Federal Regulators Sued After Denying Rehearing Requests For PennEast Approval

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STATE IMPACT PENNSYLVANIA – Environmental groups are suing the Federal Energy Regulatory Commission over its approval of the proposed PennEast natural gas pipeline, saying the regulator ignored legal requirements to consider the project’s climate-change impacts, and failed to establish that the pipeline is needed.

The plaintiffs include Delaware Riverkeeper Network, which filed suit on Monday in the Washington, D.C. Circuit Court of Appeals, and New Jersey Sierra Club, which said it will do the same. The actions follow FERC’s rejection on Friday of requests by multiple environmental groups for a rehearing of its PennEast approval, which the regulator issued in January.

The groups were unable to sue FERC while the rehearing request was under consideration, but are now free to do so, their representatives said.

“We knew that it was just a matter of time before FERC would deny our rehearing request,” said Maya van Rossum, head of DRN, in a statement. “FERC has clearly violated the law on multiple fronts.”

PennEast spokeswoman Pat Kornick had no comment on the pending litigation. FERC spokeswoman Tamara Young-Allen said the commission will respond to the suits once the court has set a briefing schedule.

The DRN suit says that in approving PennEast, FERC violated both the Natural Gas Act by failing to identify the need for the project or its public benefits, and the National Environmental Policy Act by failing to consider the project’s climate effects, including that of fracking and end use.

Van Rossum said the suit is the first to challenge FERC’s approval of PennEast on those grounds, and it alleges many deficiencies in the regulator’s Environmental Impact Statement, which concluded there would be “no significant environmental impacts” from the project.

“There’s a whole lot of missing information when it comes to PennEast,” she said.

In May, the State of New Jersey filed its own challenge to FERC’s approval, saying the regulator improperly relied on PennEast’s contracts with its affiliates, used incomplete information on environmental resources, and improperly conflated mitigation of environmental impacts with avoidance.

Permits are still needed from New Jersey’s Department of Environmental Protection, which has already twice rejected PennEast’s application for water permits, and from the Delaware River Basin Commission, which has yet to begin its own review of the project.

PennEast plans to build the approximately 120-mile pipeline from Luzerne County, Pennsylvania to Mercer County, New Jersey. The $1 billion project has stirred strong opposition from some communities, especially in Hunterdon and Mercer Counties, N.J., where about 150 landowners face eminent domain suits after refusing the company’s offers of compensation for building the pipeline on their land. The landowners await a ruling by a federal judge in New Jersey.

Opponents say the pipeline is not needed, and that the company’s contracts for natural gas that would be carried by the line are not a true indicator of demand because they are with entities that have a stake in the project.

Questions about the need for the project were also raised by FERC Commissioner Richard Glick, a frequent ally of anti-pipeline groups, who said the commission’s decision should not be based on PennEast’s agreements to supply its own affiliates with natural gas.

In a dissent to the rehearing denial, Glick said, “I disagree with the Commission’s conclusion that the Project is needed, which is based only on the existence of precedent agreements, including contracts with the project developers’ affiliates accounting for 74 percent of the Project’s subscribed capacity.”

Critics routinely accuse FERC of being a “rubber stamp” for the natural gas industry because it approves virtually every pipeline application that comes before it.

Another environmental group, New Jersey Conservation Foundation, said it would appeal to FERC over its refusal to rehear the PennEast approval.

“FERC’s action is one more in a string of bad decisions against the public interest,” said Tom Gilbert, campaign director for the foundation. “FERC is blatantly ignoring the facts that show no public need for the project and the serious threats it would pose to our environment and communities.”

New Jersey Sierra Club director Jeff Tittel said his organization, too, will sue FERC over its approval of PennEast. He predicted that the case will follow the Sierra Club’s challenge to the Sabal Trail pipeline in Georgia, Alabama and Florida last year, after which a federal court ruled that FERC’s Environmental Impact Statement on the project didn’t meet the requirements of the National Environmental Policy Act.

The court ruled the statement “didn’t look at climate impacts and alternatives,” Tittel said in a statement. “The same thing is happening with PennEast. FERC issued a flawed and incomplete EIS for PennEast Pipeline and has decided to remove greenhouse gas impacts when evaluating the project.”

Carolyn Elefant, a former FERC lawyer, said DRN’s case has a good chance of succeeding in part because New Jersey’s opposition is likely to been seen as significant by the courts; because DRN has long experience of using NGA and NEPA to oppose pipelines, and because two commissioners dissented from the rehearing denial.

Appeals courts reverse FERC rulings only 15-20 percent of the time, “so it’s always an uphill battle, but I think this case is stronger than most,” Elefant said.

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