It could be argued that, outside of the companies involved in the actual extraction, transmission and sale of fossil fuels, no group of people on Earth can take as much responsibility for our current climate catastrophe as the commissioners at the Federal Energy Regulatory Commission (FERC).
In 1977, FERC was established to regulate national energy policy independently of Congress and even, to a great extent, the president. The commissioners are nominated by the president and then confirmed by the Senate. Under the Natural Gas Act (1938), FERC reviews interstate pipeline applications for “convenience and necessity,” as well as compliance with the National Environmental Policy Act (NEPA).
Around the US, leaks and explosions, as well as air, soil and water pollution have motivated people to push back against pipelines and compressor stations. While FERC has ostensibly reviewed the proposals, it is not clear whether the commissioners are being guided by health impacts, environmental concerns and climate change as much as by a desire to serve the industry that pays their fees and to which they may return after their stint on the commission.
When we consider that pipelines put in the ground in the last decade are more likely to fail than those built in the 1940s, we understand that something has gone very wrong with FERC. Scientists are telling us we must leave fossil fuels in the ground to avoid runaway global warming. But human health and even the future of the planet may not speak as loudly to our legislators as industry dollars, so it remains doubtful that Congress will rein in this captured agency.
The courts have ruled on some of the commission’s failures to observe NEPA. In the case of Tennessee Gas Pipeline Company’s Northeast Upgrade Project, five pipeline loops were submitted separately to FERC and approved, even though the segments were part of a single project. The DC Circuit Court of Appeals decision sided with Delaware Riverkeeper Network and others, judging this to be a case of illegal segmentation. The DC Circuit Court also agreed with Sierra Club and others who charged that FERC had failed to use carbon costing on the Southeast Market Pipelines Project (aka Sabal Trail) in Florida. Those rulings have been like water off a duck’s back to FERC because the Commission can issue what’s called a tolling order, which allows a challenged project to proceed with construction even though its case may not have been decided or even scheduled by the court.
Two significant FERC orders this past year on New York pipelines may give a sense of where FERC is headed as the planet heats up.
Court Orders FERC to Consider Climate Impacts
In June 2016, the Sierra Club sued FERC over its approval of Sabal Trail. FERC had failed to consider emissions from three Florida power plants to be served by the $3.5 billion, 515-mile-long pipeline. On August 22, 2017, the Court of Appeals for the DC Circuit ruled in the Sierra Club’s favor. Sierra Club Staff Attorney Elly Benson had this to say:
Today, the DC Circuit rejected FERC’s excuses for refusing to fully consider the effects of this dirty and dangerous pipeline. Even though this pipeline is intended to deliver fracked gas to Florida power plants, FERC maintained that it could ignore the greenhouse gas pollution from burning the gas. For too long, FERC has abandoned its responsibility to consider the public health and environmental impacts of its actions, including climate change. Today’s decision requires FERC to fulfill its duties to the public, rather than merely serve as a rubber stamp for corporate polluters’ attempts to construct dangerous and unnecessary fracked gas pipelines.
The DC Circuit ordered FERC to use the social cost of carbon or other methods to assess the greenhouse gas (GHG) emissions’ impact or justify its failure to do so. FERC did file a final environmental impact statement (FEIS), but still failed to use carbon costing or any other method to assess downstream GHG emissions impacts — the burning of almost a billion cubic feet of gas per day at three Florida power plants. In effect, FERC thumbed its nose at the court.
The New York State Department of Environmental Conservation (DEC) was watching closely. Citizens in Orange County, New York, led by prominent activist and actor James Cromwell, were protesting the construction of the Competitive Power Ventures (CPV) power plant, the approval of which was shrouded in corruption. CPV would need two short pipelines to be constructed to fuel it, the Millennium Eastern System Upgrade (ESU) and Valley Lateral (VLP). ESU had already been approved, but the DEC must have thought the issue of downstream emissions could be used to redirect citizen anger. A week after the August 30 Sierra Club, et al v. FERC court ruling, the DEC rejected the water quality certificate (WQC) for the Valley Lateral under Section 401 of the Clean Water Act, and stated that its denial was partly based on downstream GHG emissions.
FERC overruled the DEC, stating that the Department of Environmental Conservation had not made a determination on VLP within one year of Millennium’s original application submission. DEC had foolishly thought it had a year from the date of a completed submission to rule. FERC added in a footnote that the agency would address DEC’s concern over downstream emissions at another time. New York State took FERC to court over the VLP order, but the Second Circuit Court of Appeals in New York City decided that FERC had jurisdiction.
FERC Refuses to “Speculate” About Emissions
The commissioners at FERC have been thinking for six months about when and how to respond to challenges by state agencies and environmental groups over greenhouse gas emissions. They decided a clever way to do it would be to declare their new policy in the context of an unrelated project challenge in which few groups had intervened.
Over a year ago, first FERC (in 2016), then the New York State DEC (in 2017) approved Dominion’s New Market Expansion: a plan to add 33,000 horsepower — the equivalent of about 100 tractor semis — to a 50-year-old pipe across central New York. Opponents to this project had filed a request for a rehearing. FERC decided that matter on May 18, 2018, not merely denying the rehearing request but going much further.
Pipelines leak millions of tons of methane — up to 12 percent of total capacity — on the way to delivery (those are called “upstream” emissions), and power plants churn out millions of tons of carbon dioxide (those are called “downstream” emissions). A divided FERC stated it would not consider up- or downstream GHG emissions in its review of any pipeline: “[W]e will no longer prepare upper-bound estimates … where, as here, the upstream production and downstream use of natural gas are not cumulative or indirect impacts of the proposed pipeline project, and consequently are outside the scope of our NEPA analysis.”
Commissioners Cheryl LaFleur and Richard Glick dissented, although they had both approved Dominion’s New Market. They indicated that they could not support the major policy shift implied by the order. In her comments LaFleur wrote:
Climate change impacts of GHG emissions are environmental effects of a project and are part of my public interest determination…. 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. 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.
Climate change poses an existential threat to our security, economy, environment, and, ultimately, the health of individual citizens. Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of greenhouse gas emissions, including carbon dioxide and methane — which can be released in large quantities through the production and the consumption of natural gas. Accordingly, it is critical that, as an agency of the federal government, the Commission comply with its statutory responsibility to document and consider how its authorization of a natural gas pipeline facility will lead to the emission of greenhouse gases, contributing to climate change…. The Commission is adopting a remarkably narrow view of its responsibilities under NEPA and the NGA’s public interest standard.
Quoting from NEPA, Glick adds, that the Commission’s approach
… violates NEPA’s requirement that federal agencies take “a hard look at [the] environmental consequences” of their decisions. As an initial matter, the principal reason that the Commission does not have this “meaningful information” is that the Commission does not ask for it. But NEPA does not permit agencies to so easily shirk their responsibilities to consider environmental consequences. Rather, NEPA requires that an agency “must use its best efforts to find out all that it reasonably can.”
The FERC rehearing rejection for Dominion’s New Market included the response FERC had promised in its overruling DEC’s 401WQC rejection on Millennium’s VLP. In two significant orders, FERC demonstrates its intent to hamstring project opposition and accelerate the approval process. A pipeline application may be crayoned on toilet paper, but FERC says the clock starts ticking the minute that submission, however erroneous or incomplete, arrives at DEC or any other state’s environmental agency. FERC decided it does not need to consider up- or downstream GHG emissions even as atmospheric methane spikes over the USA.
It’s Time to Bury FERC With Comments
However much we may admire Glick’s and LaFleur’s condemnation of the policy shift, under their watch, FERC approved every project that came before it, no matter how preposterous, dangerous or unnecessary that project was. FERC is a rubberstamp agency, staffed by oil and gas industry executives, which has only rejected two proposals in 30 years.
There may be a tiny silver lining, if the public is willing to act. FERC is reevaluating its process for review of proposed natural gas projects and has extended the deadline for commenting to July 25, 2018. FERC has not proven to be responsive to public criticism, but this is nevertheless an opportunity to appraise its policies. Environmental organizations and concerned citizens have an opportunity to detail the shortcomings or outright failures of the commission, including:
- Its orders allowing corporations to seize private land (eminent domain)
- Its willingness to approve related projects piecemeal, ignoring aggregate impacts (illegal segmentation)
- Ignoring its obligations under NEPA, as detailed by Commissioners Glick and LaFleur
- Not allowing state agencies adequate time to review completed applications
- Ignoring upstream and downstream GHG emissions, despite DC Circuit ruling ordering it to consider these
- Issuing tolling orders that enable projects to be completed while the matter is still in court, thus effectively voiding Constitutional due process.
These policies jeopardize our health, our environment and our planet. Certainly, we should bury FERC in comments. But perhaps it would be best just to bury FERC.