23 March 2021

FERC Makes First Significance Determination on Greenhouse Gas Emissions

On March 22, 2021, the Federal Energy Regulatory Commission (FERC or Commission) for the first time issued an order that assessed whether greenhouse gas emissions related to a natural gas pipeline certificate project would significantly contribute to climate change. FERC purported to perform the assessment pursuant to its obligation under the National Environmental Policy Act (NEPA) to take a “hard look” at a project’s environmental impacts.

Relying on U.S. Court of Appeals for the District of Columbia Circuit precedent in Birckhead v. FERC and Sierra Club v. FERC, FERC explained that a proposed pipeline’s reasonably foreseeable greenhouse gas emissions are relevant to its determination as to whether a project meets the Natural Gas Act’s “public convenience and necessity” requirement. FERC calculated a potential increase of 0.000006% in carbon dioxide equivalent emissions from the pipeline’s operations as compared with national levels in the United States in 2018 and did additional comparisons to the emissions levels in the states where the facilities would be located. While it deemed the increase not to be significant, FERC stated that it could consider additional or different types of evidence in future proceedings. FERC also stated that the significance of a project’s reasonably foreseeable greenhouse gas emissions would be considered, along with other factors, in determining whether a project is required for public convenience and necessity.

The significance determination was made in the context of a pipeline modernization project through the abandonment of 1940s and 1950s vintage lines and their replacement with new facilities that would maintain the pipeline’s existing capacity. FERC did not assess whether the greenhouse gas emissions resulting from the project would be an increase from emissions that may have resulted from the existing facilities.

The order elicited dissents by Commissioners James Danly and Mark Christie. Both raised concerns that FERC circumvented a pending notice of inquiry proceeding that is reviewing whether and how FERC should analyze and consider a project’s greenhouse gas emissions and their contribution to climate change. Comments in that docket, PL18-1-000, are due on April 26, 2021, and are expected from a wide array of stakeholders. Commissioner Danly’s dissent also argued that the order was arbitrary and capricious in violation of the Administrative Procedure Act. He called on pipeline companies with pending certificate orders to actively monitor these policy changes and take legal action if necessary.

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