As previously reported on PipelineLaw, the ongoing controversy over an April 2016 decision by the New York Department of Environmental Conservation (NYDEC or the Department) to deny a Clean Water Act (CWA) water quality certification to Constitution Pipeline Company (Constitution or the Company) for its interstate natural gas pipeline project in Pennsylvania and New York highlights tensions between federal and state oversight of such projects. In the latest chapter of this controversy, the Second Circuit recently denied Constitution’s petition for review of the NYDEC decision, concluding that (1) the Court lacked jurisdiction over the Company’s claims to the extent that they challenged the timeliness of the decision; and (2) the Department acted within its statutory authority in denying the certification, and its denial was not arbitrary or capricious.
Recent developments in cases brought by Constitution Pipeline Company to challenge New York’s denial of certain water quality authorizations highlight tensions between federal and state oversight of interstate natural gas pipeline construction projects, and the accompanying potential for costly and protracted delays. Under the scheme of “cooperative federalism” set up by many environmental statutes—such as the Clean Water Act (CWA), the Clean Air Act, and the Endangered Species Act—even where a natural gas project is under the exclusive federal regulatory jurisdiction of the Federal Energy Regulatory Commission (FERC), it will often require state-issued permits or other authorizations to go forward. The controversy in the pending Constitution Pipeline cases concerns the extent to which a state may assert authority over discrete aspects of a federally-regulated project in a manner that delays or prevents its construction.