Energy. Environment. Economy.

Delaware Riverkeeper sues FERC, alleging bias and corruption in pipeline cases

Jacqueline Evans, whose farm near Stockton, N.J., lies in the path of the proposed PennEast pipeline, speaks out against the project.

Emma Lee / WHYY

Jacqueline Evans, whose farm near Stockton, N.J., lies in the path of the proposed PennEast pipeline, speaks out against the project.

A Pennsylvania-based environmental group has stepped up its campaign against the Federal Energy Regulatory Commission in a lawsuit accusing the agency of corruption and routine bias toward the natural gas industry’s applications to build pipelines.

Delaware Riverkeeper Network says the agency, which regulates interstate pipelines, is unable to make objective decisions about whether a pipeline should be built because it is the only federal agency that is funded by the industries it regulates, including the natural gas industry.

In the suit, filed Wednesday in the U.S. District Court for the District of Columbia, the environmental group said FERC has approved every one of the natural gas pipeline applications that have come before it since 1986, and will not deny the projects because it recovers the full cost of its operations through the fees it charges to the industries it regulates.

“Because FERC gets its funding from the big companies it is supposed to be monitoring, it has become, perhaps inevitably, a corrupt, rogue agency,” said Maya van Rossum, who heads DRN.

As a result of its funding source, FERC’s operations contain a “structural bias” that violates the U.S. Constitution’s Fifth Amendment right of due process, the suit argues.

It seeks a court declaration that FERC’s pipeline-approval method is biased, that its funding structure is unconstitutional, and that it has unconstitutional powers to assert eminent domain over private land owners.

The suit also says FERC has unconstitutional powers to pre-empt state and local authorities in adjudicating pipeline applications, such as that for the proposed Penn East Pipeline, a natural gas line from northeastern Pennsylvania to central New Jersey, which DRN has strenuously opposed.

“Because the Commission is responsible for approving natural gas pipeline project applications to generate all of its budgetary income for the natural gas pipeline program, the Commission faces the impermissible ‘possible temptation’ to be biased toward approving jurisdictional natural gas pipeline projects, such as the Penn East project, and favoring pipeline company interests regardless of the legitimacy of the opposition of, or justifiable need for, the project proposals,” the complaint says.

Tamara Young-Allen, a spokeswoman for FERC, declined to comment on the lawsuit or any of the claims made in it.

In its budget request to Congress for fiscal 2017, the agency said it recovers the full cost of its operations “through annual charges and filing fees assessed on the industries it regulates” as authorized by two laws.

FERC has approved applications for natural gas pipelines such as Penn East because of an unconstitutional funding method, lawsuit alleges.

Susan Phillips / StateImpact Pennsylvania

FERC has approved applications for natural gas pipelines such as Penn East because of an unconstitutional funding method, lawsuit alleges.

In January, DRN was among 165 organizations that asked the Government Accountability Office to investigate FERC, saying the agency was biased in its adjudication of pipeline applications.

The new lawsuit adds to the January initiative in seeking reform of the agency, van Rossum said.

“These are complimentary actions both designed to secure needed reforms of this rogue agency that is doing so much damage to so many,” she told StateImpact. She said the number of organizations backing the call to GAO has now grown to 238, nationwide.

Van Rossum said the new suit is the first to challenge the constitutionality of how FERC is funded and makes its decisions. She said DRN’s assertion that FERC has approved every pipeline application since 1986 is based on its examination of FERC dockets.

As Pennsylvania’s natural gas industry prepares to build tens of thousands of miles of pipeline to take more of the state’s abundant Marcellus Shale gas reserves to market, companies are battling some landowners for the right to build pipelines on private land.

Pipeline builders include Williams Companies, which plans to build the Constitution Pipeline to take Marcellus gas from Pennsylvania’s Susquehanna County to New York State, and which has obtained eminent domain over some private properties after getting approval for the project from FERC.

Asked to respond to DRN’s claim that FERC is biased, Tom Droege, a spokesman for Williams, said FERC’s approval for the Constitution line followed a long investigation that took public opinion into account.

“FERC approved construction of this key piece of natural gas infrastructure after a long and comprehensive review involving significant input and participation from the public,” Droege wrote in an email. “Once in service, the Constitution Pipeline will provide millions of consumers in the Northeast with cleaner energy, as desired by the public.”

Steve Miano, an environmental lawyer with Hangley Aronchick Segal Pudlin & Schiller in Philadelphia, predicted that DRN will have an “uphill battle” to persuade a court that FERC’s funding mechanism means it is unconstitutionally biased in its pipeline decisions.

“They are going to have a challenge to convince a federal judge that a federal agency, which is not a profit-making organization, is inherently corrupt because its programs are based on fees that are paid by the regulated industry,” Miano said.

“The way that it’s funded might be unique but the fact that it’s ultimately funded by fees does not translate to the type of bias they are alleging,” he said.

Miano called the suit a “very fundamental” attack on FERC that seems to be seeking to dismantle all of the agency’s regulatory power.

Whether or not the plaintiffs succeed, the suit may be part of DRN’s very public fight against the planned Penn East Pipeline, Miano said.

“Sometimes in these kinds of cases, you try and bring such a fundamental complaint against an agency that the agency gets nervous about it and then would just as soon settle this one and not fight the larger issue,” he said.


  • FrackmanGasser

    DRC has no concept of how the approval process goes; they look at the final outcome only. Approvals are only granted after a multi-step application process and FERC often requires changes to the plans before final approval. From the FERC website:

    “Under section 7 of the Natural Gas Act, the Commission reviews
    applications for the construction and operation of natural gas
    pipelines. In its application review, the Commission ensures that the
    applicant has certified that it will comply with Department of
    Transportation safety standards. The Commission has no jurisdiction
    over pipeline safety or security, but actively works with other agencies
    with safety and security responsibilities. To meet the growing demand
    for natural gas, the Commission must continue to respond quickly when
    companies propose to expand and construct needed pipelines and related
    facilities. The Commission has expedited the certification of natural
    gas pipelines by having Commission staff actively participate in
    projects that were using the pre-filing process to engage stakeholders
    in the identification and resolution of stakeholder concerns prior to
    the filing of a certificate application with the Commission. The
    staff’s participation and initiative in these efforts will allow for the
    filing of better certificate applications enabling more efficient and
    expeditious licensing actions by the Commission”

    I don’t think this lawsuit will go far; it’s just a grandstanding effort by DRC.

    • Pipeline Awareness

      May you have the opportunity to drink the “water,” from Fracking. And, FERC is under fire and the flames are being fanned across the United States.

      • John Henders

        It is more likely we are electing Donald Trump as president, because he has INCREASED voters in our country to almost DOUBLE the Dem’s, so we should be rid of your types this year! Goodbye & good riddance!

        • DeanMarshall

          A buffoon supported by the uneducated and ill informed!

    • Rich Garella

      Two days after Delaware Riverkeeper filed the lawsuit:
      FERC Denies Jordan Cove LNG Export Terminal and Pacific Connector Pipeline
      On Friday, the Federal Energy Regulatory Commission (FERC) rejected the proposal for the Jordan Cove LNG Export Terminal and Pacific Connector Pipeline because its public interest value did not outweigh the project’s adverse effects.
      What an amazing coincidence!

  • crystalpoint

    Do any of the people who make up this group, i.e. the Delaware Riverkeeper Network, dive a car or truck ride, a motorcycle, or fly in an airplane and most of all heat your homes? Where do all of you think the fuel to power any of the above, comes from? All such fuel for your use is transported initially by pipelines!

    How would any of you survive, without a pipeline, or would you like to see the fuel transported by “Rail”? Instead of suing everybody, get together and discuss the realization, that, none of us could survive without pipelines to transport our Oil & Gas?

    Why not after you realize the truth, and the necessity of pipelines, go fishing, or find something better and useful to do?


    • Pipeline Awareness

      Do any of the people responding here realize that the United States Government subsidizes the oil and gas industry with your tax dollars; do any of the people responding here realize that we have the technology to leave fossil fuels behind but the corporations who own Congress are hell bent on stuffing their pockets even more. Do any of the people responding here realize that the American Dream is no longer a viable condition if a pipeline company wants your land. Working to own our piece of the pie for more than 40 years our property is now at risk because the Williams Company wants to build the Pacific Connector Gas Pipeline in Oregon taking the properties of more than 600 Oregonians. Fewer than 3% of the private landowners have signed on so Williams and their Canadian Partner can ship fracked LNG to Asia causing U.S. energy prices to rise and the taking of your neighbor’s properties. Go fishing? Sure, the pipeline in Oregon will kill and endanger more than 20 threatened species and cross more than 400 water bodies in tributaries and wetland areas that are already experiencing conditions that are killing the fish from over-logging. Crystal point you need some learnin’ my friend. . . Because you do not know what you are talking about. And, by the way we can survive without oil and gas what we cannot survive is the warming of this planet caused by oil and gas. Please pay better attention!

  • William Huston

    I applaud Maya and the DRN in taking these important actions. In fact, FERC are lawless rogues who violate our nation’s laws in every pipeline project I have studied (dozens).

    If you want to get some idea as to all the ways that FERC routinely trample on the law, as they destroy forests and democracy, check here:

    Please note I only included the dozens of violations of law regarding the “Constitution” Pipeline. For example, while CP got a full Environmental Impact Statement (EIS) many projects are being fast-tracked by a legally dubious scheme whereby projects with significant environmental impacts are overlooked due to having a short “Environmental Assesment” (EA) only. If you want more info on this, go to my blog and type FONSI in the search box.

    • Pipeline Awareness

      Thank you for your work! FERC needs to be FRACKED DOWN!

  • Ozzy Ezell

    The green collar apparatchiks will have to erase the Interstate Commerce Clause from the United States Constitution in order to prevail. There has been a large body of case law built up in the Federal Court’s since 1936 enshrining the I.C.C. since 1936. This case law includes a lot of SCOTUS cases upholding civil rights law since 1965.

    • Pipeline Awareness

      You are correct and guess what . . . . SCOTUS is about to change and with it the “Corporations are people too,” myth. Community rights above corporate rights.

  • John Henders

    More delays from the most foolish groups, with DRN contesting as the leader.
    Time to ignore these few and get these pipeline moving so we can help our environment with natural gas!

    • Pipeline Awareness

      Ignore these few. . . .the signers from Oregon alone represent more than 5,000 people . . . . Natural Gas is more dangerous than you can imagine. Have you heard of methane? Have you heard of methane leaks? Have you heard of methane contributing to the greenhouse effect in a much more significant way that ever imagined. Natural gas is not a bridge fuel it is a bridge to nowhere.

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