Constitution Pipeline refused water permit by New York regulator

Gas pipeline
Source: AdobeStock

The Constitution pipeline, which was to deliver 650 million cubic feet of gas from Pennsylvania’s Susquehanna County to energy-hungry and heavily populated New York state, has been stopped in its tracks when the New York State Department of Environmental Conservation (NYSDEC) denied it Water Quality Certification.

The pipeline, which has already obtained approvals from the Federal Energy Regulatory Commission and Pennsylvania’s Department of Environmental Protection, was set to ease the bottlencks that have led to a supply glut in the Marcellus shale. In March, the pipeline had another victory when U.S. District Judge ruled that the construction companies are within rights to run the pipeline across seven northeastern Pennsylvania properties whose owners had not agreed to it.

But the winning streak seems to be truly over after this latest denial, which came after full four years of back and forths between the operators (Cabot Oil & Gas, Williams Partners and Piedmont Natural Gas) and the regulators.

The NYSDEC’s refusal to grant permit to the 124-mile pipeline was based on the regulator’s belief that the project failed to meet standards that protect streams, wetlands and other water resources in its path.

In a statement, Constitution Pipeline announced that it “remains steadfastly committed to pursuing the federally-approved energy infrastructure project,” despite the recent decision by NYSDEC to deny the Section 401 Water Quality Certification for the project.

“In spite of NYSDEC’s unprecedented decision, we remain absolutely committed to building this important energy infrastructure project, which will create an important connection between consumers and reliable supplies of clean, affordable natural gas. We believe NYSDEC’s stated rationale for the denial includes flagrant misstatements and inaccurate allegations, and appears to be driven more by New York State politics than by environmental science,” the project sponsors said in a joint statement.

The statement further reads that “Constitution Pipeline worked closely with NYSDEC staff for more than three years to ensure that water quality measures are met before, during and after construction. As a result of that dialogue, Constitution Pipeline voluntarily agreed to the agency’s requests to incorporate re-routes, adopt trenchless construction methodologies, commit to site-specific trout stream restoration and agreed to fund approximately $18 million for wetland mitigation and banking and approximately $8.6 million for the restoration and preservation of migratory bird habitats.

“We worked in good faith with the NYSDEC for years, so this decision comes as a surprise and is contrary to our dialogue and collaborative effort to address concerns. The FERC-certificated route was developed after extensive environmental and engineering analysis, which included a comprehensive review of route alternatives. In its Final Environmental Impact Statement, the FERC concluded that environmental impacts associated with these alternatives were significantly greater than the preferred route. Despite this, in the spirit of collaboration we followed NYSDEC guidance and further altered our preferred route to adopt NYSDEC staff recommendations.”

“We were informed by the NYSDEC that the agency had everything it needed to process the water quality certification. This point was further emphasized when the agency issued a notice on Dec. 24, 2014, indicating that the application was indeed administratively complete.”

“Contrary to NYSDEC statements, the company was not informed of any outstanding issues that it had not agreed to address as a condition of the permit. In fact, during the past nine months, weekly inquiries were made to the department to ensure no additional data was needed. Those inquiries were either ignored or responded to in the negative. It is obvious that the NYSDEC deliberately chose to remain silent to bolster the political campaign of the State.”

It seems that there are three routes that Constitution Pipeline can now follow.

One is a judicial appeal. “A court review could easily take a year on standard briefing schedules,” analysts at ClearView Energy Partners LLC said in a note Monday. “If the court were to find in Constitution’s favour, the permit would be remanded to the agency [NYSDEC] for resolution, not awarded to Constitution.”

Constitution could also request a rehearing at NYSDEC. “…[W]e surmise that it is unlikely that NYSDEC would arrive at a different conclusion given the intensely political opposition ginned up against the project and Gov. Cuomo’s earlier decision related to fracking in the Empire State [see Shale Daily, June 29, 2015],” ClearView said.

Finally, Constitution could resubmit its application to NYSDEC and attempt to resolve the issues behind the agency’s permit denial. However, a re-submission could take as long to move through the system as the original application, ClearView said.

The DEC’s decision was received enthusiastically by the pipeline opponents. Mark Ruffalo, advisory body member of New Yorkers Against Fracking, said: “Today is an incredible Earth Day! Thank you again to Governor Cuomo and the Department of Environmental Conservation for putting the protection of our precious water and the public health and safety of New Yorkers ahead of the special interests of the oil and gas industry,” adding: “This is what real climate leadership looks like.”

Last week, Kinder Morgan announced its decision to pull the plug on its proposed Northeast Energy Direct pipeline, citing low gas prices and lack of interest from gas distributors. The project was still under review by FERC and was planned to go online in 2018.

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