Delaware Riverkeeper Network v. Sec Pa Dept Environmental Prot ( 2017 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 17-1533
_____________
DELAWARE RIVERKEEPER NETWORK;
MAYA VAN ROSSUM, the Delaware Riverkeeper,
Petitioners
v.
SECRETARY OF THE PENNSYLVANIA DEPARTMENT
OF ENVIRONMENTAL PROTECTION;
PENNSYLVANIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Respondents
Tennessee Gas Pipeline Co.,
Intervenor
On Petition for Review from the Pennsylvania Department of
Environmental Protection
WQ02-002
E52-253
E63-305
FERC-1 : FERC CP16-4
Argued July 13, 2017
Before: SMITH, Chief Judge, NYGAARD, and FUENTES,
Circuit Judges
(Filed: August 30, 2017)
Aaron J. Stemplewicz [ARGUED]
Delaware Riverkeeper Network
925 Canal Street, Suite 3701
Bristol, PA 19007
Counsel for Petitioners
Alexandra C. Chiaruttini
Joseph S. Cigan III [ARGUED]
Commonwealth of Pennsylvania
Department of Environmental Protection
2 Public Square
Wilkes-Barre, PA 18701
Kimberly Hummel Childe
Office of Attorney General of Pennsylvania
Department of Environmental Resources
9th Floor
P.O. Box 8464
Harrisburg, PA 17105
Counsel for Respondents
Pamela S. Goodwin
Saul Ewing
650 College Road East, Suite 4000
Princeton, NJ 08540
2
Patrick F. Nugent
John F. Stoviak [ARGUED]
Saul Ewing
1500 Market Street
Centre Square West, 38th Floor
Philadelphia, PA 19102
Elizabeth U. Witmer
Saul Ewing
1200 Liberty Ridge Drive, Suite 200
Wayne, PA 19087
Counsel for Intervenor Respondent
________________
OPINION OF THE COURT
________________
SMITH, Chief Judge.
Tennessee Gas Pipeline Co. (“Tennessee Gas”) submitted
applications to several federal and state agencies seeking
approval to build an interstate pipeline project. One such
agency is the Pennsylvania Department of Environmental
Protection (“PADEP”),1 which issued a permit approving the
1
A companion case, also before this panel, raises
challenges to the United States Army Corps of Engineers. See
Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs, No.
17-1506 (3d Cir. 2017).
3
project. The petitioners, Maya van Rossum and Delaware
Riverkeeper Network (collectively, “Riverkeeper”), argue that
we lack jurisdiction to rule on its petition because PADEP’s
order was not final. As to the merits, Riverkeeper challenges
PADEP’s decision on the grounds that the agency made an
erroneous “water dependency” finding and improperly rejected
a “compression” alternative to the pipeline project.
We will exercise jurisdiction because PADEP’s decision
was final. We will also uphold PADEP’s decision on the merits
because the agency’s unique interpretation of water
dependency is reasonable and worthy of deference.
Furthermore, the agency considered and rejected the
compression alternative for reasons that are supported by the
record. We will therefore deny the petition for review.
I
At issue is the so-called Orion Project—12.9 miles of
pipeline looping that would transport 135,000 dekatherms of
natural gas per day via Pennsylvania. Approximately 99.5% of
the new pipeline would run alongside existing pipelines.
Full background information on the Orion Project is
provided in a companion case, Delaware Riverkeeper Network
v. U.S. Army Corps of Engineers, No. 17-1506 (3d Cir. 2017).
For purposes of this opinion, we will focus on the aspects of
the state administrative procedures at issue here.
Under the Natural Gas Act of 1938, the Federal Energy
Regulatory Commission (“FERC”) is the “lead agency” for
evaluating interstate pipeline projects. 15 U.S.C. § 717n(b). As
4
a condition of FERC approval, the applicant is required to
obtain any other state or federal licenses required by law. One
such license is called a Water Quality Certification governed
by Section 401 of the Clean Water Act. 33 U.S.C. § 1341. “A
Water Quality Certification confirms that a given facility will
comply with federal discharge limitations and state water
quality standards.” Del. Riverkeeper Network v. Sec'y Pa. Dep’t
of Envtl. Prot., 833 F.3d 360, 368 (3d Cir. 2016), as amended
(March 24, 2017). “For activities affecting Pennsylvania
waters, . . . Water Quality Certifications are issued by PADEP.”
Id. at 369.
As a condition of obtaining a Water Quality Certification,
PADEP requires applicants to obtain other state permits,
including a Water Obstruction and Encroachment Permit
issued under Pennsylvania’s Dam Safety and Encroachment
Act and its implementing regulations, 25 Pa. Code Ch. 105.
Those permits are commonly referred to as “Chapter 105
permits.”
Chapter 105 gives special protection to “exceptional value”
wetlands. Wetlands are considered to have exceptional value
if, inter alia, they are located along a drinking water supply or
serve as habitat for endangered species. See 25 Pa. Code
§ 105.17(1). It is undisputed that the Orion Project would affect
ten exceptional-value wetlands in Pike County and three in
Wayne County.
PADEP cannot issue a Chapter 105 permit for a project
affecting exceptional-value wetlands unless it certifies in
writing that seven requirements are met. 25 Pa. Code
§ 105.18a. Two are relevant here:
5
(2) The project is water-dependent. A project is
water-dependent when the project requires
access or proximity to or siting within the
wetland to fulfill the basic purposes of the
project.
(3) There is no practicable alternative to the
proposed project that would not involve a
wetland or that would have less effect on the
wetland, and not have other significant adverse
effects on the environment.
Id. § 105.18a(a)(2)–(3).
On September 20, 2016, PADEP issued a conditional Water
Quality Certification for the Orion Project. Then, on February
23, 2017, PADEP issued two Chapter 105 permits approving
the Orion Project’s stream and wetland crossings—Permit Nos.
E52-253 (Pike County) and E64-305 (Wayne County). In
doing so, PADEP certified that the Orion Project “[i]s water
dependent” and would be “the least environmentally damaging
alternative.” JA 49, 180.
On March 10, 2017, Riverkeeper filed this petition for
review. We granted Tennessee Gas’s motion to intervene on
March 17, 2017. Riverkeeper filed a motion for an emergency
stay, which this Court denied on April 7, 2017. Riverkeeper
then filed a motion to expedite the case. We granted that motion
on May 8, 2017.
6
II
The parties ask us to resolve two jurisdictional issues:
(1) whether we may review nonfinal administrative orders
under the Natural Gas Act; and (2) whether the petition was
timely filed. We need not reach the first question. The agency
decision at issue is final, and therefore jurisdiction would be
proper under either interpretation of the Natural Gas Act. As
for the second question, we conclude that the petition was
timely filed.
A
First, Riverkeeper argues that we lack jurisdiction because
we may only review final orders, and PADEP’s order is not
final until it has been reviewed by a separate administrative
entity, Pennsylvania’s Environmental Hearing Board.
Riverkeeper asks us to transfer the case to the Board.2 We
conclude that jurisdiction is proper because PADEP’s order is
final.
1
Our jurisdiction is controlled by Section 19(d) of the
Natural Gas Act, as amended in 2005. Where an interstate
pipeline project is proposed to be constructed, see 15 U.S.C.
2
Because we conclude that jurisdiction is proper, we
need not address Riverkeeper’s request for a transfer. See
McLaughlin v. Arco Polymers, Inc., 721 F.2d 426, 430 (3d Cir.
1983); see also Moravian Sch. Advisory Bd. of St. Thomas, V.I.
v. Rawlins, 70 F.3d 270, 276 (3d Cir. 1995).
7
§ 717f, this Court has “original and exclusive jurisdiction over
any civil action for the review of an order or action of a . . .
State administrative agency acting pursuant to Federal law to
issue . . . any permit, license, concurrence, or approval . . .
required under Federal law,” id. § 717r(d)(1).
In a recent precedential opinion, this Court exercised
jurisdiction over a similar PADEP decision involving the
“Leidy Line” pipeline project. Del. Riverkeeper, 833 F.3d 360.
The petitioner, also Riverkeeper, challenged PADEP’s decision
to issue a Water Quality Certification. This Court concluded
that “the issuance of a Water Quality Certification is not purely
a matter of state law” because the certification “is an integral
element of the regulatory scheme established by the Clean
Water Act.” Id. at 371. Thus, PADEP was “acting pursuant to
Federal law” within the meaning of the Natural Gas Act. 15
U.S.C. § 717r(d)(1). We also exercised jurisdiction over
various permits issued by the New Jersey Department of
Environmental Protection, even though some permits were
“governed by state law rather than the Clean Water Act.” Del.
Riverkeeper, 833 F.3d at 374. Because those state-law permits
were, “in effect, a set of conditions” on obtaining approval
under the Clean Water Act, id. (citing 33 U.S.C. § 1341(d)),
they were issued “pursuant to Federal law,” 15 U.S.C.
§ 717r(d)(1). Likewise here, the Chapter 105 permits were
conditions of federal approval and therefore were issued
“pursuant to Federal law.” Id.; see Del. Riverkeeper, 833 F.3d
at 386 (“Because the Chapter 105 Permit was a condition of
the Water Quality Certification, it is inextricably intertwined
with the Water Quality Certification.”).
8
After the Leidy Line ruling, the First Circuit decided
Berkshire Environmental Action Team, Inc. v. Tennessee Gas
Pipeline Co., LLC, 851 F.3d 105 (1st Cir. 2017). Berkshire
ruled on an issue that was not raised in the Leidy Line case:
finality.
First, Berkshire held that § 717r(d)(1) includes an unstated
finality requirement. Even though the statute does not use the
word “final,” the First Circuit read that word into the statute
based on the “strong presumption . . . that judicial review will
be available only when agency action becomes final.” Id. at
109 (quoting Bell v. New Jersey, 461 U.S. 773, 778 (1983));
see also Columbia Riverkeeper v. U.S. Coast Guard, 761 F.3d
1084, 1092 (9th Cir. 2014). But see Tenn. Gas Pipeline Co.
LLC v. Del. Riverkeeper Network, 921 F. Supp. 2d 381, 391
(M.D. Pa. 2013).3
Second, Berkshire concluded that the particular agency
decision at issue was not final. It evaluated “[t]he substance of
the Massachusetts regulatory regime,” Berkshire, 851 F.3d at
112, and concluded that the applicant (also Tennessee Gas) was
required to go through an additional adjudicatory hearing
3
But see also Energy Transfer Partners, L.P. v.
F.E.R.C., 567 F.3d 134, 139 (5th Cir. 2009) (“Our court
has long recognized that [§ 717r(b), governing appeals
from FERC,] does not require that an order be a ‘final’ one[.]”);
Atl. Seaboard Corp. v. Fed. Power Comm’n, 201 F.2d 568, 572
(4th Cir. 1953) (“The commission argues that the order which
we are asked to review is not a definitive or final order of the
commission; but our power to review is not limited to final
orders.”).
9
before the agency action would be ripe for review. Berkshire
characterized the adjudicatory hearing as a continuation of “a
single, unitary proceeding” that had not yet finally concluded.
Id.Although the Leidy Line case was procedurally similar to
this one, the finality issue was not presented and remains
unresolved in this circuit. We must therefore address it. See,
e.g., Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 211 (3d
Cir. 2007) (“[A] court of appeals has both the inherent
authority and a continuing obligation to assess whether it has
jurisdiction over a case or controversy before rendering a
decision on the merits.”).
2
Riverkeeper argues that we should follow Berkshire’s
holding and read a finality requirement into § 717r(d)(1).
Riverkeeper further argues that PADEP’s order is not final
because Pennsylvania’s administrative scheme is analogous to
Massachusetts’s. We need not rule on whether § 717r(d)(1)
includes an unstated finality requirement. In either case, our
jurisdiction is proper because the agency action here is
administratively final.
“Our cases have interpreted pragmatically the requirement
of administrative finality, focusing on whether judicial review
at the time will disrupt the administrative process.” Bell, 461
U.S. at 779. Final agency action “must mark the
‘consummation’ of the agency’s decisionmaking process,”
“must not be of a merely tentative or interlocutory nature,” and
“must be one by which ‘rights or obligations have been
10
determined,’ or from which ‘legal consequences will flow.’”
Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (quoting
Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp.,
333 U.S. 103, 113 (1948) and Port of Boston Marine Terminal
Assn. v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71
(1970)).
According to Riverkeeper, Pennsylvania’s administrative
process does not reach a final conclusion until PADEP’s order
has been reviewed by a separate administrative entity, the
Environmental Hearing Board. In support of that proposition,
Riverkeeper cites the Pennsylvania statute governing the
Board’s jurisdiction:
[N]o action of the department [PADEP4]
adversely affecting a person shall be final as to
that person until the person has had the
opportunity to appeal the action to the board . . . .
If a person has not perfected an appeal in
accordance with the regulations of the board, the
department’s action shall be final as to the
person.
4
Note that the statute defines “Department” as “The
Department of Environmental Resources of the
Commonwealth.” 35 P.S. § 7512. Nonetheless, the parties
appear to agree that the statute applies to that agency’s more
recent incarnation, the Department of Environmental
Protection. See Texas Keystone Inc. v. Pa. Dep’t of
Conservation & Nat. Res., 851 A.2d 228, 239 (Pa. Commw.
Ct. 2004).
11
35 P.S. § 7514(c). Riverkeeper seizes on the first sentence to
argue that there has been no “appeal . . . to the board,” id., and
therefore the administrative process has not culminated in a
final decision over which we may exercise jurisdiction.
Assuming (without deciding) that § 7514(c) controls
appellate ripeness,5 the order in question is nonetheless final
because Riverkeeper “has not perfected an appeal in
accordance with the regulations of the board.” Id. The relevant
regulation provides that an appeal to the Environmental
Hearing Board must be filed within “[t]hirty days after the
notice of the action has been published in the Pennsylvania
Bulletin.” 25 Pa. Code § 1021.52(a)(2)(i). PADEP published
notice on October 8, 2016. This petition was filed in March
2017, and Riverkeeper did not take an appeal to the
Environmental Hearing Board in the interim. Thus, PADEP’s
order became “final” under 35 P.S. § 7514(c) in November
5
Paradoxically, the Board appears to apply its own finality
requirement that approximates the federal standard,
notwithstanding § 7514(c). See Law v. Dep’t of Envtl. Prot.,
No. 1071 C.D. 2008, 2009 WL 9096519, at *2 (Pa. Commw.
Ct. Jan. 23, 2009) (“[A] letter does not constitute an
adjudication or a final decision or an appealable order from
which an appeal can be taken from the Department to the
Board.”); Commonwealth of Pennsylvania Environmental
Hearing Board, Practice and Procedure Manual at 6–7 (2015
ed.) (citing multiple decisions for the proposition that the
Board has jurisdiction “over final Department actions
adversely affecting personal or property rights, privileges,
immunities, duties, liabilities or obligations of a person”).
12
2016. See Com., Dep’t of Envtl. Prot. v. Cromwell Twp., 32
A.3d 639, 653 (Pa. 2011) (“[T]he failure to appeal within thirty
days rendered DEP’s action final.”); Otte v. Covington Twp.
Rd. Sup’rs, 650 A.2d 412, 414 (Pa. 1994); cf. Berkshire, 851
F.3d at 108 (noting that the petitioners dual-filed by “filing a
Notice of Claim for Adjudicatory Hearing,” and also “hedged
their bets” by filing a petition before the First Circuit).6
Apart from § 7514(c), PADEP’s permits also bear the
traditional hallmarks of final agency action. There is nothing
left for the agency to do, and thus PADEP’s decision “mark[s]
the ‘consummation’ of the agency’s decisionmaking process”
and is not “of a merely tentative or interlocutory nature.”
Bennett, 520 U.S. at 178 (quoting Chicago & Southern Air
Lines, 333 U.S. at 113). Furthermore, its order is “one by which
‘rights or obligations have been determined,’ [and] from which
‘legal consequences will flow.’” Id. (quoting Port of Boston
Marine Terminal Assn., 400 U.S. at 71). As each permit states,
6
Riverkeeper objects, contending that PADEP’s order
is not final because Riverkeeper may attempt to file an
appeal nunc pro tunc before the Environmental Hearing
Board. See 25 Pa. Code § 1021.53a; Twp. of Robinson v.
Dep’t of Envtl. Prot., No. 451 C.D. 2007, 2008 WL
9405218, at *4 (Pa. Commw. Ct. July 3, 2008). But by that
logic, a PADEP decision would never become final under
the second sentence of § 7514(c). As the case comes
before us, there has been no appeal to the Board, and in
applying the text of § 7514(c), we do not think it would be
appropriate to speculate about whether the Board would
accept a nunc pro tunc appeal.
13
“This permit authorizes the construction, operation,
maintenance and normal repair of the permitted structures.” JA
36; JA 167; see Transcript of Oral Argument at 31:24–32:3
(“When that permit issued and we had the approval of FERC
. . . , we started construction . . . .”); NE Hub Partners, L.P. v.
CNG Transmission Corp., 239 F.3d 333, 346 (3d Cir. 2001)
(“Pa.D.E.P. permits are valid pending the E.H.B. outcome . . .
.”); Com., Dep’t of Envtl. Res. v. Bethlehem Steel Corp., 367
A.2d 222, 229 (Pa. 1976) (holding that jurisdiction existed to
enforce a consent order issued by the Department despite a
pending appeal before the Board seeking modification); cf.
Berkshire, 851 F.3d at 108 (noting that construction could not
begin until “the expiration of the Appeal Period set forth below
and any appeal proceedings that may result from an appeal”).
Thus, by combination of § 7514(c) and the practical
significance of PADEP’s permits, we conclude that we are
reviewing final agency action. Our jurisdiction is proper
regardless of whether the Natural Gas Act limits our review to
final orders. We note, however, that there are cases pending
before this Court where the petitioners dual-filed appeals
before the Environmental Hearing Board. See, e.g., Docket
Nos. 16-2212, 16-2218, 16-2400. Those actions ask this Court
to review orders that are arguably nonfinal under § 7514(c).
Whether the Natural Gas Act requires finality and how such a
requirement would interact with Pennsylvania’s administrative
scheme are issues better resolved in those cases.
B
PADEP argues that, because Riverkeeper’s petition would
be untimely before the Environmental Hearing Board, it is also
14
untimely before us. We reject that argument because the
regulation governing appeals before the Environmental
Hearing Board does not define the timeliness of petitions
before this Court.
Under Rule 15 of the Federal Rules of Appellate Procedure,
“[r]eview of an agency order is commenced by filing, within
the time prescribed by law, a petition for review.” Fed. R. App.
P. 15(a)(1) (emphasis added). “The procedures set forth in
subsection (a) of Rule 15 are jurisdictional.” Wisniewski v.
Dir., Office of Workers’ Comp. Programs, U.S. Dep’t of Labor,
929 F.2d 952, 954 (3d Cir. 1991).
According to PADEP, “the time prescribed by law,” Fed. R.
App. P. 15(a)(1), refers to the state regulatory provision that
governs appeals from PADEP to the Environmental Hearing
Board. As described above, the appeal must be filed within
“[t]hirty days after the notice of the action has been published
in the Pennsylvania Bulletin.” 25 Pa. Code § 1021.52(a)(2)(i).
But this is not an appeal before the Environmental Hearing
Board, and the Board’s regulations are not binding on us.
Rather, Rule 15 “defin[es] the time for filing a petition for
review with reference to the statute providing for review of the
agency’s orders.” United Gas Pipe Line Co. v. FERC, 824 F.2d
417, 435 (5th Cir. 1987). That refers to Section 19(d) of the
Natural Gas Act. See Islander E. Pipeline Co., LLC v. Conn.
Dep’t of Envtl. Prot., 482 F.3d 79, 83–84 (2d Cir. 2006) (“[T]he
NGA . . . provides an expedited direct cause of action in the
federal appellate courts to challenge a state administrative
agency’s order . . . .”).
15
For appeals from FERC, the Natural Gas Act prescribes a
sixty-day limitations period. See 15 U.S.C. § 717r(b). For
appeals from other federal agencies and state agencies,
however, the statute provides no limitation. See id.
§ 717r(d)(1). Whether timeliness is governed by the four-year
catchall limitations period established by 28 U.S.C. § 1658(a),7
or laches, Schaefer v. NLRB, 697 F.2d 558, 560–61 (3d Cir.
1983), we are unable to conclude that Riverkeeper filed its
petition out of time.
Accordingly, jurisdiction is proper under the Natural Gas
Act and under Rule 15 of the Federal Rules of Appellate
Procedure.
III
Turning to the merits, we review for arbitrary or capricious
agency action. Del. Riverkeeper, 833 F.3d at 377.8 Riverkeeper
argues that PADEP erred under that standard for two reasons.
First, Riverkeeper argues that PADEP made an erroneous
7
Although not raised by the parties, 28 U.S.C. § 1658(a)
establishes a four-year limitations period for any “civil action
arising under an Act of Congress enacted after” December 1,
1990. See Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369,
382 (2004); N. Star Steel Co. v. Thomas, 515 U.S. 29, 34 n.*
(1995).
8
The arbitrary-and-capricious standard derives from the
Administrative Procedure Act, 5 U.S.C. § 706(2)(A), which
does not cover state agencies, see id. § 701(b)(1). Nonetheless,
this court and others have applied that standard. See, e.g., Del.
Riverkeeper, 833 F.3d at 377; Islander, 482 F.3d at 94.
16
“water dependency” finding. Second, Riverkeeper argues that
PADEP erred by ruling out a “compression” alternative. We
reject both arguments in turn.
A
PADEP determined that the Orion Project is “water
dependent.” According to Riverkeeper, that finding was
erroneous because linear infrastructure projects (like pipelines
and roads) are categorically not water dependent. PADEP
acknowledges that, under federal law, Riverkeeper might be
right. But under Pennsylvania law, PADEP argues, water
dependency operates differently. We conclude that PADEP has
provided a reasonable explanation for how its regulations
differ, and we will defer to its interpretation.
Because the Orion Project would construct pipeline looping
through “exceptional value” wetlands, 25 Pa. Code
§ 105.17(1), PADEP cannot approve the project without first
certifying that “[t]he project is water-dependent,” 25 Pa. Code
§ 105.18a(a)(2). “A project is water-dependent when the
project requires access or proximity to or siting within the
wetland to fulfill the basic purposes of the project.” Id.Riverkeeper thus argues, by reference to federal law, that
pipelines and other types of linear infrastructure are
categorically not water dependent. It relies on the following
explanation of water dependency by a federal agency, the
United States Army Corps of Engineers:
[T]he purpose of a residential development is to
provide housing for people. Houses do not have
17
to be located in a special aquatic site to fulfill the
basic purpose of the project, i.e., providing
shelter. Therefore, a residential development is
not water dependent. . . . Examples of water
dependent projects include, but are not limited
to, dams, marinas, mooring facilities, and docks.
The basic purpose of these projects is to provide
access to the water.
Sierra Club v. Van Antwerp, 709 F. Supp. 2d 1254, 1261 (S.D.
Fla. 2009) (quoting Army Corps of Engineers Standard
Operating Procedures for the Regulatory Program (October 15,
1999)), aff’d, 362 F. App’x 100 (11th Cir. 2010). Under that
understanding, Riverkeeper argues that pipeline projects are
not water dependent because, unlike a dam, marina, or dock,
pipelines are not by their nature dependent on being in or near
water—even if the desired construction path would cross a
wetland or waterbody. See, e.g., Coastal Conservation League
v. U.S. Army Corps of Eng’rs, No. 4:16-cv-03008, 2016 WL
6823375, at *14 (D.S.C. Nov. 18, 2016) (noting that a road
project is not water dependent even though “expanding and
improving the road cannot occur without impacting special
aquatic sites”).
In the context of the federal regulatory scheme, that
understanding of water dependency makes sense. If a project
is water dependent, like a dam, it is impossible to construct
without impacting an aquatic site. But if a project is not water
dependent, “practicable alternatives that do not involve special
aquatic sites are presumed to be available, unless clearly
demonstrated otherwise.” 40 C.F.R. § 230.10(a)(3). In other
words, the agency will presume that the applicant can select a
18
different pipeline route or other alternative that does not affect
an aquatic site. If the applicant rebuts that presumption, the
project does not become “water dependent”; the applicant has
simply met its burden under the regulation. In other words, the
water-dependency finding comes first and the alternatives
analysis comes second.
PADEP took a different approach. It observed that the
proposed pipeline looping “needs to cross the wetland areas to
access land on either side of the wetland system” because
“there are no practicable crossing alternatives to avoid the
crossing.” JA 49, 180. Indeed, “[l]inear infrastructure projects
of any significant length proposed in Pennsylvania will
encounter surface waters, including wetlands.” Resp. Br. 14.
By rejecting alternatives to the Orion Project and observing the
pipeline’s path would unavoidably traverse wetlands, PADEP
concluded that the Orion Project is water dependent. Rather
than treating water dependency and alternatives analysis as two
distinct inquiries, PADEP combined them into one step.
Riverkeeper argues that the federal understanding of water
dependency should control. The definition of water
dependency in 25 Pa. Code § 105.18a(a)(2) is identical to its
federal counterpart, 40 C.F.R. § 230.10(a)(3); see also 25 Pa.
Code § 105.18a(b)(3)(i) (“It shall be a rebuttable presumption
that there is a practicable alternative, not involving a wetland,
to a nonwater-dependent project, and that the alternative would
have less adverse impact on the wetland.”).
PADEP responds that Riverkeeper’s emphasis on federal
law is misplaced because PADEP relied on a regulatory
provision unique to Pennsylvania:
19
(b) In reviewing a permit application under this
chapter, the Department will use the
following factors to make a determination of
impact:
...
(7) The extent to which a project is water
dependent and thereby requires access or
proximity to or siting within water to fulfill
the basic purposes of the project. The
dependency must be based on the
demonstrated unavailability of any
alternative location, route or design and the
use of location, route or design to avoid or
minimize the adverse impact of the dam,
water obstruction or encroachment upon the
environment and protect the public natural
resources of this Commonwealth.
25 Pa. Code § 105.14(b)(7). This provision endorses a more
flexible approach to water dependency. Contrary to
Riverkeeper’s interpretation, this provision states that a water-
dependency finding “must be based on” the unavailability of
“alternative[s]” and the project’s ability to “avoid or minimize
the adverse impact of the . . . encroachment upon the
environment.” Id. This language supports PADEP’s
interpretation. As contemplated by § 105.14(b)(7), PADEP’s
conclusion as to water-dependency was based on its finding
20
that no “alternative location, route or design” could avoid
adverse impacts on aquatic sites and the environment. Id.9
In light of these conflicting provisions, we conclude that the
meaning of “water dependent” in 25 Pa. Code § 105.18a(a)(2)
is ambiguous. If we were reviewing an order of a federal
agency, we would be required to defer to the agency’s
reasonable interpretation of its own regulations. See Auer v.
Robbins, 519 U.S. 452 (1992). The question here is whether a
state agency should receive similar deference. We conclude
that such deference is appropriate.
Pennsylvania specifically recognizes Auer-style deference
for its agencies. See, e.g., Buffalo Twp. v. Jones, 778 A.2d 1269,
1276 n.8 (Pa. Commw. Ct. 2001) (“In reviewing an agency’s
interpretation of . . . its own regulations, unless the language is
clear, we are required to defer to the agency’s
interpretation . . . .”), aff’d, 813 A.2d 659 (Pa. 2002). Nothing
in the Natural Gas Act or our system of federalism compels us
9
Riverkeeper attempts to downplay the significance of 25
Pa. Code § 105.14(b)(7) by arguing that it was not cross-
referenced in the regulation at issue here, 25 Pa. Code
§ 105.18a(a)(2) (establishing special protections for
exceptional-value wetlands). But § 105.14(b)(7) is part of a
general provision that governs “reviewing a permit application
under this chapter.” The provision is thus arguably applicable
even in the absence of an explicit cross-reference. Riverkeeper
also objects that § 105.14(b)(7) favors its position because
Tennessee Gas did not “demonstrate[]” the “unavailability” of
the compression alternative. But that is a separate question that
we will return to in the next section.
21
to strip a state agency of the deference it would otherwise
receive in its own courts. This Court recognized similar
deference in Barnes v. Cohen, which concluded that “the
[Pennsylvania Department of Public Welfare’s] interpretation
of its own regulations is, of course, entitled to considerable
deference. . . . [H]owever, we need not accept the agency
interpretation if it is ‘plainly erroneous or inconsistent with the
regulation.’” 749 F.2d 1009, 1018 (3d Cir. 1984) (quoting
Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414
(1945)); accord Bldg. Trades Emp’rs’ Educ. Ass’n v.
McGowan, 311 F.3d 501, 507 (2d Cir. 2002) (“We defer to
a state agency’s interpretation of its own regulations, unless
the interpretation is arbitrary or capricious.”).10
Applying that deferential standard, we conclude that
PADEP’s interpretation of water dependency is reasonable.
10
State agencies’ interpretations of federal law do not
ordinarily receive deference. See MCI Telecomm. Corp. v. Bell
Atl. Pa., 271 F.3d 491, 516 (3d Cir. 2001). But some federal
courts have shown deference to state agencies’ interpretations
of state law. See, e.g., Arizona v. City of Tucson, 761 F.3d 1005,
1014 (9th Cir. 2014) (“Federal courts generally defer to
a state agency’s interpretation of those statutes it is charged
with enforcing, but not to its interpretation of federal statutes it
is not charged with enforcing.”); City Of Bangor v. Citizens
Commc’ns Co., 532 F.3d 70, 94 (1st Cir. 2008); Mich. Bell Tel.
Co. v. MCIMetro Access Transmission Servs., Inc., 323 F.3d
348, 357 (6th Cir. 2003); Enter. Leasing Co. v. Metro. Airports
Comm’n, 250 F.3d 1215, 1217 (8th Cir. 2001).
22
First, as noted above, PADEP’s flexible approach to water
dependency is consistent with the text of 25 Pa. Code §
105.14(b)(7). That provision appears to be unique to
Pennsylvania and is fully compatible with PADEP’s
interpretation.
Second, PADEP’s flexible approach to water dependency is
public and longstanding. See, e.g., Barnhart v. Walton, 535
U.S. 212, 220 (2002) (“[T]his Court will normally accord
particular deference to an agency interpretation of
‘longstanding’ duration.” (quoting North Haven Bd. of Ed. v.
Bell, 456 U.S. 512, 522 n.12 (1982))). In 1991, when the
relevant regulations were first promulgated, PADEP stated its
intention to evaluate the water dependency of linear
infrastructure projects on a case-by-case basis. For example, in
response to a public comment, PADEP stated that “[r]oads may
be considered water dependent on a case by case basis.” DEP
Addendum 12; see also DEP Addendum 9 (“[T]he Department
believes that haul roads, depending on their location, may be
water dependent and will make that determination on a case by
case basis.”). Such case-by-case analysis belies the categorical
approach urged by Riverkeeper.
And third, water dependency plays a different role in
Pennsylvania’s administrative scheme. Under the federal
regulations, water dependency is a procedural consideration
that affects the applicant’s burden. See 40 C.F.R.
§ 230.10(a)(3). In Pennsylvania, water dependency is a
substantive criterion that must be met in order to obtain certain
Chapter 105 permits. See 25 Pa. Code § 105.18a(a)(2). Under
Riverkeeper’s categorical approach, some projects might be
impossible to approve even if they would be environmentally
23
harmless. It stands to reason that PADEP would retain
discretion to approve projects, such as this one, where no
alternatives would minimize or avoid adverse impacts on the
environment pursuant to 25 Pa. Code § 105.14(b)(7).
Thus, we conclude that PADEP did not act arbitrarily or
capriciously by incorporating an alternatives analysis as part of
its water-dependency finding. While PADEP’s interpretation of
water dependency appears to be unique, it is nonetheless
reasonable in light of the text and structure of Pennsylvania’s
regulatory scheme. We will therefore defer to PADEP’s
interpretation and reject Riverkeeper’s categorical approach.
B
Riverkeeper finally argues that, even if PADEP’s water-
dependency finding was not arbitrary or capricious, PADEP’s
alternatives analysis was erroneous. Specifically, Riverkeeper
asserts that PADEP was required to embrace a compression
alternative. That alternative would have increased the amount
of natural gas transported through existing pipelines—
avoiding all impacts on wetlands and waterbodies that would
be caused by constructing new pipeline looping. We conclude,
however, that PADEP considered the compression alternative
and rejected it for reasons supported by the record.
In addition to certifying that the project is water dependent,
PADEP must also certify that “[t]here is no [1] practicable
alternative to the proposed project that [2] would not involve a
wetland or that would have less effect on the wetland, and [3]
not have other significant adverse effects on the environment.”
25 Pa. Code § 105.18a(a)(3). That standard is almost identical
24
to its federal counterpart, 40 C.F.R. § 230.10(a), which we
discussed at length in the companion case Delaware
Riverkeeper Network v. U.S. Army Corps of Engineers, No. 17-
1506 (3d Cir. 2017). There, we held that the United States
Army Corps of Engineers did not arbitrarily or capriciously
reject the compression alternative because the agency
reasonably concluded that the compression alternative would
have “other significant adverse effects on the environment.” 40
C.F.R. § 230.10(a). We will uphold PADEP’s decision for the
same reason.
The compression alternative would “us[e] gas- and electric-
powered turbines to increase the pressure and rate of flow at
given points along the pipeline’s route.” Del. Riverkeeper, 833
F.3d at 369.11 As part of its application to PADEP, Tennessee
Gas included an alternatives analysis that rejected that
approach. Tennessee Gas stated that “adding a new (greenfield)
compressor station would require Tennessee [Gas] to obtain
approximately 40-acres per site,” and that construction “would
require permanent vegetation clearing from the area in order to
install permanent access roads, fencing, buildings and other
appurtenance equipment . . . resulting in increased impacts to
the environment.” JA 266, 279. Tennessee Gas also observed
that “a new (greenfield) compressor station would be an
11
The parties focus primarily on building one or more new
compressor stations rather than upgrading an existing station.
See Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs,
No. 17-1506, slip op. at 6 n.3 (3d Cir. 2017) (“[U]pgrades to
existing compressor stations, without looping, did not offer the
same reliability and flexibility on the system.”). We focus our
analysis accordingly.
25
aboveground facility with light pollution and noise impacts and
may also become a source of [greenhouse gas] emissions.” Id.
In contrast to those permanent environmental impacts, the land
affected by construction “will be allowed to re-vegetate to
minimize and mitigate possible environmental impacts.” Id.;
see JA 38 (“All disturbed wetland areas are to be restored to
the original contours and shall be replanted with indigenous
plant species.”); JA 39 (“The permittee shall monitor the
restored wetland areas within the ROW for a minimum of three
growing seasons . . . .”).
While PADEP did not explicitly mention compression in its
alternatives analysis, it did consider “System Alternatives,”
i.e., alternatives that make use of existing transportation
systems. JA 45, 176. Compression is one type of system
alternative. See JA 294. PADEP also adopted Tennessee Gas’s
reasoning as its own: “The Department has reviewed
[Tennessee Gas’s] report and finds no cause to disagree with
the conclusions and final alternative presented.” Id.
As part of a checklist reflecting the criteria for approving
projects that would affect exceptional-value wetlands, PADEP
certified that the Orion Project is “the least environmentally
damaging alternative.” JA 49, 180. In support of that
conclusion, PADEP references its alternatives analysis, which
in turn adopted Tennessee Gas’s reasoning. As discussed at
length in the federal companion case, the agency’s statement
amounts to a judgment that the permanent environmental
impacts from the compression alternative are “significant.” See
Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983) (“We will . . . uphold a decision of
less than ideal clarity if the agency’s path may reasonably be
26
discerned.” (quoting Bowman Transp., Inc. v. Arkansas-Best
Freight Sys., Inc., 419 U.S. 281, 286 (1974))).12
Accordingly, we conclude that PADEP did not arbitrarily or
capriciously disregard the compression alternative.
IV
For the foregoing reasons, we will uphold PADEP’s
decision to issue the Chapter 105 permits and deny the petition
for review.
12
The permanent, “significant” environmental impacts of
the compression alternative reasonably establish
“demonstrated unavailability” under 25 Pa. Code
§ 105.14(b)(7). See supra note 9. PADEP’s statement that there
are no “practicable crossing alternatives,” JA 49, 180, does not
imply that its decision was based purely on costs or logistics.
Rather, it reflects a judgment that “certain avoidance measures
were not feasible because they were determined not to be as
environmentally sound.” JA 25; see also JA 141, 321
(discussing “other environmental impact considerations”).
That approach is consistent with § 105.14(b)(7) and thus not
arbitrary or capricious.
27