FERC Upholds New York's Permit Denial for Constitution Natural Gas Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Federal Energy Regulatory Commission (FERC) upheld New York state's denial of a water-quality permit for the Constitution Pipeline, a proposed 124-mile pipeline that would carry 650 million cubic feet per day of natural gas from Pennsylvania to New York. Interests in the pipeline are owned by subsidiaries of Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma), Cabot Oil & Gas Corporation (NYSE:COG) (Houston, Texas), Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina) and WGL Holdings Incorporated (NYSE:WGL) (Washington, D.C.).

In April 2016, the New York Department of Environmental Conservation (DEC) (Albany, New York) denied the application for the pipeline on the grounds that the companies failed to show whether the project would meet the state's water quality standards in the protection of streams and rivers. Williams appealed the decision in federal appeals court, maintaining that the regulator's decision was "arbitrary and capricious." However, in August 2017, the U.S. Court of Appeals for the Second Circuit upheld the DEC's decision. For more information, see the August 2017 issue of the NavigatIIR online newsletter.

Despite the court's ruling, the Constitution Pipeline's ultimate fate rested with FERC, which could have decided that the pipeline was necessary and needed to be constructed. FERC's decision to uphold the DEC's water-quality assessment seems a final blow for the pipeline's construction, although Williams says it will seek a rehearing and appeal the decision if necessary.

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Construction of the pipeline was proposed in 2013 and was initially approved by FERC in December 2014, subject to other required approvals. The project remains in an "on-hold" status in Industrial Info's project platform. For more information, see Industrial Info's project reports on the Pennsylvania and New York portions of the pipeline.

Earlier last year, New York's DEC denied another natural gas pipeline planned from Pennsylvania to New York its application to be constructed on the grounds of water quality. The 96-mile Northern Access Pipeline had been approved by FERC, but was denied by the DEC in April 2017. For more information, see April 18, 2017, article - New York Denies Permit for Proposed Northern Access Gas Pipeline.

Despite the setback, Williams and its fellow companies carry on with other natural gas pipeline projects in the area. Williams' Atlantic Sunrise natural gas pipeline project on its Transcontinental Gas Pipeline system involves the construction of 183 miles of pipeline in Pennsylvania to help transport gas from the Marcellus Shale to Mid-Atlantic and southeastern U.S. The project has a combined total investment value of $3 billion. For more information, see Industrial Info's project reports on the northern and southern portions of the pipeline.

In a similar situation, Constitution partner Duke continues with partners Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia) and Southern Company (NYSE:SO) (Atlanta, Georgia) in the permitting process for the $5 billion Atlantic Coast natural gas pipeline, a 600-mile pipeline that will carry up to 1.5 billion cubic per day of natural gas from West Virginia to Virginia and North Carolina. The project received federal approval in October last year, but hit a recent snag in North Carolina, which is delaying its decision on the project's clean water certificate and other necessary permits, ultimately delaying the project's construction start. For more information, see Industrial Info's project reports on the West Virginia, Virginia and North Carolina segments of the pipeline.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.