Ne Hub Partners, L.P. v. CNG Transmission Corp.

239 F.3d 333, 2001 WL 76280
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 29, 2001
Docket00-3387
StatusUnknown
Cited by14 cases

This text of 239 F.3d 333 (Ne Hub Partners, L.P. v. CNG Transmission Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ne Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 2001 WL 76280 (3d Cir. 2001).

Opinions

OPINION OF THE COURT

GREENBERG, Circuit Judge.

After detailed examination of numerous technical, safety, and environmental issues, the Federal Energy Regulatory Commission (“FERC”) issued a certificate of public convenience and necessity for plaintiff-' appellant NE Hub Partners, L.P.’s (“NE Hub”) natural gas storage facility (the “Facility”) in Tioga County, Pennsylvania. The Commonwealth of Pennsylvania may seek to revisit those issues in consolidated administrative appeals in its own permitting process in a costly proceeding that will delay NE Hub’s construction of the Facility. Consequently, NE Hub brought a district court action seeking an injunction against the state appellate proceedings in an attempt to bar aspects of them on federal preemption grounds. The district court, however, rejected the claim without reaching its merits, principally on the jurisdictional ground that it was not ripe for decision before the state process concluded. See NE Hub Partners, L.P., No. 1: CA-99-0082 (M.D.Pa. Apr. 7, 2000) (“NE Hub”). We disagree with the district court on the ripeness issue and accordingly will reverse its order dismissing the action and will remand the case for further proceedings.

I. BACKGROUND

A. Factual History1

Since 1995 NE Hub has been seeking a plethora of federal and state permits to [337]*337construct the Facility. The construction is a substantial undertaking requiring NE Hub to drill through the Oriskany sand formation which contains competing storage facilities owned by Penn Fuel Gas, Inc. (“Penn Fuel”) and CNG Transmission Corp. (“CNGT”).2 Not surprisingly Penn Fuel and CNGT have opposed NE Hub every step of the way before both FERC and the Pennsylvania agencies exercising jurisdiction over the construction.

Because the Facility will store natural gas for use in interstate commerce it is subject to FERC’s jurisdiction and thus its construction requires a certificate of public convenience and necessity (the “Certificate”) pursuant to section 7(c) of the Natural Gas Act, 15 U.S.C. §§ 717 et seq. (“NGA”). NE Hub applied for the Certificate in November 1995, but Penn Fuel and CNGT intervened and requested FERC to reject NE Hub’s application on a variety of technical, safety and environmental grounds, including a claim that the construction and use of the Facility threatened to damage their own facilities.

FERC reviewed the entire range of technical, safety, and environmental issues relating to the Facility, and, at the instance of Penn Fuel and CNGT, convened a technical conference on the application in September 1996 at which they raised the following 23 issues relating to the technical, safety, and environmental soundness of the Facility:

(1) Whether NE Hub’s Drilling and Construction Program, utilizing a large diameter drill bit, would result in massive mud loss to the Oriskany sand formation;
(2) Whether circulation materials would satisfactorily mitigate the mud loss into the surrounding geological strata;
(3) Whether test drilling performed on well TW 501 indicated that the Drilling and Construction Program would lead to massive fluid loss to the Oriskany sand formation;
(4) Whether NE Hub’s Drilling and Construction Program had sufficient documentation relating to rates of penetration that could reasonably be expected from the use of large diameter (28") drilling bits to penetrate the Oriskany sand formation;
(5) Whether NE Hub’s Drilling and Construction Program had properly taken into account fracture permeability of the Oriskany sand formation;
(6) Whether NE Hub’s Drilling and Construction Program had accounted for the pressure fluctuations it might encounter during drilling operations due to existing gas storage facilities;
(7) Whether NE Hub’s Drilling and Construction Program would result in cement invasion to the Oriskany sand formation;
(8) Whether mud loss and cement invasion cause d by NE Hub’s Drilling and Construction Program would result in irremediable damage to the deliverability of gas from the CNGT/Penn Fuel Storage;
(9) Whether NE Hub’s Drilling and Construction Program would lead to increased risk of gas leaks and catastrophic blowouts;
(10) Whether the use of large quantities of loss circulation materials in NE Hub’s Drilling and Construction Program would cause a ‘cake’ to form across the Oriskany sand formation and reduce the likelihood of achieving an adequate ce[338]*338ment bond between the wall of the well and the casing string;
(11) Whether NE Hub’s Drilling and Construction Program would achieve the turbulent flow required to remove loss circulation material from the Oriskany sand formation and permit the development of an adequate cement bond;
(12) Whether NE Hub’s Drilling and Construction Program required or contained sufficient contingencies in the event an adequate cement bond was not achieved;
(13) Whether NE Hub’s Drilling and Construction Program included procedures for the use of a cement bond log tool to evaluate the integrity of the cement bond between the well and casing string;
(14) Whether NE Hub’s Drilling and Construction Program would lead to fracturing of the casing shoe;
(15) Whether NE Hub’s Drilling and Construction Program would lead to overpressuring of shallow formations;
(16) Whether NE Hub’s Drilling and Construction Program would increase the likelihood of gas loss or gas migration for the CNGT/Penn Fuel Storage;
(17) Whether NE Hub’s Drilling and Construction Program would result in salt cavern subsidence;
(18) Whether NE Hub’s Drilling and Construction Program relied on proper research and data regarding the tensile and compressive strengths for salt;
(19) Whether NE Hub’s Drilling and Construction Program relied on proper mechanical integrity testing of the salt caverns;
(20) Whether NE Hub had failed to consider alternate sites for cavern development;
(21) Whether the Sandia National Laboratories report used in development of the Drilling and Construction Program adequately addressed cavern operating pressures, cavern creep and subsidence, and rock mechanics;
(22) WTiether the geologic conditions at locations targeted by NE Hub’s Drilling and Construction Program were adequate for cavern development; and
(23) Whether NE Hub should be required to obtain insurance and/or indemnities that would be available to compensate CNGT and/or Penn Fuel for potential losses arising from the construction or operation of the Facility.

App. at 20-22.

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239 F.3d 333, 2001 WL 76280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ne-hub-partners-lp-v-cng-transmission-corp-ca3-2001.