A new federal ruling has opened the door for National Fuel to revive a plan to build a 97-mile natural gas pipeline between northwestern Pennsylvania and Elma.
The Federal Energy Regulatory Commission ruled Monday that the state Department of Environmental Conservation failed to act within its one-year statutory limit before it denied a water quality certificate needed to build the proposed Northern Access Pipeline.
The company's half-billion-dollar proposed Northern Access Pipeline is designed to transport natural gas from the shale-rich regions of Pennsylvania north through Allegany, Cattaraugus and Erie counties.
Nearly a dozen affected landowners and environmental groups fought the pipeline in advance of last year's DEC decision on grounds it would detrimentally affect the environment, watersheds and their properties.
The water quality certificate under the federal Clean Water Act is critical to the project moving forward.
"We are pleased with yesterday's ruling, which removes a major barrier for an important project that will provide consumers with increased access to abundant energy supplies, while also improving reliability and resiliency of the energy grid," National Fuel said in a statement Tuesday.
The ruling roiled some local environmental advocates who thought the issue was decided more than a year ago.
"It's like changing the goalposts in the middle of the game," Diana Strablow, vice-chair of the Sierra Club, Niagara Group.
The project, which the company has said could create nearly 1,700 jobs with millions of dollars in tax revenue to the state, would reach a connection point in Elma.
Besides the pipeline, National Fuel also proposes upgrading a compression station in Porterville, installing a new compression station in Pendleton, building a gas dehydration facility in Wheatfield and constructing two additional miles of pipeline in Pendleton.
The company said it remains committed to the project and is developing a revised timeline "due to the significant delay caused by actions of the state agency."
That state agency, the DEC, rebuked the FERC decision.
"DEC disagrees with FERC's decision that sides with the fossil fuel industry over protecting our environment," the agency said in a statement. "DEC's focus is always protecting our environment and water quality for all New Yorkers."
As part of its ruling, FERC found a mutually agreed-upon deadline between the DEC and National Fuel of April 8, 2017, was not legally enforceable and the true deadline was one year from the date of National Fuel's application, March 2, 2016.
FERC initially approved the pipeline in early 2017 on the condition that its water quality certificate would be approved by the DEC. It ruled Monday that the DEC effectively waived its authority to rule on the issue of water quality in March 2017 because it didn't rule within the statutory one-year time period.
The DEC said it intends to appeal FERC's decision by seeking a rehearing and a stay on the project.
"If FERC fails to reverse its misguided decision, DEC will appeal to the U.S. Second Circuit and seek a stay of any construction and continue to vigorously use every legal avenue to protect our state's resources," it added.
It was April 7, 2017, when the state DEC denied the certificate on the grounds it was too big of a threat to water quality and wildlife.
"After an in-depth review of the proposed Northern Access Pipeline project and following three public hearings and the consideration of over 5,700 comments, DEC has denied the permit due to the project's failure to avoid adverse impacts to wetlands, streams and fish and other wildlife habitat," the DEC said at the time.
The proposed pipeline project would cut across close to 200 creeks and streams between the Pennsylvania border and Elma.
Company officials said during their permitting process that only about 60 of the streams the pipeline would cross are year-round waterways and about a dozen are higher-grade streams sustaining trout and other aquatic life.
Officials added that construction across streams would only be done at specific dry times of year to minimize potential environmental impacts.
In its order on Monday, FERC denied re-hearings by landowners, environmental groups and a municipality who appealed FERC's earlier approval of the project on various grounds.
One of them — that there was no inherent economic need for the pipeline because more than 70 percent of the gas produced in Pennsylvania would be exported to Canada — was also rejected.
"We affirm the certificate order's finding of economic need," FERC wrote in its order Monday. "Our policy does not require that shippers be domestic end-use consumers of natural gas."
One of the five FERC commissioners, Richard Glick, offered a dissenting opinion.
Glick argued that the commission made no accounting for the proposed project's contribution to climate change.
National Fuel said that besides the benefits provided by investment in infrastructure and jobs, the project will also help in accessibility to "a substantial supply of low-cost energy."
"The development of vast natural gas reserves has markedly decreased the average winter heating bills of customers in Western New York," National Fuel said.
Environmental groups derided the decision.
"Under the Clean Water act, the DEC has the right to determine whether it meets the standard. That's inherent in the process," said Strablow, of Sierra Club, Niagara Group. "FERC is trying to change the end date (the deadline) of what National Fuel and DEC agreed to."
Several organizations lauded FERC's decision.
"This is a significant and welcome ruling for the future of natural gas development in New York," said Darren Suarez, director of government affairs for the Business Council of New York State.
In a conference call last Friday, Ronald J. Tanski, the president and chief executive officer of National Fuel, said the climate in Washington, D.C., is changing with regard to certifying pipeline construction projects.
"All the infrastructure construction delays over the past two years have not gone unnoticed on Capitol Hill either," Tanski said. "Earlier this week, a bill was introduced in the Senate to amend the Clean Water Act to prevent states from blocking federally-approved projects. We’ll be watching to see how that bill progresses and we plan to work with our trade associations to seek some certainty in the permitting process."
David Robinson, deputy business editor, contributed to this report.