Williams & Co. Stumble in Pipeline Project: Did NYS Just Create a Playbook?

The money backing the “Constitution Pipeline” (‘Who could be against ‘the Constitution’!?’) didn’t bank on the Clean Water Act and NEPA joining forces. According to the Second Circuit, it should’ve.

The New York State Department of Environmental Conservation (NYSDEC) is the authorized agency implementing New York’s Clean Water Act water quality standards. The extraordinary thing about these standards is that federal projects that might violate those standards cannot just be waived through by a federal agency in control. Only the authorized state can do that under CWA § 401. For something like a 121-mile long pipeline—expected to cross 250+ waterbodies through 98 miles in New York State—the project applicant needs a certification from NYSDEC that applicable water quality standards won’t be violated. And that’s where it all went sideways for Constitution. Was it a Waterloo?

NEPA Slows Everything Down. Stonewalling Only Gets You So Far

The money behind the ‘Constitution’ pipeline proposal was probably accustomed to telling state regulators that it’s going to investigate a project’s environmental threats only ‘so far’ and, if that isn’t good enough, that the state can just do the further investigation itself. Sorting through so many stream crossings and the best ways of burying a pipeline below grade to minimize disturbance and environmental risk is, no doubt, an extreme information burden. Since there were federal agencies dealing out permissions to build this project, the consultant money (like water!) probably aimed uphill: toward the highest authority.

But what if that authority, in this case the Federal Energy Regulatory Commission (FERC) and the Army Corps of Engineers, must prepare an environmental impact statement (EIS) pursuant to the National Environmental Policy Act (NEPA)? And what if their standard procedure is to incorporate the substance of any supporting studies done for media-specific threats as they become available? And what if one coordinating agency is being stonewalled in its own proceeding with the same applicant?

The preferred methods NYSDEC told these applicants New York state water quality standards (WQSs) demand (“trenchless” methods) would be costly—and, in some cases, highly uncertain in effect.

The pipeline partners, once FERC was on scene, seemed to grow disinterested in bringing forth the information and contingency planning that NYSDEC said its WQSs would require. The partners’ 2013 “trenchless feasibility study” (“trenchless” methods involve all manner of avoiding surface disturbance in the installation) heavily emphasized the cost of doing things as NYSDEC proposed:

Trenchless construction methods are limited … not only by such matters as “underlying geology, available workspace, [and] available time,” but also by “available finances budgeted for a capital project. This phase eliminated waterways from trenchless-crossing consideration largely on the basis of expense; as a result, there remained only 13 waterbody crossings in New York for which Constitution planned to investigate a “formal trenchless construction design.”

Constitution Pipeline v. New York, 2017 WL 3568086 (2d Cir. 2017) at *2 (quoting Constitution 2013 Trenchless Feasibility Study).

All told, the court pointedly noted, Constitution proposed to use NYSDEC’s methods for a tiny minority of crossings. And NYSDEC made this plain to FERC as it prepared and finalized the EIS for Constitution. For some reason, though, FERC decided to plow ahead with its EIS and with its permission pursuant to the Natural Gas Act. Buried deep in an appendix, in fact, FERC had this to say about the disagreement between Constitution and NYSDEC:

We concur with Constitution’s assessment that it is not practicable to use trenchless crossing methods where waterbodies were listed as ephemeral or intermittent (because these waterbodies are likely to be dry at the time of crossing) or for waterbodies less than 30 feet in width (as extra workspaces needed would offset potential benefits).

Constitution, 2017 WL 3568086 at *4. In short: FERC’s agreement with the applicant was that “trenchless crossing methods” would cost too much.  So no investigation thereof was necessary—to the FERC EIS process.

The Second Circuit Confirms: WQS Certification is for the Authorized Agency to Give

All indications from the record are that the give-and-take between Constitution, NYSDEC, FERC and the Corps (the agency issuing the “dredge and fill” permit pursuant to Clean Water Act (CWA) § 404) was detailed, contentious, and, ultimately, unresolved—regarding stream crossings and the NYS WQSs—as of early 2015.

Constitution urged that it was “impracticable” to cross small streams with trenchless methods and that shallow bedrock would, in many places, complicate such techniques.  NYSDEC held its ground arguing that more study of the crossings and how they could be executed with minimal disturbance was needed. Constitution would not budge either way, seemingly in an effort to run out the clock.

Sensing that the stonewalling from Constitution was going nowhere, NYSDEC finally issued a letter stating that it did not certify compliance with NYS WQSs.

In their suit in the Second Circuit (original jurisdiction there provided by the Energy Policy Act of 2005), the Constitution crew alleged the denial was late and arbitrary—both of which would, if true, invalidate it. But the court was unimpressed. The Second Circuit has a history of reviewing state certification denials in this nexus where the CWA and gas pipelines meet, having twice before confirmed that it will review a CWA § 401 certification denial and that all of the familiar grounds of review are provided by the federal Administrative Procedure Act.  See Islander East Pipeline Co., LLC v. McCarthy, 525 F.3d 141 (2d Cir. 2008) (Islander East I); Islander East Pipeline Co., LLC v. Conn. Dept. of Envtl. Protection, 482 F.3d 79 (2d Cir. 2006) (Islander East II).

Unlike some of those earlier cases, NYSDEC did not make findings in denying certification which could later be undermined collaterally in federal court.  It simply refused to judge a substantively incomplete submission. Nothing “arbitrary” about that—and not beyond the 1-year deadline imposed by CWA § 401, either, because of the correspondence with Constitution and FERC throughout its NEPA process wherein NYSDEC kept up the pressure about stream crossings and minimizing the impacts thereof. Cf. Islander East, 482 F.3d at 95-101 (reviewing and reversing state’s findings issued from incomplete factual record).

Findings, of course, require support, substantiation, documentation—proof to a reasonably neutral bystander (like the federal judges hearing legal challenges thereto) that those making the findings know what they’re talking about.  With applications like Constitution’s, where the potentially affected environment is so immense, diverse, and uncatalogued, the better move is simply to note the applicant’s failure to produce needed factual support to judge the application. Because if it’s a pipeline and the answer is “no,” there will almost certainly be litigation.

Assuming other courts adhere to the simple text of CWA § 401(a)(1) (“No license or permit shall be granted if a [§ 401] certification has been denied by the State”], failure to supply the state with needed information in a timely manner can become a scheme “whereby a single state agency effectively vetoes an energy pipeline that has secured approval from a host of other federal and state agencies.” Constitution, 2017 WL 3568086 at *10 (quoting Islander East II, 525 F.3d at 164). That’s pretty simple.

The NEPA Dimension: Using the Impact Assessment to Underline Material Uncertainties

The critical dimension of this case for other states opposing pipeline construction is how NYSDEC so deftly used the NEPA process FERC was obliged to conduct.  Intentionally or not, NYSDEC used comments on the draft NEPA documents to reiterate its own doubts and information needs that had arisen in the CWA § 401 exchanges. As the stonewalling continued in NYSDEC’s proceeding, the agency reinforced what it was representing to the applicant by letters and comments to the federal record in the NEPA process. This can’t help but make clear to all involved that the agency’s information demands are real, public, and that it is incumbent upon the applicant barring anyone else doing so to fulfill those demands. Saying that WQS’s operation protocols would be “impracticable” and refusing to supply the needed information should be met with one thing: a prompt denial of CWA § 401 certification.

Ultimately, as the Second Circuit makes clear in its opinion, it is NYSDEC’s job to certify WQS compliance. Don’t be surprised if the struggle over the nearby “Millenium” pipeline takes on a different tone going forward in light of the Constitution opinion. Indeed, so might several others.

No federal agency—neither FERC nor the Corps—can bypass the CWA-authorized agency in this context. But because applicants so often use the clock against an under-staffed state agency like NYSDEC to argue that the right to deny certification was “waived,” use of a parallel NEPA process can prove vital when defending against the collateral attacks that will surely come in the event of a refusal to certify.

As one opposition coalition responsible for our cover image above argued, the “Constitution” pipeline was vital to future well development plans in the region. (That is why Williams, Cabot and the others would spend so much to build it.) Unless they figure out how to build it without unacceptable risk to native streams, flora, and fauna in vulnerable karst environments like this one, though, they may have just hit a wall.

{Cover Image: Stop the Pipeline!’s track of proposed pipeline and local governments in the study region that currently restrict hydraulic fracturing}

I teach environmental, natural resources, and administrative law at Penn State Law. Before teaching I was an enforcement lawyer at U.S. EPA. Along the way I've done work for environmental nonprofits and written a fair bit about NEPA.
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