Ruling in pipeline case suggests Federal Energy Regulatory Commission may accept less strict review

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Energy and environmental lawyers across the state said a recent ruling by the U.S. Court of Appeals for the Second Circuit giving the go-ahead to construction of a 39-mile long, 30-inch wide natural gas pipeline through northern Pennsylvania provides some guidance as to the Federal Energy Regulatory Commission's standard of review.

A number of environmental groups had opposed FERC's order granting Central New York Oil and Gas Co. permission to build the pipeline, known as the MARC I, claiming the commission did not examine closely enough the possible environmental impact of the project.

Coalition for Responsible Growth and Resource Conservation v. FERC plaintiffs alleged that the agency failed in determining an environmental impact statement was unnecessary.

According to the Environmental Protection Agency, an environmental impact statement, or EIS, is a detailed statement on the possible environmental effects of a proposed project.

In the case, FERC conducted an environmental assessment, meant to help determine whether an EIS is necessary. The agency ultimately issued a finding of no significant impact, eliminating the need for an environmental impact statement.

A three-judge panel of the Second Circuit ruled that, through the environmental assessment, FERC adequately considered the possible environmental impact the MARC I project could have.

Elizabeth U. Witmer, a partner at Saul Ewing whose practice includes representing energy companies in siting pipeline facilities and who was not involved in this case, said the ruling is of interest to energy and environmental attorneys because it offers another example of the type of project for which an environmental assessment is sufficient.

"It is important because it confirmed what FERC had been consistently doing," she said, explaining that the ruling "confirms that projects of the size and scope of MARC I" will typically only require environmental assessments to proceed.

Ms. Witmer said it has been a long time since FERC's ability to decide the appropriate level of environmental review has been challenged and that, while it appeared to her that MARC I was the type of project that required only an environmental assessment, the possibility of a court changing the standard was something she closely monitored.

Steve Saunders, a Scranton-based oil and gas lawyer who focuses his practice on representing landowners, said the Second Circuit's ruling was not unusual because challenging the commission is always a difficult proposition.

"The burden of proof for parties objecting to FERC is so high that it's pretty unusual to find a circuit court that would overturn the federal agency in one of these kinds of cases," said Mr. Saunders, who was not involved in the case.

Doug Clark, a Peckville, Pa.-based energy and environmental lawyer who represents landowners in pipeline disputes, added that FERC has broad discretion with regard to environmental assessments, pointing to the U.S. Supreme Court's 1989 decision in Robertson v. Methow Valley Citizens Council, which the Second Circuit cited in its opinion.

The Robertson court held that the National Environmental Policy Act "merely prohibits uninformed -- rather than unwise -- agency action."

"They can make poor, unwise decisions as long as they have facts in front in them," he said. "That really gives you some perspective of what you're dealing with here and that's why it's so important to get the facts in front of them so they don't just arbitrarily or capriciously make a decision."

A Second Circuit panel -- Judges Ralph K. Winter, Denny Chin and Christopher F. Droney -- said in its opinion, which was signed by clerk of court Catherine O'Hagan Wolfe, that FERC's certificate order "carefully considered the concerns" raised by members of the public who submitted comments and that the agency's subsequent order denying petitioners' request for a rehearing on the certificate order further explained why FERC decided an EIS was not appropriate in this case.

Mr. Saunders said that if the petitioners don't appeal the Second Circuit's ruling, they'll have little recourse to stop the MARC I project from proceeding.

"Once approval is granted [by FERC] and appeals are exhausted, there's virtually nothing you can do to challenge it unless the pipeline company is not building in compliance with the approval they've received," he said.

Representatives for both the coalition and FERC did not respond to requests for comment on the ruling.

environment - legalnews

Zack Needles: 215-557-2493 or zneedles@alm.com. To read more articles like this, visit www.thelegalintelligencer.com. First Published July 2, 2012 12:00 AM


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