A state appellate court ruled this week in favor of National Fuel Gas in its proposed construction of the Northern Access Pipeline through Allegany, Cattaraugus and Erie counties.

Three appellate court judges ruled the state Department of Environmental Conservation did not provide enough information to support its denial of a water-quality permit for the 97-mile pipeline.

The Federal Energy Regulatory Commission ruled in August that DEC had exceeded the time limit when it could address the National Fuel Gas application under the Clean Water Act.

Rather than issuing a final ruling in the appeal, however, the judges gave DEC “an opportunity to explain more clearly — should it choose to do so — the basis for its decision,” according to Tuesday’s ruling.

“Because the DEC did not sufficiently articulate the basis for its conclusion, on appeal we cannot evaluate the department’s conclusions and decide whether they are arbitrary and capricious,” the judges wrote.

National Fuel Gas spokeswoman Karen Merkel said Thursday that, as FERC stated in its Aug. 6 order, the DEC waived the ability to issue or deny a Clean Water Act Section 401 permit for the Northern Access project.

“The Second Circuit also has now made it clear that New York's denial of the permit application failed to provide factual justification for their decision,” she said. “Like the dozens of natural gas pipeline projects that National Fuel developed previously, the Northern Access Project will use construction techniques which are protective of the environment and will not put at risk or endanger water supplies.”

Merkel said National Fuel Gas remains “firmly committed to the Northern Access Project that will provide access to a low-cost source of energy for residential and commercial customers throughout the North American pipeline grid.”

She said the energy company expects more legal challenges, but now has “a targeted in-service date as early as 2022.”

The Northern Access Project is likely to cost in excess of $455 million, according to previously reported estimates. It would bring Marcellus shale gas from National Fuel’s Pennsylvania hydraulic fracturing wells to Canada and to Eastern U.S. markets. Merkel said Allegany, Cattaraugus, Erie and Niagara counties and several towns in its path would share $11.8 million in annual property taxes and a one-time $6.6 million sales tax impact on the same counties.

In Cattaraugus County, the pipeline route goes through the towns of Portville, Hinsdale, Ischua, Franklinville, Machias and Yorkshire.

The appellate judges said DEC needs “to more clearly articulate its basis for the denial and how that basis is connected to information in the existing administrative record.”

Asked whether DEC will appeal the judges’ decision, spokesman Benning Delamater said DEC “is reviewing the court’s decision. DEC is considering all options to defend our decision and our authority to protect New York State’s water quality resources.”

The pipeline crosses numerous creeks and streams in its path, with most crossings to be a “cut and bury” operation. There were a few horizontal drilling locations to go under streams proposed by NFG, but DEC had asked for more.

The proposed pipeline had faced active opposition from groups like Concerned Citizen of Allegany County and Wyoming, Erie and Cattaraugus Communities Act on the Pipeline, or WECAP.

(Contact reporter Rick Miller at rmiller@oleantimesherald.com. Follow him on Twitter, @RMillerOTH)