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Green Group Sues FERC Over Leidy Expansion, Claims Improper Segmentation

Environmental group Delaware Riverkeeper Network (DRN) continues to hound FERC, filing a lawsuit Tuesday in the United States Court of Appeals for the District of Columbia challenging the agency’s approval of Transcontinental Gas Pipeline Co.’s (Transco) Leidy Southeast Expansion.

DRN is looking to build on its successful challenge to the Federal Energy Regulatory Commission’s handling of the environmental review of Tennessee Gas Pipeline Co. LLC’s (TGP) Northeast Upgrade Project. In 2014, in a case led by DRN, the U.S. Court of Appeals for the District of Columbia Circuit ruled that FERC "impermissibly segmented the environmental review" of the project and remanded that case to FERC "for further consideration of segmentation and cumulative impacts" (see Shale Daily, June 6, 2014).

The challengers had argued that FERC failed to provide a meaningful analysis of the cumulative impacts of the Northeast Upgrade Project in conjunction with three other closely related projects.

DRN is following a similar line of argument in its legal challenge to FERC’s approval of the Leidy Southeast Expansion (see Daily GPI, Dec. 18, 2014). The green group is accusing FERC of violating the National Environmental Policy Act (NEPA) by improperly segmenting its environmental review of Leidy from its reviews of Transco’s Atlantic Sunrise Project and Northeast Supply Link, as well as the not-yet-pre-filed Diamond East expansion.

Prior to the case going to appeals court, FERC issued an order March 3 denying a request for rehearing that DRN had filed over a year earlier in January 2015, shortly after the Leidy Southeast Expansion was approved.

In the March 3 order, FERC drew a distinction between the circumstances of the 2014 appeal of Tennessee’s project and the current challenge to the Leidy expansion.

“In Del. Riverkeeper Network v. FERC, the D.C. Circuit ruled that [TGP’s] individual pipeline proposals were interdependent parts of a larger action where four pipeline projects, when taken together, would result in ‘a single pipeline’ that was ‘linear and physically interdependent’ and where those projects were financially interdependent,” FERC wrote. “The court put a particular emphasis on the four projects’ timing, noting that, when the Commission reviewed the proposed project, the other projects were either under construction or pending before the Commission.

“Courts have subsequently indicated that, in considering a pipeline application, the Commission is not required to consider in its NEPA analysis other potential projects for which the project proponent has not yet filed an application, or where construction of a project is not under way. Further, the Commission need not jointly consider projects that are unrelated and do not depend on each other for their justification.”

FERC noted the distinct timelines for the different Transco expansions and said each expansion offers independent utility, rebutting DRN’s argument that the projects are interdependent simply because they’re interconnected.

“Delaware Riverkeeper asserts that the Northeast Supply and Leidy Southeast project facilities are designed to work in unison and therefore they are interdependent and connected actions,” FERC wrote. “Every natural gas pipeline project before the Commission can be found to be interconnected with another by virtue of the fact that the entire interstate pipeline grid is a highly integrated transportation network.”

Other environmental groups have argued recently that Transco’s Atlantic Sunrise Project should be reviewed simultaneously with the company’s Virginia Southside Expansion Project II, contending that the projects are linked since they both would involve work at the same existing compressor station in Virginia (seeDaily GPI, Jan. 14).

FERC began authorizing parts of the Leidy Southeast Expansion to begin service last year (see Daily GPI, Dec. 30, 2015; Oct. 16, 2015). FERC approved the Northeast Supply Link in 2012 (see Daily GPI, Nov. 6, 2012) , and the project began service in 2013 (see Shale Daily, July 15, 2013). Transco filed with FERC for the Atlantic Sunrise Project last spring (see Daily GPI, March 31, 2015).

DRN’s Leidy challenge comes less than a week after the group sued FERC over an alleged “structural bias” towards approving natural gas infrastructure projects because of the agency’s fee-based funding mechanism (see Daily GPI, March 4).

Transco, a wholly owned subsidiary of Williams Partners LP, operates 10,200 miles of transmission pipelines moving up to 10.9 Bcf/d from supply areas in the Gulf Coast, Midcontinent and Appalachian Basin to markets in the Southeast, Mid-Atlantic and Northeast.

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