Delaware Department of Natural Resources v. FERC

Mar 13: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-1007. Petitioner Delaware seeks review of two Federal Energy Regulatory Commission (FERC or Commission) orders by which the Commission conditionally approved an application to site, construct, and operate a liquid natural gas terminal near the mouth of the Delaware River. The Appeals Court dismissed the petition citing a "lack of jurisdiction: Delaware lacks standing because it has not suffered an injury-infact."

According to the background in the case, in September 2004, Crown Landing LLC, a wholly-owned subsidiary of BP America Production Company, filed an application with the Commission to site, construct, and operate a liquid natural gas import terminal at the mouth of the Delaware River. Onshore portions of the proposed project were to be located in New Jersey, but a pier designed for the unloading of tanker ships was planned to extend beyond New Jersey waters into that portion of the river which appertains to neighboring Delaware.

Section 3 of the Natural Gas Act (NGA), prohibits the importation of foreign natural gas without prior authorization by the Commission. The NGA specifically provides for the protection of rights granted to the states under the Coastal Zone Management Act of 1972 (CZMA), and the Clean Air Act (CAA). Crown Landing did not file a CZMA certification with Delaware but did request a status decision from the state.

On February 3, 2005, the Delaware Department of Natural Resources and Environmental Control, petitioner here, issued its decision and rejected the project. On appeal, Delaware’s Coastal Zone Industrial Control Board unanimously affirmed that decision. Meanwhile, New Jersey filed an original action before the Supreme Court challenging Delaware’s jurisdiction to regulate the Crown Landing terminal pursuant to its authority under the CZMA. The Supreme Court confirmed that Delaware indeed possesses this authority. New Jersey v. Delaware, 128 S. Ct. 1410, 1427-8 (2008) [See WIMS 3/31/08].

On June 20, 2006, the Commission issued an order approving Crown Landing’s application subject to some sixty-seven conditions precedent. The Commission acknowledged that the Crown Landing proposal is subject to coastal zone consistency reviews in New Jersey, Delaware, and Pennsylvania and thus concluded that the company must obtain the concurrence of the relevant state agencies prior to Commission approval of the commencement of construction.

The Appeals Court said finally, "In sum, because FERC’s order -- as it stands now -- cannot possibly authorize Crown Landing’s project absent the approval of Delaware, the state has suffered no injury-in-fact, and thus lacks standing. For the foregoing reasons, the petition for review is dismissed."

Access the complete opinion (click here).