A court battle over whether to build a natural gas pipeline in north-central Pennsylvania could have wider effects on gas industry regulation, attorneys for both sides said.

Central New York Oil and Gas wants to build the 39-mile MARC1 pipeline to connect three interstate pipelines carrying gas from the Gulf Coast, and to take locally produced gas to Northeastern markets.

Three local environmental groups argue the pipeline would damage pristine forest in three counties, and say the Federal Energy Regulatory Commission (FERC) failed to meet the required standard of environmental assessment before it approved the project.

The case, now before the Second Circuit Court of Appeals, could result in stronger federal oversight of an industry that is now largely regulated by the states.

Bob Alessi, an attorney for CNYOG, accused the plaintiffs of using the case to boost federal government control over the Marcellus Shale industry.

Who Should Regulate Marcellus Shale Development?

Alessi argued that while the plaintiffs are seeking to block construction of the pipeline on environmental grounds, their underlying aim is to increase federal government regulation of the industry and to “usurp” the states’ regulatory role.

If plaintiffs prevail, the case could have a far-reaching impact on how the industry is regulated, he said.

“This is the first court case to address the degree to which pipeline projects must analyze and take into account unrelated projects such as Marcellus Shale development,” Alessi said in an interview with Breaking Energy. “Up to this point, the federal government’s role in regulating Marcellus Shale development is very, very modest.”

The industry has consistently argued that it already faces a raft of environmental regulations at the state level and doesn’t need more rules coming from Washington.

In Pennsylvania, at the heart of the Marcellus Shale, the industry’s position has been backed by the strongly pro-drilling administration of Republican Governor Tom Corbett, whose environment secretary, Michael Krancer, told a Congressional committee in November last year that his state doesn’t need federal oversight in order to properly regulate the booming industry.

Environmentalists Claim State Failure

Critics argue that Pennsylvania regulators have failed to prevent contamination of waterways and aquifers with chemicals used in hydraulic fracturing, the controversial gas-extraction process that has enabled the exploitation of vast shale gas reserves in Pennsylvania and elsewhere in the US.

Deborah Goldberg, an attorney for the environmental law firm Earthjustice, which is representing the plaintiffs – the Sierra Club, Damascus Citizens for Sustainability and the Coalition for Responsible Growth and Resource Conservation – denied they are seeking to force federal oversight of the gas industry under the National Environmental Policy Act.

“To suggest that this is a case that’s going to get federal regulation is preposterous,” she said. “The Environmental Protection Agency does not regulate via NEPA.”

But she said the case could set a precedent if the court rules that FERC should have conducted a more thorough environmental assessment of the pipeline’s impact, including impact from Marcellus Shale wells.

“If the Second Circuit decides that the level of scrutiny doesn’t meet the standard, it will establish that the type of review that’s being done is inadequate,” Goldberg said.

Breaking Ground As Case Drags On

Although the appeal is still pending, trees are already being cleared to make way for the pipeline, following the court’s denial in February of the plaintiffs’ request for a stay to prevent the work going ahead before the appeal was concluded.

FERC conducted an Environmental Assessment and submitted it in a 300-page report when approving the pipeline in November. But it declined to perform a comprehensive Environmental Impact Study because it concluded the pipeline wouldn’t have a significant impact on the human environment.

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Oral arguments are due after briefs have been submitted on May 4.