By Rich Heidorn Jr.

FERC’s Republican majority on Friday narrowed the circumstances under which it will estimate greenhouse gas emissions from natural gas pipeline projects, sparking dissents by its two Democratic commissioners.

The commission unanimously rejected a rehearing request by conservation organization Otsego 2000, which contended FERC had not conducted a sufficient environmental review in its 2016 approval of Dominion Energy Transmission’s New Market Project. The project includes two new compressor stations and upgrades to three others in upstate New York (CP14-497-001).

But Democrats Cheryl LaFleur and Richard Glick dissented from the commission’s declaration that it will no longer prepare upper-bound estimates of GHG emissions when “the upstream production and downstream use of natural gas are not cumulative or indirect impacts of the proposed pipeline project.” They instead contended the decision effectively eliminates any consideration of GHG emissions associated with a project.

Republicans Kevin McIntyre, Neil Chatterjee and Robert Powelson said they were taking the action to “avoid confusion as to the scope of our obligations under [the National Environmental Policy Act] and the factors that we find should be considered” when determining whether a project is in the public convenience and necessity under the Natural Gas Act.

NEPA requires FERC to prepare an environmental impact statement for pipelines that may significantly impact the environment but allows for a less detailed environmental assessment if it determines the project is not likely to have significant adverse effects.

Notice of Inquiry

In separate partial dissents, LaFleur and Glick said they were disappointed that the majority initiated the policy shift just a month after issuing a Notice of Inquiry to reconsider the commission’s 1999 policy statement on gas pipeline permitting (PL18-1). (See FERC Outlines Gas Pipeline Rule Review.)

LaFleur said the new policy reverses the commission’s practice since late 2016 of including more information on upstream and downstream GHG emissions in its pipeline orders. That included “upper-bound” estimates of downstream emissions that assumed all the gas transported by the project would be burned for electric generation, heating and other purposes.

“The commission placed caveats on the information and analysis, stating generally that the downstream impacts do not meet the definition of an indirect impact and are not mandated as part of the commission’s NEPA review,” LaFleur acknowledged. “The commission nonetheless made a full-burn calculation to determine an upper-bound GHG emissions amount, unless it had specific information to calculate net and gross GHG emissions.”

The commission used Department of Energy studies for generic estimates of the impact of projects on upstream natural gas production, including production-related GHG emissions.

LaFleur said the commission’s obligations increased under the D.C. Circuit Court of Appeals’ August 2017 Sabal Trail ruling, which found that the emissions resulting from burning the natural gas transported by a commission-approved project are an indirect impact. (See FERC Must Consider GHG Impact of Pipelines, DC Circuit Rules.)

“Today, however, the majority has changed the commission’s approach for environmental reviews to do the exact opposite. Rather than taking a broader look at upstream and downstream impacts, the majority has decided as a matter of policy to remove, in most instances, any consideration of upstream or downstream impacts associated with a proposed project,” LaFleur wrote. “The majority’s reasoning for excluding the information and calculations is generally that it is inherently speculative and does not meaningfully inform the commission’s project-specific review. I disagree.

“At a time when we are grappling with increasing concern regarding the climate impacts of pipeline infrastructure projects, the commission should not change its policy on upstream and downstream impacts to provide less information and be less responsive,” she added.

‘Remarkably Narrow’

Glick criticized the majority for what he called a “remarkably narrow view of its responsibilities under NEPA and the NGA’s public interest standard.”

“The principal reason that the commission does not have … ‘meaningful information’ [on GHG impacts] is that the commission does not ask for it,” Glick said, noting that FERC could require pipeline developers to provide information about the source of the gas to be transported and its end use.

“A simple data request would seem to fall easily within what constitutes the commission’s ‘best efforts,’” Glick said. “In the absence of any such efforts, the commission should not be able to rely on the lack of ‘meaningful information’ to satisfy its obligations under NEPA and the NGA to identify the reasonably foreseeable consequences of its actions.”

“There will undoubtedly be some cases where those emissions are, in fact, too speculative to be considered ‘reasonably foreseeable,’” he continued. “But there may also be others, such as Sabal Trail, where an adequate record would provide sufficient information to make those emissions reasonably foreseeable.”

Glick said he was not suggesting that the commission stop approving new pipeline projects. “What I am arguing is that, as a result of the commission’s new policy, we frequently will not know whether the benefits outweigh the costs because the commission is not asking enough questions or doing enough analysis.”

Dissents ‘Mischaracterize’ Shift

The majority said the dissents “mischaracterize” the policy shift as changing the commission’s public interest and environmental review.

“Our decision does not in any way indicate that the commission does not consider, or is not cognizant of, the potentially severe consequences of climate change,” the majority wrote. “We will continue to analyze upstream and downstream environmental effects when those effects are sufficiently causally connected to and are reasonably foreseeable effects of the proposed action.”

They also said the order does not “prejudge or preclude the [commission] from considering the questions on greenhouse gas emissions posed in the Notice of Inquiry.”

The Republicans said that even if the commission presumed a causal relationship between the New Market Project and upstream production, “the scope of the impacts from any such production is too speculative and thus not reasonably foreseeable.”

“Neither the commission nor the applicant generally has sufficient information to determine the origin of the gas that will be transported onto a pipeline. We disagree with the dissent’s assertion that we lack information about specific upstream production or downstream uses simply because we ‘did not ask for it.’ To be clear, the commission only has jurisdiction over the pipeline applicant, whose sole function is to transport gas from and to the contracted for delivery and receipt points. While the shippers might contract with a specific producer for their gas supply, the shipper would not know the source of the producer’s gas, and, for that matter, producers are not required to dedicate supplies to a particular shipper and thus likely will not know in advance the exact source of production. In short, ‘just ask[ing] for it’ would be an exercise in futility.”