State attorneys general are addressing energy infrastructure projects and needs in their states and regions, including advocating for the interests of communities that would be affected by proposed natural gas pipelines. This advocacy has included working at both the state and federal levels including, in particular, at the Federal Energy Regulatory Commission (FERC).
Advocacy at the Federal Level
Ending FERC’s Abusive Use of Tolling Orders under the Natural Gas Act
Under the Natural Gas Act (NGA), a company seeking to build or operate a natural gas pipeline must obtain a certificate of public convenience and necessity from FERC to construct and operate the pipeline. Once the certificate has been issued, the private company holding the certificate can use eminent domain to condemn land necessary to construct, operate and maintain the pipeline. Actions to condemn land have been the subject of much litigation (see discussion below of the efforts of the attorneys general of Maryland and New Jersey to oppose condemnation of state-owned land to build natural gas pipelines in their states).
Private landowners who wish to challenge FERC’s issuance of the certificate order must first seek rehearing before the Commission before seeking judicial review in the courts. The Natural Gas Act provides that unless FERC “acts upon the application for rehearing within thirty days after it is filed, such application may be deemed to have been denied.”
For years, FERC has routinely issued tolling orders that have extended for months the congressionally mandated thirty-day statutory limit on FERC’s authority to act on rehearing requests on FERC’s pipeline certification approvals. FERC’s tolling order practice has denied landowners’ access to the courts to challenge the certification approvals, while simultaneously allowing pipeline construction activities – including condemnation of privately-owned land – to proceed.
In March 2020, in litigation in the D.C. Circuit Court of Appeals, Maryland Attorney General Brian Frosh led a coalition of 12 attorneys general in filing an amicus brief urging the court to end FERC’s use of tolling orders. The brief noted that FERC’s approach of allowing pipeline construction to proceed, while precluding challengers from securing judicial review, undermined the due process rights of the residents in the 12 jurisdictions. Further, the attorneys general pointed out that FERC’s use of tolling orders outside of the pipeline context, most notably under the Federal Power Act (FPA), injures states where the rehearing requests seek to vindicate states’ sovereign right to adopt and implement important public policies.
In June 2020, the D.C. Circuit issued an en banc ruling in favor of the attorneys general. The decision held that FERC’s use of tolling orders is contrary to the language of the NGA. The FPA has identical language about rehearing requests “deemed to have been denied” after thirty days, and within a week, FERC conceded that the decision applies in the FPA context as well.
FERC filed a motion to stay the issuance of the mandate in the case by arguing that it needed additional time to bring its NGA and FPA processes in line with the court’s decision. In July 2020, the D.C. Circuit granted a stay until October 5, 2020.
FERC's Obligations to Analyze GHG Emissions for Pipeline Projects
The National Environmental Policy Act (NEPA) requires that federal agencies prepare an environmental impact analysis for major federal actions that may significantly impact the environment. In August 2017, the D.C. Circuit Court of Appeals held that to comply with NEPA, FERC must identify and evaluate greenhouse gas (GHG) emissions associated with proposals to build new natural gas infrastructure.
Despite its obligation to conduct an analysis of the environmental impact of the GHG emissions associated with new natural gas infrastructure, FERC announced in a May 2018 rehearing denial that it would no longer evaluate upstream and downstream GHG emissions from new natural gas infrastructure.
New York Attorney General Barbara Underwood, in July 2018, filed comments with FERC opposed to the newly announced policy. The comments noted that adopting a major policy change through denying a request for a rehearing made it virtually impossible for interested parties to challenge the new policy, as only the party that had requested the rehearing could seek judicial review of the order. New York argued that the rehearing denial was also substantively flawed as federal courts have repeatedly held that the impact of GHG emissions associated with new natural gas infrastructure must be analyzed under NEPA.
In December 2018, New York Attorney General Underwood led a coalition of seven attorneys general in filing an amicus brief in support of litigation in the D.C. Circuit brought by a local environmental group in New York challenging the 2018 rehearing denial. The brief noted that FERC violated NEPA by refusing to evaluate the project’s “reasonably foreseeable” upstream and downstream impacts on GHG emissions that would result from the burning of natural gas that would be transported by the project. Further, FERC’s order on the rehearing is contrary to the D.C. Circuit’s August 2017 ruling that FERC must identify and evaluate GHG emissions associated with proposals to build new natural gas infrastructure. Lastly, the brief noted that FERC improperly announced its new policy in an adjudicatory proceeding despite the pendency of an administrative inquiry on the same matter as FERC is seeking comments on its 1999 policy statement on how it evaluates applications to construct and operate new natural gas projects.
In May 2019, after oral arguments were heard in the litigation, the D.C. Circuit dismissed the lawsuit brought by a local environmental group challenging the 2018 rehearing denial. The D.C. Circuit found that the local environmental organization could not satisfy the Constitution’s standing requirement. The organization had not alleged an informational injury in its filings with the court and could not advance a claim that it had suffered an organizational harm beyond resources spent litigating the rehearing denial.
Insisting that it had established standing, the local environmental group the following month filed a petition to have the D.C. Circuit rehear its claim or to have the D.C. Circuit rehear the case en banc. In July 2019, the D.C. Circuit denied the local environmental group’s petition for the panel or the court to rehear the group’s claim.
Reforming FERC's Natural Gas Pipeline Approval Process
In December 2017, Kevin McIntyre, then chairman of the Federal Energy Regulatory Commission announced plans for reassessing FERC’s certification process for new natural gas pipelines. The decision was based on the assertion that the industry has changed significantly since the 1999 release of the FERC’s Natural Gas Policy Statement. In April 2018, FERC released a Notice of Inquiry (NOI), soliciting public comments on how the agency determines whether a new natural gas pipeline satisfies the public need standard of the Natural Gas Act.
In July 2018, Massachusetts Attorney General Healey, along with seven other attorneys general, filed comments with FERC on the NOI. The comments raised concerns that the current certification process has led to the approval of natural gas pipelines in excess of what is needed to meet current national peak demand, and that the process fails to account for the cumulative environmental impacts of new pipelines on a regional basis.
New York Attorney General Barbara Underwood filed her own comments that adopted the Massachusetts-led comments. Attorney General Underwood's comments stressed the harm that landowners could suffer on the basis of FERC’s current practice of issuing conditional certificates that allow natural gas companies to initiate eminent domain proceedings before states have completed their own environmental reviews of proposed pipelines.
Ensuring States Have Sufficient Time to Review the Clean Water Act Impacts of Projects
In September 2020, FERC released a proposed rule intended to ensure compliance with the Environmental Protection Agency’s (EPA) July 2020 rule on water quality certification applications for federally-permitted projects under section 401 of the Clean Water Act in connection with a project for which authorization is sought from FERC under section 3 or 7 of the Natural Gas Act (NGA). Section 401 of the Clean Water Act requires that federally-permitted projects involving discharges into waters of the United States must obtain a certification from the relevant state that the project meets state water quality standards. States are required to act on a state water quality certification request within a “reasonable period of time”—not to exceed one year—or the certification requirement is waived.
The EPA’s July 2020 section 401 rule imposes a strict limit on the time states have to review water quality certification requests, restricts states’ section 401 review process to pollution discharges from point sources, and prohibits states from considering how a federally permitted project as a whole will impact state water quality. Learn more about EPA’s section 401 rule and the work of attorneys general in opposing the rule here.
FERC proposed that a state certifying authority waives its authority to issue a water quality certification under section 401 of the Clean Water Act in connection with a NGA section 3 or section 7 project if it has not denied or granted a certification one year after the certifying agency receives the written request for certification.
In November 2020, Maryland Attorney General Frosh led a coalition of 16 attorneys general in submitting comments on FERC’s proposed rule. The comments voiced the states’ strong support for providing state certifying authorities with the maximum amount of time allowed by statute before the section 401 certification authority is waived. It would be difficult for the certifying authority to complete the review with anything less than the maximum review period given the complexity of natural gas pipeline projects. Additionally, the attorneys general noted their concerns with EPA’s underlying section 401 water quality certification rule by including their October 2019 comments on EPA’s proposed section 401 rule and the lawsuit that the attorneys general filed in California federal district court challenging EPA’s final section 401 rule.
Advocacy in the States
In May 2019, Columbia Gas filed a complaint in federal district court in Maryland to condemn state land in order to construct a natural gas pipeline. The lawsuit asserted that FERC’s certificate of public necessity for the project provides Columbia Gas the authority to exercise the federal power of eminent domain to condemn the state land, a rails-to-trail bike path. The following month, Maryland Attorney General Brian Frosh filed a motion to dismiss Columbia Gas’ complaint. The motion noted that the Eleventh Amendment to the Constitution bars federal jurisdiction over suits by any private citizens against a state and that Columbia Gas’s action does not satisfy any of the three exceptions to the Eleventh Amendment’s bar to suits.
In August 2019, the court granted Maryland Attorney General Frosh’s motion to dismiss the complaint filed by Columbia Gas. The court found that although Federal Energy Regulatory Commission approval conferred eminent domain authority to Columbia Gas to condemn land for its project, the Eleventh Amendment prohibits a private company from exercising eminent domain against a state in federal court.
Protecting Ratepayers During the Transition Away from Fossil Fuels
In June 2020, Massachusetts Attorney General Healey filed a petition with the state’s Department of Public Utilities (DPU) requesting it open an investigation into the future of the natural gas industry as Massachusetts transitions away from fossil fuels toward a clean energy future. In the petition, Attorney General Healey recognized that sizable reductions in the heating sector’s use of fossil fuels will be necessary to achieve Massachusetts’s legally binding statewide limit of net-zero greenhouse gas emissions by 2050. This decline in fossil fuel demand will have significant impacts on gas distribution companies and will require them to make significant changes to their planning processes and business models that will directly affect ratepayers. Attorney General Healey therefore urged the DPU to work with stakeholders to develop a regulatory and policy roadmap that protects customers and ensures an equitable and fair transition away from fossil fuels and toward clean energy.
Scrutinizing the Practices of the Natural Gas Industry
In October 2017, Massachusetts Attorney General Healey initiated an inquiry after a release of a report that concluded that natural gas companies in Massachusetts and Connecticut engaged in abusive pipeline scheduling practices that artificially constrained pipeline capacity and cost consumers $3.6 billion between 2013 and 2016. Healey's action followed a 2015 report commissioned by her office that determined that the region could cost-effectively and sustainably meet its energy needs without increasing natural gas pipeline capacity.
In May 2018, New Jersey Attorney General Gurbir Grewal filed a petition for review of FERC’s certificate of public necessity for the PennEast natural gas pipeline. The PennEast pipeline is expected to cost $1 billion and would carry natural gas for 120 miles. The petition asserted that FERC’s certificate order was arbitrary and capricious because it relied on insufficient data on the environmental impact of the pipeline, and did not properly attempt to mitigate environmental impacts associated with the pipeline. This case is being held in abeyance pending the outcome of the Supreme Court case described below.
In December 2018, the federal district court in New Jersey granted PennEast’s notice of condemnation to take, through the federal government’s power of eminent domain, privately-owned property and state-preserved land for use in constructing, operating and maintaining the PennEast pipeline. The Fifth Amendment to the Constitution provides the federal government the authority to take private property for “public use,” if the federal government provides “just compensation” to the property owners. The federal district court judge held that PennEast, armed with the FERC certificate of public necessity, was vested with the federal government’s eminent domain powers and could immediately possess the state-preserved land for the “public use” of constructing, maintaining and operating the pipeline; the issue of “just compensation” would be dealt with later.
In January 2019, New Jersey Attorney General Grewal appealed the district court’s decision to the Third Circuit Court of Appeals. Attorney General Grewal noted that New Jersey is entitled to sovereign immunity under the Eleventh Amendment to the Constitution and thus the district court did not properly have jurisdiction to hear PennEast’s notice of condemnation. In March 2019, the Third Circuit sided with Attorney General Grewal in issuing a preliminary injunction that prohibits PennEast from proceeding to take the state-preserved land or begin physical construction of the pipeline as litigation continues over whether the company can take the state-preserved land.
In April 2019, New Jersey Attorney General Grewal filed the state’s merits brief in the Third Circuit action challenging the district court ruling that allows PennEast to possess the state-preserved land to construct the pipeline. The brief noted that New Jersey’s sovereign immunity prohibits PennEast from condemning the state’s property as the federal government cannot delegate its exemption from state sovereign immunity to a private party.
In September 2019, the Third Circuit sided with New Jersey Attorney General Grewal in vacating the district court’s decision. The court held that New Jersey’s sovereign immunity under the Eleventh Amendment to the Constitution barred PennEast’s attempt to extend the federal government’s eminent domain powers to condemn state land to build the pipeline. In November 2019, the Third Circuit denied PennEast’s en banc rehearing request.
In addition to seeking rehearing from the Third Circuit, PennEast asked FERC to weigh in. And in January 2020, FERC granted PennEast’s petition for declaratory order. In a split decision, FERC disagreed with the Third Circuit, asserting that a certificate holder’s right to exercise eminent domain authority under the Natural Gas Act (NGA) is not limited.
In February 2020, PennEast filed a petition with the Supreme Court to review the Third Circuit’s decision. New Jersey Attorney General Grewal, in June 2020, filed a brief in opposition to the Supreme Court reviewing the Third Circuit’s decision. Attorney General Grewal noted that the petition for writ of certiorari should be denied because the Third Circuit’s decision was well reasoned and there is no split among the courts of appeals on the issue. In December 2020, the Trump administration filed an amicus brief on behalf of the United States, urging that the Supreme Court grant the petition and review the Third Circuit’s decision. The brief claimed that the appeals court decision was incorrect and warranted review.
The New York Attorney General successfully represented the New York State Department of Environmental Conservation (NYSDEC) before a Second Circuit Court of Appeals challenge to NYSDEC's denial of a state water quality certification under section 401 of the Clean Water Act for the proposed natural gas Constitution Pipeline. Construction of the 100-mile pipeline would have impacted more than 250 streams and more than 80 acres of wetlands.
In January 2018, Constitution Pipeline Company filed a petition with the Supreme Court to review the Second Circuit’s decision. The New York Attorney General opposed the request for cert, noting in the brief that the case did not raise any major jurisdictional issues. Additionally, the New York Attorney General defended NYSDEC's denial of the requested water quality certification based on Constitution’s refusal to provide information about how it would minimize adverse water quality impacts. In April 2018, the Supreme Court agreed with the New York Attorney General and denied cert.
Similarly, Constitution attempted to secure a declaratory order from the Federal Energy Regulatory Commission (FERC) that NYSDEC had waived its authority to deny a water quality certification for the project based on the argument that NYSDEC failed to act within the statute’s time limit. In January 2018, FERC denied the request for a declaratory order, ruling that NYSDEC had acted within the statute’s time frame. In July 2018, FERC subsequently rejected Constitution’s request for a rehearing for the same reason. Undeterred, Constitution filed a petition for review of FERC’s denial of the rehearing request with the D.C. Circuit Court of Appeals. In February 2019, the D.C. Circuit granted FERC’s request to remand the case to the Commission in light of the D.C. Circuit’s recent decision in a separate, but similar case.
In August 2019, FERC denied NYSDEC’s motion to stay construction of the Constitution pipeline. Relying on the D.C. Circuit’s recent decision in Hoopa Valley Tribe v. FERC (see "California" on the Hydropower Projects page), FERC determined that NYSDEC’s denial of the state water certificate fell outside the one-year decision timeline outlined in the Clean Water Act. Thus, NYSDEC had waived its authority under section 401 of the Clean Water Act to issue or deny a water quality certification for the project. In December 2019, FERC denied a request for rehearing of the August 2019 denial, affirming its finding that NYSDEC had waived its section 401 authority to issue or deny a water quality certification. That same month NYSDEC filed a petition for review with the Second Circuit, seeking to set aside as unlawful, unreasonable and arbitrary and capricious FERC’s August 2019 order and December 2019 denial of NYSDEC’s rehearing request.
In February 2020, plans for Constitution Pipeline were canceled amid concerns from the project’s partners and investors about economic feasibility. In April 2020, the Second Circuit granted NYSDEC’s motion to hold the appeal in abeyance until FERC’s certificate for the pipeline expires in December 2020.
In December 2018, Virginia Attorney General Mark Herring filed a lawsuit in state court against Mountain Valley Pipeline LLC for repeated violations of state and federal environmental laws. The lawsuit alleges that the company, in seeking to construct and operate a 300-mile natural gas pipeline through West Virginia and Virginia, acted illegally by discharging pollutants into protected water without a permit; failing to maintain and repair erosion and sediment control structures; and failing to install clean water diversions. In all, Attorney General Herring brought ten claims against Mountain Valley Pipeline and sought a court order to force the company to comply with environmental laws and regulations.
In December 2019, the Virginia state court approved the consent decree between the state and the Mountain Valley Pipeline. Under the terms of the consent decree, the Mountain Valley Pipeline must provide confirmation that alleged instances of non-compliance with state and federal environmental laws have been corrected and the project must remain in compliance with such laws. The company was also assessed fines that it must pay to the state.