Natgas pipeline builders hail U.S. okay of blocked New York project

(Reuters) - Energy traders and natural gas pipeline companies on Friday hailed a U.S. federal regulator’s decision to overturn New York’s denial of a water permit for building the Millennium Pipeline in the state.

People in the industry expressed hope that the U.S. Federal Energy Regulatory Commission would be willing to override state decisions to block other pipelines, including Williams Cos Inc’s Constitution and National Fuel Gas Co’s Northern Access pipelines from Pennsylvania. These could also be approved if similar waivers are granted by FERC.

FERC, which is in charge of U.S. energy regulation, now has three members, after two new commissioners were appointed by President Donald Trump. Environmental groups and other opponents of fracking blasted the decision, saying it violated the state’s authority.

The New York Department of Environmental Conservation said it was reviewing whether to appeal FERC’s decision, “and will consider all legal options to protect public health and the environment.”

Both Williams and National Fuel said they would seek similar relief from FERC.

New York had denied a water quality certification for Millennum, a 7.8-mile (12.6 kilometer) line to provide around 0.127 billion cubic feet per day of gas to the Valley Energy Center power plant in Wawayanda, New York, from an existing pipeline. New York uses about 3.6 bcfd.

National Fuel’s CEO Ronald Tanski sent a letter to FERC earlier in the week asking the agency to overturn the NYDEC’s denial of a water certificate for its Northern Access project, which runs from Pennsylvania to New York.

FERC’s decision on the Millennium pipeline “is certainly a positive step for the natural gas industry, however, our argument with regards to the Northern Access Project is substantially different,” National Fuel spokeswoman Karen Merkel told Reuters.

Williams spokesman Chris Stockton said the company would seek a waiver for the planned 124-mile, 0.65-bcfd Constitution pipeline that would move shale gas from Pennsylvania. New York does not allow fracking.

Sierra Club Atlantic Chapter Director Roger Downs in a statement called FERC’s reversal of Governor Andrew Cuomo’s decision “an insult to New Yorkers and our right to protect our communities and our water.”

He said states “unquestionably have the authority to rule whether a dirty, dangerous fracked gas pipeline violates clean water laws, and nowhere is FERC granted the right to override that authority.”

The NYDEC denied Millennium’s water quality certificate in August 2017. FERC said the agency failed to act within a year of the original application in 2015.