Spectra's $1.2B NY-NJ Pipeline Project Hit With Enviro Suit

By Natalie Rodriguez, Law360.com, New York (September 06, 2012, 6:19 PM ET) 
Six environmental groups and seven individuals filed a suit in New York state court Wednesday to block construction of Spectra Energy Corp.'s $1.2 billion natural gas pipeline along the Hudson River Park, contending review requirements and state laws were broken in its approval.

Led by a group known as the Sane Energy Project, which has filed objections to the pipeline before with federal regulatory agencies, the petition claims New York's Hudson River Park Trust failed to properly comply with New York's State Environmental Quality Review Act and violated both the Hudson River Part Act and New York Public Trust Doctrine by greenlighting a project that does not fit the park, commercial or government uses required under the law.

The trust should have conducted a SEQRA review before entering into a lease agreement with one of Spectra's units, the petition contends, claiming that it has instead improperly relied on a Final Environmental Impact Statement issued by the Federal Energy Regulatory Commission that does not consider a nearby pipeline connection to Consolidated Edison Co.'s system.

“On information and belief, the trust has not taken any action to fulfill its obligations under SEQRA. The trust is relying entirely on the FERC FEIS for its environmental review. However, the FERC FEIS did not consider any of the environmental impacts that might be involved with non-jurisdictional facilities, including the ConEd 1,500-foot pipeline,” the petition said.

The environmental groups further contend that the pipeline will introduce serious rupture and explosion hazards in the densely populated area, as well as make the area's pipeline infrastructure more of a terrorist target, according to the petition.

Spectra and its subsidiaries are also named in the suit. Though the company declined to comment on pending litigation, “once the project is complete, we will prove a safe, reliable source of natural gas,” Marylee Hanley, a Spectra spokeswoman, told Law360.

Work on the pipeline began in July after Spectra subsidiaries Texas Eastern Transmission LP and Algonquin Gas Transmission LLC received a partial order to proceed on the project from FERC in June, over the objections of Sane Energy and others.

Spectra plans to run the 20-mile tube from Linden, N.J., through Staten Island, beneath Jersey City and finally under the Hudson River before winding up near Manhattan's West Village. About three-quarters of that is new pipeline, and the remainder is replacement.

In lobbying for approval, the company promised an array of benefits, including energy security and improved air quality linked to use of a relatively clean power source, and has said that the project could bring $700 million of annual energy savings to New York and New Jersey by alleviating seasonal natural gas volatility.

Representatives for Sane Energy and the Hudson River Park Trust could not immediately be reached for comment Thursday.

Petitioners are represented by Erica T. Kagan of The Kurland Group, Richard J. Lippes of Richard J Lippes & Associates, and John J. Zimmerman of Zimmerman & Associates.

Spectra is being represented by in-house counsel.

Counsel  information for The Hudson River Park Trust was not immediately available.

The suit is Sane Energy Project, et al., v. The Hudson River Park Trust, et al., case number 12103707, filed in the State of New York Supreme Court, County of New York.

—Additional reporting by Kelly Rizzetta.  Editing by Sarah Golin