National Fuel Gas Co. subsidiaries have filed a motion for expedited action with FERC, asking Commissioners to act quickly on a request they made earlier this year to bypass New York regulators and start construction on the beleaguered Northern Access expansion project.
The New York State Department of Environmental Conservation (DEC) in April denied National Fuel Gas Supply Corp. and Empire Pipeline Inc. a water quality certification (WQC) for the project, saying it would negatively impact the environment. The decision came after nearly three years of review. NFG anticipated the move, and before the decision came down, filed a request for reconsideration of the Federal Energy Regulatory Commission’s certificate order authorizing the project. It later filed a petition for review in the U.S. Court of Appeals for the Second Circuit, asking the court to vacate DEC’s decision.
If the Commission grants the request for rehearing and issues a favorable order, NFG argued in its motion on Wednesday, it would “reinforce the appropriate balance between state and federal jurisdiction over separate and distinct elements of the natural gas industry.”
The company acknowledged that states have expansive jurisdiction over natural gas production, but said New York has exercised its authority in pursuit of an anti-fossil fuel agenda. NFG pointed to the state’s decision under Democratic Gov. Andrew Cuomo in 2015 to ban high-volume hydraulic fracturing.
“The state of New York’s prejudice against fracking is not at issue in this proceeding and the state and its elected officials may continue to make decisions, parochially, politically or otherwise motivated, about access to natural resources located in New York under the guise of state law,” NFG wrote in its motion. “New York state may not, however, through permits preempted by the federal Natural Gas Act (NGA) or through the belated action of the DEC with respect to an already-waived federal authorization, lawfully prevent the transportation of natural gas produced in other states from entering into or passing through the state of New York.”
NFG subsidiaries argued in their request for rehearing that the Commission “erred” by not finding that DEC stream crossing, water withdrawal and wetlands permits are preempted by the NGA and not required to begin construction. They also argued that the state waived its requirement for the project to obtain a WQC by failing to issue it within the statutory timeframe.
The DEC has argued that it has broad authority under the federal Clean Water Act to review such projects, saying its process for Northern Access was thorough and transparent. The agency also denied a WQC for the Constitution Pipeline last year.
The Second Circuit ruled last week to uphold the DEC’s decision in a similar case filed by Constitution Pipeline LLC. The court found that DEC has the authority under relevant federal laws to make such decisions, but it deferred to the U.S. Court of Appeals District of Columbia Circuit’s jurisdiction regarding Constitution’s claim that the DEC took too long to issue a denial.
NFG argued that New York’s “blockade” of natural gas could disrupt interstate commerce, as the broader natural gas industry has argued. It urged FERC to issue a favorable order, pointing to an executive order signed by President Trump requiring the federal government to expedite the review and permitting of major infrastructure projects, such as oil and gas pipelines.
Until earlier this month, FERC was without a quorum to vote on important projects or rules. NFG will likely have to get in line, other project sponsors have recently made similar requests, asking the Commission to promptly issue certificate orders, which are likely to come first.
In an audio recording posted on the Commission’s website earlier this month, interim FERC Chairman Neil Chatterjee said the Commission would “triage orders and start going through them.” A FERC spokeswoman said Chatterjee has not yet announced a priority list of cases to be decided. The Commission has set its first public meeting since January for Sept. 20.
The more than 490,000 Dth/d Northern Access project would expand the Empire and National Fuel systems to move gas from Seneca Resources Corp.-operated wells in northwest Pennsylvania to markets in New York, Canada, the Northeast and Midwest.
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