Environmental group Otsego 2000's request to set aside FERC's decision to allow Dominion Transmission Inc. to construct and operate compression facilities for its New Market Project has been dismissed by the United States Court of Appeals for the District of Columbia (DC) Circuit.

In a judgment handed down Thursday, the three-judge panel found that Otsego's petition lacked jurisdiction [No. 18-1188].

"We do not reach the merits of petitioner's challenge because it failed to demonstrate...standing to petition this court," the judges wrote in their two-page judgment. "Otsego acknowledged at oral argument that it is not a membership organization and it does not suggest that it has associated standing.

"Its standing in this matter therefore turns on whether it has organizational standing. We find that it does not. Otsego's affidavits do not identify any injury other than the organization's expenditure of time and money related to this litigation."

Dominion first asked for Federal Energy Regulatory Commission approval of the New Market project in 2014. FERC staff issued an environmental assessment in 2015 and gave Dominion permission to begin construction in upstate New York in March 2017. The $159 million project was designed to provide 112,000 Dth/d of firm transportation service, improve access for two National Grid subsidiaries, and add more than 33,000 hp of compression.

In May 2018, FERC by a 3-2 vote denied a request for rehearing of its decision to issue a certificate of public convenience and necessity for the project, with the majority declaring that it would continue to take into account proposed pipelines' potential greenhouse gas (GHG) emissions, but not their impacts on natural gas production and consumption [CP14-497].

The National Environmental Policy Act (NEPA) requires federal agencies to consider indirect impacts of projects. Since a 2017 decision by the DC appeals court found that downstream GHG emissions from burning natural gas are indirect impacts, FERC has taken that requirement a step further. That practice is coming to an end, the majority said in the New Market decision.

Arguing that FERC "arbitrarily and capriciously" ignored its obligations under NEPA, Otsego 2000 in July 2018 challenged the order. According to Otsego 2000, the court's 2017 ruling "left no ground for the Commission to shirk its obligations under NEPA, and yet that is precisely what the Commission majority has done..." Six states and the District of Columbia have also argued that FERC should set aside plans to limit climate reviews when considering natural gas pipeline project applications.

FERC argued that it had fully satisfied its obligations under NEPA in deciding the fate of the New Market project.

FERC's GHG policy is likely to face further legal challenges, according to analysts with ClearView Energy Partners LLC.

"The court's dismissal of the Otsego appeal allows the first application of the new policy to stand as if it were never challenged," ClearView said in a note to clients Thursday.

"This may make it harder, but not necessarily impossible, for a different petitioner to prevail in the application of this approach (as opposed to the policy change itself) in a different case...Overall, we still think that the court does not favor FERC's new "don't ask, don’t evaluate" approach to its GHG reviews, and its inability to consider Otsego's appeal for lack of standing deprived the court of an opportunity to render an assessment at this time."