New York State

This is how a fossil fuel pipeline gets approved by New York

It all comes down to Section 401 of the federal Clean Water Act.

A pipeline being built.

A pipeline being built. Rainer Fuhrmann/Shutterstock

Pipelines has been a controversial topic in state politics this year as environmental activists, elected officials and business interests battle over the proposed Northeast Supply Enhancement pipeline that would run across Lower New York Bay. What gets lost in the conversation is the actual authority that state government has over fossil fuel projects within its boundaries.

Pipeline opponents argue that blocking new fossil fuel infrastructure is an essential element of the fight against climate change. Supporters say that the economic benefits of individual projects outweigh their symbolic value. Legally speaking, however, neither of these arguments really matter when it comes to the state approving or rejecting a proposed pipeline. The state’s only real authority over oil or gas pipeline approval comes through Section 401 of the federal Clean Water Act, which requires that states certify that the construction of any project – whether a pipeline, a dam or other types of infrastructure – will not harm water quality. The process in New York is supposed to take one year to determine whether a project meets all the bureaucratic and scientific requirements established by the Act and state regulations, though exceptions to those rules are matters of much dispute.

This process begins after the Federal Energy Regulatory Commission requires that applicants go through seven basic steps, including agency analysis of the public benefits of a proposed project, public comment and a hearing, which take on average about a year to complete. Approval of a project by the FERC, however, is contingent on state approval of the project.

Getting a 401 Water Quality Certification – a process that is described in detail by the National Renewable Energy Laboratory – from the state Department of Environmental Conservation requires a developer to seek approval by filing an application with its Division of Water Resources. The four-page application appears simple enough, with boxes for the name of the applicant, contact information and the project’s stated purpose – but if any details are missing, a multimillion dollar project could be at risk. The application requires supplemental information such as environmental mitigation strategies, details on the project site and an overview of the construction process. 

Once that is submitted, the department inspects the site of the proposed project and certifies the completeness of the application within 60 days of receiving it. At any time, the department can also request additional information. Failure to provide that could result in the outright rejection of a project. The application could also be scuttled if an applicant takes more than a year to respond to notice of an incomplete application. 

When an application is successfully completed, the department then issues a draft 401 certification that goes through a public notice period. The department notifies the “chief executive officer of any municipality in which the project is located and such other persons as the department deems to have an interest in the application,” according to department regulations. A public notice with the applicant’s name and project details must also be published in a newspaper and public comment is received thereafter. If the department determines that there is a significant public interest in an application, or to meet requirements for the approval of an environmental impact statement, then it can decide to hold a public hearing

Once the application is deemed complete and public input is solicited and received, the department gets down to reviewing the merits of the project itself. This includes verifying that construction and the pipeline itself would “not cause unreasonable, uncontrolled or unnecessary damage to the natural resources of the state, including soil, forests, water, fish, shellfish, crustaceans and aquatic and land-related environment,” according to state regulations. The department is required to used scientific analysis to determine whether or not a project’s environment impact merits approval or rejection, without political meddling. What is and is not “unreasonable, uncontrolled or unnecessary damage” may be subjective to some extent, but the final decision the department makes has to stand up to judicial scrutiny.

An applicant can challenge a state’s rejection of its 401 application on its merits by arguing that politics, rather than science, affected the department’s decision. One notable example of this in New York is the case of National Fuel Gas Supply Corporation v. New York State Department of Environmental Conservation, which was over the proposed Northern Access natural gas pipeline that would transport gas from Pennsylvania to Canada via Western New York. In a filing with the federal Second Circuit Court of Appeals, National Fuel asserted that a quote in The Buffalo News attributed to Gov. Andrew Cuomo that argued the adverse environmental effects of the projects outweigh its economic benefits meant that politics had been taken into consideration by the department in violation of the Clean Water Act. The court later ruled that the department had to elaborate its rationale for rejecting the pipeline. The department ultimately rejected the application for the second time in Aug. 2019 and it remains unclear whether the pipeline will ever get built.

Energy companies have also challenged the department’s rejection of proposed pipelines like the Constitution Pipeline – which would carry gas from Pennsylvania through the Catskills to the Capital Region – by asserting that the state did not make its decisions by the required one-year deadline. At issue is whether this one-year window is reset whenever an application is withdrawn and resubmitted. This had been the practice for state environmental agencies nationwide until a federal ruling earlier this year in the case of Hoopa Valley Tribe v. FERC. Simply put, this case concerned the Hoopa, a Native American tribe that lives along the California-Oregon border, that argued that its due process rights were violated by a utility company that continued to operate hydroelectric facilities on the Klamath River by avoiding the federal approvals process by withdrawing and resubmitting its application over a decade. Williams Companies – which is the company proposing the Constitution Pipeline – argued to FERC after the ruling that New York state had exceeded the one-year window because the department had requested the company withdraw and resubmit its application in order to satisfy department regulators. FERC then granted a waiver to Williams to override New York state’s rejection and opponents of the pipeline are currently appealing that decision through the agency’s appeals process.

The ability of states like New York to reject pipeline applications based on Section 401 may be constrained in the future. Future federal court rulings could limit how much time a state has to review an application as well as narrow the environmental factors that states can consider. The Trump administration installed a former Republican operative, Neil Chatterjee, as the head of FERC in 2017. Since then, he has been accused of politicizing the work of a commission long-known for being apolitical. The administration and commission have also pursued industry-friendly changes to federal regulations in the coming years and more waivers for companies that want to overcome state opposition to their proposed pipelines could also be given in the coming years. One thing FERC and the administration cannot change by themselves is the law itself. This means that until Congress passes a law – and whoever is then president signs it – the Clean Water Act remains the law of the land and Section 401 will continue to be the top way that a state can control who gets to build a natural gas pipeline. 

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