As the recent decision in Algonquin Gas Transmission, LLC v. Weymouth Conservation Commission[1] illustrates, local units of government have limited options to foreclose the siting of natural gas pipelines and appurtenances. The Natural Gas Act (the “NGA”) provides FERC broad preemptive authority to site natural gas facilities, with only a few enumerated exceptions.[2]

On October 22, 2015, Algonquin Gas Transmission, LLC (“Algonquin”) and Maritimes & Northeast Pipeline, LLC (“Maritimes”) filed an application for a Certificate of Public Convenience and Necessity with the Federal Energy Regulatory Commission (“FERC”), seeking regulatory approval of their Atlantic Bridge natural gas pipeline project (the “AB Project”). As a part of the AB Project, Algonquin sought to construct a compressor station (the “Weymouth Compressor Station”) in the town of Weymouth, Massachusetts (the “Weymouth”) on land near the Fore River currently owned by Algonquin and on which Algonquin presently operates a pipeline and metering and regulating station. Following environmental review and the close of a public comment period, on January 25, 2017, FERC issued the Certificate of Public Convenience and Necessity (the “AB Certificate”), authorizing the construction and operation of the AB Project, including the Weymouth Compressor Station.[3]

Weymouth’s attempt to preclude construction of the Weymouth Compressor Station is a fascinating case study in the preemptive power of the NGA, as well as the extent localities try to apply NIMBY, even though natural gas supplies are well needed throughout New England.

As the Weymouth Compressor Station was to be located in a “coastal zone”, as defined by the Coastal Zone Management Act (“CZMA”),[4] affecting land regulated by the Massachusetts Coastal Management Program (“MCMP”), the AB Certificate required Algonquin and Maritimes to seek a consistency certification with the CZMA.[5] The Massachusetts Office of Coastal Zone Management (“MCZM”) has primary responsibility for regulating the MCMP. Weymouth passed a Wetlands Protection Ordinance (“WPO”) that intended to regulate Weymouth’s wetlands above and beyond the regulations and procedures provided by the Massachusetts Wetlands Protection Act (“WPA”), Mass. Gen. L. c. 131, § 40.[6] Local conservation commissions, including the Weymouth Conservation Commission (“WCC”) administer both the WPA and any relevant local ordinances like the WPO.[7] Part of the Weymouth Compressor Station was subject to the WPA and WPO.[8] While the AB Certificate encouraged Algonquin and Maritimes to cooperate with state and local authorities, it maintained that no “state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction or operation of facilities approved by” FERC.[9] On February 22, 2016, Algonquin filed a Notice of Intent with the WCC seeking an Order of Conditions (“OOC”) pursuant to the WPA and a WPO permit.[10] On June 15, 2016, the WCC issued a written decision denying the OOC and WPO permit, concluding that the construction of the Weymouth Compressor Station would threaten “resource areas and interest protected under the WPA and the WPO” on the basis of concerns about an excessive risk of explosions, damage to the facility because of hurricanes, and negative effects due to odors, noise and “visual impacts.”[11] However, previously on May 2, 2016, FERC had issued an environmental assessment for the AB Project that addressed issues including: (1) impact on wetlands (found Algonquin would not permanently fill any wetlands); (2) safety of the Weymouth Compressor Station; (3) potential air quality, noise, and visual effects from the Weymouth Compressor Station; and (4) risks of flooding or inundation of the land on which the Weymouth Compressor Station would be built.[12] FERC concluded that any impacts it had identified relating to the AB Project could be mitigated, thus “support[ing] a finding of no significant impact.” FERC concluded on this basis that a full environmental impact statement was not warranted.[13] Simply, FERC had addressed the WCC’s concerns and found them wanting.

Preemption may be express or implied.[14] Express preemption occurs when Congress has clearly defined the extent of preemption over state law.[15] Implied preemption has two subsets: conflict preemption and field preemption. By conflict preemption, a state law is preempted when it either makes “compliance with both federal and state regulations [] a physical impossibility,” or “stand[s] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”[16] A state law is preempted under field preemption when Congress has “occupied the field” by creating “a framework of regulation ‘so pervasive . . . that Congress left no room for the States to supplement it’” or “where there is a ‘federal interest . . . so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.’”[17] However, the NGA does not affect “the rights of States” with respect to (1) the Coastal Zone Management Act,[18] (the “CZMA”), (2) the Clean Air Act,[19] (“CAA”), or (3) the Federal Water Pollution Control Act,[20] (“FWPCA”).[21]

Weymouth asserted that the WPO was exempt from preemption as a lawful directive issued under the CZMA.[22] The district court disagreed. The court found that the WPO, its implementing regulations and the WCC’s denial of the requested permit were not promulgated under rights of States reserved by any of the three aforementioned federal laws.[23] Even though the MCZM, the state body responsible for CZMA applications in Massachusetts, stated in its “policy guide” that any application for a consistency concurrence must include the appropriate license or permit applications, including a Notice of Intent under the WPA, the policy guide further stated that MCZM will not concur if the relevant state permit is denied.[24] In other words, the MCZM within its CZMA authority that is expressly carved out from preemption by the NGA requires applicants such as Algonquin to have received a permit from local conservation committees such as the WCC.[25] However, this link between the MCZM and WPO was found insufficient by the court to save the order denying the OOC from preemption.[26] The court found that that the WPO was not passed pursuant to the authority reserved to the states under the CZMA, CAA or FWPCA, holding instead that the WPO was promulgated pursuant to Massachusetts state law.[27] It was simply too attenuated from the authority delegated to the State of Massachusetts under the CZMA to overcome the preemptive power of the NGA.[28] The court held: “[a]s such, [Defendants] ha[ve] failed to demonstrate that [their] laws are protected from preemption by one of the NGA’s statutory preemption exceptions.”[29]

Pipeline projects (including compressor stations) face heightened attacks, including challenges to their authority to exercise eminent domain—either under state law or the NGA. Such issues will continue to slow the construction of FERC approved pipeline projects.