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FERC Conducts First-Ever Climate Change Review

Monday, March 29, 2021

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For the first time in the agency’s history, the Federal Energy Regulatory Commission has completed a climate change review.

The infrastructure project in question involves the replacement of 87 miles of Northern Natural Gas Co.-owned natural gas pipeline that was built in the 1940s and 1950s, stretching through South Dakota and Nebraska.

The replacement project was approved to proceed on March 22 in a 3-2 decision. Neil Chatterjee joined current FERC Chairman Richard Glick and Allison Clements, both Democrats, while Republican commissioners James Danly and Mark Christie, dissented.

“We find that the project’s contribution to climate change would not be significant,” the commission said in its review of Northern Natural Gas Co.’s replacement request.

According to reports, the Northern Natural Gas Co. made the request to replace the pipeline after inspections revealed that the infrastructure had mechanical joints and acetylene welds that were more susceptible to leaks and hydrostatic pressure test failures.

Once replaced, the old pipeline is slated to be sold to a salvage company and removed.

Policy Changes

Following the inauguration of President Joe Biden, Glick was appointed to Chairman of FERC, where there have since been significant changes in policy.

zorazhuang / Getty Images

For the first time in the agency’s history, the Federal Energy Regulatory Commission has recently completed a climate change review.

On Feb. 18, FERC issued a Notice of Inquiry seeking new information and additional stakeholder perspectives to help it decide whether to revise its approach for assessing the significance of GHG emissions.

Moving forward, Glick reports that the Commission will continue to consider all appropriate evidence regarding the significance of a project’s reasonably foreseeable greenhouse gas emissions and their contribution to climate change. The Commission is also committed to treating GHG emissions' contribution to climate change the same as all other environmental impacts.

“A proposed pipeline’s contribution to climate change is one of the most consequential environmental impacts and we must consider all evidence in the record to assess the significance of that impact,” Glick said.

However, despite the NOI, FERC claims that future changes would not affect its decision regarding the Northern Natural Gas pipeline.

To reach a decision, the FERC compared the $173.8 million project’s foreseeable GHG emissions to total GHG emissions of the US, revealing that the project could potentially increase CO2 emissions based on 2018 levels by 0.0003%, in subsequent years, the operations only would be 0.000006%.

Although the project was approved, Danly dissented in part, saying the commission violated the law “by reversing its longstanding determination that it is unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change without sufficient reasoning.”

Adding that, “regulatory malfeasance at its most arbitrary and capricious,” and the change in policy direction announced is in “an obscure docket that is likely not to be appealed.” Danly also went on to say in his dissent that the new order would be likely to have profound consequences.

Recent Pipeline Rulings

Following his inauguration, President Biden announced that he had revoked the permit for the $8 billion Keystone XL pipeline. The cancellation arrived through the President’s Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis and is only the first step in his plans to dismantle former President Trump’s climate and environmental rollbacks.

On the same day, Biden also rejoined the nation with the Paris Climate Agreement, banned new oil and gas drilling leases in the Arctic National Wildlife Refuge and ordered a review of more than 100 policies including on vehicle fuel economy standards and limiting pollution from the fossil fuel sector.

Without the presidential permit, the project is unable to cross the U.S.-Canadian border, ultimately forcing construction on the project to cease. Following the Executive Order, Canadian pipeline company TC Energy Corp. announced that they had suspended all work on the project, which meant the layoff of thousands of union workers.

While the project has been debated about for over a decade, on the other side of the spectrum, environmentalists and Indigenous communities are praising the decision. Anthony Swift, the Director of the Canada Project at the Washington-based Natural Resources Defense Council, an environmental group long critical of the oil sands, said the decision signaled a new era.

However, just a few months after the announcement, attorneys general from 21 states announced a lawsuit to overturn President Joe Biden’s cancellation of the Keystone XL oil pipeline.

Led by Ken Paxton of Texas and Austin Knudsen of Montana, in addition to attorneys general from the other 19 states accuse Biden of overstepping his authority in revoking the presidential permit required for the Keystone pipeline project.

The suit argues that because the pipeline is slated to run through multiple U.S. states, it is Congress who should have a final say over whether the infrastructure is built and that Biden doesn’t have the unilateral authority to change energy policies previously set by the U.S. government.

According to reports, last month, Joe Manchin, Head of the U.S. Senate Energy Committee, urged Biden to reverse his opposition, arguing that the project provides union jobs and is safer than transporting the oil via trucks and trains.

The lawsuit was filed in the U.S. District Court in Texas.

   

Tagged categories: Emissions; Federal Energy Regulatory Commission (FERC); Government; Government contracts; Health & Safety; Infrastructure; NA; North America; Oil and Gas; Pipelines; Program/Project Management; Project Management; Upcoming projects

Comment from Dave Polovitz, (3/29/2021, 8:12 AM)

I have a bad feeling about using climate change as a factory in making decisions on infrastructure. How does one measure or calculate accurately the impact on climate vs the impact on business? I would love to see that spreadsheet (or maybe not).


Comment from Dave Polovitz, (3/29/2021, 8:13 AM)

I meant to say factor.


Comment from Tom Schwerdt, (3/30/2021, 10:38 AM)

Infrastructure projects are typically expecting a multi-decade (or even century) lifespan. How do you design responsibly if you don't consider what conditions are likely to be during the design life using the best available projections?


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