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FERC places limits on climate analysis in environmental reviews for gas projects

The Federal Energy Regulatory Commission will limit its analysis of upstream and downstream impacts of natural gas infrastructure projects as it aims to focus future environmental reviews.

The shift in policy, detailed in a May 18 decision that drew dissent from the commission's two Democratic members, will limit reviews to more direct impacts from gas pipeline projects under its consideration.

"For a short time, the commission went beyond that which is required by [National Environmental Policy Act, or NEPA], providing the public with information regarding the potential impacts associated with unconventional natural gas production and downstream combustion of natural gas, even where such production and downstream use was not reasonably foreseeable nor causally related to the proposals at issue," the FERC majority wrote. "That information was generic in nature and inherently speculative, providing upper-bound estimates of upstream and downstream effects using general shale gas well information and worst-case scenarios of peak use."

Instead, the FERC majority, consisting of Chairman Kevin McIntyre and commissioners Neil Chatterjee and Robert Powelson, all Republicans, moved to put up walls around guidelines from the White House Council on Environmental Quality for NEPA reviews. The decision said FERC will limit its emissions analysis of gas production or gas use at the upstream and downstream ends of the pipeline unless there is a clear relationship to warrant such analysis. This approach would include power plants directly connected to a pipeline project, such as the plants tied to the Southeast Market Pipelines project that was the subject of an August 2017 court decision that found FERC had not done enough analysis of emissions from the plants. It would not include power plant emissions from a pipeline project further upstream, such as a supply lateral or a compressor station project.

Denial

In the order, FERC denied a request for rehearing by a New York environmental and historic conservation group, Otsego 2000, of the commission's 2016 approval of Dominion Energy Transmission Inc.'s New Market Project, an estimated $159 million pipeline expansion project based around gas compression facilities in New York that is already in service. The FERC majority ruled the commission's environmental assessment for the project properly excluded an analysis of upstream and downstream impacts. Observing that the project consists of building and modifying compressor stations, and not putting down pipeline, the majority said the project would only have environmental impacts in limited geographical areas.

"In short, the incremental upstream and downstream activities that are the subject of Otsego's rehearing request do not meet the definition of cumulative impacts," the majority said. "Accordingly, the April 28 [2016 approval order] and the [environmental assessment] appropriately excluded potential upstream and downstream activities related to the production and consumption of natural gas."

Dissent

In separate statements that dissented in part from the majority, commissioners Cheryl LaFleur and Richard Glick, both Democrats, criticized the majority's move to limit the review of cumulative impacts. Although LaFleur backed the original approval of the project in 2016, she said times have changed with the U.S. Appeals Court for the D.C. Circuit decision on the Southeast Market Pipelines project that found shortcomings in the commission's analysis of downstream greenhouse gas emissions. The court "clearly signaled that the commission should be doing more as part of its environmental reviews," but the majority has moved in the opposite direction, LaFleur said.

"At a time when we are grappling with increasing concern regarding the climate impacts of pipeline infrastructure projects, the commission should not change its policy on upstream and downstream impacts to provide less information and be less responsive," LaFleur said. "Rather, I believe the commission should proactively seek and disclose in pipeline proceedings more information regarding both upstream production and downstream end-use."

Glick said the commission was not doing enough analysis. The commission's order, following its response to the D.C. Circuit on Southeast Market Pipelines, "represents another step toward drastically limiting the commission's consideration of climate change in the [Natural Gas Act] Section 7 certification process."

LaFleur said she hoped the FERC inquiry into a policy statement guiding its reviews of pipelines will let the commission expand the information it requires in pipeline applications and change the way it analyzes environmental impacts. The Democratic commissioners' statements on environmental issues have already been picked up by environmental groups and others involved in the pipeline policy review and in challenges to pipeline projects at FERC and in the courts.

FERC allowed Dominion Energy Inc.'s Dominion Energy Transmission to start service on the New Market project in October 2017. The compressor-driven expansion project provides 112,000 Dth/d of additional firm gas transportation capacity to National Grid PLC subsidiaries in New York. (FERC docket CP14-497)