National Fuel's Surprising Alignment with Project Opponents
National Fuel and Empire Pipeline (National Fuel) recently filed a petition for review (Petition) of the Federal Energy Regulatory Commission's (FERC) grant of its certificate order for the Northern Access 2016 project to the DC Circuit-an action which is separate from National Fuel's appeal of New York State's denial of its Water Quality Certificate (WQC). Surprisingly, National Fuel filed its Petition before FERC had ruled on its motion for a rehearing, suggesting that National Fuel agrees with an earlier appeal in the DC Circuit filed by the Sierra Club and other project opponents to Transco's Atlantic Sunrise Project. A ruling by the DC Circuit that the FERC must rule on rehearing requests within 30 days could result in less thoroughly reasoned orders denying rehearing requests, which would increase the uncertainty for pipelines in commencing construction while the appeal process proceeds.
On February 3, 2017, just before FERC lost its quorum, the FERC issued a certificate for National Fuel's Northern Access 2016 project. On March 3, National Fuel filed with FERC a request for reconsideration or, in the alternative, a request for rehearing. Importantly, National Fuel's rehearing request asked FERC to find that the New York State Department of Environmental Conservation (NYSDEC) had waived its right to issue a WQC by failing to act by the FERC deadline for applicable federal permits. As we have previously reported, the NYSDEC ultimately acted on the application for the WQC by denying it. National Fuel has appealed that denial to the Second Circuit Court of Appeals.
National Fuel was not the only party to seek rehearing of the FERC's order granting the certificate. A number of environmental opponents, including the Sierra Club and the Allegheny Defense Project, also sought rehearing. As it often does, even when it has a quorum, FERC issued a tolling order on April 3 in which it granted itself additional time to consider all of the rehearing requests that had been filed.
Tolling orders are typically viewed as advantageous to pipeline applicants, primarily because they allow the applicant to begin construction while FERC considers the rehearing requests filed by opponents. In an appeal that is currently pending before the DC Circuit regarding a similar tolling order issued in Transco's Atlantic Sunrise Project, the Sierra Club asserted that the issuance of such tolling orders "allow the pipeline company to exercise eminent domain and cause irreparable injury and ecological damage-all while Petitioners are stuck in administrative purgatory, unable to seek judicial review despite a statute that permits them to do so if the Commission has not acted expeditiously."
Given this rationale from environmental groups, it is somewhat surprising that, on June 1, National Fuel filed a Petition for Review of the tolling order issued in its case. While National Fuel is not yet required to file its statement of the issues, the fact that it has sought immediate judicial review likely means that it believes, much like the Sierra Club in the Atlantic Sunrise Project, that the issuance of the tolling order is improper, and that immediate court review is appropriate. The court has set an initial schedule for the filing of the various pleadings in the case, but has not yet indicated whether it intends to hold an oral argument.
As it did in Atlantic Sunrise, FERC will likely file a motion to dismiss the entire case on the basis that the tolling order properly extended the time for FERC's review of the original certificate order, which means that the certificate order is not a final and appealable order. In the Atlantic Sunrise appeal, which the Sierra Club and others initiated about two months before this National Fuel Petition, the DC Circuit has neither ruled on the motion to dismiss nor set the case for oral argument. Given the similarity in the procedural posture of the two cases, it is likely that the National Fuel case will be decided in the same manner as Atlantic Sunrise, which most likely will be decided first, unless the two cases are combined.