The U.S. Court of Appeals for the District of Columbia (DC) Circuit has agreed to rehear a case challenging FERC’s review of the Atlantic Sunrise Project, and while some analysts don’t see any immediate impact to service on the 1.7 Bcf/d Appalachian takeaway expansion, the move could have implications for the Commission’s rehearing process.
Petitioners including the Allegheny Defense Project had filed a lawsuit to overturn the Federal Energy Regulatory Commission’s certificate order approving Atlantic Sunrise, an expansion of the Transcontinental Gas Pipe Line (aka Transco) designed to uncork production flowing out of the eastern Marcellus Shale region.
The DC court on Thursday agreed to an en banc rehearing of the case, vacating an Aug. 2 order that denied the petitioners’ challenge and scheduling oral arguments for March 31.
Among the issues raised in their original challenge, the petitioners argued that FERC violated the due process rights of landowners along the project route by issuing “tolling orders” while simultaneously allowing construction to move forward. A tolling order effectively allows FERC to delay judicial review of a decision by extending the 30-day statutory deadline for action on a rehearing request. A challenger traditionally must wait for a final rehearing decision from FERC before taking their case to court.
In its August ruling, the DC Circuit dismissed claims that FERC’s environmental review and needs determination were insufficient. The court also dismissed the due process arguments, but not without a concurring opinion from Circuit Judge Patricia Millett that sharply criticized FERC’s implementation of tolling orders. Millett focused in particular on the effect the practice has had on landowners subject to eminent domain.
“I recognize that circuit precedent ties my hands,” Millett wrote. “But the Commission has twisted our precedent into a Kafkaesque regime. Under it, the Commission can keep homeowners in seemingly endless administrative limbo while energy companies can plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop.
“The Commission does so by casting aside the time limit on rehearing that Congress ordered -- treating its decision as final enough for the pipeline companies to go forward with their construction plans, but not final for the injured landowners to obtain judicial review. This case starkly illustrates why that is not right.”
Analysts at ClearView Energy Partners LLC wrote in a note to clients following the circuit court’s decision that they see “little risk” to the continued operation of Transco’s Atlantic Sunrise facilities for now. On the other hand, “FERC’s practice of issuing tolling orders may be vulnerable to prospective change,” they said.
Atlantic Sunrise went into service last fall, opening up an outlet for Appalachian Basin producers like Cabot Oil & Gas Corp. to move additional volumes onto Transco, a 10,000-mile interstate transmission system that stretches from South Texas to New York City.