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FERC Assesses Climate Impact of Gas Project for 1st Time

By Michael Brooks

Danly and Glick Spar During Open Meeting over Decision

In a shift in commission policy, FERC on Thursday for the first time assessed the greenhouse gas emissions of a proposed natural gas infrastructure project and its impact on global climate change (CP20-487).

Chair Richard Glick said he was able to reach a compromise with Commissioners Neil Chatterjee and Allison Clements on the order, which nevertheless approved Berkshire Hathaway Energy’s proposal to replace 87.3 miles of facilities on its Northern Natural Gas pipeline, from South Sioux City, Neb., to Sioux Falls, S.D.

The commission found that there would be no downstream emissions from the project, and that the emissions related to its construction did not outweigh its benefits.

FERC Climate Impact
FERC approved Berkshire Hathaway Energy’s proposal to replace 87.3 miles of facilities on its Northern Natural Gas pipeline, from South Sioux City, Neb., to Sioux Falls, S.D. | Berkshire Hathaway Energy

The “South Sioux City-to-Sioux Falls A-line Replacement Project will enhance safety, security and operational efficiency of Northern Natural’s pipeline system in South Dakota and Nebraska,” FERC said in a statement.

The decision is a potential landmark in the ongoing battle over whether to consider GHG emissions in its gas certificate orders, which began in May 2018 when the Republican majority, including Chatterjee, said it would no longer consider the indirect impacts of a project. (See FERC Narrows GHG Review for Gas Pipelines.) Since then, Glick has continually dissented on the commission’s approvals of gas projects, arguing that it was ignoring a directive from the D.C. Circuit Court of Appeals.

“Going forward, we are committed to treating greenhouse gas emissions and their contribution to climate change the same as all other environmental impacts we consider,” Glick said in a statement. “A proposed pipeline’s contribution to climate change is one of its most consequential environmental impacts, and we must consider all evidence in the record — both qualitative and quantitative — to assess the significance of that impact. I look forward to continuing to work with my colleagues as we refine our methods for doing so.”

“This order is a great example of a pragmatic compromise, because without compromise like this, needed infrastructure won’t get built,” Chatterjee said during the commission’s open meeting Thursday. “I want to emphasize that our prior orders were legally strong, and today’s order doesn’t change that. But policy evolves, and I’m always willing to work with my colleagues to move forward.”

In an email, Chatterjee declined to elaborate on why he switched his position. He told the Washington Examiner, however, that he chose to compromise because it enabled the project to move forward.

“This is [President] Biden and Glick’s FERC approving a natural gas project,” Chatterjee said. “I stand by the approach the commission took under my leadership, but these are necessary projects, and Chairman Glick promised me he was not against all natural gas infrastructure. This shows that. Now we’ve got him on the record.”

Glick told reporters after the meeting that he did not choose Northern Natural in particular to compromise on and that, going forward, the commission would evaluate each project on a case-by-case basis.

Danly vs. Glick

Commissioners James Danly and Mark Christie dissented on the order in part, over the climate analysis.

Danly, the previous chair, in particular delivered a forceful rebuke of the decision and got into a rare, off-the-cuff argument during the meeting with Glick.

“Northern Natural marks a dramatic change, a very drastic departure from the commission’s longstanding position that it lacks the tools to assess the significance of GHG emissions in our project certificates,” Danly said. “In my view, this order does not meet the bare requirements of the [Administrative Procedure Act] to support the reversal in course with the reasoned decision-making required to justify such a departure from previous issuances,” making the order “legally infirm.”

He argued that none of the parties in the proceeding were “on notice that such a dramatic change would occur” in “a fairly small, obscure certificate proceeding. Also critically, none of the parties outside of the proceeding could have anticipated that this would be the vehicle for these changes, so they weren’t aware of the fact that they would want to intervene to protect their interests.”

Danly urged that “every single natural gas pipeline company, every LNG company and every shipper should intervene in every single certificate proceeding pending before the commission. All of them. There’s no other way, if you don’t do that, to ensure your status as a party to the litigation … if another drastic change of course comes without warning.” He said that he would include a list of the proceedings in his dissent and also post it on his webpage on the commission’s site.

Glick responded by urging “all the other people who have been screwed by the commission … over the years” to intervene as well. He called Danly’s remarks “the height of hypocrisy.”

“You were the general counsel, Mr. Danly, when the commission” issued the May 2018 decision, “without any notice, without telling landowners, without telling people who are concerned about climate change, that we were going to change our … approach to how we handle pipeline proceedings. …

“We need to hear from” those impacted by the projects too, “not just the voices of those who can afford high-priced D.C. law firms and participate in these proceedings,” Glick said.

The chairman also questioned the logic of Danly’s argument. “Are we supposed to tell the people at Northern Natural that we’re not going to vote on their [proposal] until we go through a generic proceeding? … I don’t think it’s right to hold on to these orders and do nothing. If we have the votes to go in a different direction, we should. When you were chair, Commissioner Danly, we were not even allowed to vote on certain orders that you thought were legally infirm, even though there were statutory deadlines for those particular orders.”

Glick was referencing the high number of omitted and struck agenda items from the last open meeting under Danly’s brief chairmanship during the last months of the Trump administration. (See FERC Ends Trump Era with a Busy Agenda.)

Danly then “amended” his remarks to urge everyone to intervene, saying he highlighted gas companies “because they are probably the ones with, at least in the last couple of issuances, the most at stake.” He also acknowledged Glick’s criticisms of the May 2018 decision as accurate. “I was, however, as you pointed out, the general counsel; I was not a voting commissioner. So there is a degree to which I think a fair-minded person would acknowledge that though I was part of staff at the time, I was certainly not the one who ultimately voted for any of the orders that were issued back then.”

He also noted that he had brought forward numerous orders that he knew were going to be voted down. “In the history of the commission, I think you would be unlikely to find any chairman who was as willing to take his lumps as I was during my brief tenure in advancing the policies in the orders that I thought were legally correct with the very real possibility that I would lose. I think that some credit should be given to me on that.”

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