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D.C. Circuit Provides Additional Clarity on Federal and State Roles in Natural Gas Pipeline Permitting

Dennis_Jeffrey_COLORBy Jeffery S. Dennis

On Friday, June 23, 2017, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision in a long-running dispute between the developer of an interstate natural gas pipeline project and New York State environmental regulators concerning a federal water quality permit that must be obtained before project construction may begin. Millennium Pipeline Company v. Basil Seggos, et al., D.C. Cir. No. 16-1415 (June 23, 2017).  The decision provides additional clarity regarding the interplay of Federal and State permitting authorities with respect to interstate natural gas pipeline infrastructure, and the role of the courts in adjudicating disputes with State permitting agencies. 

The pipeline project at issue is a proposed 7.8 mile extension of Millennium Pipeline’s existing interstate natural gas pipeline in southern New York. The extension will serve a new natural gas-fired power plant.  To construct the project, Millennium must obtain a “certificate of public convenience and necessity” from the Federal Energy Regulatory Commission (“FERC”) pursuant to Section 7 of the Natural Gas Act (“NGA”), 15 U.S.C. § 717f(c).  The NGA requires that FERC ensure that all proposed interstate natural gas pipeline projects comply with all applicable federal, state, and local regulations, including environmental regulations.  15 U.S.C. § 717b(d).  FERC granted Millennium a certificate of public convenience and necessity, conditioned on Millennium obtaining a Clean Water Act (“CWA”) water-quality certificate pursuant to section 401 of the CWA, 33 U.S.C. § 1341(a)(1), since its project would cross several streams.

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