Dewey & LeBoeuf recently helped secure a significant victory in the U.S. Court of Appeals for the Second Circuit for Inergy, L.P. and its subsidiary Central New York Oil And Gas Company, L.L.C. (“CNYOG”) in an important case which clears the way for the development of the company’s $257 million Marcellus Shale pipeline project. Upon completion, the pipeline will transport natural gas produced in Pennsylvania’s Marcellus Shale, one of the nation’s largest known natural gas supply resources, to several major interstate pipelines.
On February 14, 2012, various environmental groups, led by the Sierra Club and its counsel, Earth Justice, filed a petition in the Second Circuit to overturn Federal Energy Regulatory Commission (“FERC”) orders authorizing CNYOG to construct and operate a 39-mile interstate natural gas pipeline in north central Pennsylvania known as the MARC I pipeline. The purpose of the MARC I pipeline is to provide much-needed access to interstate markets for natural gas to be produced from the Marcellus Shale.
Petitioners alleged that FERC violated the National Environmental Policy Act (“NEPA”) by approving the MARC I pipeline without considering the environmental impacts of Marcellus Shale well drilling and associated infrastructure development. FERC had concluded that NEPA did not require it to analyze environmental impacts related to Marcellus Shale well drilling because those activities are outside its jurisdiction and are not readily evaluated other than in a general manner given the many uncertainties involved. The Petitioners requested an emergency stay of construction and tree clearance activity for the proposed interstate pipeline pending further review of the court. That emergency stay was granted by the Second Circuit on February 17, 2012; with it, all construction work on the MARC I project was suspended.
CNYOG successfully intervened in the Second Circuit proceeding, and oral arguments on the emergency motion for stay were held before a three judge panel in the Second Circuit courthouse on February 28, 2012, during which Dewey & LeBoeuf Partner Robert J. Alessi argued on behalf of CNYOG. In his argument, Mr. Alessi pointed the court to extensive record support for FERC’s determination that its environmental review of the related Marcellus Shale well drilling impacts were factually grounded and legally sound under applicable court precedent. He also detailed for the court the substantial harm that continuation of the stay would impose on the MARC I project and on CNYOG, which stood to lose as much as $80 million, and potentially faced the failure of the project altogether, unless the stay were lifted.
Later that same day, the Second Circuit denied the emergency motion and vacated its earlier emergency temporary stay. As a result of Dewey & LeBoeuf’s efforts, CNYOG’s construction of the MARC I pipeline may now resume. Husch Blackwell LLP served as co-counsel to CNYOG.
The Dewey & LeBoeuf team included Partners James F. Bowe, Jr. and Robert J. Alessi, and Associates Jeffrey D. Kuhn and Gregory G. Nickson.
