NATURAL GAS

Judges seem open to second-guessing FERC in N.Y. pipeline case

Residents of a town in southeastern New York fighting a natural gas compressor station appeared to gain some traction with federal appellate judges today in a packed Washington, D.C., courtroom.

The Minisink Residents for Environmental Preservation and Safety argued that federal energy regulators failed to consider the environmental impact of Millennium Pipeline Co.'s facility and dismissed an alternative plan supported by people in the town.

The Federal Energy Regulatory Commission, the residents' attorney argued, was predisposed to sign off on projects under the Natural Gas Act.

"The commission's decision should be second-guessed," attorney Carolyn Elefant told a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit before a standing-room crowd.

In July 2012 FERC approved Millennium's plan for a 12,260-horsepower gas-powered station in Minisink that adds pressure to the existing pipeline, allowing the company to move more gas daily.

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The commission's decision was not unanimous. Then-Chairman Jon Wellinghoff and Commissioner Cheryl LaFleur, who is now acting chairwoman, dissented.

At issue in their dissent and again in court today was the so-called Wagoner Alternative, a proposal from the community that would have allowed Millennium to meet its demand requirements without building the station in Minisink. The alternative required Millennium to construct a smaller compressor station next to an existing facility in Sparrowbush, N.Y., where fewer people would be directly affected.

Judge Patricia Millett took issue with FERC's willingness to sign off on proposed projects under its Natural Gas Act authority.

She pointedly asked FERC attorney Karin Larson whether there was a "presumption" in favor of such proposals.

When Larson replied that there wasn't, Millett asked whether there was an opportunity for the public to comment on the proposal.

For large projects, Larson responded, there was during a "pre-filing" period. But the Minisink station, she said, was a "rather small project" that didn't meet that criterion.

Her answer prompted groans and gasps from the courtroom, which was full of residents of Minisink, a town of 4,400 people.

After a moment, Millett responded: "I hope the commission can understand why comments like that would give people pause."

Millett also had problems with FERC's dismissal of the Wagoner Alternative. The main justification given by the commission and Millennium was that option would require the company to replace a 24-inch Neversink section of the pipeline, which is about 7 miles long, with a 30-inch pipe. Such a process would cause environmental damage.

But Millett, a Democratic appointee, noted that there was already a "bottleneck" in southern New York's natural gas transportation system. And Judge Brett Kavanaugh, a Republican appointee, noted that "common sense" would indicate that Millennium would have to replace that section of the pipeline in the future anyway.

Attorney Aaron Streett of Baker Botts LLP, representing Millennium, acknowledged that "at some point," the Neversink section "will have to be expanded."

"Everyone agrees on that," he said.

The judges also posed difficult questions to the residents' attorney, including whether the group must defer to the commission's judgment and ruling in the case. Kavanaugh, in particular, seemed reluctant to second-guess the commission's findings.

And Millett noted that the Wagoner Alternative was not properly before the commission as an actual possibility.

She added that companies have proposed expanding the Neversink pipeline before and have run into a host of environmental concerns regarding the fauna and flora in the area.

If the commission were to shut down the Minisink station and encourage Millennium to pursue the alternative, it would be "out of the frying pan and into the fire."

Elefant countered that it is not out of the norm for agencies to review alternatives.

"Agencies routinely consider alternatives whether they are before the agency or not," she said.

The third judge on the panel, Democratic appointee Robert Wilkins, asked few questions during the arguments.

Twitter: @GreenwireJeremy | Email: jjacobs@eenews.net

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