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"),
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.
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, 869 F.3d 148, 2017 WL 3611780 (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 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:
Id. § 105.18a(a)(2)-(3).
On September 20, 2016, PADEP issued a conditional Water Quality Certification
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.
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.
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.
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. § 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
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, 103 S.Ct. 2187, 76 L.Ed.2d 312 (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).
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 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.").
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, 103 S.Ct. 2187. 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 determined,' or from which `legal consequences will flow.'" Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (quoting
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:
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,
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.
PADEP argues that, because Riverkeeper's petition would be untimely before the Environmental Hearing Board, it is also 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
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),
Accordingly, jurisdiction is proper under the Natural Gas Act and under Rule 15 of the Federal Rules of Appellate Procedure.
Turning to the merits, we review for arbitrary or capricious agency action. Del. Riverkeeper, 833 F.3d at 377.
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:
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 Fed.Appx. 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 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:
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 that no "alternative location, route or design" could avoid adverse impacts on aquatic sites and the environment. Id.
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, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). 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, 571 Pa. 637, 813 A.2d 659 (2002). Nothing in the Natural Gas Act or our system of federalism compels us 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, 65 S.Ct. 1215, 89 S.Ct. 1700 (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.").
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, 122 S.Ct. 1265, 152 L.Ed.2d 330 (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, 102 S.Ct. 1912, 72 L.Ed.2d 299 (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 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.
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
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 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, 869 F.3d 148, 2017 WL 3611780 (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.
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
Accordingly, we conclude that PADEP did not arbitrarily or capriciously disregard the compression alternative.
For the foregoing reasons, we will uphold PADEP's decision to issue the Chapter 105 permits and deny the petition for review.