Stopping the pipeline: What are the options?

Editor’s Note: As the line of protestors proceeds across the state in opposition to the proposed network of high-pressure natural gas pipelines conveying the fuel from the Pennsylvania fracking fields to East Coast ports for export, environmental lawyer Mary Douglas examines what rights under the law citizens, towns, and Conservation Commissions have to intervene and stop the proposed routes.

As Kinder Morgan pitches its plans for an extension of a natural gas pipeline at town meetings throughout western Massachusetts, residents worried about environmental impacts are increasingly wondering what tools may be available to stop – or slow down – the steady march toward construction. A labyrinth of laws and regulations governs pipeline projects. Understanding the process is a crucial first step toward effecting changes in its design, or, possibly, adoption of an alternative to the project. The federal laws are:

• The Natural Gas Act of 1938 (NGA). The NGA governs all aspects of interstate transportation and sale of natural gas, and gives the Federal Energy Regulatory Commission (FERC) authority over all pipeline projects. After an interstate pipeline is constructed and operational, the Department of Transportation takes over, assuming responsibility for the safety of the pipeline under the Natural Gas and Hazardous Materials Pipeline Safety Act.

• Certificate of Public Convenience and Necessity. FERC must issue a Certificate of Public Convenience and Necessity to pipeline applicant, Kinder Morgan, before it can proceed with its plans. Issuance of a Certificate means that FERC has concluded that the public benefits of the project outweigh any adverse impacts. It also means that FERC has considered the avoidance of unnecessary disruptions to the environment and unnecessary exercise of eminent domain.

• Preemption. The NGA preempts any state or local law relating to the transportation of natural gas in interstate commerce. A big exception is that when a federal law itself gives authority to the state to make a determination or issue a permit, the state action is NOT preempted, which means that when the state environmental or water quality agency issues a water quality certificate under section 401 of the Clean Water Act, it cannot be preempted by FERC.

• Eminent Domain. When and if Kinder Morgan is granted a Certificate of Public Convenience and Necessity, it can exercise eminent domain. Under the NGA, if a landowner fails to agree with the pipeline company on a purchase price for real property, Kinder Morgan can initiate a court process to condemn the tract in question and establish a fair value for the property to be used for the pipeline.

• The National Environmental Policy Act (NEPA). NEPA requires FERC to review the environmental impacts of the proposed project in either an Environmental Assessment (EA) or a more comprehensive Environmental Impact Statement (EIS) before issuing a Certificate. Both documents must include alternatives to the project and must analyze the project’s impacts on geology, soils, groundwater, surface waters, wetlands, vegetation, wildlife and aquatic resources, land use, recreation, visual resources, socioeconomics (including transportation and traffic), cultural resources, air quality and noise, reliability and safely, and cumulative impacts

• Other Federal Agencies. FERC, as the lead federal agency, prepares the EA or EIS and, under the Energy Policy Act of 2005, must coordinate all applicable Federal authorizations, including the review of the project by other agencies, such as the Department of Transportation.

Understanding the Process

Under pressure from Congress and pipeline companies, FERC streamlined its review process over the last decade, and a pipeline sponsor can now request a pre-filing of its proposal, which, in effect fast tracks the decision-making process. Hoping to step up the pace of approvals even more, the U.S. House of Representatives passed a bill last fall to speed up the review of certificate applications by holding FERC to an absolute 12-month deadline. When the bill reached the Senate, however, it became entangled in Senator Markey’s proposals to plug methane leaks in pipelines and scrutinize exports of natural gas more carefully. It appears to be dead for now, but there continues to be a steady drumbeat among industry and the Republican-led House to move along construction of natural gas pipelines and streamline agency reviews.

Landowners, townships and counties affected by the pipeline will want to familiarize themselves with the windows in the process for drafting letters and intervening in court action. A summary of the process being followed by Kinder Morgan and FERC is:

1. The company assesses market need and considers project feasibility. According to Richard Wheatley of Kinder Morgan, lining up customers – both producers and end users of natural gas – is the company’s current goal. “We can’t build a $2- to $3-billion project on spec,” Wheatley said, adding as well that “customers could be in the Midwest, in Canada, from the Marcellus or Utica plays – we can’t discriminate because we’re an open access pipeline.”
2. Kinder Morgan representatives present the company’s proposal at town meetings as has been occurring throughout May and June.
3. In September or October, the company will request use of FERC’s Pre-Filing Process.
4. FERC approves Pre-Filing Process and issues a Docket Number to Kinder Morgan. Citizens and others should use the docket number for all written comments and filings from this point.
5. Kinder Morgan and FERC will hold at least one, and likely more, open houses. Landowners, municipalities, counties, non-governmental organizations and others impacted by the pipeline may choose to file motions to intervene with FERC at this stage.
6. FERC issues a Notice of Intent for preparation of an EA or a draft EIS and opens the scoping process to seek public comments. The NEPA regulations require “scoping” meetings to give the public a chance to voice opinions in writing and/or through oral comments about what issues should be addressed by FERC in the environmental analysis.
7. FERC mails out the EA or draft EIS, and the public has 30 days to submit written comments to FERC; 45 days are allowed if a draft EIS has been prepared. Deadlines for intervening are included in the EA or draft EIS.
8. FERC issues its Certificate of Public Convenience and Necessity.
9. Parties can request that FERC rehear the decision.
10. FERC issues a Notice to Proceed with construction. 

State Energy Needs

In part because of the planned retirement of the Vermont Yankee and Brayton Point power plants in 2017 and the recent closure of Salem Harbor, the Commonwealth is concerned about energy security. The New England States Committee on Electricity (NESCOE), a nonprofit organization whose managers are appointed by the governors of Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire and Maine, is actively seeking to increase the region’s natural gas capacity to ensure reliability of the grid during peak season usage, and to mitigate electricity rate spikes. According to a March 4 letter to FERC from the New England Council – a nonpartisan alliance of businesses, academic and health institutions throughout New England – “the region’s Governors…are currently seeking the construction of new, or expansion of existing, pipelines into the region…” Nonetheless, FERC must consider and analyze viable alternatives to the pipeline.

Alternatives to the Pipeline

The NEPA regulations that govern FERC’s environmental review of the project state that the Alternatives section “is the heart of the environmental impact statement.” FERC must present the environmental impacts of the proposal and the alternatives in comparative form, providing a clear basis for choice among options.

FERC must “rigorously explore and objectively evaluate all reasonable alternatives,” and must include reasonable alternatives outside FERC’s own jurisdiction. The Courts that have reviewed these alternatives requirements have taken a range of judicial approaches. Some have taken a broad view of the alternatives requirements. The Seventh Circuit Court of Appeals ordered the Army Corps of Engineers to investigate and include property not even owned by the applicant when community interveners identified property that would lessen environmental impacts from the applicant’s coal-loading facility in Illinois. The Court held that NEPA requires “an evaluation of alternative means to accomplish the general goal of an action; it is not an evaluation of the alternative means by which a particular applicant can reach his goals.”

As might be imagined, other courts have taken narrower views of what alternatives are required, particularly when a third party, rather than an agency itself, is seeking a permit. In fact, the trend seems to be that NEPA alternatives can be more limited when nonfederal sponsors are proposing them. Summing up two cases, one commentator said, “[the Federal Aviation Administration] has no power to strong-arm FedEx into using a shorter, 7,000-foot runway or to force Burlington Air Express to stay in Toledo…Private projects do not become ‘federal’ by virtue of their required approval by federal agencies.”

One of the alternatives addressed by FERC must include the alternative of no action at all. However, when FERC spokesperson, Tamara Young-Allen was asked whether the no-action option had ever been chosen by FERC in a pipeline case, she answered, “No, I don’t think that has ever been selected because, after all, the Commissioners look at all the customers [for the pipeline] who have been lined up, and constructing it is necessary for them.”

Two main alternatives to the Kinder Morgan proposal have emerged so far, both of which acknowledge the need for additional energy sources for power generation in the State, but point to less destructive means to that end: Under the first scenario, increased energy efficiency and reduced demand would meet energy demands; under the second scenario, the pipeline would be rerouted through already-compromised areas, such as existing roadways.

A Black & Veatch study for NESCOE supports the first alternative, concluding, “No long-term infrastructure solutions are necessary under the Low Demand Scenario.” No pipeline would be needed, and FERC would choose a no-action alternative.

Although this option would seem to be a long shot, there is precedent for community groups swaying federal agencies through the NEPA process: The Federal Highway Administration has scrapped proposed highways in Tennessee and Michigan because of the persistence and persuasiveness of opposition groups. While the situation of a third-party applicant is different from a federal project, the NEPA process – including organized, coordinated, analytically supported comments at public meetings and in writing – is still a viable avenue for public persuasion concerning alternative sources of energy, conservation, energy efficiency measures, repair of methane leaks in existing pipelines, and faster rollout of renewable energy resources.

Advocates of rerouting the pipeline, including the Conservation Commissions, also question whether it is needed, but appear to be willing to accept it if – and only if – it is relocated near less ecologically sensitive areas.

Conservation Commissions were invented by Massachusetts, and established by the Conservation Commission Act of 1958. Every city and town in the Commonwealth now has a Commission, composed of volunteers, whose purpose is to promote and develop natural resources and protect watershed resources. While much of their time is spent addressing wetlands cases, the Commissions are also charged with protecting the land, water and biological resources of their communities.

On May 8, the Association of Conservation Commissioners, which represents more than 2,100 conservation commissioners throughout Massachusetts, sent a letter to Gov. Deval Patrick, urgently requesting the Governor’s assistance in initiating a public process that would, at an early enough stage to be meaningful, address less environmentally destructive routes for the pipeline, including routing near already-compromised stretches, such as along roadways or utility easements. As of this writing, neither the Governor nor the Secretary of Energy and Environmental Affairs has responded to this letter.

Other Conservation Commissioners have enumerated the grave and irreversible negative impacts of the pipeline in letters to Governor Patrick: A May 28 letter from the Trustees of Reservations noted that the proposed pipeline route travels through an estimated 20 state-protected wildlife management areas and state forests, municipal watershed protection areas, the reservations and sanctuaries of The Trustees and Mass Audubon, and the Appalachian Trail. The Trustees urged the Governor to “protect the deep public and private investments that have created this spectacular network of conservation lands along the northern Massachusetts corridor.”

The Nashua River Watershed Association pointed out in its letter to the Governor that the pipeline is planned to travel through the two largest Massachusetts state-designated Areas of Critical Environmental Concern: the Squannassit and Petapawag, which together have 39 state-listed rare species of animal and plant life. And a letter from the Groton Conservation Trust describes the ecology of the same Area as “the result of unique geology, hydrology and geography…one of the most remarkable arrays of glacial landforms in New England.”

If the currently proposed route of the Kinder Morgan pipeline continues as proposed, what authority can assist localities to preserve these and other resources that have been carefully stewarded over the years by the local Conservation Commissions? Localities can intervene in and participate in the FERC process, and, as scientific experts, Commissioners can call to FERC’s attention studies and assessments of impacts that will be relevant to FERC’s determination as to whether issuance of a Certificate is truly in the public interest. As interveners, localities can petition FERC for a rehearing, and can, if necessary, seek judicial review.

The Commonwealth of Massachusetts has itself required installation of a pipeline in previously developed properties rather than untouched open space: The March 28, 2014 Certificate of the Secretary of Energy and Environmental Affairs approving the Algonquin Incremental Market (AIM) natural gas pipeline project states that “the majority of the pipeline will be installed beneath 4.5 miles of roadway [which are] bordered by a combination of industrial and commercial land uses…” The New England Council stated that the AIM project “will be constructed largely within Algonquin’s current footprint to minimize impacts to landowners, communities and the environment.” This same sensitivity toward minimizing impacts should inform the Commonwealth when it becomes involved in the Kinder Morgan project, whose current route is a matter of serious concern to scores of affected localities.

State and Local Permit Conditions

If the project goes forward as proposed, the NEPA regulations require FERC to acknowledge inconsistencies between the pipeline construction and operation and the affected conservation area and must describe “the extent to which the agency would reconcile” conflicts. Specifically, the NEPA regulations state:

(d) To better integrate environmental impact statements into State or local planning processes, statements shall discuss any inconsistency of a proposed action with any approved State or local plan and laws (whether or not federally sanctioned). Where an inconsistency exists, the statement should describe the extent to which the agency would reconcile its proposed action with the plan or law.

While this language does not actually require FERC to comply with State or local laws, FERC Certificates often condition the issuance of the Certificate on the applicant’s compliance with state and local laws and ordinances, as long as they do not duplicate federal requirements. In NE Hub Partners, L.P. v. CNG Transmission Corp. the federal district court interpreted language in the Certificate to mean that FERC approval “was conditioned on NE Hub’s obtaining any and all necessary state or local permits required to carry out the drilling and construction program.”

Moreover, state water quality standards, which are federally required by the Clean Water Act and the Coastal Zone Management Act, cannot be federally preempted. Running afoul of state water quality certifications can cost FERC a pipeline. In a May 2 opinion, the Second Circuit Court of Appeals denied a petition for review by Islander East Pipeline Company, which had twice applied for – and twice been denied – a water quality certification from the State of Connecticut. The Appeals court stated, “while the Natural Gas Act generally preempts local permit and licensing requirements, the Clean Water and Coastal Zone Management Acts are notable in effecting a Federal-state partnership to ensure water quality and coastal management around the country, so that state standards approved by the Federal government become the federal standards for that state.” The pipeline was to run from Connecticut to New York across Long Island Sound. The Second Circuit held, however, that evidence in the record supported Connecticut’s finding that the techniques proposed for installation of the pipeline violated state water quality standards by eliminating a significant area of nearshore waters from their existing and designated use of shellfishing.

Cumulative Impacts

FERC must also include in its EA or EIS meaningful analysis of the cumulative impacts of pipeline projects, or “the impact on the environment which results from…the action when added to other past, present, and reasonably foreseeable future actions” in the words of the NEPA regulation. In an opinion released June 6, 2014, the District of Columbia Court of Appeals ordered FERC to review together all of the upgrade projects on the contested pipeline. Pointing out that the Environmental Assessment contained a scant few pages on the impacts of one upgrade on groundwater, habitat, soils and wildlife, the Court stated, “In light of the close connection between the various sections of the pipeline…FERC was obliged to assess cumulative impacts by analyzing the Northeast Project in conjunction with the other three projects.”

In Massachusetts, the Algonquin Gas Transmission line already traverses the State from the southwest to the northeast. In addition, Spectra Energy is planning to construct the Algonquin Incremental Market project and the Salem Lateral Project. Spectra is planning to complete the new projects in the 2016 – 2018 time frame. Some of the environmental impacts on biological diversity, water resources, and open space of the Kinder Morgan and Spectra projects may have cascading, cumulative impacts, and FERC should acknowledge them and include them in the EA or EIS.

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