FERC to Review Climate Impacts for 2 Projects


The U.S. Court of Appeals for the D.C. Circuit has recently ruled that the Federal Energy Regulatory Commission did not thoroughly consider environmental justices or the potential climate impacts of two previously approved gas infrastructure projects.

While the ruling remands a 2019 approval, it is also just the latest court decision consistent with FERC Chair Richard Glick's stance that the commission needs to step up its investigation process when analyzing how a project might contribute to the climate crisis or cause harm to local communities.

Climate Change Reviews

In March, FERC reportedly conducted its first-ever 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.

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.

The approval followed Glick’s appointment as FERC Chairman in February, where there have since been significant changes in policy. 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 reported that the Commission would 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.

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 Orders

At the beginning of the month, the D.C. Circuit ruled that FERC’s consideration into environmental justices and climate impacts were “deficient” and remanded the commission’s approval to the Rio Grande and Texas LNG projects, both slated to be liquefied natural gas (LNG) export terminals and associated pipeline facilities.

The ruling was made under the under the National Environmental Policy Act, the Natural Gas Act and the Administrative Procedure Act.

In reporting on his dissent of the commission’s 2019 approval, Glick stated that the decision “clearly demonstrates that the Commission has the authority and obligation to meaningfully analyze and consider the impacts from GHG emissions and impacts to Environmental Justice communities. Moreover, failure to do so puts the Commission's decisions – and the investments made in reliance on those decisions – in legal peril.”

In its environmental analysis report, FERC found that the facilities’ impacts on the climate crisis could not be determined in that there is no methodology for calculating such impacts.

However, both petitioners and the courts agreed that the commission could have attempted a stronger assessment, suggesting that the use of social cost of carbon or another form od generally accepted metric could have been used to determine a more precise evaluation.

“This court is saying you really do actually need to try to evaluate impacts based on whatever information is either out there in the real world, or that is based on academic or other research,” said John Moore, Director of the Sustainable FERC Project at the Natural Resources Defense Council. “Before you say you can't do it, you need to try a lot harder.”

While the court’s ruling will force FERC to review the projects a second time, it will not necessarily stop the projects in question from ever being completed. According to the companies behind the Texas LNG and Rio Grande LNG, the ruling will only serve as a “reminder” to ensure companies are keeping environmental justice and climate change factors in mind.

“The DC Circuit's opinion is a reminder that environmental justice, energy transition, and climate change are some of our most important generational issues,” said a spokesperson from Texas LNG in an email, adding the company “has taken tremendous actions to ensure the project is a market-leader on these issues.”

“We are pleased the Court affirmed the validity of the FERC authorization of our Rio Grande LNG project and we look forward to the FERC's response to the Court's requests,” said Matt Schatzman, NextDecade's Chairman and CEO in a statement.

The court believes that the commission will “remedy any deficiencies” in its previous ruling when it reviews the projects on remand.

According to reports, however, the latest ruling is just one of several where FERC has been found to lack in thoroughness when assessing the impacts of gas projects.

In June, the D.C. Circuit was reported to have vacated a federal order granting a $287 million Midwest gas pipeline license to operate after finding that FERC “ignored record evidence of self-dealing and failed to seriously and thoroughly conduct the interest-balancing required by its own Certificate Policy Statement.” Preciously, FERC had issued the project’s approval in 2018.

The ruling arrived as FERC was in the process of reassessing its 1999 pipeline certification policy, however finding that the commission was not compiling with the policy as it currently exists.

At the end of the month, FERC released a draft version of an additional climate review of a pending Columbia Gulf Transmission pipeline project in Louisiana, finding once more that agency staff could not draw conclusions about the significance of natural gas projects' contributions to climate change.

The project is just one of several slated to receive additional consideration of climate change impacts.

At the time of the announcement, Glick defended the additional climate reviews, saying that they would strengthen the legal durability of permitting decisions and that it remained up to commissioners to work out how to determine the significance of projects' contributions to global warming.

Glick has also said the commission would analyze climate impacts of pipeline projects on a case-by-case basis while it prepared a potential update to the agency's decades-old policy for permitting pipelines.

“From my perspective, I do see the analyses that are going to come down from the environmental impact statements as potentially helping the commissioners, including myself, determine whether the emissions associated with those projects are significant.

“In my opinion, we can make that analysis, we should make that analysis, and the courts have told us we have to do that analysis.”


Tagged categories: Environmental Controls; Federal Energy Regulatory Commission (FERC); Government; Infrastructure; Infrastructure; Laws and litigation; NA; North America; Oil and Gas; Program/Project Management; Project Management; Regulations

Join the Conversation:

Sign in to our community to add your comments.