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, 20172 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 Petitioner s

Aledandra 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 Respondent s

Pamela S. Goodwin Saul Ewing 650 College Road East

, Suite 4000 Princeton, NJ 085403 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 Ar my Corps of Engineers. See Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs , No.

17

- 1506 (3d Cir. 2017).4 project. The petitioner s , 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 ground s 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 fin al. We will also uphold PADEP’s decision on the merits

because t he agency ’s unique interpretatio n 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 loop ing 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 b ackground 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) . As5 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 Wate r Obstr uction 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 un d isputed that the Orion Project would affect ten exceptional

- value wetlands in Pike County and three in Wayne County.

PADEP cannot issue a Chapter 105 p ermit for a project affecting exceptional

- value wetlands unless it certifies in writing that seven requi rements are met. 25 Pa. Code § 105.18a. Two are relevant here:6 (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 C ounty). 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, 2017.7 II

T he 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. T he 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).8 § 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 Q uality 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 so me 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, t he Chapter 105 permits were condition s of federal approval and therefore were issued

“ pursuant to F ederal 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.”).9 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 doe s 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 tha t 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.”).10 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, t he 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

. W

e 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.

“ O ur cases have interpreted pragmatically the requirement

of administra tive 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 been11 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 [PADEP 4 ] adversely affectin g 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 a s 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).12 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.

A ssuming ( without deciding ) that § 7514(c) controls appellate ripeness

, 5 the order in question is nonetheless final because Riverkeeper “has not perfected an appeal in

accord ance with the regulations of the board.” Id. The relevant regulation provide s 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 N ovember

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] let ter 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

e d.) (citing multiple decisions for the proposition that the

Board has 

### jurisdiction “over final Department actions adversely affecting personal or property rights, privileges, immunities, duties, liabiliti es or obligations of a person”).13 2016

. See Com., Dep’

t o f 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); c f. 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 hallm arks 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, i ts 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 7 1). As each permit states,

6 

### Riverkeeper obje cts , 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 apply ing 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.14 “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 age ncy action. O ur jurisdiction is proper regardless of whether the Natural Gas Act limi ts 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 B oard

. See, e.g.

, Docket

Nos. 16

- 2212, 16

- 2218, 16

- 2400. T hose actions ask this Court

to review orders that are arguably nonfinal under § 7514(c).

W hether 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 also15 untimely before us. We reject that argument because the regulation go verning 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.” Wisnie wski 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 pro viding for review of the agency’ s orders

. ” United Gas Pipe Line Co. v. FERC , 824 F.2d 417, 435 (5th Cir. 1987)

. T hat 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 s tate administrative agency’s or der .

. . . ”).16 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 timeline ss 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, 56 0

– 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 “civi l 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 94.17 “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 pipeline s 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 ar e 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 have18 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 dep endent. .

. . 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 Regulato ry 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 Cor

ps 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 a19 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 ei ther 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. ” ).

PA DEP responds that Riverkeeper’s emphasis on federal law is misplaced because PADEP relied on a regulatory provision unique to Pennsylvania :20 (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 unavailabi lity 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 Commonwea lth.

25 Pa. Code § 105.14(b)(7). This provision endorse s a more flexible approach to water dependency . Contrary to Riverkeeper’s interpretation , this provision states that a water

depen dency finding “must be based on ” the un availability 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 finding21 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 federal ism compels us

9 Riverkee per 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 po sition 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



### .22 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 “t he [ 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)); a ccord 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 wat er dependency is reasonable.

10 S tate 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.3 d 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. Citize ns 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).23 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 evalua te the water dependency of line ar 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.” DE P

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 aff ects 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 permit s

. 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 environmentally24 harmless

. It stands to reason that PADEP would retain discretion to approve projects , such as this one, where no alternatives would minimize or avoid a dverse 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 a n 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, River keeper 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,

howe ver, 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 propo sed 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 identical25 to its f ederal 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 arbitrari ly or capriciously reject the compression alternative because the agency reasonably concluded that the compression alternative would have “other significant adv erse 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 A s 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

. Tenne ssee Gas also observed that “a new (greenfield) compressor station would be an

11 The parties focus p rimarily 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, witho ut looping, did not offer the same reliability and flexibility on the system.”). We focus our analysis accordingly



### .26 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 pl ant sp ecies.”); 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 existi ng transportation systems. JA 45, 176. C ompression 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.

A s 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 environ mentally 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

. ” S ee 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 o f less than ideal clarity if the agency’s path may reasonably be27 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 disrega rd 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” unde r 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 “oth er environmental impact considerations”). That approach is consistent with § 105.14(b)(7) and thus not arbitrary or capricious.