Environmental Impact Analysis Required for Natural Gas Facilities Clarified in Court Decision Denying Residents’ Challenge to Compressor Siting Approval

By on August 20, 2014
Posted In FERC, Natural Gas

A New York town’s challenge to the Federal Energy Regulatory Commission’s (FERC) siting authorization for a natural gas pipeline compressor station was rejected by the U.S. Court of Appeals for the D.C. Circuit in Minisink Residents for Environmental Protection and Safety v. FERC.  The court’s August 15 decision denying the petition for review of residents of the Town of Minisink, when read in conjunction with its decision earlier this year in Delaware Riverkeeper Network v. FERC, delineates the scope of environmental impact analysis that the court will require of FERC  under the National Environmental Policy Act (NEPA).

Residents of the Town protested the compressor station’s location and urged FERC and Millennium to pursue an alternative site referred to as the Wagoner Alternative.  The Wagoner Alternative would have resulted in the compressor station being located in a less populous area but would have required the replacement of a seven mile pipeline segment (called the Neversink segment).  In developing its environmental assessment, FERC had actively considered the Wagoner Alternative but concluded that because of the need to replace the Neversink segment, the environmental impact associated with the Minisink location would be less and the Minisink location was therefore preferable.  FERC’s decision approving the Minisink proposal was split 3-2, with former Chairman Wellinghoff and current Chairman LaFleur dissenting, both Commissioners concluding that the Wagoner Alternative was the better option.

Fundamental to the D.C. Circuit’s decision was its finding that FERC had adequately analyzed the Wagoner Alternative and that there was ample evidence to support its determination that the Wagoner Alterative would have a greater impact due to the need upgrade the Neversink segment.  The petitioners attempted to undermine this finding by pointing to a Millennium PowerPoint presentation that they alleged showed that even if the compressor station were to be located in Minisink, Millennium still planned to replace the Neversink segment.  The court, however, did not consider the PowerPoint persuasive in light of both Millennium’s representation to FERC and Millennium’s counsel’s representation at oral argument that Millennium had no current plans to replace the Neversink segment.

In an instructive footnote, the D.C. Circuit contrasted this case to its recent decision in Delaware Riverkeeper, where it held that FERC improperly segmented and failed to consider the cumulative impact of four connected pipeline construction projects.  The court clarified that the “critical” factor in Delaware Riverkeeper was that all of the pipeline’s projects were either under construction or pending before FERC for environmental review at the same time.  The court acknowledged that the issue before them in Minisink Residents would potentially be “more troublesome” if Millennium were now planning to pursue the Neversink upgrade.

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