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FERC is upheld on Atlantic Sunrise; judge decries 'Kafkaesque' tolling practice


Decision backs prior FERC practice on GHG calculations

1.7 Bcf/d pipeline connects Pennsylvania gas to markets

Washington — The DC Circuit Court of Appeals has upheld Federal Energy Regulatory Commission orders approving the 196.5-mile, 1.7 Bcf/d Atlantic Sunrise Project, denying in brief fashion multiple objections from environmental groups and homeowners.

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The pipeline, which won FERC approval February 2017, began service in the fall of 2018, therefore the ruling does not immediately impact its operations. But DC Circuit rulings on FERC natural gas project approvals are closely watched because of ongoing battles at FERC and in the courts, particularly over climate considerations in environmental reviews.

FERC's Atlantic Sunrise orders, now backed by the court ruling, relied upon FERC's prior approach to greenhouse gas considerations in which it presented upper bound, maximum burn estimates of pipelines to calculate downstream impacts of end uses of gas. Since May 2018, under a Republican majority, FERC has moved away from offering such indirect emissions estimates, except in narrow circumstances where end use locations are explicit. The ruling appears unlikely to quiet debate over the current approach (Allegheny Defense Project, et al., v FERC et al, 17-1098).


Of note, landowner petitioners failed to sway the panel that their due process rights were denied by a process in which FERC tolls decisions on certificate rehearing orders. The court concluded that circuit court precedent foreclosed homeowners' claims.

But Judge Patricia Millett's concurring statement offered a scathing critique of FERC's practice of putting off ultimate decisions on rehearing orders for months, calling it a "Kafkaesque regime."

"Under it, the commission can keep homeowners in seemingly endless administrative limbo while energy companies plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop," she said. The commission had taken the court's patience on this issue and "turned it into a license to routinely blow past Congress' deadline, granting itself as much time as it desires to act on rehearing requests," she said.

Remedies could include requiring FERC to act in a timely manner on rehearing, or declining to issue construction orders until it resolves certificate rehearing requests, according to Millett, who said "the case starkly illustrates why a second look by us or by the commission is overdue."


On GHG emissions, the court found that the environmentalists were right that the National Environmental Policy Act required FERC to consider both direct and indirect environmental effects, and that "despite what the commission argues, the downstream greenhouse gas emissions are such an indirect effect."

But it said FERC had already taken the steps environmentalists were seeking in the Atlantic Sunrise case.

FERC had estimated the amount of emissions resulting from the gas that the project would transport. And it had predicted those emissions would be partially offset by reductions in higher carbon emitting fuels that the gas would displace, the ruling said.

Gary Kruse of LawIQ said the ruling appeared to narrow the field on the GHG debate but not provide a final answer. The ruling leaned toward the approach Commissioner Cheryl LaFleur previously put forward -- that including a minimum burn satisfies the obligation for calculating downstream GHG emissions -- rather than the more limited approach backed by the majority or the more expansive approach sought by Commissioner Richard Glick, he said.

It does not yet answer whether the commission can do even less than the maximum burn calculation, a matter of current debate, he said.

On other matters, the court rejected the argument that FERC had impermissibly segmented the pipeline review from that of the Southeast Market Pipelines. The record supported FERC's view that each project had independent utility, it said, since if Atlantic Sunrise were never built, Southeast Market Pipelines would still be connected to other gas supplies.

The court also found FERC took a hard look at another route alternative and found the current route would cross fewer recreational areas and avoid potentially dangerous elevation changes.

And it backed FERC's position of market need for the project, citing evidence that there were contracts for 100% of the capacity, along with comments from shippers and an end-user reinforcing the demand.

-- Maya Weber,

-- Edited by Jasmin Melvin,