Boston — In a setback for Kinder Morgan’s Otis State Forest pipeline plans, the U.S. Court of Appeals for the First Circuit has ruled that it has no jurisdiction to hear arguments about the project’s water quality permit until the Commonwealth has finalized its review of the permit.
On March 15, the Court held that the Natural Gas Act does not allow pipeline companies to leapfrog over state administrative procedures in order to expedite their projects. This is the first time a federal Circuit Court has interpreted the relevant language in the Natural Gas Act.
Unless reversed by the Supreme Court, the Court’s interpretation is now the law within courts in the First Circuit – Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico. Courts outside the Circuit may also choose to invoke it as a precedent.
Pipeline opponents are applauding the decision. Pipeline companies fear that states and environmental groups may, in the words of a Law 360 article, “be emboldened to drag out reviews of projects already approved by the federal government.”
Appeal of a State Water Permit Leads to New Federal Law
Last June, Massachusetts issued a 401 water quality permit to Kinder Morgan subsidiary, Tennessee Gas Pipeline Company, which will construct and operate the pipeline. Section 401 of the Clean Water Act requires that an applicant for a federal license for a project that may impact waterways and wetlands must obtain a permit from the state.
The Berkshire Environmental Action Team (BEAT) and sixteen individual plaintiffs challenged the state permit in July on the grounds that the Massachusetts Department of Environmental Protection (MassDEP) had failed to require Tennessee to comply with a number of its own state water quality requirements.
As they are allowed under Massachusetts’ regulations, the plaintiffs requested an Adjudicatory Hearing on the sufficiency of the 401 permit.
Tennessee then filed suit in federal District Court of Massachusetts to have that court decide the validity of BEAT’s complaints about the water permit – likely hoping to avoid the delay of waiting for the DEP to consider BEAT’s claims. The company, however, filed its suit in the wrong court.
BEAT and the other plaintiffs filed against Tennessee in the right court, the First Circuit Court of Appeals. The Natural Gas Act grants that court exclusive jurisdiction over any State order or action.
BEAT actually did not want to be in any court, but, rather, wished to have its disagreements with the water permit reviewed by the MassDEP, under administrative – not judicial – procedures.
As the First Circuit put it, “[BEAT and other plaintiffs} hedged their bets. They filed the petition before us in order to preserve some review of the June 29 conditional water quality certification…[but] at the same time, they asked us to reject their petition on the grounds that…review is premature until MassDEP completes its adjudicatory process.”
BEAT has now won the argument. Tennessee must wait for Massachusetts to complete its process before seeking First Circuit review on the actual merits of the water permit.
The press officer for the Western Region of the MassDEP stated that the Commissioner is on track to complete his review of the permit “on or before March 27.”
BEAT and the other plaintiffs will then have seven days to file a motion for reconsideration. After reconsideration, should that step occur, the permit is final.
Will plaintiffs then petition the First Circuit for consideration of the merits of the water permit? Kathryn Eiseman, Director of Massachusetts Pipeline Awareness Network says that plaintiffs “are keeping their options open and waiting to evaluate the Commissioner’s decision.”
The Battle to Save Article 97
The Court decision is the latest in a series of skirmishes over Kinder Morgan’s plan to construct the Connecticut Expansion pipeline loop through a pristine forest and pond area in Otis State Forest in Sandisfield.
The Otis State Forest is protected under Article 97 of the Commonwealth’s constitution. Adopted in 1972, the Article states that “the people shall have a right to clean air and water…and the natural scenic, historic, and esthetic qualities of their environment,” with the fulfillment of these rights to be carried out through [state] parkland acquisition and conservation. Only a two-thirds vote in both the House and Senate can remove conservation status.
In fall of 2015, Representative Garrett Bradley of Hingham was tapped by Tennessee to introduce a bill granting easements to the company. Mr. Bradley obliged. The Legislature has not enacted the bill.
After giving up on the Legislature, Tennessee sued last March in Berkshire District Court for immediate access to the Otis State Forest in order to begin work.
In May, Judge John Agostini ruled in favor of Tennessee, basing his opinion on the Supremacy Clause of the United States Constitution, which gives federal laws, such as the Natural Gas Act, precedence over state laws when conflicts occur. The Massachusetts Attorney General defended Article 97 in the court action, but has not appealed the decision.
Does Connecticut Need the Gas?
During the time that the fight for Otis State Forest has heated up, the energy landscape has changed.
Connecticut Natural Gas, Southern Connecticut Gas Company, and Eversource had entered into contracts to buy the gas supplied by the new pipeline in 2014. The Connecticut Comprehensive Energy Plan released in 2013 envisioned significant residential home heating conversions from oil to gas. Thus, the contracts, and the pipeline.
As the price of oil has tanked over the last several years, however, residential conversions to gas in Connecticut have languished, leading many to question why Otis State Forest and Spectacle Pond should be degraded when the gas doesn’t even appear to be needed.
The delay occasioned by the administrative and judicial proceedings on the water permit, as well as questions remaining about Native American ceremonial stone landscapes, may give valuable time to Massachusetts’ lawmakers and others to weigh in on Connecticut’s revised Comprehensive Energy Strategy, perhaps trimming back natural gas conversion forecasts and obviating the need for the pipeline. Connecticut regulators are now updating the 2013 version.
Time may yet be on the side of Article 97 and the Otis State Forest.