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National Fuel gains 3-year deadline extension for natural gas pipeline construction

National Fuel gained a three-year deadline extension from federal regulators to complete a pipeline that would carry natural gas from the fracking fields of northern Pennsylvania into Canada.

The Federal Energy Regulatory Commission gave the company until Feb. 3, 2022, to finish the Northern Access pipeline. The project has been on the drawing board since 2013.

"A three-year extension of time is necessary because applicants do not anticipate commencement of project construction until early 2021, due to New York's continued legal actions and to time lines required for procurement of necessary pipe and compressor facility materials," according to Thursday's letter from Richard W. Foley, a branch chief in FERC's Division of Pipeline Certificates.

National Fuel spokeswoman Karen L. Merkel called the letter "yet another step in the right direction."

The 97-mile route would run through Allegany, Cattaraugus and Erie counties and also includes two miles of extensions of existing pipelines in Niagara County.

Merkel said the goal is to connect to a Canadian pipeline under the Niagara River, to feed the gas into the North American Pipeline Grid serving Canada and the northeastern U.S.

FERC approved the project in February 2017, despite opposition from environmentalists and some residents in towns along the route, and the agency gave the company two years to finish the work. That deadline would have expired Sunday.

The state Department of Environmental Conservation has sought to block the project. It denied National Fuel a water quality certificate it needs to build the pipeline across streams in Western New York.

But last August, FERC ruled the DEC missed a deadline to act on the water quality certificate, making the denial invalid as far as FERC is concerned.

National Fuel CEO Ronald J. Tanski told Wall Street analysts during a quarterly earnings call Friday that he was encouraged by a recent ruling by the federal Court of Appeals in the District of Columbia, in an unrelated case, that state agencies aren't allowed to take more than a year to process a water quality certificate.

"We’re hoping that this recent federal court decision will allow FERC to quickly dismiss New York’s rehearing request on FERC’s most recent authorization for our project," Tanski said.

Meanwhile, state judges have issued contradictory rulings on whether National Fuel can use eminent domain powers for private property along the construction route.

In November, National Fuel lost to a couple in Allegany County who refused to sell National Fuel a pipeline easement. The Appellate Division of State Supreme Court in Rochester ruled 3-2 that DEC's denial of the water permit means National Fuel had no valid project and thus could not use eminent domain powers for the property.

Two weeks later, National Fuel won a ruling from a State Supreme Court judge in Erie County, who said the company should be allowed to use the eminent domain law for property in Sardinia. Justice John F. O'Donnell relied on FERC's ruling in making his decision.

All the rulings are being appealed by the losing sides.

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