HARFORD, Pa. – The output of maple syrup is down this year at Cathy and Tom Holleran's Susquehanna County farm, and not just because the weird winter weather has disrupted the seasonal flow of sap.
Last year, a natural-gas pipeline developer obtained an easement across land owned by Cathy Holleran’s family, over their objections. While U.S. marshals kept protesters at bay, work crews cleared a 100-foot-wide swath for the Constitution Pipeline through their land, wiping out about three acres of trees, many of them productive maples.
Then something unexpected happened: New York regulators denied permits for the 124-mile project and stopped it dead in its tracks. Now, a year later, the pipeline connecting Pennsylvania’s gas fields with New York state is still not built. On the Hollerans' land, a path of rotting timber lies untouched beneath the snow, as if a storm passed through.
“It’s kind of tragic and pointless,” said the Hollerans' daughter, Megan, an archaeologist who was transformed into an activist and became the family spokeswoman.
The fate of the $925 million pipeline awaits a decision by the U.S. Court of Appeals for the Second Circuit, which heard arguments in November. The pipeline company says that the Federal Energy Regulatory Commission’s 2014 approval of the pipeline limits the state’s authority, and that New York’s denial of the permits was arbitrary, capricious, and politically motivated.
The court’s ruling, expected in the next few months, could have nationwide implications for interstate pipeline projects, which have become battlegrounds for climate-change activists seeking to slow the growth of fossil-fuel development.
Though the Constitution Pipeline was able to secure permits in Pennsylvania, where state policy has been more accommodating to the gas industry, it ran into stiff opposition in Albany, where fossil-fuel producers have less clout and anti-fracking interests have Gov. Andrew Cuomo's ear.
Permits that the New York Department of Environmental Conservation denied would have allowed the pipeline to cross more than 250 streams and about 80 acres of wetlands. The pipeline company said New York state used its “narrowly circumscribed jurisdiction to, in effect, veto a federally approved interstate pipeline project.”
In its defense, New York state said the record supports its “detailed, substantive and well-reasoned” permit denials. “Constitution’s vague insinuations of political influence are insufficient to render the decision arbitrary and capricious,” state Attorney General Eric T. Schneiderman said in court filings.
The case has attracted attention from environmental groups such as the Natural Resources Defense Council, the Waterkeeper Alliance, Earthworks, and PennEnvironment, which urged the appeals court to uphold the permit denials “to ensure that states remain arbiters of their own water quality.”
They are opposed by trade associations representing the gas industry, business interests, and large energy customers, which say New York’s action interferes with the authority of the Federal Energy Regulatory Commission (FERC) and deprives markets in New York and New England of access to a new source of natural gas.
“You have five governors of five New England states who all expressed support for this project,” said Christopher Stockton, Constitutional Pipeline’s spokesman. “You have one governor that has essentially denied them access to Pennsylvania gas. You’re talking about interfering with interstate commerce.”
Constitution Pipeline, which would be supplied by the prolific Marcellus Shale fields in Susquehanna County, is designed primarily to displace gas imported from Canada and the Gulf Coast that now goes to the northeastern United States. The pipeline company is owned by Williams Partners LP, WGL Holdings Inc., and Cabot Oil & Gas Corp., the largest gas producer in the county.
But the pipeline also would serve some local customers, including industries and communities along its route through New York state north of the Catskills, where residents are desperate for any economic boost.
“There is no work here,” said Dick Downey, 82, an outspoken supporter of gas development and a board member of the Unatego Central School District in Otsego County, N.Y. “Our school district would save $80,000 a year in energy costs from natural gas at one school alone. That’s a teacher and an aide, when we’re bleeding jobs.”
“Without that job, I probably would have lost my home and my farm, because there was just no work,” he said.
The jurisdictional battle centers on interpretations of the Natural Gas Act, which designates FERC as the lead agency for coordinating federal authorizations for large interstate energy projects.
In 2014, FERC determined that the Constitution Pipeline’s benefits outweighed any adverse effects, including those on landowners and surrounding communities. It also found that the project would cause some adverse environmental impacts, but that the impacts would be reduced to “less-than-significant levels” with some mandated design modifications, including horizontal drilling beneath some streams to reduce disruptions to waterways.
FERC’s issuance of a “certificate of public convenience and necessity” gave Constitution Pipeline the legal authority to go to court to take easements by eminent domain from landowners who had declined to sign right-of-way agreements. It filed more than 120 condemnation proceedings in New York and 19 in Pennsylvania, including one against the Hollerans.
“We said no to a pipeline,” Megan Holleran said. “We assumed that meant something, and very quickly learned that it doesn’t.”
FERC’s approval was conditioned upon compliance with other federal laws, including the Clean Water Act, which requires projects to obtain permits to reduce the impact on streams and wetlands. In Pennsylvania and New York, the state environmental agencies are authorized to enforce the Clean Water Act through the approval of what are called Section 401 permits.
In Pennsylvania, which is the nation’s second-largest natural-gas producer because of the shale boom, the Department of Environmental Protection in 2015 granted the permits Constitution Pipeline needed.
But the pipeline company, represented by the law firm Saul Ewing, said the New York State Department of Environmental Conservation impermissibly dragged out its permit decision. In 2015, it said, the agency indicated that the company’s application was complete and “then ceased any meaningful communications with Constitution.”
A key part of Constitution’s claim that the decision was politically motivated cites a conversation said to have taken place in August 2015 between its contractor and a New York environmental official, Christopher Hogan, who indicated that “although NYSDEC was ready to issue the permits, the governor's office was not.”
New York issued its denial eight months later, on April 22, 2016 – Earth Day. It dismissed the significance of the “hearsay” conversation with the state environmental official, saying he was not the decision-maker “authorized to reach a position and bind the agency.”
The pipeline company argues that New York state undermined its challenge about the pipeline's design and route because it failed to seek a rehearing of the 2014 decision by FERC, which approved the pipeline plans.
In a separate federal court action filed in Albany, Constitution also unsuccessfully sought to forestall any efforts by the state to delay the pipeline through other regulatory actions. A federal judge dismissed that suit this month because it was premature – the pipeline company had not yet suffered any injury.
The Hollerans, who say their North Harford Maple operation suffered a palpable injury last year, said they had not yet received any compensation from the pipeline company, which rushed to clear their land before the annual March 31 timber-cutting ban went into effect to protect migratory birds and threatened bats.
The trees on some other properties are still standing, said Cathy Holleran, 60. “I swear they got us for spite.”
The Hollerans fired their lawyer and say they can’t find an appraiser who is not beholden to the gas industry to assess their property's reduced value because of the pipeline.
“We’re still hanging in limbo,” Cathy Holleran said. “Our family was devastated by this.”