Delaware Riverkeeper Network v. Sec Pa Dept Environmental Prot

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 17-1533

_____________

DELAWARE RIVERKEEPER NETWORK;

MAYA VAN ROSSUM, the Delaware Riverkeeper,

Petitioners

v.

SECRETARY OF THE PENNSYLVANIA DEPARTMENT

OF ENVIRONMENTAL PROTECTION;

PENNSYLVANIA DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

Respondents

Tennessee Gas Pipeline Co.,

Intervenor

On Petition for Review from the Pennsylvania Department of

Environmental Protection

WQ02-002

E52-253

E63-305

FERC-1 : FERC CP16-4

Argued July 13, 2017

Before: SMITH, Chief Judge, NYGAARD, and FUENTES,

Circuit Judges

(Filed: August 30, 2017)

Aaron J. Stemplewicz [ARGUED]

Delaware Riverkeeper Network

925 Canal Street, Suite 3701

Bristol, PA 19007

Counsel for Petitioners

Alexandra C. Chiaruttini

Joseph S. Cigan III [ARGUED]

Commonwealth of Pennsylvania

Department of Environmental Protection

2 Public Square

Wilkes-Barre, PA 18701

Kimberly Hummel Childe

Office of Attorney General of Pennsylvania

Department of Environmental Resources

9th Floor

P.O. Box 8464

Harrisburg, PA 17105

Counsel for Respondents

Pamela S. Goodwin

Saul Ewing

650 College Road East, Suite 4000

Princeton, NJ 08540

2

Patrick F. Nugent

John F. Stoviak [ARGUED]

Saul Ewing

1500 Market Street

Centre Square West, 38th Floor

Philadelphia, PA 19102

Elizabeth U. Witmer

Saul Ewing

1200 Liberty Ridge Drive, Suite 200

Wayne, PA 19087

Counsel for Intervenor Respondent

________________

OPINION OF THE COURT

________________

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”),1 which issued a permit approving the

1

A companion case, also before this panel, raises

challenges to the United States Army Corps of Engineers. See

Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs, No.

17-1506 (3d Cir. 2017).

3

project. The petitioners, Maya van Rossum and Delaware

Riverkeeper Network (collectively, “Riverkeeper”), argue that

we lack jurisdiction to rule on its petition because PADEP’s

order was not final. As to the merits, Riverkeeper challenges

PADEP’s decision on the grounds that the agency made an

erroneous “water dependency” finding and improperly rejected

a “compression” alternative to the pipeline project.

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.

I

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 (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

4

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:

5

(2) The project is water-dependent. 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.

(3) There is no practicable alternative to the

proposed project that would not involve a

wetland or that would have less effect on the

wetland, and not have other significant adverse

effects on the environment.

Id. § 105.18a(a)(2)–(3).

On September 20, 2016, PADEP issued a conditional Water

Quality Certification for the Orion Project. Then, on February

23, 2017, PADEP issued two Chapter 105 permits approving

the Orion Project’s stream and wetland crossings—Permit Nos.

E52-253 (Pike County) and E64-305 (Wayne County). In

doing so, PADEP certified that the Orion Project “[i]s water

dependent” and would be “the least environmentally damaging

alternative.” JA 49, 180.

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.

6

II

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.

A

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.2 We

conclude that jurisdiction is proper because PADEP’s order is

final.

1

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.

2

Because we conclude that jurisdiction is proper, we

need not address Riverkeeper’s request for a transfer. See

McLaughlin v. Arco Polymers, Inc., 721 F.2d 426, 430 (3d Cir.

1983); see also Moravian Sch. Advisory Bd. of St. Thomas, V.I.

v. Rawlins, 70 F.3d 270, 276 (3d Cir. 1995).

7

§ 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 Federal law,” 15 U.S.C.

§ 717r(d)(1). Likewise here, the Chapter 105 permits were

conditions of federal approval and therefore were issued

“pursuant to Federal law.” Id.; see Del. Riverkeeper, 833 F.3d

at 386 (“Because the Chapter 105 Permit was a condition of

the Water Quality Certification, it is inextricably intertwined

with the Water Quality Certification.”).

8

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 (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).3

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

3

But see also Energy Transfer Partners, L.P. v.

F.E.R.C., 567 F.3d 134, 139 (5th Cir. 2009) (“Our court

has long recognized that [§ 717r(b), governing appeals

from FERC,] does not require that an order be a ‘final’ one[.]”);

Atl. Seaboard Corp. v. Fed. Power Comm’n, 201 F.2d 568, 572

(4th Cir. 1953) (“The commission argues that the order which

we are asked to review is not a definitive or final order of the

commission; but our power to review is not limited to final

orders.”).

9

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.”).

2

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. 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

10

determined,’ or from which ‘legal consequences will flow.’”

Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (quoting

Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp.,

333 U.S. 103, 113 (1948) and Port of Boston Marine Terminal

Assn. v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71

(1970)).

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:

[N]o action of the department [PADEP4]

adversely affecting a person shall be final as to

that person until the person has had the

opportunity to appeal the action to the board . . . .

If a person has not perfected an appeal in

accordance with the regulations of the board, the

department’s action shall be final as to the

person.

4

Note that the statute defines “Department” as “The

Department of Environmental Resources of the

Commonwealth.” 35 P.S. § 7512. Nonetheless, the parties

appear to agree that the statute applies to that agency’s more

recent incarnation, the Department of Environmental

Protection. See Texas Keystone Inc. v. Pa. Dep’t of

Conservation & Nat. Res., 851 A.2d 228, 239 (Pa. Commw.

Ct. 2004).

11

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,5 the order in question is nonetheless final

because Riverkeeper “has not perfected an appeal in

accordance with the regulations of the board.” Id. The relevant

regulation provides that an appeal to the Environmental

Hearing Board 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). PADEP published

notice on October 8, 2016. This petition was filed in March

2017, and Riverkeeper did not take an appeal to the

Environmental Hearing Board in the interim. Thus, PADEP’s

order became “final” under 35 P.S. § 7514(c) in November

5

Paradoxically, the Board appears to apply its own finality

requirement that approximates the federal standard,

notwithstanding § 7514(c). See Law v. Dep’t of Envtl. Prot.,

No. 1071 C.D. 2008, 2009 WL 9096519, at *2 (Pa. Commw.

Ct. Jan. 23, 2009) (“[A] letter does not constitute an

adjudication or a final decision or an appealable order from

which an appeal can be taken from the Department to the

Board.”); Commonwealth of Pennsylvania Environmental

Hearing Board, Practice and Procedure Manual at 6–7 (2015

ed.) (citing multiple decisions for the proposition that the

Board has jurisdiction “over final Department actions

adversely affecting personal or property rights, privileges,

immunities, duties, liabilities or obligations of a person”).

12

2016. See Com., Dep’t of Envtl. Prot. v. Cromwell Twp., 32

A.3d 639, 653 (Pa. 2011) (“[T]he failure to appeal within thirty

days rendered DEP’s action final.”); Otte v. Covington Twp.

Rd. Sup’rs, 650 A.2d 412, 414 (Pa. 1994); cf. Berkshire, 851

F.3d at 108 (noting that the petitioners dual-filed by “filing a

Notice of Claim for Adjudicatory Hearing,” and also “hedged

their bets” by filing a petition before the First Circuit).6

Apart from § 7514(c), PADEP’s permits also bear the

traditional hallmarks of final agency action. There is nothing

left for the agency to do, and thus PADEP’s decision “mark[s]

the ‘consummation’ of the agency’s decisionmaking process”

and is not “of a merely tentative or interlocutory nature.”

Bennett, 520 U.S. at 178 (quoting Chicago & Southern Air

Lines, 333 U.S. at 113). Furthermore, its order is “one by which

‘rights or obligations have been determined,’ [and] from which

‘legal consequences will flow.’” Id. (quoting Port of Boston

Marine Terminal Assn., 400 U.S. at 71). As each permit states,

6

Riverkeeper objects, contending that PADEP’s order

is not final because Riverkeeper may attempt to file an

appeal nunc pro tunc before the Environmental Hearing

Board. See 25 Pa. Code § 1021.53a; Twp. of Robinson v.

Dep’t of Envtl. Prot., No. 451 C.D. 2007, 2008 WL

9405218, at *4 (Pa. Commw. Ct. July 3, 2008). But by that

logic, a PADEP decision would never become final under

the second sentence of § 7514(c). As the case comes

before us, there has been no appeal to the Board, and in

applying the text of § 7514(c), we do not think it would be

appropriate to speculate about whether the Board would

accept a nunc pro tunc appeal.

13

“This permit authorizes the construction, operation,

maintenance and normal repair of the permitted structures.” JA

36; JA 167; see Transcript of Oral Argument at 31:24–32:3

(“When that permit issued and we had the approval of FERC

. . . , we started construction . . . .”); NE Hub Partners, L.P. v.

CNG Transmission Corp., 239 F.3d 333, 346 (3d Cir. 2001)

(“Pa.D.E.P. permits are valid pending the E.H.B. outcome . . .

.”); Com., Dep’t of Envtl. Res. v. Bethlehem Steel Corp., 367

A.2d 222, 229 (Pa. 1976) (holding that jurisdiction existed to

enforce a consent order issued by the Department despite a

pending appeal before the Board seeking modification); cf.

Berkshire, 851 F.3d at 108 (noting that construction could not

begin until “the expiration of the Appeal Period set forth below

and any appeal proceedings that may result from an appeal”).

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.

B

PADEP argues that, because Riverkeeper’s petition would

be untimely before the Environmental Hearing Board, it is also

14

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 Board’s regulations are not binding on us.

Rather, Rule 15 “defin[es] the time for filing a petition for

review with reference to the statute providing for review of the

agency’s orders.” United Gas Pipe Line Co. v. FERC, 824 F.2d

417, 435 (5th Cir. 1987). That refers to Section 19(d) of the

Natural Gas Act. See Islander E. Pipeline Co., LLC v. Conn.

Dep’t of Envtl. Prot., 482 F.3d 79, 83–84 (2d Cir. 2006) (“[T]he

NGA . . . provides an expedited direct cause of action in the

federal appellate courts to challenge a state administrative

agency’s order . . . .”).

15

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),7

or laches, Schaefer v. NLRB, 697 F.2d 558, 560–61 (3d Cir.

1983), we are unable to conclude that Riverkeeper filed its

petition out of time.

Accordingly, jurisdiction is proper under the Natural Gas

Act and under Rule 15 of the Federal Rules of Appellate

Procedure.

III

Turning to the merits, we review for arbitrary or capricious

agency action. Del. Riverkeeper, 833 F.3d at 377.8 Riverkeeper

argues that PADEP erred under that standard for two reasons.

First, Riverkeeper argues that PADEP made an erroneous

7

Although not raised by the parties, 28 U.S.C. § 1658(a)

establishes a four-year limitations period for any “civil action

arising under an Act of Congress enacted after” December 1,

1990. See Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369,

382 (2004); N. Star Steel Co. v. Thomas, 515 U.S. 29, 34 n.*

(1995).

8

The arbitrary-and-capricious standard derives from the

Administrative Procedure Act, 5 U.S.C. § 706(2)(A), which

does not cover state agencies, see id. § 701(b)(1). Nonetheless,

this court and others have applied that standard. See, e.g., Del.

Riverkeeper, 833 F.3d at 377; Islander, 482 F.3d at 94.

16

“water dependency” finding. Second, Riverkeeper argues that

PADEP erred by ruling out a “compression” alternative. We

reject both arguments in turn.

A

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:

[T]he purpose of a residential development is to

provide housing for people. Houses do not have

17

to be located in a special aquatic site to fulfill the

basic purpose of the project, i.e., providing

shelter. Therefore, a residential development is

not water dependent. . . . Examples of water

dependent projects include, but are not limited

to, dams, marinas, mooring facilities, and docks.

The basic purpose of these projects is to provide

access to the water.

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 F. App’x 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

18

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:

19

(b) In reviewing a permit application under this

chapter, the Department will use the

following factors to make a determination of

impact:

...

(7) The extent to which a project is water

dependent and thereby requires access or

proximity to or siting within water to fulfill

the basic purposes of the project. The

dependency must be based on the

demonstrated unavailability of any

alternative location, route or design and the

use of location, route or design to avoid or

minimize the adverse impact of the dam,

water obstruction or encroachment upon the

environment and protect the public natural

resources of this Commonwealth.

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

20

that no “alternative location, route or design” could avoid

adverse impacts on aquatic sites and the environment. Id.9

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 (1992). 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, 813 A.2d 659 (Pa. 2002). Nothing

in the Natural Gas Act or our system of federalism compels us

9

Riverkeeper attempts to downplay the significance of 25

Pa. Code § 105.14(b)(7) by arguing that it was not cross-

referenced in the regulation at issue here, 25 Pa. Code

§ 105.18a(a)(2) (establishing special protections for

exceptional-value wetlands). But § 105.14(b)(7) is part of a

general provision that governs “reviewing a permit application

under this chapter.” The provision is thus arguably applicable

even in the absence of an explicit cross-reference. Riverkeeper

also objects that § 105.14(b)(7) favors its position because

Tennessee Gas did not “demonstrate[]” the “unavailability” of

the compression alternative. But that is a separate question that

we will return to in the next section.

21

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

(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.”).10

Applying that deferential standard, we conclude that

PADEP’s interpretation of water dependency is reasonable.

10

State agencies’ interpretations of federal law do not

ordinarily receive deference. See MCI Telecomm. Corp. v. Bell

Atl. Pa., 271 F.3d 491, 516 (3d Cir. 2001). But some federal

courts have shown deference to state agencies’ interpretations

of state law. See, e.g., Arizona v. City of Tucson, 761 F.3d 1005,

1014 (9th Cir. 2014) (“Federal courts generally defer to

a state agency’s interpretation of those statutes it is charged

with enforcing, but not to its interpretation of federal statutes it

is not charged with enforcing.”); City Of Bangor v. Citizens

Commc’ns Co., 532 F.3d 70, 94 (1st Cir. 2008); Mich. Bell Tel.

Co. v. MCIMetro Access Transmission Servs., Inc., 323 F.3d

348, 357 (6th Cir. 2003); Enter. Leasing Co. v. Metro. Airports

Comm’n, 250 F.3d 1215, 1217 (8th Cir. 2001).

22

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 (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 (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

23

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.

B

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 the compression alternative

and rejected it for reasons supported by the record.

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

24

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 (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 369.11 As part of its application to PADEP, Tennessee

Gas included an alternatives analysis that rejected that

approach. Tennessee Gas stated that “adding a new (greenfield)

compressor station would require Tennessee [Gas] to obtain

approximately 40-acres per site,” and that construction “would

require permanent vegetation clearing from the area in order to

install permanent access roads, fencing, buildings and other

appurtenance equipment . . . resulting in increased impacts to

the environment.” JA 266, 279. Tennessee Gas also observed

that “a new (greenfield) compressor station would be an

11

The parties focus primarily on building one or more new

compressor stations rather than upgrading an existing station.

See Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs,

No. 17-1506, slip op. at 6 n.3 (3d Cir. 2017) (“[U]pgrades to

existing compressor stations, without looping, did not offer the

same reliability and flexibility on the system.”). We focus our

analysis accordingly.

25

aboveground facility with light pollution and noise impacts and

may also become a source of [greenhouse gas] emissions.” Id.

In contrast to those permanent environmental impacts, the land

affected by construction “will be allowed to re-vegetate to

minimize and mitigate possible environmental impacts.” Id.;

see JA 38 (“All disturbed wetland areas are to be restored to

the original contours and shall be replanted with indigenous

plant species.”); JA 39 (“The permittee shall monitor the

restored wetland areas within the ROW for a minimum of three

growing seasons . . . .”).

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 statement

amounts to a judgment that the permanent environmental

impacts from the compression alternative are “significant.” See

Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983) (“We will . . . uphold a decision of

less than ideal clarity if the agency’s path may reasonably be

26

discerned.” (quoting Bowman Transp., Inc. v. Arkansas-Best

Freight Sys., Inc., 419 U.S. 281, 286 (1974))).12

Accordingly, we conclude that PADEP did not arbitrarily or

capriciously disregard the compression alternative.

IV

For the foregoing reasons, we will uphold PADEP’s

decision to issue the Chapter 105 permits and deny the petition

for review.

12

The permanent, “significant” environmental impacts of

the compression alternative reasonably establish

“demonstrated unavailability” under 25 Pa. Code

§ 105.14(b)(7). See supra note 9. PADEP’s statement that there

are no “practicable crossing alternatives,” JA 49, 180, does not

imply that its decision was based purely on costs or logistics.

Rather, it reflects a judgment that “certain avoidance measures

were not feasible because they were determined not to be as

environmentally sound.” JA 25; see also JA 141, 321

(discussing “other environmental impact considerations”).

That approach is consistent with § 105.14(b)(7) and thus not

arbitrary or capricious.

27