A battle between the natural gas industry and the state of New York heated up in court on Friday over what the industry argues is a misappropriation of state authority to block pipeline development.
A number of national industry groups filed a brief in the U.S. Court of Appeals for the 2nd Circuit, supporting a lawsuit filed against the Empire State by the National Fuel Supply Corporation and Empire Pipeline regarding the denial of the Northern Access pipeline project.
The primary groups in the Friday amicus brief included the American Petroleum Institute, the American Gas Association, the Interstate Natural Gas Association of America, and the Natural Gas Supply Association.
The groups argue that New York overstepped its authority by using its permitting powers over water resources to block the pipeline's construction. They argued that it is the Federal Energy Regulatory Commission that has primary siting authority over interstate pipelines, and that the state's water permit denial is irrelevant.
Dena Wiggins, president and CEO of the Natural Gas Supply Association, said this is the most recent time the state has used its water certification authority to delay a project that is "far outside of the state's purview."
She said the action "undermines the careful balance between federal and state roles in reviewing pipelines" as outlined by Congress in the Natural Gas Act.
"Congress gave FERC primary authority for reviewing pipeline projects, so that one state could not unilaterally veto FERC-approved projects and deprive others states' natural gas consumers of a useful and valuable source of competitive natural gas transportation," Wiggins said.
The Department of Environmental Quality has been seen by industry over the last year as supporting Democratic Gov. Andrew Cuomo's progressive environmental agenda as one of the only states on the East Coast to ban the practice of hydraulic fracturing, or fracking.
Environmental groups see the pipelines as supporting natural gas in nearby Pennsylvania, thereby benefitting the growth of the fossil fuel industry.
The D.C. Circuit Court of Appeals had denied a pipeline company standing last month in a case that the New York environmental agency was dragging its feet in issuing permits to hinder pipeline development in the state. But the D.C. Circuit ruling could favor the industry in the industry's latest challenge.
"Although the D.C. Circuit held that it did not have jurisdiction to find that the department waived its Section 401 [of the Clean Water Act] rights, the court made clear that the Federal Energy Regulatory Commission does have that power and should exercise it in circumstances like these," Catherine Stetson, an attorney for the company in the lawsuit, told Law 360 in June.
"The D.C. Circuit's decision thus makes clear that state agencies like the department cannot ignore federal statutory deadlines with impunity, and clarifies the administrative process for pipelines caught up in bureaucratic red tape," she said.