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New Gas Pipeline Decision

July 8, 2014

petervickery

archimedes

Leverage requires a place to stand

Three environmental groups lost their case against the Federal Energy Regulatory Commission (FERC) because they lacked standing. As Archimedes noted, you can move the world with a long enough lever and a fulcrum, but only so long as you have a place to stand. Without standing, not only will you fail to move the world, but — as the three groups learned too late — you will also fail to move the United States Court of Appeals for the D.C. Circuit.

The story began when Spectra Energy applied to FERC for a certificate of public convenience and necessity (a permit) to build a natural gas pipeline to New York City via Jersey City. The Atlantic Chapter of the Sierra Club, Food & Water Watch, and NO Gas Pipeline intervened in the FERC proceedings and opposed the issuance of a certificate for several reasons, notably the increased likelihood that the gas in the pipeline would cause the homes of their Jersey City members to suffer from increased levels of radon. FERC did not fnd the objections persuasive and on May 2012 issued the certificate. The three organizations and the City of Jersey petitioned the Court of Appeals to review the decision.

On July 1, 2014, the court dismissed the petition for want of jurisdiction. It had other reasons for dismissing Jersey City’s petition, but for the environmental coalition the fatal issue was standing: the court held that each group had failed to show “injury in fact,” meaning “the invasion of a legally protected interest which is (a) concrete and particularized… and (b) actual or imminent, not conjectural or hypothetical.” In trying to demonstrate standing, the groups alleged that the pipeline would raise the risk of radon and terrorism, both of which could injure their Jersey City membership.

These risks were too speculative, the court decided. The supposedly heightened radon risk depended on energy companies choosing to (1) extract high-radon gas and (2) transport it without taking steps to reduce the radon levels. There was no evidence that Spectra would make these choices.

As for the terrorism threat, the court observed that the commission of an act of terrorism depends on the “intervening acts of third parties,” i.e. terrorists.  Perhaps the court had in mind the perverse incentive that would result from forbidding construction of a pipeline because of the chance that terrorists might try to blow it up. If acts of violent sabotage could serve as the basis for denying permits, some pipeline opponents might find themselves unable to resist the temptation to engage in them. And, besides, there is precious little that al Qaeda et al will not target or weaponize in the realm of infrastructure (or anything else, for that matter).

Here, however, I am speculating. But if I were trying to persuade a judge to deep six a project, I would keep this public policy issue in mind and refrain from relying on the target-for-terrorism argument. The main point for readers with an interest in the Northeast Expansion Project is that for standing purposes, organizations and the individuals that they consist of must demonstrate facts that establish “actual and imminent” injury. Harms that are too contingent and attenuated will not suffice. That remains true even if the organizations intervened at the FERC stage.

The take-away: In and of itself intervening in FERC proceedings is no guarantee that the intervenor will have standing to challenge FERC’s decision in court.

All means nothing

May 19, 2014

petervickery

What does “all” mean? In eminent domain law the word does not necessarily mean what you might think, according to today’s Supreme Judicial Court’s decision in Sorenti Bros, Inc. v. Commonwealth.  In fact, it can mean “nothing.”  Readers with an interest in takings and damages (e.g. landowners with property along the route of the Tennessee Gas Pipeline Company’s proposed northeast expansion project) may wish to pay particular attention.

The case involved a gas station, the construction of a flyover, and the elimination of a traffic island in Bourne, the town that describes itself as “the gateway to Cape Cod.”

The old road configuration was a boon to plaintiff’s Shell gas station. But the new highway configuration has made it a more difficult — and, therefore, less attractive — place to get to. As part of the flyover project the Commonwealth took part of the plaintiff’s land, bringing the eminent-domain statute into play.  The part of the statute that relates to partial takings provides that the landowner should receive damages for “all injury to the part not taken caused by the taking or by the public improvement for which the taking is made.”

Does “all” include the loss of business that the new road configuration means for the Shell gas station?  The jury said yes, but the Supreme Judicial Court said no.i_want_it_all___queen_by_agynesgraphics-d5zgn11

Because the new layout only renders the route to the gas station “more circuitous” the station’s owner is not entitled to damages. After noting that “luck [of enjoying]… being where the crowd is” does not amount to a right, the Court stated that the “limitations on access… do not approach the severity that has been found to justify damages for impairment of access.” At trial, the judge had instructed the jury that they could award damages for the impaired access, and they arrived at the sum of $4.15 million. The SJC, in contrast, decided that the plaintiff was simply not entitled to damages. From “all” to nothing.

Pipeline: House feels the need for speed

April 28, 2014

petervickery

Although the Natural Gas Act preempts state laws about natural gas pipelines, it preserves the role state agencies play in issuing permits under federal environmental laws. This proviso appears in section 717b(d) of the statute. For example, because pipeline construction involves the discharge of water, the Clean Water Act requires the pipeline company to obtain a water quality certificate (in addition to a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC)). reduced speed

Not being immune to public pressure, state agencies have allegedly dragged their feet on occasion (e.g. failing to promptly process water-quality applications) a problem Congress sought to address in 2005 via the Energy Policy Act. Congress intended to accelerate the permitting process through expedited judicial review, which allows a pipeline company to petition the U.S. Court of Appeals for the D.C. Circuit if the agencies fail to meet FERC’s deadlines.

But according this report from the Interstate Natural Gas Association of America, since the act took effect the speed of permitting has gone down rather than up. In 2012 President Obama issued Executive Order 13604 directing federal agencies to “adhere to guidelines and schedules”  and, to that end, establishing a Steering Committee on Federal Infrastructure Permitting and Review Process Improvement. But the new committee does not seem to have injected or diffused sufficient alacrity into the executive branch.

So to solve the problem (again) Congress is considering another bill, the Natural Gas Pipeline Permitting Reform Act. This post on PipelineLaw.com provides some helpful background. At present, if an agency lets FERC’s deadlines slide the onus is on the pipeline company (not FERC) to go to court for an order telling the agency to comply with the timetable. Under the proposed bill if an agency fails to approve or deny a permit by FERC’s deadline, the permit will issue anyway. After passing the House (252:165) the bill is now before the Senate. With no action likely this side of the November elections, the bill will probably not have any effect on the Northeast Expansion that Tennessee Gas Pipeline Company proposes to build across northern Massachusetts.

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