The Court of Appeals Upholds a Pipeline that May Never Be Built

The Court of Appeals handed down a 25-page decision on June 25, 2020 that approved the condemnation of private property for a pipeline that may never be built.

In 2017, the Federal Energy Regulatory Commission issued a Certificate of Public Convenience and Necessity to National Fuel Gas Supply for its proposed construction of a 99-mile natural gas pipeline spanning from Pennsylvania to Western New York.

The issue before New York’s highest court was did the Certificate of Public Convenience and Necessity which did not condition Natural Fuel’s eminent domain power on receipt of a water quality certification remain valid and operative despite the New York State Department of Environmental Conservation denial for such a certification.

New York’s Eminent Domain Procedure Law sets forth a strict method for acquiring land by exercising its power of eminent domain.  It requires public notice, public hearings and judicial review of any “Findings and Determinations” pursuant to EDPL Sec. 204.

But Article 2 of the EDPL has an exception to the Public Hearing requirement, Section 206(a).  This section provides that when a State, Federal, or local law or regulation considers and submits factors similar to those enumerated in EDPL Sec. 204(B) before proceeding with the acquisition and obtains a license, a permit, a Certificate of Public Necessity or other similar approval from such agency, Board, or Commission, a Condemnor need not duplicate public benefit review.

National Fuel Commission commenced the EDPL vesting proceeding seeking to acquire, by eminent domain, temporary construction easements and a 50-foot wide permanent easement owned by Respondents in order to facilitate construction and operation of a natural gas pipeline.  Respondents contested the Petition asserting that the Certificate was ineffective because of failure to comply with the condition, “[p]rior to receiving written authorization . . . to commence construction of any project facilities, National Fuel Shall filed with [FERC] documentation that it has received all applicable authorizations required under federal law (or evidence of waiver thereof).”  National Fuel Gas Supple Corp. v Schueckler

According to Respondents, this condition was not met and the FERC certification was therefore invalidated due to the subsequent denial of National Fuel’s application for a water quality certification by the New York Department of Environmental Conservation.

The Court of Appeals held that National Fuels did exactly as the statute requires.  The Court stated, “[t]his certificate was incontrovertibly premised upon a meaningful review of substantial information, alternatives, and viewpoints of various stakeholders, and FERC’s analysis focused largely on the factors delineated in EDPL 204(B).”

In sum, the decision states, “where, as here, a gas company holds a valid certificate of public convenience or necessity from FERC for the proposed construction of a pipeline and that certificate places no relevant conditions on the eminent domain power and has not been stayed or revoked by FERC or a federal court properly reviewing its issuance, compliance with Article 2 is excused under EDPL 206(A).”

I have a real problem with this decision.  The Certificate of Public Convenience and Necessity contains numerous “conditions” including a water quality Certificate and other pre-construction conditions that affect the ultimate completion of the project.  National Fuel’s application for a water quality certification was denied by DEC, so how can the Court hold that the terms of the FERC Certificate does not preclude National Fuel from pursuing eminent domain before all  pre-construction conditions have been fulfilled.  What happened to the requirement that a public purpose must exist for an eminent domain taking?  The Pipeline may never be built, how is it a “public use?”  The Clean Water Act says that FERC cannot grant a permit for the pipeline until the Water Quality Certificate is issued.  The Army Corps. Of Engineers has not issued a Permit.  Effectively, New York has stopped the pipeline.

Posted in EDPL 204(B), FERC, Pipelines, Water Quality Certificate
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