it morning your honour's may place the court my name is kate stetson i represent the petitioner in this case mountain valley pipeline pipeline permit applications as this court knows require a lot of complex federal and state choreography many different federal and state agencies have roles to play and that process this appeal involves whether the state agency responsible for defying north carolina's water quality overstepped its role of state water quality certification and also called the for a while and is a key component of the federal pipeline permitting process but water quality is also the limit of the state's certification authority in that respect north carolina can't issue a water quality certification or conditioned on changes to a pipelines route that is for to decide north carolina can't deny a water quality certification based on its conclusion that the pipeline isn't needed that's for fur to decide and similarly north carolina must consider that water quality certification based on the activity that is proposed and hear about activities to natural gas from point a to point b if that proposed activity will comply with state water quality standards with certain conditions and mitigation as is always the case then certification shall issue that's the mandatory language of the rest of the regulations the north carolina d e q in this case was presented with a detailed report from its hearing officer that the proposed southgate project which is at issue here would not violate state water quality standards if it was carried out under specified conditions and with the best management practices to which mountain valley had committed the d e choose decision letter though which is all of two pages didn't take issue with any of those findings instead the d e q concluded and this is a joint appendix one thousand three hundred and sixty three dollars that without certainty that a related pipeline project the mainline project would be completed it would deny the southeast projects request for a water quality certification and then in resting its decision on that basis the d e q went outside its length and went outside its lane for  probably why north carolina didn't raise it as such and right now the office of administrative hearings proceeding has been held in abeyance pending this court's determination on the petition for review the three reasons i mentioned and i'll get into each of them in turn had to do with the hughes failure to abide by its own regulations its failure to stay within its statutory boundaries under the clean water act and then of course just its basic failure under the appealed to the north carolina office of administrative hearings and we're talking about north carolina regulations why this court has any business at this stage meddling in what north carolina does but for the administrative primitives of exhausted in north carolina i think judge factor that the reason has to do with with what i mentioned in passing is the difference between this kind of  to the d c circuit until we complete that process nor can any petitioner this is different this is a opportunity that is provided to a petitioner under the north carolina across the seas but it's non exclusive and it's not jurisdictional so we  chose both paths and ultimately upon agreement with north carolina we agreed to hold the administrative review process in abeyance until this case went forward so in terms of what this court has to rely on what this court has to rely on the no i don't believe that's the case i think the reason that the parties agreed to hold the hearing in a bay as that that that additional process in advance was precisely to wait for in this court's decision before deciding whether to move forward or not if this court concludes that the d e q overstepped its bounds that the basis for its determination was not an appropriate basis under the north carolina regulations or the statute or the administrative procedure act this case would return to the d e q for further proceedings on that one i don't think now is the issue here and i'd point out that the the d e q has not raised you know a grade with us to a the final word on what the north carolina law would say about those that think it doesn't undermine federalism judge gregory because of the cooperative federalism that's that's baked into this entire process i mean the reason that we're in front of you in the st place is because we are here because of a certification proceeding that was kind of a pertinent to the federal pipeline permitting process so there are already has been that allocation of state authority and federal responsibility including this court's responsibility to take appeals from denials of among other things for a one per so i don't think that you're i don't think you are overstepping your at all i think the d e q overstepped its role which is the basis for our appeal if i could turn to the regulations and i want to make one thing clear from the beginning there's a lot of back and forth in the opposition of grace in the reply about what regulations control the current ones are the former ones and our point is under eyes or regulation there under the current regulations or the former regulations d to violate them both so this  conclude we suggested that it needed conclude which regulations apply because the same answer and south either way but just to start with the current regulations the current regulations and this is fifteen a of the north carolina administrative code t and six the current regulations require the d e q to assess whether the proposed activity that's the language has satisfied six specific factors and then upon determining that the proposed activity will comply with state water quality standards the division shall issue a four a one certification the hearing officer in this case and you can find this in detail at joint appendix  that are pertinent to this case there are some that are not and concluded that with certain conditions attached that water quality standards would not be impacted by the proposed activity where the hearing officer went off the rails and where we sit and where the d e q bounds based its entire determination was in finding that because the hearing officer and then the d e q were not sufficiently certain that the mainline project would be completed that all of those other findings that water quality wouldn't be impacted that surface water wouldn't be impacted that no mitigation was necessary that any medication under riparian rules was accomplished all of those things were thrown out the window in favor of this determination that because mainline may or may not go forward they weren't sufficiently certain about the south a project to be able to attest to its water quality that is a kind of reexamination and  of the projects purpose that is outside of the d e q is laid under both the current regulations and the former regulations if we want to talk about those what the d t was asked to do is to look at what the activity that is proposed if i'm following what it looks like to me you really may be going i'm not sure is that it was some of the recent decisions because they were reflected that there was it didn't bow like the water quality on the section for one certification and if your client compile complied with it then it would be fun and but yet they did denied it and there seems to be some go spend time on a clean water act but only really need to if we can say yes they did all right but of section forty one certification is the decision that ultimately came from those determination this abortive and it is your contention as i understand it that it wasn't a reason decision because of this inconsistency judge when that's that's right but i'd want to clarify if i could that there are there are two types of unreason decisions there's a decision that's not accompanied with the right reasoning and that would result in a kind of you know the do over that we've seen where you said that to me intimacy of the agency supplies the missing reasoning but the st two of our arguments in our i think i think what we would argue is yes to your point but to the extent the d e q based its decision on something that was not permitted to consider that that is i think more of a significant defect in the de excuse decision it wasn't just that its decision didn't line up with what the hearing officer said throughout his decision it's that what the d e q based its decision on and you can see in the in north carolina's brief that says there is no dispute about the factual basis for the issues decision that we agree with the detail of based its decision on something that it was not permitted to consider it is not permitted to consider whether the purpose of a project will be viable to go forward and do it often do should do it with such a sketchy if you will project it may never need to disturb any of north carolina's was in service was because is to certainly did take issue with the purpose because of course what it was supposed to look at is what is this proposed activity what is the purpose of the project and by saying we know what the purposes we just don't think it's actually going to happen that negates the purpose of the project and when you said viability judge gregory i think that brings up a very important point and i think it's one that the court can rest a lot of confidence  boy a certificate shall be issued to any qualified applicant and then there's words that don't matter if it is found that the applicant is able and willing property properly to do the acts enter perform the service proposed so that viability question chief judge gregory that you just raised that's the component of the st determination that says is there a need for this praja ect can this application do this project and when it comes down to the current viability of the project the one important point i want to make and i i know i'm over my time some please indulge me for the just this point what st concluded in this case was that work could not go forward on the south project until two things happened the st is that the necessary federal permits all issued and the nd is that st office of energy projects issued a notice that southgate could proceed so there is nothing that is going to happen imminently with southgate until those two for conditions are satisfied and one of the real defects in the d e q is order here isn't just that it overstepped its lane it's that it had that option available to me that could have mirrored those conditions and said this will not be  permitted to go forward until all federal permits are issued and for issues a notice to proceed but it chose not to do that the chose to question the very purpose of the project and to deny it on that basis and that we acted well within his of the already in denying him b p s request for a for a one certification for the southgate project this case is not about the department substituting its policy preferences for those of the federal energy regulatory commission this case has about whether  state can require an applicant to provide reasonable assurance that the water quality impacts of the project it proposes will not be objectively unnecessary southgate is a typical and that it is wholly contingent on another large linear project the mainline that is still under construction and the mainline has been subject to an abnormal degree of regulatory uncertainty given the multiple verifications and authorizations that have been vacated by this court southgate will have it most significant water quality impacts during the period of construction as streams are damned pumps and trenches are dug through stream beds and wetlands allowing those that construction to commence without united states court of appeals for the circuit in which a facility subject to regulation under the natural gas act is proposed to be constructed shall have original and exclusive jurisdiction over any civil action for the review of an order of a state administrative agency acting pursuant federal law that covers section four a one per certifications like this one we've taken the position that this jurisdiction is is original and exclusive as a statu  that that action in the office of administrators hearings in abeyance to avoid having to resolve that issue but we believe d that this action is properly before this court and it's properly exclusively for this court you heard  certification requires an analysis of water whether the project as a boy did and minimize water i guess so whether the impacts that occur are necessary given the substantial uncertainties surrounding the mainline  north carolina was concerned that any water all the impacts that were there were incurred by the project prior to achieving certainty regarding whether the mainline would be completed w ultimately be unnecessary so if south it were allowed to go forward and this the mainline project ultimately did not come to fruition any water quality impacts the damian pumping of streams and cutting  ultimately be unnecessary and so so so many to help me out don't you have to assume that the pipeline will achieve its purposes so is it your row here to consider hollow to minimi the pipelines impact given its construction require that the impacts to water quality and this case will have this i plan will will have significant water all the impacts will not be for no purpose at all and in this regard we're not nd guessing any a all of these things about the involvement of impacts to water quality and the use of coal repairing buffers i love that word how does that how does that job is what i'm seeing it looks like it's inconsistent to make certain think what's important about that statement that you just referenced is that that statement was contingent and condition upon a certification issued with the conditions that were recommended by the hearing officer one of those recommended conditions was a condition that required the resolution of all legal ambiguities regarding the permits for the mainline project those being resolved prior to commencing with construction and that you're not searched presley recognized when he recommended that condition that d a denial might be necessary to us to serve or to address that same concern the concern about the uncertainty with whether the mainline would ultimately be completed so i don't think that that can be viewed as inconsistent with the with state regulations absent a certification the southgate project will violate water quality standards in the streams and what one set of process now in b p faults the department for not spending much time on this issue but there was no need to it's not contest authorization through to proceed through the jefferson natural national forests that authorisation was received a couple weeks ago and was was immediately challenge the this court had also fav hated the verification of compliance with the army course nationwide twelve fermat issued by the huntington district in here that was reissued back in the fall and as you as you know that your honor this court recently suggested that  so north carolina's regulations do provide a path to approving removals of use to improving such meals of use that would otherwise fall at water quality standards north carolina's any decoration policy which is another component of  clean water act standards programs allows for removals of used to be approved provided that the op can't can show that the the project adequately avoids d and minimize water all the impacts of required by both the mains significant critical uncertainty regarding the mainline projects all to completion now the department's concerns about the viability of the mainline project are not speculative as i just mentioned there are multiple permits and authorizations that have been already vacated by this court and at the time the department issued this now decision the project was also subject to a stop work order issued by for based on the need to redo a flawed biological and given this cloud of uncertainty regarding whether the mainline would ever be completed that apartment acted in accordance with this regulations in denying the certification because it lacked reasonable assurance the construction of the project would not result in unnecessary water on the impacts so if so it seems to me you un petition have a documents a done a five sit in them for the clean water act and it seems to be that seems to be a big dispute joint right there so so explain your position a little bit more on that because i mean once you get there if  of bases that a state can rely on in issuing its for a one certification decision the st is a set of a numerated clean water act standard programs that includes the state's water quality standards and the nd is other appropriate acquirements of state position that right carry a buffer rules like the jordan rules do you fall within this brand of authority for other appropriate armistice day off so it may be end and the state your honor may have just been talking past each other a little bit  we have consistently continued that contended that this falls within the grant of authority for other appropriates requirements of state law not in that form or category of a state or it so turn into over simplifying this by saying that you simply saying that you did not do certification based on north carolina is quarter quality stand ups or your own quality standards yes and haven't done so nice but that's really all you say it isn't that's correct your honor this is about your cost water quality standards and it's about the north carolina's requirement that that any violations of the water already standards and only be excused if  goes back to the findings as opposed to your conclusions where i think i seem to see there is some there's some inconsistency it very least if not just  doesn't follow it so much in terms of what was found and what was concluded it seems to me to be the heart of what we're dealing with you i mean we can we can get into the know what we need to decide some of sometimes you can actually if we got there it went in that direction we c condition takes out the inconsistency started here at i believe the inconsistency you referred to earlier was in the hearing officer statement that the project will not violate water quality standards number of verifications and authorizations that have been issued by various federal agencies only to be subsequently baited by the sport that's happened to you and soon to be it likely three times from the sport so i think that difference minimizing unnecessary water quality impact the concern that stems from the uncertainty regarding the mainline project so be addressed in one of two ways it could either be addressed through this conditional certification or it could be addressed through which is the option the department alternately chose now that you're an officer didn't recommend one or the other didn't didn't list either as a preferred option it simply lasted both of them as options and so in that regard i don't think you can say that the me earlier when i said what needs to happen here i think you still responded that sounded like legal ambiguities need to be resolved or all these issues with the permits need to be resolved st is that right let me see if i can address the bit that puts the opponents of the pipeline in a position to well anytime a permit is issued we will immediately you know so let me take a step back the department's denial decision was based on the continuing uncertainty my only point regarding the condition not being in actual condition it was that require that the pipeline we told you got these legal ambiguity is so on the p resolve why would that lead you to consider the other option that was off about officer that is that the certification be condition the reason why did they did not it is because at that point they were not certain when they issued that there would not result in the necessary water quality impact that's the sole reason that unnecessary has nothing to do with purpose policy or in that long said viability it is all a simple commonsense question it is the we don't want you to start constructing this thing because most of the impact is doing construction until we know it would be even necessary to do so as so many not just s but court rulings and judgments of problems of stop waters then we don't want you to do something in north carolina that maybe and necessary it is not policy is it so would you minimisation you see that phrase over and over again in the north carolina brief from page three to page sixty seven dollars avoidance of minimum nomination the issue is and this is why the purpose matters if you go back to the regulations and now to be clear we're talking about the two thousand and nineteen regulations but let's sit with them for a minute what it says it is the lack of practical alternatives which is what this this whole discussion is turning on may be shown by demonstrating that words not necessary the basic project purpose cannot be practically accomplished in a manner which would avoid or result in less adverse impact to surface waters or wetlands so the reason i said this gets back to judge wins question is because whether you look at the new regulations or the old one you have to assume something important you have to assume as judge when said that the project will achieve its  that the purpose won't be achieved because of some rd condition but that the project will achieve its purpose that's what the avoidance and minimisation language is tied to and i think it's quite telling frankly that the north carolina brief drops that qualifier it's not just will this project avoid a minimize impacts no project would be built if that were the standard it's can the purpose of this project be fulfilled in a way that  avoids or better minimizes impacts and what the hearing officer in this case concluded was that the answer to that question was no there's no other way to fulfilled the purpose of this project is what he said am and minimize impacts any further the water quality impacts will be minimal the water quality impacts will not be surface water and other impacts will not be suffering under this particular project so that's the st point the nd point i would say is just to be very clear on judge gregory you made the point that you you were initially asking about the remedy that was imposed you were asking about the reasoning and i hope i've answered that but with respect to the remedy i want to make it clear what the condition was that we're talking about because there is a passing reference during the hearing officers decision so this idea about legal levick you would do you surrounding the project and i think for both the reasons that mr crabtree pointed out and judge bakker pointed out that's not a that's not a serviceable standard you know a permit when it is issued from a federal agency or anyone else has a presumption of regularity so simply assuming that a permit under challenge is going to meet a particular  is not the standard the condition that was actually imposed or suggested by the hearing officer is on joint appendix one thousand three hundred and sixty and it's exactly the same condition that ferg imposed a condition requiring the lifting of all the stop work orders and acquisition of all necessary permits for the mountain valley pipeline meeting line project be acquired before the for a one certification is that so that's the condition that we're talking about and one of the things that you didn't hear mr explain is wife that condition with the vice and that is one of the points of our brief if the if the d e q was called upon as it was here to exercise its discretion in a particular way it needs to explain why it exercise discretion to deny a water quality permit when all of the findings leading up to that point suggested that the permit should be granted and i want to be clear on this too it's not that the ultimate conclusion  inconsistent with the hearing officer finding the hearing officer lobbed in the same suggestion that the permit just be the application just be denied every single finding pertinent to the water quality question pointed in favor a pipeline that is the inconsistency we're talking about the last point i'd make is this it order for this court to uphold what the d e q did in this case it has to conclude three different things it has to conclude that q did not violate its own regulations when it examined whether a purpose could be carried out it has to conclude that it did not overstep that statutory authority despite the fact that st is the one who decides purpose need that viability and it has to conclude that despite all of the hearing officers factual findings that this project would not impact water quality that the d e q is conclusion nevertheless can be upheld we think for any and founded this project would have him believe you correct me please could you know record far better or not but what they found is that they had their proposal for the construction done as much as they could to that that it won't be an unnecessary venture eventually is find the policy the purpose and all things and minimize it but it would be absolutely unnecessary even the have the minimum properly minimize impact if you start this southgate project and you have nothing to hook it up to in the main line and it is not just people around the nest sabir all cause it these  one is the law absolutely chief judge of gregory gregory sorry let me make two quick points the st is when you talk about a project being unnecessary i think the i think the next question that you have to ask yourself this unnecessary because of what unnecessary because the d e q concluded in this case the mainline project might be completed it's eighty percent completed maybe it won't get the rest of the twenty percent that is the problem  with what the d e q did here in finding that it was potentially unnecessary the d e q went outside its lane because what the department is supposed to do in the water quality certification is to say if if the projects purpose is fulfilled like judge when said we assume the projects purpose is achieved if it's achieved has it avoided and minimized water quality impacts to the extent possible in any agency can always find a project might not be necessary but that's not what this agency is charged under it's particular allocation of roles and i would end with this point you know the treasury made the point about the prior decisions some of them up held agency actions some of them have found fault with them when these decisions have found fault with agency actions it's been because either the agency went outside its assigned role or didn't explain itself or didn't adequately do its job and i think in this case all of those has ok what they're going to do in your state state x no matter what go on what the real practical was going all in state why they can never consider that in terms of whether or i think it's great granting that it's so far fetched hypothetical given i will say i would say it's our position that there is another agency with responsibility over what you're talking about so if you take your example and you talk about bankruptcy let's put it into the pipeline context would have the authority in the responsibility to make determinations including the one that i mentioned earlier is this pipeline sponsor this applicant ready willing and able to able and willing properly to do the axa to perform the service requested if the applicant proves itself able to for perform the service requested that will be st prerogative at that point to say this project is no longer viable and that's why i think the conditions that were attached here by for of are so important and again mr crabtree didn't refute these the conditions are all federal permits issue again and the office of energy projects and f r issuing a notice to proceed to southgate nothing is going to happen until those two things happen and as mr crabtree pointed out those things are in the process of occurring but the permits haven't all issued yet and the notice to proceed has not issued yet and will not until that point now at the point where those permits issue then i think you should attach the presumption of regularity i mentioned earlier it cannot be a that or said that we wait to see whether anyone challenges a permit to decide whether or not a project is viable if a federal permit issues that carry something it carries a presumption of regularity so at the point where all permits issue  you i think that i think the question is if this is a lawyer only answer what is final meeting when it comes to determining water quality impacts north carolina's decision is final when it comes to discernment in the purpose the root the need the viability other conditions of the project is final so what the d e q can't do here is to say yes our hearing officer determined and made all these findings a fact that as long as certain medications other conditions are met that the project will not have others and minimal water quality and that's necessary to serve the purpose of the project that is the end of the road that is the water policy determination and d e q can't step into st determinations to conclude otherwise