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NFG Attorney Tells Court Constitution Ruling Not Applicable to Northern Access Case

Less than two weeks after a federal appeals court in Manhattan declined to force regulators in New York State to issue a water permit for the Constitution Pipeline, supporters of the Northern Access expansion -- another embattled project also denied a water permit -- told the same court the two cases are not alike and that a different ruling is warranted.

But the state's assistant attorney general told the U.S. Circuit Court of Appeals for the Second Circuit that the state's Department of Environmental Conservation (DEC) denied Northern Access a permit on similar grounds, and urged the court to reach the same conclusion.

On Aug. 18, a three-judge panel at the Second Circuit disagreed with Constitution Pipeline LLC's contention that the DEC's refusal to issue a Section 401 Water Quality Certification under the federal Clean Water Act (CWA) was arbitrary and capricious. But the panel also ruled that the New York City-based court lacked jurisdiction over Constitution's argument that the DEC had exceeded the statutory time limitations for the state's review of the project.

In a letter to the court on Monday, Eamon Joyce, an attorney with Sidley Austin LLP representing Northern Access backers National Fuel Gas Supply Corp. (NFG) and Empire Pipeline Inc., said the ruling in the Constitution case doesn't bolster the DEC's argument. Rather, the ruling "recognizes the narrowness of DEC's delegated authority," among other things.

The ruling in the Constitution case "recognizes that DEC's authority to review federally approved pipeline projects is limited to the 'project's effect on water quality,'" Joyce said, with emphasis on the words "water quality." He added that the Constitution ruling "does not give DEC an unchecked veto based on any facet of state environmental policy. Rather, DEC is authorized only to determine the project's likely effects under 'New York State water quality standards.'

"That is not what DEC did here. Instead, DEC improperly conflated its review under state water quality standards with broader environmental policies...DEC thus exceeded its narrow mandate under the CWA, which requires vacatur..."

Joyce added that the DEC -- which denied of a water quality certification (WQC) for Northern Access last April, after nearly three years of reviewing the 490,000 Dth/d expansion project -- couldn't use the same argument that it used in denying Constitution the 401 permit. Specifically, that NFG didn't give regulators enough information for the DEC to award the WQC.

"By contrast, in this case, DEC's denial letter gives not the slightest indication that NFG's 8,385-page application lacked any information necessary for DEC to render a conclusion," Joyce said. "And in fact, NFG did provide extensive site-specific information addressing each of [the] newly claimed deficiencies."

Last Thursday, New York Assistant Attorney General Meredith Lee-Clark opined in a separate letter to the court that it should reach the same conclusion as it did in the Constitution case.

"This court dismissed the petition to the extent that it challenged the timeliness of DEC's decision, and denied the petition to the extent that it challenged DEC's decision on the merits," Lee-Clark said. "Among other things, the court held that DEC had the right to determine whether the proposed project would comply with state water quality standards. The court also rejected the petitioner's argument that DEC's decision was arbitrary and capricious, deferring to DEC's determination that the petitioner had failed to provide sufficient information to support issuance of the certification.

"Constitutionsupports the argument...that the environmental review conducted by FERC did not preempt DEC's review of petitioners' project under state water quality standards...The decision also supports the argument...that respondents reasonably denied the certification based on DEC's expertise in applying state water quality standards."

Last week, NFG filed a motion for expedited action with the Federal Energy Regulatory Commission. The company asked FERC to reconsider a certificate order from February authorizing the project.

Northern Access would expand the Empire and NFG systems, allowing natural gas to move from wells operated by Seneca Resources Corp. in northwest Pennsylvania to markets in New York, Canada, the Northeast and Midwest.

The appellate case is NFG et al v. DEC et al[No. 17-1164].

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