Spectra pipeline under construction, but lawsuits pending

Efforts to block the high-profile pipeline extension are stuck in a holding pattern as a federal agency continues its review of project.

In May, Spectra Energy won approval from the Federal Energy Regulatory Commission to build a 16-mile extension of its Texas Eastern Transmission and Algonquin Gas Transmission pipelines. The expansion would boost the system’s capacity to transport natural gas to Manhattan and other parts of the region. The project has faced stiff opposition from Jersey City and community groups who see it as a safety risk to put the pipeline in a densely populated area.

Jersey City has asked FERC to reconsider its decision. Derek Fanciullo, assistant corporation counsel for the city, said the reconsideration request is necessary before the city can take further legal action.

In the meantime, the approval gave Spectra permission to begin building the pipeline. Marylee Hanley, a Spectra spokeswoman, said construction began July 9. The project is slated for completion in November 2013.

Fanciullo said there’s no clear timeline for when FERC will make its next move. FERC was supposed to respond to the city’s rehearing request within 30 days. Technically, they did so, Fanciullo said, but only to say they needed more time. Fanciullo said experts he’s talked to suggest it could be months before FERC acts.

“They think if we got something back by the end of the year from them, we might be lucky,” he said.

Fanciullo thinks it’s highly unlikely FERC will reverse course. If it doesn’t, he said, the city is committed to going up the legal ladder, which in this case would mean asking a federal court to review the matter.

Fanciullo said the city thinks it’s a losing strategy to simply ask the court to nitpick FERC’s decision in this particular case. Instead, the city plans to make the agency itself the issue.

“Part of what we’re saying is FERC is unconstitutional on its face,” he said.

Fanciullo said the agency is funded by fees and charges from the industries it regulates, which he argues skews its judgment. As evidence, he said, while FERC is supposed to consider alternative routes for pipeline projects, the agency has only once declined to approve a route originally proposed by the pipeline company. In the lone exception, he said the agency made only a minimal change, and asked the pipeline company’s permission first.

Fanciullo said the city is prepared to take the case to the Supreme Court, if necessary.

Meanwhile, other opponents are preparing for legal action. Dale Hardman, president of No Gas Pipeline, said his group stands ready to sue once FERC acts. He said other citizens’ groups have expressed plans to do the same.