulatory review of the merits of Constitution’s application for a water quality certification. We are ultimately seeking to have the court overturn this veiled attempt by the state to usurp the federal government’s authority and essentially 'veto' a FERC-certificated energy infrastructure project.”

FERC gave Constitution permission to begin cutting trees for the Pennsylvania portion of the project at the end of January (see Shale DailyFeb. 24Feb. 1).

The saga over the Constitution Pipeline has lasted more than four years. The project had an original in-service date of March 2015. It was proposed in February 2012, and its backers began the pre-filing process with FERC two months later (see Shale Daily, April 27, 2012; Feb. 22, 2012). A formal application to FERC was filed in June 2013 (see Shale DailyJune 17, 2013) and approved in December 2014.

Three months after winning FERC approval to begin construction, a federal court ruled the pipeline could proceed (see Shale DailyMarch 20, 2015). The company then resubmitted an application for the water quality permit from the DEC in April 2015 (see Shale DailyApril 30, 2015), but the DEC denied the permit last month (see Shale DailyApril 25). At the time, analysts speculated that the company could either re-submit its permit application to the DEC or file a judicial appeal.

Last March, the company pushed the in-service date for the pipeline back to the second half of 2017 in order to comply with directives from FERC and the U.S. Fish and Wildlife Service to protect wildlife along the pipeline's route (see Shale DailyMarch 10).

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