Millennium Pipeline Co. LLC began constructing the Valley Lateral pipeline on Friday, one day after a federal appeals court in Manhattan rejected a request by New York regulators to block the long-delayed project while their legal challenge with FERC plays out.

On Thursday, the U.S. Court of Appeals for the Second Circuit denied a motion for a stay by the New York Department of Environmental Conservation (DEC). The ruling allows Millennium to begin building the 7.8-mile, 16-inch diameter Valley Lateral, which would deliver about 130 MMcf/d of natural gas from the Marcellus Shale to the Competitive Power Ventures (CPV) 680 MW Valley Energy Center plant under construction in Wawayanda, NY.

“Millennium is pleased that the court dissolved the stay after hearing arguments from the DEC,” company spokeswoman Michelle Hook told NGI. “We will continue to operate within the law as we begin work on this important project. We also vow to adhere to the water and wetlands protections in our original application to the DEC.”

Still unresolved is whether the Federal Energy Regulatory Commission had the authority to rule last September that the DEC had waived its authority to issue a Section 401 water quality certification for the project — which is required under the Clean Water Act — on the grounds that the state agency took too long to render a decision [CP16-17].

Disagreement over the Valley Lateral has since degenerated into a regulatory turf war between FERC and the DEC. The Commission gave Millennium permission to begin construction of the pipeline in October, prompting the DEC to file petitions for a rehearing and a stay. FERC denied the DEC’s requests in mid-November, at the same time that the Second Circuit agreed to hear arguments from both sides in the dispute.

On Friday, the DEC suggested that the court schedule opening briefs on Dec. 22, followed by responsive briefs on Jan. 11, 2018, and reply briefs six days later.

Hook said Millennium began construction Friday, conducting tree clearing operations for the pipeline within the Wawayanda town limits. One challenge, she said, is that a bald eagle’s nest is in the area.

“It is unoccupied,” Hook said. “We’ve been cooperating with the U.S. Fish and Wildlife Service and the DEC — everybody is aware that the eagle’s nest is there. All of the monitors that have been out there have seen no activity, and the nesting season doesn’t really start until January.

“We have a window to get within 660 feet of this eagle’s nest, just in case it becomes reoccupied during nesting season. And so this is the area that we’re focusing on right now — to get in and get out before the nesting season.”

CPV, which already has the necessary permits to begin operations, has said that without the lateral it would burn ultra-low sulfur diesel to generate electricity.