Shale Law in the Spotlight: Valley Lateral Pipeline Project – An Overview of Status and Current Legal Developments

Written by Chloe Marie – Research Fellow

This article is intended to provide an overview of the current status of the Valley Lateral Project as well as recent legal developments related to construction activities on the project.

The Valley Lateral Project is a new pipeline project intended to directly connect and transport approximately 130,000 Dth/day of natural gas from the Millennium pipeline’s mainline in Orange County, New York to the CPV Valley Energy Center in the Town of Wawayanda, Orange County, New York. The CPV Valley Energy Center is a 680 Megawatt (MW) combined-cycle gas power plant currently under construction, which will generate electricity using natural gas coming from the Millennium pipeline in order to supply around 650,000 houses in the region.

On November 13, 2015, Millennium Pipeline Company LLC filed a certificate application with the Federal Energy Regulatory Commission (FERC) for construction and operation of the Valley Lateral Project. In the meantime, on November 20, 2015, Millennium applied to the New York Department of Environmental Consideration (DEC) for a Section 401 Water Quality Certification. New York DEC several times questioned the completeness of Millennium’s application and requested additional information. New York DEC ultimately conceded the completeness of the application on August 31, 2016. Consequently, Millennium filed a Request for Expedited Review for the Section 401 Water Quality Certification, to which New York DEC indicated it had a one-year deadline to review the application.

On November 9, 2016, FERC issued a Certificate of Public Convenience and Necessity allowing the project to go forward. On December 5, 2016, Millennium filed a petition for review to the U.S. Court of Appeals for the District of Columbia Circuit to order New York DEC to take action on delayed Section 401 certification application. Millennium alleged that New York DEC exceeded the regulatory timeline prescribed under the Clean Water Act to take action on the Section 401 certification application stating that “the Department received Millennium’s application on November 23, 2015. One year came and went on November 23, 2016, without action.” Millennium also claimed that because New York DEC failed to act within the regulatory timeline, it waived its right to issue a water quality certification.

On June 23, 2017, the U.S. Court of Appeals denied Millennium’s petition for review due to a lack of standing and ruled that FERC only has jurisdiction to provide a remedy for the delayed action. As a result, on July 21, 2017, Millennium filed with FERC a Request for Notice to Proceed with construction of the Valley Lateral Project and asked FERC to declare that New York DEC waived its authority under the Clean Water Act Section 401. Interestingly, on August 30, 2017, New York DEC denied Millennium’s application for a Section 401 Water Quality Certification.

On September 15, 2017, FERC issued a Declaratory Order holding that New York DEC indeed waived its authority to issue a water quality certification. In this order, FERC explained that, pursuant to the Clean Water Act and Congressional intent, the waiver period runs from the day that New York DEC received the certification application.

On October 13, 2017, New York DEC filed a Request for Rehearing and Stay of the Declaratory Order. In the meantime, on October 27, 2017, FERC issued a Notice to Proceed authorizing Millennium to start construction of the Valley Lateral Project.

On October 30, 2017, New York DEC filed a Request for Stay of the Notice to Proceed and also filed a petition for review with the U.S. Court of Appeals for the 2^nd Circuit asking for a temporary stay of the FERC’s Notice to Proceed pending action on New York DEC’s Request for Rehearing and Stay of the Declaratory Order.

On November 15, 2017, FERC denied New York DEC’s Request for Rehearing and Motions to Stay that were filed on October 13 and 30 contending that New York DEC failed to demonstrate irreparable injury to support its requests for stay.

Recently, on March 12, 2018, the U.S. Court of Appeals for the Second Circuit denied New York DEC’s petition for review holding that FERC has sole jurisdiction over the Valley Lateral Project and that the New York DEC had waived its authority to issue a water quality certification.

Stay tuned for further legal developments!

                                                                

This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.