Spire counters EPA appeal that FERC delay decision on gas storage expansion

Spire Inc. says the Federal Energy Regulatory Commission's effort to expand climate considerations in permitting decisions for natural gas infrastructure should not be a reason to hold off on a decision on the company's proposed expansion of its Wyoming gas storage facility.

Spire's comments to FERC came in response to a Dec. 21, 2021, filing by the Environmental Protection Agency that advised the commission to postpone any decision on the project pending revisions to the decades-old FERC natural gas infrastructure permitting policy (CP21-6).

It is unclear when FERC will adopt revisions to the permitting policy. But modernizing the policy is a priority in 2022 for Chairman Richard Glick, who is now part of a 3-2 Democratic majority at the regulator after Commissioner Willie Phillips was sworn in as the fifth member of FERC on Dec. 3, 2021.

A key issue in the pending policy update, and one that has divided commissioners in recent years, is how FERC should gauge the significance of natural gas projects' planet-warming emissions.

"EPA believes these pending policy decisions will be critical to ensuring that impacts and potential measures to avoid and minimize those impacts are fully considered, thus better informing the commission's decisions around natural gas infrastructure project proposals," an official from EPA's Region 8 office based in Denver wrote in the December 2021 filing in the Spire proceeding. "Therefore, EPA strongly recommends that the commission postpone any decision on this proposed action and similar pending applications until the commission has considered all input received and has finalized its policy updates."

These comments drew pushback from Spire Storage West, the developer of the Clear Creek expansion project in Uinta County, Wyoming, slated to receive an environmental assessment in May 2021. The company was subsequently notified that FERC plans to issue a final environmental impact statement in January. FERC has been pursuing a series of supplemental reports for gas infrastructure projects to take a closer look at climate change impacts, but agency staff have repeatedly said they are unsure how to determine the significance of greenhouse gas emissions associated with projects.

"The fact that the commission may change its policies at some point in the future does not change the environmental impacts of the project nor change the requirements the commission must follow today," Spire said in its Jan. 3 filing.

The Clear Creek project is part of an effort by Spire to capitalize on changing dynamics in Western energy markets. The company expected that market interest in reserving gas storage capacity will hold up as intermittent renewable generation becomes a growing share of electric power demand.

St. Louis-based Spire in October 2020 proposed a tenfold increase to the maximum daily injection and withdrawal capability at its Clear Creek storage field to 500 MMcf/d, as well as a fivefold expansion of the certificated gas storage capacity to 20 Bcf. The project, estimated at the time to cost more than $243 million, would nearly double Spire Storage's maximum withdrawal and injection rates and boost its reservoir total by about 52%.

FERC staff issued a draft environmental impact statement in October 2021 that estimated construction of the Clear Creek project would result in relatively low volumes of greenhouse gas emissions, with up to about 8,100 mt of CO2 equivalent emissions estimated to result from construction and up to about 78,700 mt/year of CO2 equivalent emissions estimated to result from operations. As in previous supplemental reviews for other gas projects, FERC staff avoided drawing conclusions about the impacts on climate change. Apart from that issue, FERC staff concluded that the project would not cause significant environmental harm.