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Legal divisions abound as US FERC sorts through GHG mitigation for gas projects

Highlights

Danly calls legal precedent for altered approach unstable

Tech conference fields debate on GHG mitigation, quantification

A strong divide over the bounds of the US Federal Energy Regulatory Commission's legal authorities repeatedly surfaced as the commission began sorting through ways to mitigate potential greenhouse gas emissions as part of its natural gas project reviews.

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The commission held a technical conference Nov. 19 to examine methods natural gas companies may use to mitigate the effects of direct and indirect GHG emissions resulting from Natural Gas Act Section 3 and 7 authorizations.

Yet, commissioner James Danly, at the start and end of the Nov. 19 forum, questioned a central assumption -- that it is legal for FERC to get into mitigation of GHGs under its conditioning authority in the NGA.

Chairman Richard Glick long has argued FERC should assess the significance of a gas project's climate impacts and should seek mitigation of such impacts if they are significant. He has cited appeals court decisions, including a 2017 ruling involving the Sabal Trail Transmission project, to argue this will enhance durability of FERC's orders.

Danly, however, asserted Nov. 19 that, "anybody who thinks that there is stability around Sabal Trail is mistaken." He suggested there is an "impending collision" between that case and a prior US Supreme Court ruling in Public Citizen. "I don't know that Sabal Trail will survive it," he said.

Former FERC Chairman Joseph Kelliher, who was a panelist Nov. 19, shared the view that FERC lacks direct or indirect legal authority under the NGA to order mitigation of the GHG emissions.

Glick declared himself "a little astounded" by Kelliher's position. Glick read Sabal Trail to clearly state that FERC has authority to deny a project if it is too harmful to the environment and to state that FERC has authority to mitigate reasonably foreseeable downstream emissions.

Favoring mitigation

The approach FERC takes could have bearing on which projects are approved.

Commissioner Allison Clements suggested climate considerations could play a role in the broader determination of whether projects are needed.

"For example," she asked, "should the commission assess the risks the current demand for transportation of natural gas will dissipate as federal, state and local governments respond to climate change by restricting some use of fossil fuels?"

The legal basis for ordering mitigation and potentially denying certificates when harm cannot be eased was supported by panelists from the Environmental Protection Agency and environmentalist lawyers.

Moneen Nasmith, senior attorney at Earthjustice, said the law is clear that FERC must consider direct and reasonably foreseeable indirect impacts of projects.

"Given the extent of the climate crisis, and the need to avoid not just new emissions but reduce existing emissions, the commission should be putting a thumb on the scale in favor of mitigation measures to eliminate GHG emissions wherever possible," she said. The burden should be put on the applicant to show that measures, such as electrification of equipment, might be infeasible, she said.

FERC could choose from a menu of mitigation options, offered Melissa Hoffer, EPA principal deputy general counsel.

Those could include requiring use of equipment that minimizes emissions, such as electrifying motors, electric turbines for compressors, and requiring methane emission reduction measures "additional to any required by law." It could also require offsets where emissions already have been reduced as much as practicable, she said.

Moreover, FERC could limit the duration of certificates to ensure the public interest in avoiding more dangerous levels of warming is not undermined by locking in long-term GHG emissions, she said.

Quantification challenges

The conference also featured debate about methods for quantifying emissions and associated climate impacts such as the social cost of carbon.

Scott Hallam, Williams senior vice president for transmission and Gulf of Mexico, cautioned that before diving into mitigation, it is important to face challenges around quantifying emissions, given the variation in pipeline capacity utilization, and the myriad of projects serving different purposes.

"What I'm challenged with as an operator of a pipeline and developer of projects is that not all projects are the same," and there are projects that are disadvantaged in terms of providing estimates.

He also urged that a regulatory approach be open to evolution of pipeline systems to incorporate innovations such as renewable natural gas, hydrogen and carbon capture.

Kelliher warned that FERC's approach of estimating downstream emissions, assuming a full burn, grossly exaggerates emissions. Setting a national or regional average of pipeline utilization as a rebuttable presumption is a "truer way and a fairer way" to try to estimate, he offered.

On the question of indirect emissions, Susan Tierney, senior advisory at Analysis Group, floated ideas for establishing a default methodology for estimating life-cycle emissions for various scenarios as a starting point, making use of government data.

"There are datasets that are available from government agencies like the National Energy Technology Laboratory, like the Environmental Protection Agency, like the Energy Information Administration, all of which provide different metrics associated with the greenhouse gas emissions associated with one set of activities or another along the supply chain," she said.