FERC has rejected a request by New York Attorney General (AG) Eric Schneiderman to issue a stay of certificates for the embattled Constitution Pipeline, but it did agree to have its staff investigate allegations of unauthorized tree cutting and other activities.

Last May, Schneiderman filed a complaint with the Federal Energy Regulatory Commission [CP13-499] and petitioned the agency to impose a stay on the certificates of public convenience and necessity it issued in December 2014 for the project (see Shale DailyMay 16). But in an order issued Wednesday, FERC said the AG should have submitted a request for an investigation instead.

Schneiderman alleged that Constitution began cutting trees and performed other construction-related activities in the state without prior approval from regulators. An investigator in the AG's office also alleged that Constitution did not tell landowners that FERC had denied the company permission to begin tree clearing activities in New York, and that the company threatened landowners.

But in its order, FERC said that if it had handled Schneiderman's filing as a complaint it would have rejected the filing because the AG failed to clearly identify the statutes that were allegedly violated, or to adequately explain how Constitution violated them. FERC also said the AG didn't include any specific facts to support the allegations of tree cutting, "but instead relies upon speculation that Constitution had a role in the land clearing that has occurred within its right-of-way."

FERC also disagreed with Schneiderman's claim that Constitution was obliged to tell landowners and third parties along the pipeline route to cease ground disturbance activities once the company was put on notice. "The filing provides no authority for such a theory of vicarious liability," the agency said.

Despite its procedural shortcomings, FERC agreed that the AG's filing "may constitute a valid request for investigation...of Constitution's alleged affirmative acts. Accordingly, the Commission construes it as such and refers this matter to commission staff for further examination and inquiry as may be appropriate."

According to FERC records, Constitution responded to Schneiderman's filing on June 2 and requested that the matter be set for an evidentiary hearing before an administrative law judge (ALJ). But in its order, FERC said that since it was handling the matter as a request for an investigation, it did not need to rule on the company's ALJ request.

The pipeline would transport Marcellus Shale gas to markets in New York and New England (see Shale Daily, Dec. 3, 2014).

Constitution is owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. Inc. and WGL Holdings Inc. The 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 DailyMarch 19, 2014).

FERC gave Constitution permission to begin cutting trees for the Pennsylvania portion of the project at the end of January (see Shale Daily, Feb. 24; Feb. 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 DailyApril 27, 2012Feb. 22, 2012). A formal application to FERC was filed in June 2013 (see Shale Daily, June 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 Daily, March 20, 2015). The company then resubmitted an application for the water quality permit from the DEC in April 2015 (see Shale Daily, April 30, 2015), but the DEC denied the permit last month (see Shale Daily, April 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 Daily, March 10).