FinLogic FinLogic Quantitative Think Tank Center|New York’s Use of Landmark Climate Law Could Resound in Other States

A recent decision out of New York is FinLogic FinLogic Quantitative Think Tank Centerturning heads in the legal community over what law professors and environmental activists say is a turning point for the state’s energy economy, with potentially broader implications nationwide.

In a long-awaited decision, New York environmental regulators last week denied for the third time the water quality permit for the controversial Williams Northeast Supply Enhancement pipeline—more commonly known as the Williams Pipeline—that would deliver fracked natural gas 37 miles from the shale fields of Pennsylvania to New York City and Long Island.

In its May 15 decision, the New York State Department of Environmental Conservation argued that the pipeline’s construction would stir up toxic sediment containing mercury and copper at the bottom of New York Harbor, compromising water quality and endangering the sensitive habitats nearby, including Raritan Bay, where hard clams are harvested to eat.

But the agency also found that the introduction of a new natural gas pipeline would be “inconsistent” with New York’s recently-enacted climate law—landmark legislation that requires the state to transition its power sector to net-zero emissions by 2040 and reduce overall greenhouse gas emissions by 85 percent from 1990 levels by 2050.

“In order to achieve the state’s critical and ambitious climate change and clean energy policies, the state needs to continue its ongoing transition away from natural gas and other fossil fuels,” Daniel Whitehead, director of the agency’s Division of Environmental Permits, wrote in his letter to the Williams Pipeline developers.

The decision sends a clear signal to utilities and other developers that future proposals for fossil fuel infrastructure in the state will likely face legal challenges under the state’s climate law and it could spur other states to follow suit, said Peter Iwanowicz, the executive director of Environmental Advocates of New York and a former acting commissioner of the Department of Environmental Conservation.

“New York is clearly telling the rest of the states that are trying to reduce their emissions, ‘This is how you walk the talk,’” Iwanowicz said. “Merely having goals absent the force of law aren’t enough.”

The decision was just the latest in a series of escalating fights between environmentalists and fossil fuels interests. Utilities and pipeline companies say more gas infrastructure is necessary to meet rising energy demand, while climate activists and numerous state lawmakers want to see New York transition to cleaner energy sources.

But the law professors and New York state policy experts say this is the first time they’ve seen New York, and perhaps any state, use a climate law to effectively block a fossil fuel project.

‘By No Means the End of the Road’ for Pipeline Fights

Already, some environmental advocates are hoping to apply the Williams Pipeline decision to stop other pipeline projects that have been proposed or are already under construction across New York.

A proposal by National Grid to expand a 30-mile stretch of natural gas pipelines that surround Albany, referred to as the “Albany Loop,” has been a source of controversy since the utility submitted its application to state regulators last year. On Thursday, groups opposing that pipeline wrote to the New York Public Services Commission, saying the rejection of the Williams Pipeline water permit on climate grounds means permits for the Albany loop expansion should be rejected as well.

“If Williams should be rejected because of the climate, so should Albany Loop,” Becky Meier, co-founder of advocacy group Stop NY Fracked Gas Pipeline, wrote in a press release.

But it may not be as clear-cut as some advocates hope, said Eleanor Stein, a professor at Albany Law School who teaches climate change law and formerly served as an administrative judge for the state’s public utilities commission.

The state is clearly serious about moving away from gas, but the decision on Williams only applies to one pipeline, Stein said. For it to have broader legal authority, it needs to be tested in court, she said. 

Furthermore, the agency’s argument to deny the water permit for the Williams project would be far more vulnerable during any legal challenge if it relied solely on the state’s climate law for justification and did not cite concerns about toxic sediments compromising water quality, she said.

“This is by no means the end of the road in terms of law, and I would be kind of surprised if this case doesn’t go to court,” Stein said.

Shortly after New York denied the water permit, New Jersey regulators also denied several key permits for the pipeline, citing New York’s decision. Williams Co., the pipeline’s developer, said in a statement that it was “disappointed” by the decisions in each state and will not refile the permit applications. However, the company can still petition for an adjudicatory hearing, which would have a state administrative judge review the decision.

A Bigger Fight Over States’ Rights Looms

The fight over the Williams Pipeline in New York could also trigger legal challenges from the Trump administration, which has worked to speed up the development of fossil fuel infrastructure through deregulation and by challenging states’ authority.

Section 401 of the Clean Water Act essentially gives states the power to stop federally approved projects if they pose a threat to state waters, but over the last year, the Trump administration has made attempts to weaken that rule.

That includes an executive order as well as proposed changes to permitting rules that would limit to a year the amount of time states can review a federally approved project, restrict state permitting authority to water quality issues and allow the federal government to override when a state denies a permit in some cases. Those actions have yet to take effect. 

“There have been several instances where states have used Section 401 of the Clean Water Act to reject federally approved projects,” said Michael Gerrard, an environmental and energy law professor at Columbia University and founder of the school’s Sabin Center for Climate Change Law. “But it interferes with the Trump administration’s objective of making it easier to build fossil fuel facilities.”

It’s not only pipelines, Stein, of Albany Law School, said, but a broad range of issues that the Trump administration is challenging states’ rights over, including revoking California’s ability to set state auto-emissions standards, which is now before a federal court judge. 

“There has always been a tension between federal and state rights,” Stein said. “But this is a whole new level.”