TOWNSHIP OF BORDENTOWN, NEW JERSEY; TOWNSHIP OF CHESTERFIELD v. FEDERAL ENERGY REGULATORY COMMISSION
No. 17-1047
No. 17-3207
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
September 5, 2018
PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 17-1047
TOWNSHIP OF BORDENTOWN, NEW JERSEY; TOWNSHIP OF CHESTERFIELD, Petitioners
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent
Transcontinental Gas Pipe Line Company, LLC, Intervenor Respondent
No. 17-3207
TOWNSHIP OF BORDENTOWN, New Jersey; TOWNSHIP OF CHESTERFIELD; PINELANDS PRESERVATION ALLIANCE, Petitioners
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Respondent
Transcontinental Gas Pipe Line Company, LLC, Intervenor Respondent
On Petition for Review of Orders of the Federal Energy Regulatory Commission (Agency Nos. FERC CP15-89-000 and CP15-89-001) and of the New Jersey Department of Environmental Protection (Permit Nos. Nos. 0300-15-0002.2 FWW150001, 1322D DWP150001, 0300-15-0002.2 FHA150001, and 0300-15-0002.2 FHA150002)
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) June 11, 2018
Before: CHAGARES, GREENBERG, and FUENTES, Circuit Judges.
(Filed: September 5, 2018)
Jennifer Borek
Lawrence Bluestone
Genova Burns
494 Broad Street
Newark, NJ 07102
Counsel for Petitioner Township of Bordentown
John C. Gillespie
Parker McCay
9000 Midlantic Drive, Suite 300
P.O. Box 5054
Mount Laurel, NJ 08054
Counsel for Petitioner Township of Chesterfield
Paul A. Leodori
Todd M. Parisi
Law Offices of Paul Leodori
61 Union Street, 2nd Floor
Medford, NJ 08055
Counsel for Petitioner Pinelands Preservation Alliance
David L. Morenoff
Robert H. Solomon
Susanna Y. Chu
Ross Fulton
Rekha Sherman
Federal Energy Regulatory Commission
888 1st Street, N.E.
Washington, DC 20426
Counsel for Respondent Federal Energy Regulatory Commission
Gurbir S. Grewal
Jason W. Rockwell
Ryan C. Atkinson
Lewin J. Weyl
Office of Attorney General of New Jersey
25 Market Street
P.O. Box 116
Trenton, NJ 08625
Counsel for Respondent New Jersey Department of Environmental Protection
Christine A. Roy
Brian B. Keatts
Richard G. Scott
Rutter & Roy
3 Paragon Way, Suite 300
Freehold, NJ 07728
Counsel for Intervenor Respondent Transcontinental Gas Pipe Line Co LLC
CHAGARES, Circuit Judge.
- I. Introduction...............................................................................5
- II. Background................................................................................6
- A. Statutory Background...........................................................7
- B. Procedural History................................................................8
- III. Challenges to FERC‘s Orders..................................................12
- A. Interpreting the CWA..........................................................12
- B. NEPA Challenges................................................................16
- 1. Segmentation of PennEast..............................................17
- 2. Consideration of the SRL...............................................24
- 3. Potable Well Impacts......................................................39
- C. Need for the Project............................................................46
- D. Good Faith Notice...............................................................49
- E. Green Acres Act..................................................................52
- F. Cumulative Error..................................................................56
- IV. Challenges to the NJDEP‘s Order............................................56
- A. Jurisdiction Under the NGA.................................................57
- B. New Jersey Law..................................................................64
- V. Conclusion................................................................................69
I. Introduction
This consolidated appeal considers a bevy of challenges brought by the Township of Bordentown, Township of Chesterfield,
to Transco various permits that Transco was required under federal law to obtain before it could commence construction activities on the pipeline project, and (2) denying the petitioners’ request for an adjudicatory hearing to challenge the permits’ issuance, based only on the NJDEP‘s allegedly incorrect belief that the New Jersey regulations establishing the availability of such hearings were preempted by federal law.
As explained more fully below, although we conclude that the petitioners’ challenges to FERC‘s orders lack merit, we agree that the NJDEP‘s interpretation of the relevant federal law was incorrect, thus rendering unreasonable the sole basis for its denial of the petitioners’ request for a hearing. Given our disposition, we do not reach the petitioners’ substantive challenges to the NJDEP‘s provision of the permits, which—assuming a hearing is granted—we leave for the NJDEP to address in the first instance. We accordingly will deny in part and grant in part the petitions for review, and we will remand to the NJDEP for proceedings consistent with this opinion.
II. Background
This case presents challenges to both the federal and state governments’ treatment of Transco‘s application to construct its interstate pipeline project. Before detailing the agency proceedings that preceded this appeal, we first briefly set forth the various interlocking federal and state regulatory schemes at play, which this Court has already elucidated in some detail. See Del. Riverkeeper Network v. Sec‘y of Pa. Dep‘t of Envtl. Prot., 870 F.3d 171, 174 (3d Cir. 2017) (”Delaware II“); Del. Riverkeeper Network v. Sec‘y Pa. Dep‘t of Envtl. Prot., 833 F.3d 360, 367–69 (3d Cir. 2016) (”Delaware I“).
A. Statutory Background
Under the Natural Gas Act of 1938 (“NGA“),
water quality standards, including by regulating the discharge of pollutants into bodies of water in the state. Id.
The NGA and CWA converge where, to construct an interstate pipeline, a company must discharge into — or displace water from — the navigable waters of the United States. Before a company is permitted to undertake this activity, it must obtain a permit pursuant to Section 404 of the CWA, which itself may issue only after the company secures a state-issued Water Quality Certification, pursuant to Section 401 of the CWA, “confirm[ing] that a given facility will comply with federal discharge limitations and state water quality standards.” Id.; see also
B. Procedural History
The permits at issue in this case relate to Transco‘s Garden State Expansion Project (the “Project“), by which Transco planned to upgrade its existing interstate natural gas pipeline system so that it could support the transportation of
another 180,000 dekatherms per day of capacity for natural gas from its Mainline to its Trenton–Woodbury Lateral. The Project proposed to construct a new meter and regulating station, compressor station, and electric substation along the Trenton–Woodbury Lateral in Chesterfield, New Jersey (Station 203), and to upgrade and modify the existing motor drives and compressor station located on the Mainline in Mercer County, New Jersey (Station 205).
The New Jersey Natural Gas company (“NJNG“) contracted with Transco to utilize all the capacity added by the Project, for distribution via NJNG‘s intrastate pipeline system. In anticipation of obtaining the excess capacity, NJNG has proposed to construct the Southern Reliability Link Project (“SRL“), a 28-mile-long intrastate pipeline that would connect to Transco‘s Trenton–Woodbury Lateral pipeline and deliver gas south-eastward for connection into NJNG‘s existing system. Separately, PennEast has proposed to construct the interstate PennEast Pipeline Project, which would deliver natural gas from Pennsylvania‘s Marcellus Shale region
As required by the NGA, Transco sought and obtained from FERC a certificate of public convenience and necessity authorizing the construction of the Project, subject — as is generally the case — to Transco “receiv[ing] all applicable authorizations required under federal law.” Appendix (“App.“) 67. Prior to issuing the certificate, FERC conducted an environmental analysis and issued an EA concluding that, with the appropriate mitigation measures, the Project would have “no significant impact” on the environment. App. 1479; see also App. 45. FERC issued the EA in November 2015 and, after receiving comments, issued Transco the certificate in April 2016. Bordentown and Chesterfield moved FERC for a rehearing, which FERC denied in November 2016. See App. 74–97.
Because the Project would be situated in freshwater wetlands and transition areas, and the construction of the Project would require discharging fill or dredge material into navigable waters as well as the diversion of a significant volume of water, Transco applied to the NJDEP for a Freshwater Wetlands Individual Permit and Water Quality Certificate (“FWW permit“) and dewatering permit, as required by the CWA and New Jersey law.3 The NJDEP held two days of public hearings to consider the FWW permit, and received over 1,800 written comments, which included concerns raised by each of the petitioners. After obtaining
Transco‘s responses to the public comments, as well as its responses to the NJDEP‘s requests for additional information concerning possible alternative sites for an electrical substation that would be built as part of the Project, the NJDEP issued the FWW permit on March 13, 2017. Shortly thereafter — and also following a public hearing — the NJDEP on March 16, 2017 issued the temporary dewatering permit.
Pursuant to New Jersey law, the petitioners sought an adjudicatory hearing concerning each permit. Bordentown — later joined by Chesterfield and PPA — filed a request for a hearing on the FWW on March 22, 2017. On April 11, 2017, Bordentown alone also requested an adjudicatory hearing on the dewatering permit. Both requests were filed within the 30-day limitations period established under New Jersey law for seeking adjudicatory hearings. See
“requires that final permits be appealed to the Third Circuit,” the NJDEP denied the petitioners’ hearing requests.
The petitioners timely sought review in this Court, both of FERC‘s orders issuing the certificate and denying rehearing, and of the NJDEP‘s issuance of the permits and its order denying the requests for an adjudicatory hearing to challenge them. We have jurisdiction to review these petitions for review of the federal and state agencies’ orders regarding the interstate Project under
III. Challenges to FERC‘s Orders
We begin with the challenges directed at FERC‘s orders (docket No. 17-1047). As explained more fully below, we conclude that the petitioners’ FERC-related claims are unavailing.
A. Interpreting the CWA
Before turning to the merits of the certificate‘s issuance, we must address the petitioners’ challenge to its timing. As noted, Transco was required under the CWA to obtain a Section 401 permit from the NJDEP affirming that Transco‘s discharge activities would comply with federal and state water quality standards. Under Section 401, Transco had to obtain such a permit prior to the issuance of any “Federal license or permit to conduct any activity . . . which may result in any discharge into the navigable waters.”
Transco obtained the Section 401 permit from New Jersey, thereby authorizing the pipeline project that “may result in . . discharge into the navigable waters” in contravention of § 1341(a)‘s mandate.
FERC does not dispute that Transco had yet to obtain the Section 401 permit, but argues instead that it only issued a conditional certificate, which required Transco first to obtain the required state permits and then to secure FERC‘s permission to proceed before it could begin any construction related to the project. See App. 67, 89–90. In FERC‘s view, because the certificate did not, in fact, permit Transco to “conduct any activity” that could “result in any discharge into the navigable waters” until Transco had received the necessary state permits, FERC‘s issuance of the conditional certificate prior to Transco‘s receipt of the state-issued Section 401 permit did not contravene the CWA.4 We agree with FERC‘s position and hold that FERC‘s practice of issuing certificates that condition the start of construction on the receipt of the necessary state permits complies with the plain language of the CWA.5
As the Court of Appeals for the District of Columbia Circuit explained, “the ‘logically antecedent’ question under § 401 is
The petitioners concede that the certificate did not permit Transco to engage in any construction — which implicitly acknowledges that it did not permit Transco to engage in any activity that could result in discharge — but argue that the certificate nevertheless “sanctions other conduct that Transco would not otherwise be permitted to undertake,” such as initiating condemnation actions under the NGA,
petitioners’ argument, FERC‘s conditional certification does not contravene the CWA‘s requirements. The petitioners’ argument would expand the CWA from a statute meant to safeguard the nation‘s water sources to a statute regulating the initiation of an interstate pipeline‘s construction process. However, the latter statute already exists and, as the petitioners themselves note, it provides Transco the condemnation authority upon the issuance of the certificate, with no caveats. To the extent that the NGA recognizes the continued applicability of the CWA, it is only with respect to pipeline-related activities that impact the CWA‘s area of concern. The mere ability to initiate condemnation proceedings, proceedings regarding land from which discharge
permits before obtaining authorization to begin construction — which the petitioners do not contest is the only conduct that could proximately result in discharge — the certificate alone neither “logically” nor “legally” results in the consequence of a discharge. It is black letter law that an independent intervening act — here, the state permit and FERC‘s authorization to commence construction — severs the causal chain. See, e.g., Texas v. United States, 809 F.3d 134, 160 (5th Cir. 2015) (explaining that “the Supreme Court [has] held that an injury [is] not fairly traceable” to an action where the “independent act of a third party was a necessary condition of the harm‘s occurrence, and it was uncertain whether the third party would take the required step“), aff‘d by an equally divided court, 136 S. Ct. 2271 (2016). In summary, because no discharge-creating activity can commence without New Jersey independently awarding Transco with a Section 401 permit, no activities that may result in a discharge can follow as a logical result of just FERC‘s issuance of the certificate.
into the United States’ navigable waters might not even occur, plainly is not an activity that the CWA prohibits prior to obtaining a Section 401 permit.
Because, as was the case before the D.C. Circuit, the petitioners have “pointed to no activities authorized by the conditional certificate itself that may result in such discharge prior to the state approval and the Commission‘s issuance of a Notice to Proceed,” DRN II, 857 F.3d at 399 (quoting Gunpowder Riverkeeper v. FERC, 807 F.3d 267, 279 (D.C. Cir. 2015) (Rogers, J., dissenting in part and concurring in the judgment)), we conclude that FERC did not violate the CWA by issuing the certificate
B. NEPA Challenges
Turning to the merits of FERC‘s issuance of the certificate, the petitioners first raise a number claims asserting that FERC violated NEPA by failing — in numerous ways — to consider the full scope of the Project‘s environmental impacts. The petitioners specifically challenge FERC‘s conclusion that the Project‘s impacts should be considered separately from the impacts of the PennEast and SRL projects, as well as FERC‘s determination that the Project would not significantly impact the potable wells in the project‘s vicinity.
NEPA is “primarily [an] information-forcing” statute; it “directs agencies only to look hard at the environmental effects of their decisions, and not to take one type of action or another.” Sierra Club v. FERC, 867 F.3d 1357, 1367 (D.C. Cir. 2017) (quoting Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 194 (D.C. Cir. 1991)). In addition to that general
directive, NEPA created the Council of Environmental Quality (“CEQ“) to issue regulations to effectuate the statute. These regulations are “‘mandatory for all federal agencies, carry the force of law, and are entitled to ‘substantial deference.‘” Del. Dep‘t of Nat. Res. & Envtl. Control v. U.S. Army Corps of Eng‘rs, 685 F.3d 259, 269 (3d Cir. 2012) (quoting Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 372 (1989)). A court reviewing an agency decision under NEPA and its implementing regulations may only overturn an agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
1. Segmentation of PennEast
Under NEPA and its implementing regulations, when evaluating a proposed project‘s environmental impacts, an agency must take account of “connected,” “cumulative,” and “similar actions” whose impacts should be “discussed in the same impact statement” as the project under review.
unified review into multiple independent analyses that insulate each project from the impacts created by its sister projects, it “fails to address the true scope and impact of the activities that should be under consideration” and therefore runs afoul of NEPA. Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1313 (D.C. Cir. 2014) (”DRN I“). The petitioners allege that FERC did just that, by refusing to consider the Project‘s impacts in conjunction with the anticipated impacts of the proposed PennEast pipeline that, when completed, will be the source of the gas that NJNG will transport using the capacity added by the Project. The petitioners insist that PennEast is a “connected action” that must be considered together with the Project because the two pipeline projects “lack independent functional utility.” Pet. Br. 16 (citing Native Ecosystems Council v. Dombeck, 304 F.3d 886, 894–95 (9th Cir. 2002)). Given that the undisputed facts here clearly attest to the projects’ separateness, we conclude that FERC correctly rejected this argument.
Actions are deemed “connected” with one another if they “(i) [a]utomatically trigger other actions which may require environmental impact statements,” “(ii) [c]annot or will not proceed unless other actions are taken previously or simultaneously,” or “(iii) [a]re interdependent parts of a larger action and depend on the larger action for their justification.”
The petitioners’ theory of interdependence — or, stated in the inverse, the lack of independent utility — relies entirely on their unfounded contention that “Transco‘s sole stated purpose for the Project is to supply capacity to NJNG from the PennEast Line.” Pet. Br. 16. But this is simply not so. The statements that the petitioners point to in support merely articulate the undisputed fact that the Project would supply capacity to NJNG; they are agnostic as to the source of the gas that would utilize the capacity. App. 887, 1419.7 Rather, as FERC concluded below, the agreement between NJNG and Transco concerning the Project makes clear both that NJNG contracted for Transco‘s capacity without regard to the source (or even availability) of the natural gas — which NJNG is alone responsible for sourcing — and, more importantly, that the actual source of the physical supply for the capacity added by the Project is the Station 210 Zone 6 pooling point, not the
PennEast line.8 In addition, FERC found the PennEast project‘s proposed capacity of 1,107,000 dekatherms per day is 90 percent subscribed by 12 different shippers, such that NJNG‘s subscription makes up less than 15 percent of the pipeline‘s capacity. App. 47–50; 80. In other words, the Project would go forward even if PennEast were not built (such that NJNG could not obtain PennEast gas to consume Transco‘s capacity) and conversely the PennEast project would go forward even if the Project were not built (such that PennEast could not deliver its gas to NJNG).
Indeed, in their reply, the petitioners all but concede that their segmentation claim fails. They acknowledge that PennEast has
purpose of the Project is to connect PennEast and the SRL. But even to describe the petitioners’ argument is to refute it. If just constructing the Project — and thus adding the capacity that NJNG requires — is sufficient to meet Transco‘s contractual obligation, such that NJNG must buy the capacity regardless of any other contingency (such as PennEast‘s status), then the Project‘s construction alone plainly serves an independent purpose separate and apart from whatever happens to the PennEast pipeline.9 See, e.g., NRDC v. U.S. Nuclear Regulatory Comm‘n, 879 F.3d 1202, 1209 (D.C. Cir. 2018) (rejecting as insufficient to rebut a finding of economic viability a petitioner‘s claim that the developer had “envisioned” the project “as part of a larger” development plan).
To conclude otherwise, the petitioners confuse the means of the Project for its ends. The Project exists to fulfill NJNG‘s need for gas in southern New Jersey, a need that will exist and require satisfaction whether or not PennEast is constructed. As we elaborate on below in discussing the need for the Project, NJNG required more supply to shore-up the southern parts of the state after Hurricane Sandy. App. 1419. To obtain that supply, NJNG contracted (1) with Transco to increase its pipeline‘s capacity and (2) with PennEast to get the gas to Transco. But while Transco‘s capacity increase is necessary to the plan, PennEast‘s participation is not. NJNG can (and by contract, must) simply buy gas from the Zone 6 pooling point that was delivered by a different supplier.
Finally, even if the petitioners are correct that we are obligated to ignore the contractual terms and focus only on the functionality of the pipeline, such an analysis
Because we conclude that the Project‘s purpose is to supply the capacity that NJNG requested from their Zone 6 pool, and that the source of the pool‘s gas will be determined based on market conditions, we agree that FERC‘s refusal to consider PennEast a “connected action” in the Project‘s EA was not arbitrary and capricious.
2. Consideration of the SRL
a. Direct Review
As an intrastate pipeline, the SRL does not fall within FERC‘s jurisdiction under the
(1) whether the regulated activity comprises “merely a link” in a corridor type project; (2) whether there are aspects of the non-jurisdictional facility in the immediate vicinity of the regulated activity that uniquely determine the location and configuration of the regulated activity; (3) the extent to which the entire project will be within the Commission‘s jurisdiction; and (4) the extent to which cumulative federal control and responsibility.
Applying the test in its order denying the petitioners’ request for rehearing, FERC concluded that “on balance” the factors weighed against federalizing the SRL. App. 83. It reached this conclusion after giving careful attention to each factor. As to the first factor, for the same reasons that PennEast and the Project were not improperly segmented, FERC concluded that PennEast, the SRL, and the Project do not comprise a single corridor type project and that the Project would be a comparatively minor element compared to the 30-mile SRL. On the second factor, FERC concluded that the SRL did not “uniquely determine” the location of the project, because the SRL needed only to connect to the Transco lateral at some point at or downstream of the newly constructed Station 203, not to the compressor station itself. The location of Station 203, accordingly, was not uniquely dictated by the needs of the SRL. Regarding the third factor, FERC explained that (excluding PennEast which, as noted, is not part of the Project) the jurisdictional Project is dwarfed by the size of the SRL. FERC rejected the contention that its oversight of the PennEast‘s and the Project‘s costs — which the petitioners assert will be passed on to SRL ratepayers — means that FERC has decisional authority impacting the SRL. As FERC further explained, because each pipeline is owned by different companies, there will be no cost sharing between them; rather, shippers using each line will bear their own costs. Moreover, the tariffs of SRL, as an intrastate line, are governed by the New Jersey Board of Public Utilities and FERC has no role in funding, approving, or overseeing the SRL‘s construction or operation. Finally, concerning the fourth factor, FERC noted the almost total absence of federal control over the SRL and rejected the petitioners’ argument that, by briefly traversing a federal military base and in light of some generally applicable federal permitting requirements, the SRL was subject to significant cumulative federal control. Although we recognize that one could quibble with its analysis of the second factor, we discern no abuse of discretion in FERC‘s final analysis or its weighing of the factors.
The petitioners’ argument that the first factor is satisfied is based solely on their view that the Project, when considered in conjunction with the 122-mile PennEast line, is significantly larger than the SRL. But this avenue of attack is foreclosed by our agreement with FERC‘s determination that the PennEast line was properly segmented from the Project. The petitioners’ assertion that FERC has de facto jurisdiction over the SRL by virtue of its oversight over the Project‘s rates which in turn impacts the SRL‘s rates, even if accurate, articulates a logic that would extend
b. Cumulative Impacts
The petitioners alternatively argue that, even if FERC were not required to assert jurisdiction over the SRL, it was nevertheless required under NEPA to assess whether — in conjunction with the jurisdictional Project — the non-jurisdictional SRL would foreseeably have cumulative impacts on the environment. Under NEPA‘s implementing regulations, FERC is required to consider “the incremental [environmental] impact of the jurisdictional action when added to the existing or ‘reasonably foreseeable’ impacts of other actions, whether or not jurisdictional.”
[M]ust identify (i) the ‘area in which the effects of the proposed project will be felt‘; (ii) the impact expected ‘in that area‘; (iii) those ‘other actions — past, present, and proposed, and reasonably foreseeable’ that have had or will have impact ‘in the same area‘; (iv) the effects of those other impacts; and ([v]) the ‘overall impact that can be expected if the individual impacts are allowed to accumulate.’
Sierra Club v. FERC, 827 F.3d 36, 49 (D.C. Cir. 2016) (quotation marks omitted) (quoting TOMAC v. Norton, 433 F.3d 852, 864 (D.C. Cir. 2006)).
In line with this test, FERC determined that the Project‘s “main region of influence” in which cumulative impacts might be felt was .25 miles from each of the
The petitioners complaint is not that the .25 mile area was incorrect,11 but that FERC failed to take full account of all the environmental impacts across the entire span of pipelines other than the project under review — impacts far afield from the geographic area impacted by the Project — merely because those pipelines will ultimately be part of the same network as that served by the Project. To echo the Court of Appeals for the District of Columbia Circuit, such an expansive reading of
the cumulative impacts requirement “draws the NEPA circle too wide for the Commission,” which need only review impacts likely to occur in the area affected by the project under FERC review. Sierra Club, 827 F.3d at 50. In this case, notwithstanding its determination — uncontested on appeal — that the area impacted by the Project was of an exceptionally small size, FERC considered the cumulative impact of the totality of the SRL (and PennEast) pipeline and determined that their cumulative impact was insignificant. In light of the gratuitousness of FERC‘s extended cumulative impacts review, the petitioners’ complaint — which concedes the sufficiency of FERC‘s analysis as it relates to wetlands — that FERC gave short-shrift to its consideration of the SRL‘s impact on vegetation, wildlife, and aquatic species fails to persuade us.
The core of the petitioners’ argument, that the SRL “as a major linear project”
But even taken head-on, the petitioners’ argument is unavailing. Contrary to the petitioners’ claim, FERC did consider the SRL‘s impact on vegetation and wildlife, and given the Project‘s “minor . . . impacts” determined that the cumulative impacts would be insignificant. App. 1469. FERC explicitly acknowledged that the SRL may affect the Pinelands National Reserve and concluded reasonably that any impacts would be mitigated by the responsible state agency overseeing the permitting process for that project. App. 53. FERC was correct to rely upon New Jersey authorities to do so, as opposed — as the petitioners would have it — to assuming the worst and piggybacking that hypothetical impact onto the otherwise compliant jurisdictional Project.12 See, e.g., EarthReports, Inc. v. FERC, 828 F.3d 949, 959 (D.C. Cir. 2016) (concluding that FERC reasonably relied upon the regulated parties’ “future coordination with” other regulators in its NEPA assessment); Ohio Valley, 556 F.3d at 207–08 (upholding finding of no cumulative impact that was based partly on projected mitigation efforts because the mitigation was a condition of other permitting regimes to
consideration and reasonable responses that FERC provided to the petitioners’ concerns.
Furthermore, had FERC failed to give the specific attention that it did to the various types of impacts that the SRL might potentially cause, we would still approve their cumulative impact conclusions. Aside from their challenge to FERC‘s determination of the Project‘s well impacts (discussed below), the petitioners do not contend that FERC improperly concluded that, taken alone, the Project would not “significantly affect[] the quality of the human environment.” App. 64; see also App. 1424 (concluding in the EA that “the impacts associated with th[e] Project can be sufficiently mitigated to support a finding of no significant impact“). And — again, besides the wells challenge — nothing in the petitioners’ briefing suggests that FERC‘s detailed consideration of the Project‘s impacts to the area‘s geology; water resources; vegetation; wildlife; endangered species; cultural resources; land use, recreation, and visual resources; or air quality and noise was erroneous or wanting. FERC thus reasonably concluded in the EA that the Project‘s “minimal impacts” in its service area — relegated largely to “geological and soil resources” impacts and other temporary impacts — meant that the Project necessarily “would not result in cumulative impacts.” App. 1465, 1469. We conclude that FERC did not abuse its discretion in reaching this decision. This is especially true considering that the impacts from the SRL that the petitioners allege FERC ignored are different than the limited kind of impacts that FERC concluded were likely to result from the Project and so are less likely to result in cumulatively significant impacts when considered together.13 See Council of Envtl. Quality, Considering Cumulative Effects Under the National Environmental Policy Act 8 (Jan. 1997) (“Cumulative effects need to be analyzed in terms of the specific resource . . . being affected.“). Given that the petitioners failed to show anything more than minimal impacts from the Project itself, they have failed to show that FERC acted arbitrarily or capriciously in determining that the Project would likewise not contribute to significant cumulative impacts, even taking into account the potential different impacts of the SRL on other areas within the Project‘s region. This conclusion is reinforced by the petitioners’ own insistence that the SRL‘s construction is being held up by legal challenges, Pet. Br. 22–24, such that whatever impacts it causes will be temporally distinct from the Project‘s short-term impacts. See, e.g., Friends of Santa Clara River v. U.S. Army Corps of Eng‘rs, 887 F.3d 906, 926 (9th Cir. 2018) (concluding that where an EIS reasonably finds that a project is unlikely to have an impact on a given population, that it is “also not arbitrary or capricious to conclude that the Project would not result in significant cumulative
population); Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 113 (D.C. Cir. 2014) (upholding cumulative impact analysis finding “no significant cumulative impacts were expected” where the project under consideration “itself was expected to have minimal impacts” and — as is the case here — the two projects had distinct construction timelines). By addressing and expressly considering the specific concerns raised by the petitioners, FERC “fulfilled NEPA‘s goal of guiding informed decisionmaking” and ensured that FERC at least considered the wisdom of the agency action. Sierra Club, 867 F.3d at 1370–71; Sierra Club v. U.S. Dep‘t of Energy, 867 F.3d 189, 196 (D.C. Cir. 2017) (“Our job is simply ‘to ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary or capricious.‘” (quoting DRN I, 753 F.3d at 1312–13)).
The petitioners nevertheless argue that this low-impact project should be halted as a result of the possibly significant — but mostly different-in-kind — impacts of the nearby but later-in-time SRL. But this cannot be how the cumulative analysis inquiry operates. To hold otherwise would permit a jurisdictional project with little environmental impact to be torpedoed based only on a nearby non-jurisdictional project‘s significant impact, which FERC has no authority to control or mitigate. Such a rule would effectively condition the approval of pipelines operating under federal jurisdiction on the fastidiousness of pipeline companies operating in the same region under state authorities. Pipelines subject to lax state authorities or state environmental requirements that fall short of federal standards could, by mere proximity to a jurisdictional project, trump federal regulation and undermine FERC‘s careful balancing of environmental protection and public energy needs. Less pernicious, if a proposed state-governed project has potentially significant impacts but has not yet gone through the state‘s regulatory process (which could be expected to mitigate those impacts), such a project would essentially stay all federally regulated projects proposed in the area until the state agency either rejects the plan or approves a mitigation proposal. Congress surely did not intend for FERC‘s exclusive authority to control interstate pipeline construction to be so easily usurped by state regulators. Rather, the cumulative impacts analysis was meant to address instances where the jurisdictional project itself has minor environmental impacts that nevertheless fall short of stopping the project, but where — if added to the minor impacts from nearby non-jurisdictional projects — the cumulative impact of all the projects would be significant. See
The relevant question — as FERC correctly understood — is rather whether, taking the non-jurisdictional impacts as a given, the addition of the jurisdictional project‘s impacts on top of the other projects’ existing or anticipated impacts renders significant those projects’ otherwise insignificant impacts. See
3. Potable Well Impacts
The petitioners’ final NEPA-based claim regards FERC‘s conclusion that the Project‘s construction would not significantly impact the water quality of wells or cisterns in the service area. In its EA, FERC determined that “[m]inor, temporary impacts on groundwater infiltration could occur as a result of tree, herbaceous vegetation, or scrub-shrub vegetation clearing” around Station 203 during its construction, but that Transco would thereafter “restore and revegetate cleared areas to pre-construction conditions to the maximum extent practicable.” App. 17-18. The EA continued that, in the event that groundwater is “encountered during construction,” Transco would adhere to a series of mitigation measures, which would ensure that “impacts on groundwater would be adequately minimized.” App. 18. Although reaching this general conclusion about the risk of groundwater impacts as a result of the Project, FERC made no specific finding about the impacts to any particular wells or cisterns “within 150 feet and up to one mile” from the Project, because at the time of the EA, neither FERC nor Transco had identified any such resources. App. 17. Accordingly, the particular finding that FERC did not “anticipate any significant impacts on cisterns, wells, or septic systems in the Project areas” was based most directly on FERC‘s understanding that those resources simply did not exist.
On appeal, the petitioners in large part renew the challenge levied before FERC. They add that even if FERC were not absolutely required to identify the number of affected wells, its proposed mitigation plan is inadequate because: (1)
it cannot effectively be enforced, and (2) because without knowing how many wells are potentially impacted, it is impossible to determine whether the proposed mitigation plan will suffice. The petitioners contend that FERC‘s “no significant impacts” conclusion was therefore arbitrary and capricious because it was not based on sufficient evidence. Because we conclude that FERC sufficiently established the efficacy of the proposed mitigation plan, we will not disturb its conclusion that the Project‘s groundwater impacts if any will not be significant.When an agency‘s “proposed mitigation measures [are] supported by substantial evidence, the agency may use those measures as a mechanism to reduce environmental impacts below the level of significance.” Nat‘l Audubon Soc. v. Hoffman, 132 F.3d 7, 17 (2d Cir. 1997). Mitigation measures will be deemed “sufficiently supported” where “they are likely to be adequately policed,” such as where the mitigation measures are included as mandatory conditions in a permit. Id.; Bering Strait Citizens for Responsible Res. Dev. v. U.S. Army Corps of Eng‘rs, 524 F.3d 938, 955-56 (9th Cir. 2008) (explaining that an “agency is not required to develop a complete mitigation plan detailing the precise nature . . . of the mitigation measures[,]” so long as the measures are “developed to a reasonable degree.” (quoting Nat‘l Parks & Conservation Ass‘n v. Babbitt, 241 F.3d 722, 734 (9th Cir. 2001))).
Nor must the proposed mitigation be included in the original EA in order to pass muster under NEPA. If FERC in its certificate order addresses the commenters’ concerns about the adequacy of the EA‘s analysis and clearly articulates its mitigation plan therein, it takes “the requisite ‘hard look’ at the impact of the . . . Project on the environment.” DRN II, 857 F.3d at 401 (quoting NRDC v. Hodel, 865 F.2d 288, 294 (D.C. Cir. 1988)). This is because NEPA‘s “purpose is not to generate paperwork — even excellent paperwork — but to foster excellent action” and to “[e]nsure that environmental information is available to public officials and citizens before decisions are
FERC determined in the EA that groundwater effects were expected to be temporary, limited, and controlled by Transco‘s adoption of prophylactic measures to limit sediment discharge. After it learned of the wells’ existence, FERC imposed supplementary measures to mitigate and remedy any damage to private wells in the project area, along with a reporting framework to ensure Transco‘s compliance. We conclude therefore that the record establishes that FERC adequately considered the potential impact to the wells, responded appropriately to the concern, and reasonably concluded that in light of its intervention, any impact would be insignificant. Given that FERC in the EA had already reached a reasoned conclusion regarding the intensity of the expected effects of the construction — which it deemed to be minor and transient — its failure to detail fully the number of wells potentially impacted by this limited impact is insufficient to render its findings arbitrary and capricious. The petitioners do not contend that FERC underestimated how the construction would impact a well in the project area, but only that it has not confirmed how many wells this uncontested calibration would disturb. FERC could reasonably conclude that a consequence whose intensity was unlikely to significantly impact any one resource was likewise unlikely to significantly impact additional — but distinct — instances of that same resource.14
This case is therefore unlike the Babbitt case cited by the petitioners, in which the Court of Appeals for the Ninth Circuit rejected the agency‘s EA that made a no significant impact finding without articulating the expected intensity or expected consequences of the projected environmental effects. See 241 F.3d at 732. The Babbitt case involved the impact of growing cruise ship traffic in the Glacier Bay. The agency recognized that expanded traffic would increase the level of underwater disturbance, the risk of collision with sea life, and the risk of oil spills, and acknowledged that the intensity and effects of such increases
The issue in Babbitt was not that the agency did not know, for instance, how many sea lions would be impacted by the traffic increase, but rather that it did not know the intensity of impact in the first place. We recognize that in certain circumstances — such as where the intensity of the impact is expected to be moderate or significant — the failure to identify the number of species or resources impacted could render the EA insufficient because the magnitude of gross harm would be too uncertain. That is not the case here, however, where FERC identified the intensity of the impacts and concluded that they would be minor and temporary. Even without knowing the precise number of wells potentially impacted, FERC could reasonably conclude that the total environmental impact of such low-intensity and fleeting effects would be insignificant, especially when accounting for the mandatory mitigation and remedial conditions imposed upon Transco in the certificate, which FERC has assured the Court that it will enforce.15 See id. at 735 (recognizing that even where mitigation procedures are not fully developed, “the imposition of special conditions, enforced through a permit,” and adequately supervised could “ensure[] that the measures would be enforced in a manner that properly reduced negative environmental impact“). We therefore reject the petitioners’ claim that FERC‘s treatment of the well impacts ran afoul of NEPA.
C. Need for the Project
FERC must determine that the proposed project “is or will be required
Applying the above criteria in this case, FERC found “a strong showing of public benefit” based upon NJNG‘s “binding precedent agreement” to purchase 100 percent of the Project‘s capacity that outweighed the Project‘s “minimal adverse impacts,” and so granted the certificate. App. 42. The petitioners challenge this finding as arbitrary and capricious because FERC “considered only Transco‘s asserted need for the Project, ignoring other factual developments” that the petitioners assert “demonstrated that the need was speculative.” Pet. Br. 22. Specifically, the petitioners argue that regulatory and legal challenges to both the SRL and PennEast created a “very real possibility that neither” project would be built, which in the petitioners’ view would “obviat[e] the need for the Project.” Id. FERC rejected this argument in denying the petitioners’ motion for rehearing, noting that NJNG‘s contract was itself sufficient to establish need and that the Project was not reliant on the existence of either the PennEast or SRL. Again, we agree.
The petitioners’ argument that the need for the Project is speculative misapprehends the purpose of the analysis, the focus of which is on the objective existence of a market need, not the precise mechanics of fulfilling that need. See, e.g., Sierra Club, 867 F.3d at 1379. A contract for a pipeline‘s capacity is a useful indicator of need because it reflects a “business decision” that such a need exists. See App. 76. If there were no objective market demand for the additional gas, no rational company would spend money to secure the excess capacity. Cf., e.g., Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 884 (9th Cir. 1982) (noting that, in the ordinary course, a company‘s “legitimate business decisions” will not be against their self-interest). In this case, FERC reasonably relied on NJNG‘s binding contract to utilize all of the Project‘s capacity — a contract that was not contingent on the completion of either the SRL or PennEast16 — as evidence of the
Even were this not the case, the petitioners’ view of the need is myopic. The need is not, as they contend, to provide capacity for gas to reach the SRL; this is the means of fulfilling the need, not the need itself. Rather, the “need” is for the provision of “enhanced reliability and resiliency to NJNG‘s service territory in Monmouth and Ocean Counties,” App. 790, which is why NJNG is building the SRL and why it is seeking additional capacity from Transco. This need exists objectively, and independently of the SRL. If for whatever reason NJNG cannot build the SRL as it is proposed, this need for “enhanced reliability and resiliency” will endure, and the Project will still be necessary to meet that need by providing additional capacity for the southward supply of natural gas. Nor, as we explained above, is the Project reliant on PennEast‘s completion. Thus, FERC correctly determined based on substantial evidence that even if the SRL or PennEast were not built, the Project would still serve the public need. Because the petitioners do not challenge FERC‘s balancing at step two of the analysis — regarding which FERC is afforded “broad discretion,” Minisink, 762 F.3d at 111 — we conclude that FERC properly granted the certificate to Transco.
D. Good Faith Notice
The petitioners’ next challenge — that, contrary to the requirements of
Most fundamentally, the petitioners’ claim is unsupported by any relevant citation to the record, and is belied by FERC‘s explicit finding in its order granting the certificate that Transco complied with the “intent of the landowner notification requirements.” App. 44. This finding, like all FERC fact-finding, is conclusive where supported by substantial evidence. FERC‘s determination is supported by Transco‘s submission, filed March 24, 2015, that it had “mailed notices to all affected landowners” and re-mailed to new addresses the notices that were returned undelivered, FERC Docket CP15-89, Submittal 20150324-5228 (Mar. 24, 2015), and FERC‘s own investigation confirming the submission‘s accuracy, App. 44, 96. By contrast, the petitioners’ claim that Bordentown was not given notice is only a representation in their appellate brief, which does not constitute record evidence, see United States v. Genser, 582 F.2d 292, 311 (3d Cir. 1978), and is in fact contradicted by the record, see, e.g., App. 1735-38 (letters dated September and October 2015 in which Transco‘s counsel discusses the Project with Bordentown‘s counsel, and which noted discussions from as early as August 2015). We therefore defer to FERC‘s fact-finding and conclude that Transco satisfied their good faith notice requirements.17
E. Green Acres Act
The petitioners’ penultimate claim is that FERC erred by granting Transco the certificate because it will permit Transco to construct the Project on property subject to regulation under New Jersey‘s Green Acres Act,18 without first seeking state-level approval to divert the property to non-Green Acres uses. This argument is facile because the petitioners entirely fail to articulate what portion of its governing law was violated when FERC neglected to seek New Jersey state approval before granting the certificate of public necessity, the authority over which Congress exclusively vested in FERC.
Although the parties primarily dispute whether the Green Acres Act is preempted or whether FERC addressed sufficiently the Act‘s substantive concerns before granting the certificate, we need not even get that far. Nothing in the NGA, NEPA, or its implementing regulations require FERC to do anything more than at most consider the proposed land-use and its alternatives.19 There is certainly no requirement that prior to issuing a certificate, FERC pass through the procedural hoops that the state places upon the alienation of land subject to its authority. The petitioners’ demand that FERC should have proceeded
If anything, the NGA itself suggests that FERC need not concern itself with the legal technicalities concerning — or the ownership status of — land upon which FERC determines that the placement of a pipeline would be in the public interest. The NGA,
Finally, we would be remiss not to point out that although the petitioners levy their challenge against FERC‘s issuance of the certificate, the real target of their claim is actually the Township of Bordentown‘s interpretation thereof. FERC, in issuing the certificate, did not specifically opine that any particular provision of the Green Acres Act is preempted. See App. 63 (explaining generally in the certificate order
F. Cumulative Error
The petitioners finally ask that we grant the petition based on the cumulative effect of FERC‘s various alleged errors. Under the cumulative error doctrine — which we have to date applied only in the context of criminal trials — a court “may determine that, although certain errors do not require relief when considered individually, the cumulative impact of such errors may warrant a new trial.” SEC v. Infinity Grp., 212 F.3d 180, 196 (3d Cir. 2000). We need not decide whether the cumulative error doctrine applies in this type of case, because even assuming its applicability, our conclusion that none of FERC‘s challenged decisions were individually erroneous forecloses a cumulative error claim. See id.
IV. Challenges to the NJDEP‘s Order
We now turn to the petitioners’ challenge to the NJDEP‘s conclusion that the New Jersey regulations establishing the availability of adjudicatory hearings to contest the grant of water quality permits to an interstate pipeline project were preempted by federal law (docket No. 17-3207). As noted above, we conclude that the NJDEP misunderstood the scope of the NGA‘s assignment of jurisdiction to the federal Courts of Appeals. Because this erroneous view was the only articulated reason for its denial of the petitioners’ hearing request, we will remand to the NJDEP for reconsideration of the petitioners’ request and to give the NJDEP the opportunity to in the first instance address the petitioners’ substantive challenges to the provision of the permits.
A. Jurisdiction Under the NGA
We begin with the language of the federal statute that the NJDEP purports divests it of jurisdiction to grant adjudicatory hearings arising from permit decisions affecting interstate natural gas pipelines. Under the NGA:
The United States Court of Appeals for the circuit in which a facility subject to
section 717b of this title orsection 717f of this title is proposed to be constructed, expanded, or operated shall have original and exclusive jurisdiction over any civil action for the review of an order or action of a . . . State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit, license, concurrence, or approval . . . required under Federal law . . . .
The Supreme Court has recognized that “the word ‘action’ often refers to judicial cases, not to administrative ‘proceedings,‘” West v. Gibson, 527 U.S. 212, 220 (1999), and has parsed statutes based on Congress‘s understanding of the distinction between a civil “action” in a court and an administrative “proceeding” at the agency level, New York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 60-62 (1980). This Court, for its part, has held in the context of interpreting a statute providing for attorneys’ fees in taxpayer disputes against the IRS that the even broader term “‘civil action or proceeding’ includes only judicial proceedings and not administrative actions.” Toner v. Comm‘r, 629 F.2d 899, 902 (3d Cir. 1980). Our sister Courts of Appeals have reached similar conclusions. In Schindler, for instance, the Court of Appeals for the Federal Circuit noted that “[u]nder
The Supreme Court has long recognized that administrative hearings, even to the extent that they in some ways mirror an adversarial trial, do not constitute proceedings in courts of law or equity. See, e.g., Dixon v. Love, 431 U.S. 105, 115 (1977) (holding that “procedural due process in the administrative setting does not always require application of the judicial model“); Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229-30 (1938) (explaining that the purpose of the section of the NLRA at issue there, which freed an administrative tribunal from applying the rules of evidence required “in courts of law and equity,” was to “free administrative boards from the . . . technical rules” inherent “in judicial proceedings“). And notably, the New Jersey Supreme Court has explicitly held, in upholding the constitutionality of an administrative body tasked with adjudicating allegation of unlawful discrimination, that administrative adjudication “involves no . . . intrusion upon subject matter jurisdiction of the judicial
Viewed in light of both federal and New Jersey authority, and barring any specific statutory language to the contrary, a hearing before an administrative body is not a “civil action.” Accordingly, such hearings are not impacted by
That
Finally, although not squarely faced with this issue, this Court and the Court of Appeals for the First Circuit have implicitly held that state administrative review of interstate gas permitting decisions is not preempted by the NGA. In our recent opinion in Delaware Riverkeeper Network v. Secretary Pennsylvania Department of Environmental Protection, Nos. 16-2211, 16-2218, 16-2400 (3d Cir. Sept. 4, 2018) (”Delaware III“), as well as in Delaware II and Berkshire, the courts considered whether
B. New Jersey Law
Having decided that the NGA does not preempt the regular operation of New Jersey‘s administrative review process, we turn next to the determination of whether the NJDEP‘s refusal to afford the petitioners an adjudicatory hearing based on the NJDEP‘s erroneous interpretation of the NGA amounts to a violation of New Jersey law. As explained below, we conclude that it does.
The NJDEP regulations implementing the FWPA allow a party to request an adjudicatory hearing to challenge the grant of an FWW permit. The FWPA explicitly provides for the availability of such a hearing where the requestor is the permit seeker,
Here, the NJDEP denied the petitioners’ request for an adjudicatory hearing on the FWW and dewatering permits on the sole basis that, pursuant to the NGA, the federal Courts of Appeals have exclusive jurisdiction to hear any challenges to final decisions granting permits, and accordingly that the provisions permitting an adjudicatory
The NJDEP and Transco urge that jurisdiction properly lies in this Court because the permit decision was final and because requiring exhaustion of state remedies would run counter to the NGA‘s purpose of streamlining natural gas permits. This may be so. However, the determination of whether we may assert jurisdiction immediately upon a permitting decision does not answer whether the agency is simultaneously stripped of jurisdiction to provide an administrative adjudicatory hearing in the ordinary course. Our limitation to considering only final orders, see Delaware III, slip op. at 10, is a constraint on our own jurisdiction, not a determination that we are the only forum available to consider final orders.25 Indeed, if the NJDEP and Transco are correct that the NJDEP orders at issue here were final when issued, see Transco Br. 24; NJDEP Br. 10, 12, New Jersey clearly provides for a 30-day window to seek an adjudicatory hearing to contest that final order. We therefore do not necessarily disagree with the NJDEP and Transco‘s assertion that the petitioners could have immediately appealed the NJDEP‘s orders to this Court. Nor do we disagree that, assuming the petitioners sought immediately to bring such a civil action — and again putting aside the question of finality — this Court would be the only judicial body to which such a challenge could be brought. Our holding is only that (1) instead of bringing a civil action in this Court, the petitioners were entitled under New Jersey law to have alternatively first sought an intra-agency adjudicative hearing, and (2) the NJDEP violated New Jersey law by unreasonably denying the petitioners’ request for such a hearing based on its misreading of the NGA and this Court‘s precedent.
V. Conclusion
In light of the foregoing, we will deny in part and grant in part the petitions for review, and remand to the NJDEP for proceedings consistent with this opinion.