Weaver's Cove Energy v. Rhode Island Coastal
| Decision Date | 02 October 2008 |
| Docket Number | C.A. No. 07-246 S. |
| Citation | 583 F.Supp.2d 259 |
| Parties | WEAVER'S COVE ENERGY, LLC, Plaintiff, v. RHODE ISLAND COASTAL RESOURCES MANAGEMENT COUNCIL, et al., Defendants. |
| Court | U.S. District Court — District of Rhode Island |
Bruce F. Kiely, Baker Botts, LLP, Washington, DC, Gregory L. Benik, Benik & Associates P.C., Warwick, RI, for Plaintiff.
Brian A. Goldman, Goldman Law Offices, Paul J. Roberti, Michael Rubin, Attorney General's Office, Providence, RI, for Defendants.
In this case a developer of liquefied natural gas ("LNG") facilities and the Rhode Island agency that oversees coastal development and resource protection have squared off in a high stakes confrontation involving the transportation of LNG by tanker ship through Rhode Island waters. Weaver's Cove Energy LLC ("Weaver's Cove") and the Rhode Island Coastal Resources Management Council ("CRMC")1 reached an impasse after engaging in a protracted and tense dialogue pursuant to a complicated permitting process. At the core of the dispute is the question of whether CRMC has the ability to indefinitely stall its concurrence with or objection to Weaver's Cove's permit application—a process that ordinarily must be completed within six months. By choosing the tactic of indefinite delay (as opposed to objection), CRMC has succeeded in grounding Weaver's Cove's proposed project, forcing the company to bring this action for relief. CRMC's tactic, however, was a gamble. Whatever the short term benefit of this tactic may have been, in the long run, CRMC's inaction necessarily results in a finding that the agency is legally presumed to have concurred with Weaver's Cove's application. For the reasons stated below, then, Weaver's Cove's motion for summary judgment is granted, and CRMC's cross-motion for summary judgment is denied.
Weaver's Cove is a limited liability company organized and incorporated under the laws of Delaware, with its principal place of business in Fall River, Massachusetts. CRMC is an agency of the State of Rhode Island created to preserve and protect the coastal resources of Rhode Island. See R.I. Gen. Laws 1956, chapter 23 of Title 46 (entitled "Coastal Resources Management Council"). CRMC's primary responsibility is "the continuing planning for and management of the resources of the state's coastal region." R.I. Gen. Laws § 46-23-6(1)(i). Importantly, it is also the state agency responsible for administering the federal Coastal Zone Management Act ("CZMA"), 16 U.S.C. §§ 1451 et seq.
This dispute centers on Weaver's Cove's proposal to construct and operate a liquefied natural gas ("LNG") terminal in Fall River, Massachusetts.2 As envisioned by the proposal, tanker ships carrying LNG would transit Rhode Island and Massachusetts waters, through the federal navigation channel in the Taunton River, on their way to deliver their cargo to the terminal. The terminal would have the capacity to provide 800 million cubic feet per day ("MMcfd") of natural gas, which is equivalent to an estimated 15% of New England's peak daytime natural gas requirements in 2010. The natural gas imported to the facility would be injected into the existing U.S. natural gas pipeline grid via two lateral pipelines proposed for construction by Mill River Pipeline, LLC ("Mill River"), an affiliate of Weaver's Cove.
On December 19, 2003, Weaver's Cove filed an application with the Federal Energy Regulatory Commission ("FERC") under section 3 of the Natural Gas Act ("NGA"), 15 U.S.C. §§ 717 et seq., requesting authority to site, construct, and operate the proposed terminal.3 Also on December 19, 2003, Mill River filed an application with FERC to construct and operate the two lateral pipelines to transport the natural gas from the proposed terminal. In order to facilitate the passage of LNG tanker ships through the federal navigation channel, Weaver's Cove proposed in its application to dredge and permanently deepen the channel. The proposal would require the dredging of up to about 2.6 million cubic yards of sediment from the Taunton River and Mount Hope Bay, disturbing approximately 191 acres of submerged land. About 230,000 cubic yards of the total would be dredged from Rhode Island waters. FERC approved Weaver's Cove's application, subject to conditions too numerous (and unnecessary) to list here. See Weaver's Cove Energy, LLC, 112 FERC ¶ 61,070 (2005) ("Weaver's Cove I"). The only condition relevant to this proceeding is that Weaver's Cove obtain CRMC's concurrence that the terminal project will be consistent with Rhode Island's coastal zone management program ("CMP").4 Id. at 61,546. Under the CZMA, applicants for certain federal licenses or permits for activities affecting coastal resources may be required to certify that the proposed activity complies with the affected state's federally approved CMP and that such activity will be conducted in a manner consistent with the CMP. See 16 U.S.C. § 1456(c)(3)(A). This process is known as "consistency certification." See 15 C.F.R. § 930.57.
In addition to FERC approval, Weaver's Cove's proposal to dredge the federal navigation channel requires the approval of the U.S. Army Corps of Engineers ("USACE") under Section 10 of the Rivers and Harbors Act. See 33 U.S.C. § 403. Consequently, on March 18, 2004, Weaver's Cove submitted a "Joint Section 10/404 Individual Permit Application" to the USACE seeking authorization to dredge in United States waters and to discharge fill materials into United States waters.5 And because Rhode Island has listed Section 10 permits as among the various federal licenses and permits subject to its review under the CMP, Weaver's Cove was required to certify that the Section 10 permit activity—dredging— would be consistent with Rhode Island's CMP.6 Weaver's Cove subsequently filed its certification with CRMC that the dredging proposed by its Section 10 permit application would be consistent with Rhode Island's CMP.
Weaver's Cove filed its consistency Certification with CRMC on July 19, 2004. Later that month, Dan Goulet, a CRMC staff member, telephoned Weaver's Cove and claimed that CRMC could not review the certification until Weaver's Cove provided certain information, purportedly required by the CMP, regarding the ultimate destination of the dredge material, and until Weaver's Cove resubmitted its design drawings for the project stamped by a Rhode Island engineer. In its July 19 submission to CRMC, Weaver's Cove had claimed that its specific dredge disposal plan was outside the jurisdiction of both CRMC and the Rhode Island Department of Environmental Management ("RDEM"):
Notably, Weaver's Cove intends to utilize dredged material as engineered fill on the LNG terminal site, and therefore has control over the proposed dredged material placement site. The permitting process for handling the dredge material at the Fall River site is well under way with the relevant Massachusetts permitting agencies. Details regarding existing and proposed conditions on the Fall River site are subject to the jurisdiction of the FERC and other federal agencies, as well as the pertinent Massachusetts agencies for review and permitting. No authorization for these Massachusetts activities is required from the RI DEM/CRMC.
Weaver's Cove followed Mr. Goulet's telephone call with two written communications. First, on August 2, 2004, Weaver's Cove sent a letter to CRMC explaining that the dredge material would be disposed of outside Rhode Island, and claiming that the CMP did not require information about such out-of-state disposal. Second, on August 12, 2004, Weaver's Cove resubmitted its design drawings to CRMC stamped by a Rhode Island engineer.
On August 26, 2004, CRMC sent a letter to Weaver's Cove in which it maintained that Weaver's Cove's application was incomplete.7 This time, CRMC cited Weaver's Cove's failure to provide a RIDEM Water Quality Certification with its application. A RIDEM Water Quality Certification confirms that a proposed activity complies with Rhode Island's water quality standards promulgated pursuant to Section 401 of the Federal Water Pollution Control Act ("Clean Water Act"), 33 U.S.C. §§ 1251 et seq. See R.I.Code R. 12 190 001. CRMC's August 26, 2004 letter did not refer to the issue of dredge materials disposal. After this letter, in spite of several additional communications, the parties reached an impasse. To this day, CRMC has neither concurred with nor objected to Weaver's Cove's consistency certification. Rather, CRMC has staked out a position that it was not—and still is not—required to act on the application because the six-month time period for doing so does not begin until it (CRMC) deems the application to be complete.
In the four years since Weaver's Cove filed its consistency certification with CRMC, two events have occurred that may impact the ultimate terminal proposal. While neither of these events, contrary to CRMC's view, affect either the justiciability of the present dispute or its outcome, they deserve mention in order to provide additional context and because CRMC raised them. On March 17, 2005, Weaver's Cove requested that USACE "formally consider open ocean disposal as a backup option" for disposal of the dredge material.8 Joint Appendix ("JA") 19, at 2. However, although CRMC claims that "[i]t has become clear that ... upland disposal is canceled," Weaver's Cove disputes that its request to USACE signaled an end to the upland disposal plan.
In August 2005, Congress passed and the President signed the "Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users" ("SAFETEA-LU"). SAFETEA-LU provides that:
Notwithstanding any Federal law, regulation, or policy to the contrary, no Federal funds shall be...
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Weaver's Cove Energy v. R.I. Coastal Resources
...of Mount Hope Bay. Weaver's Cove Energy, LLC ("Weaver's Cove") is the sponsor of the LNG terminal. Weaver's Cove Energy, LLC v. R.I. Coastal Res. Mgmt. Council, 583 F.Supp.2d 259 (D.R.I.2008). The barriers, which CRMC has attempted to impose, are to necessary dredging by Weaver's Cove in Rh......