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Atlantic Sunrise Construction Halted by DC Appeals Court

The U.S. Court of Appeals for the District of Columbia has ordered a temporary stay of construction on the Transcontinental Gas Pipe Line Co. LLC (Transco) Atlantic Sunrise project in the latest setback for the Northeast infrastructure build-out.

The appeals court issued the administrative stay to further consider an emergency motion filed Oct. 30 against the project by a coalition of environmental groups. FERC issued a certificate in February. Transco parent Williams Partners LP stressed that the stay is temporary and “not related to the project’s execution or its compliance with applicable federal or state regulations or permit conditions.” The company confirmed that it had ceased construction activities.

The groups, represented by the Appalachian Mountain Advocates and the Sierra Club, said late Monday after the order was issued that the Federal Energy Regulatory Commission and Williams each are trying to rush construction of the project.

“The arrogance of the industry is on full display as they rush this project and silence protestors while there are still pending cases in court,” said Mark Clutterbuck of Lancaster Against Pipelines, which is challenging Atlantic Sunrise. “Transco wouldn’t be rushing if they weren’t worried, and I hope this is the beginning of a turning tide that will check the fossil fuel industry, an industry that has been rolling over the rights of communities for years.”

Williams filed a motion for clarification of the stay on Tuesday. “Atlantic Sunrise has undergone a nearly four-year, extensive review process and is operating and being constructed in compliance with all state and federal permits,” Williams COO Michael Dunn said Tuesday. “These current actions by opponents of American energy are, this morning, idling thousands of workers in Pennsylvania and could delay the benefits of low-cost energy delivery to millions of American families.”

Greenfield construction of the project started in September, and it is scheduled to enter service in mid-2018. Cabot Oil & Gas Corp. (1 Bcf/d), Chief Oil & Gas LLC (420 MMcf/d) and Seneca Resources Corp. (190 MMcf/d) have contracted for the highest volumes.

Shares of Cabot were down as much as 5.6% on Tuesday.

FERC granted Transco a variance last week to prevent further delays, allowing around-the-clock construction at two compressor stations in Pennsylvania, where most of the construction is taking place.

The groups contesting the project have requested that construction not move forward until FERC conducts a “comprehensive environmental review” of the short- and long-term impacts, as well as the public need. After FERC issued the certificate order, the groups filed for a rehearing, but without a quorum the Commission tolled the request until it could make a final decision. Citing FERC’s inability to act, the groups filed a petition for review in March, which is pending.

Williams started the pre-filing process at FERC in early 2014 for the nearly $3 billion project and applied for a certificate in March. The company received key permits from Pennsylvania in August. Unions and business interest groups on Tuesday urged the appeals court to lift the stay.

The 1.7 Bcf/d project would move natural gas from the Marcellus Shale’s constrained northern tier to Mid-Atlantic and Southeast markets.

Complicating matters, the DC Circuit ruled in August that FERC’s environmental impact statement for a trio of pipelines, including Sabal Trail, failed to adequately consider the impact of greenhouse gas emissions. Environmentalists have challenged other projects with that decision, and it was also cited by New York state in its decision to deny Millennium Pipeline Co. LLC’s Valley Lateral project a water quality certificate.

Valley Lateral was cleared by FERC to begin construction after the Commission waived New York’s authority on that project. It is unclear whether the DC Circuit’s August decision may factor into its review of Atlantic Sunrise.

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