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Oil and Gas Update

One Project, Many Lawsuits

September 7, 2017

By: Blair M. Gardner

On August 23rd, the federal Court of Appeals for the Third Circuit affirmed a decision by the Corps of Engineers to issue a Clean Water Act §404 permit to Tennessee Gas Pipeline Company to construct about 13 miles of “looped” pipeline in two counties in northeastern Pennsylvania (read the JK Energy & Environmental Monitor summary of Delaware Riverkeeper Network v. U.S. Army Corps of Engineers, No. 17-1506. Link.   One week later, August 30, the same court issued another opinion in a companion case, Delaware River Network v. Secretary, Pennsylvania Department of Environmental Protection, No. 17-1533.  Link.  In a nutshell, same project, same plaintiff, different claim, but same outcome.

In the second case, the Delaware Riverkeeper Network sued the Pennsylvania DEP for issuing a federal Clean Water Act §401 water qualification in September 2016 conditioned on the project securing two state permit for encroaching on wetlands that the agency deemed to have “exceptional value” under state law. The agency subsequently issued the two permits, and the environmental group sought review. The federal court has jurisdiction because the project is authorized under the federal Natural Gas Act, 15 U.S.C. §717r(d). On review, the environmental group raised two issues.

The first contested the “finality” of the September DEP water quality certification. The group argued that no agency action was final until an appeal could be filed with the Pennsylvania Environmental Hearing Board, which it admitted it did not file within the time (30 days) permitted by state regulations. Predictably, the Third Circuit made short shrift of this claim.

The second and more serious claim, was that a finding relied upon by the DEP in issuing its certification and permits – that the pipeline project was “water dependent” – was erroneous. A project that is “water dependent” has a familiar meaning under the federal Clean Water Act for Corps issued permits. The state agency has an identical definition to the federal standard, but employs a different analysis, one that the court described as more flexible and that merited the court’s deference because the case involved a state agency’s interpretation of a state regulation. The court explained why the agency’s analytical method is sound. One reason was simply that “water dependency plays a different role in Pennsylvania’s administrative scheme. In a moment of exceptional insight the court wrote, “[u]nder Riverkeeper’s categorical approach, some projects might be impossible to approve even if they would be environmentally harmless.”

In reflecting on that sentence, one can only respond, “but isn’t that the point?”

This article was authored by Blair M. Gardner, Jackson Kelly PLLC.


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