Circuit Court Upholds FERC Permit of PA Pipeline, Impact of Shale Gas Development



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On June 12, 2012, a three-judge panel of the United States 2nd Circuit Court of Appeals ruled that FERC properly approved the 39-mile MARC 1 pipeline through Bradford, Sullivan, and Lycoming counties in Pennsylvania.  A coalition of environmental groups and landowners challenged FERC's decision, arguing that FERC did not properly analyze the potential impacts from development of the Marcellus shale natural gas reserves.   


FERC had previously approved the MARC I pipeline project.  Before granting approval, FERC took a hard look at the possible effects of the project and issued a 296-page Environmental Assessment (EA).  In its EA, FERC concluded that the impacts of the Marcellus shale development were not sufficiently causally related to the pipeline project to warrant a more in-depth analysis.  FERC determined that an Environmental Impact Statement  was not necessary.  


The 2nd Circuit held that FERC's decision not to probe further into the potential environmental impact of additional drilling in the area surrounding the pipeline was properly considered and was not arbitrary and capricious.  It held that FERC properly addressed any actual incremental effects of the pipeline project, such as preparation and execution of a Migratory Bird Impact Assessment and Habitat Restoration Plan.  Considering this review to be a "hard look" at the relevant environmental concerns, the 2nd Circuit found FERC's consideration and analysis sufficient to support its ultimate approval of the project.  


The Inergy Midstream LP MARC I pipeline is intended to transport Marcellus shale gas to major interstate pipelines and to a natural gas storage field in southern New York as early as fall 2012.


Click here to read the entire opinion.



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