More than two years after order, FERC denies rehearing on Mountaineer XPress project

Washington — Two years after environmental groups sought rehearing of an order approving TC Energy's 170-mile, 2.7 Bcf/d Mountaineer XPress natural gas pipeline project, the Federal Energy Regulatory Commission has finally ruled on the merits, voting 2-1 to deny the request.

The action allows opponents of the project to head to federal appeals court, but the project has been in full service for a little over a year, diminishing odds of any impact on the project.

The Mountaineer XPress project and the Gulf XPress project approved alongside it are Appalachian Basin takeaway pipelines, delivering natural gas to Columbia Gas Transmission's TCO Pool and Columbia's Leach interconnect with Columbia Gulf. The 860 MMcf/d Gulf XPress project comprises seven new compressor stations on Columbia Gulf's system in Kentucky, Tennessee, and Mississippi.

The projects were working their way through the FERC process about the same time as other large-scale Appalachian takeaway projects, but did not garner the same breadth of opposition or critical comments in the dockets as did the Atlantic Coast Pipeline and Mountain Valley Pipelines further east.

FERC granted a certificate of public convenience and necessity December 29, 2017, and a request for rehearing was filed January 29, 2018, collectively by the Sierra Club, Allegheny Defense Project, and Ohio Valley Environmental Coalition.

GHG debate

The extensive critique of FERC's environmental impact statement in their requests covered topics as adequacy of the needs determination, water impact, mitigation of endangered species impact, and failure to calculate greenhouse gas emissions associated with induced natural gas production.

In rebutting the arguments on GHG emissions, FERC concluded in the rehearing order "wWe are unable to identify, based on the record, an incremental increase in natural gas production that is causally related to our action in approving the projects."

Part of the groups' argument was that FERC failed to follow precedent set in the US Court of Appeals for the District of Columbia Circuit decision in Sierra Club v. FERC that called for further explanation or consideration of downstream GHG emissions.

But FERC argued that its order already "went beyond what is required by the National Environmental Policy Act by estimating GHG emissions from downstream consumption of natural gas, an activity that is attenuated and not reasonably foreseeable."

Commissioner Richard Glick dissented on the rehearing, repeating his general opposition to the FERC's recent approach on GHG emissions. Commissioner Bernie McNamee, in a concurring statement, offered his analysis that FERC lacks legal authority to deny a project based on environmental effects of upstream or downstream production, and lacks an objective basis to determine significance of climate change impacts.

Spotlight on tolling

FERC's record of waiting months before ruling on merits of rehearing has drawn criticism from landowners and environmental groups, who argue it deprives them of due process. And the unusually long wait for the Mountaineer XPress order has been highlighted in congressional testimony and recent court filings about FERC's tolling order practice.

In response to criticism from a DC Circuit judge about the practice, FERC Chairman Neil Chatterjee has said FERC is dedicating more resources and restructuring its Office of General Counsel, with the goal of issuing rehearing orders related to landowner issues within 30 days of its certificate orders. Asked about the two-year-plus wait in this case, Chatterjee in an email said "[A]s you know, the commission doesn't discuss internal deliberations. However, I have made issuing rehearings a priority."

While the length of FERC's delay in issuing the rehearing order for Mountaineer XPress is even longer than normal, Delaware Riverkeeper Network leader Maya van Rossum said the outcome is not unusual in terms of outcome: projects being mostly constructed and at least partially in service by the time petitioners are able to get a decision in court.

By way of example, she noted that her group's challenge of a state decision involving a Millennium Pipeline expansion was dismissed in court as moot because the project was built and operational.

"It always comes back to Congress," she said, contending it would be possible to get a handle on the problem only through meaningful Natural Gas Act reform.

Debate over FERC's practice of tolling rehearing decisions is important because litigation related to the impact on due process for landowners has the potential to upend FERC procedures relevant to project schedules.