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September 18, 2014
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Is FERC biased in favor of gas companies? A central question in the Minisink case


WASHINGTON, DC — In case after case involving gas infrastructure projects, residents opposed to those projects say it appears that regulatory agencies, in this case the Federal Energy Regulatory Commission (FERC), are too cozy with the industry they are regulating, and that those relationships create an unequal playing field for residents who try to influence projects.

That was one of the central questions in the case of Minisink Residents for Environmental Preservation and Safety against FERC and the Millennium Pipeline Company.

The neighbors have been loudly protesting the compressor station in their neighborhood for several years, and the lawsuit finally was heard in front of a three-judge panel of the U.S. Court of Appeals in Washington, DC on May 1.

Carolyn Elefant, the attorney representing the neighbors, said that FERC is predisposed to accept projects applied for by companies like Millennium, and a statement from the agency backed that up.

Referencing an earlier case, Elefant said, the “statement the commission made, that project sponsors invest substantial sums in these projects, when they submit them we expect they’re going to be qualified for approval, or we assume that these proposals are going to be meritorious, our system weeds out questionable proposals and leaves us only meritorious ones to consider—that really suggests a predisposition toward the sponsor’s project.”

Later, the lawyer for FERC, Karin Larson, refuted that notion saying, “There is no predisposition at the commission with regard to any application for a natural gas project; what the commission was explaining was the high approval rate for pipeline proposals simply demonstrates the prudence on the industry’s part and consistency on FERC’s part that has resulted over the years in a process that weeds out marginal projects and leaves FERC to consider only those that merit serious consideration.”

On another matter, Larson told the judges that there is public involvement in the “pre-filing process” in gas infrastructure projects, but there was no pre-filing process in the case of the Minisink Compressor Station because “often it’s used for larger projects. This is actually a rather small project for natural gas infrastructure.”

Judge Patricia Millett responded to that saying, “I would hope the commission could understand how comments like that could give people pause or concern, members of the public, when they see statements like that, that there’s going to be a thumb on the scale in the process.”

Another central question in the case is whether another pipeline project called the Wagoner alternative could have been used instead of building the compressor in Minisink.

Millet noted that Millennium had considered that that option, which would have included the widening of a portion of a pipeline called the Neversink segment, would have involved serious environmental hurdles, but opposition from human neighbors would have been significantly less than with the Minisink option.

Elefant said that when Millennium was considering Wagoner, “more than 50 landowners were contacted. A few wrote to FERC in support of the proposal, many had no opinion, there may have been one who objected, but the record suggests there was going to be very little objection.” Some residents had safety concerns about the current pipeline there because of its age.

When asked if it were true that the Neversink segment were going to have to be enlarged eventually, attorney Aaron Streett, representing Millennium said, “Yes, I believe eventually at some point if the market demand increases to the point necessary to justify that expansion.”

The Minisink Compressor Station is up and running in spite of the fact that all sides knew about the ongoing litigation. The neighbors are hoping the judges will shut it down. If they do, it will be a rare victory of the neighbors over an energy company.