FERC Failing to Consider Climate Impacts in Gas Pipeline Approvals

Earlier this month, the Federal Energy Regulatory Commission (FERC) moved to review the 1999 Policy Statement that established guidelines for the Commission’s approval of natural gas pipelines. There is bipartisan support on the FERC for the review, which began on April 19, 2018, and comes on the heels of a number of controversial pipeline rulings over the last couple years. And, while the support for a review is unanimous among the FERC commissioners, they disagree about the extent to which environmental concerns related to climate change should be incorporated into its decisions. Part of the FERC’s responsibility is weighing the economic and environmental pros and cons of different pipeline development projects.

In a recent case, a majority of commissioners ruled that FERC should not to consider the “upstream” and “downstream” environmental effects of pipelines when approving them. The inclusion of those related impacts, they claim, is an overextension of the Commission’s responsibility under the National Environmental Policy Act (NEPA) and makes its implementation and enforcement more confusing. Commissioners LaFleur and Glick, the two dissenting members in the commission’s ruling, expressed their frustration, arguing that this de facto shift in the way the commission considers the environmental impact of pipeline construction precludes the possibility of including climate change in its decisions. Going into the review, they hope to see the FERC expand the economic impacts that it considers to incorporate diverse environmental and economic concerns—like the negative health and environmental externalities of natural gas consumption—into decisions around pipeline approval. Such considerations would ultimately reduce the number of pipelines approved and promote more development of renewable energy.

This year’s case was not the first instance in which upstream and downstream costs became a point of contention, and the FERC’s most recent stance goes against recent court rulings. Last year, a D.C. circuit panel mandated that the FERC redo its environmental review of the Sabal Trail Pipeline, asserting that the FERC’s failure to consider downstream environmental costs in its environmental analysis exhibited a break from NEPA. Earlier this year, FERC approved the Sabal Trail Pipeline in a split decision after redoing the environmental review. The Republican majority argued that the increase in Florida’s fossil fuel consumption that would be caused by the pipeline, estimated to be between 3.6 and 9.9 percent, was not significant. Such delays and lawsuits against pipeline construction have become commonplace.

The Atlantic Coast Pipeline, a project headed by Dominion Energy and Duke Energy, has been bogged down in legal and bureaucratic struggles. After receiving a green light from FERC, it was delayed again in early May after a federal appellate court ruled that the incidental take permit given out by the U.S. Fish and Wildlife Service was too vague to be enforced or monitored under the Endangered Species Act (incidental take permits are used to establish limits on the number of endangered species affected by a given project). The Southern Environmental Law Center, the group litigating against the pipeline, countered that any construction done without a valid incidental take permit would leave Dominion Energy liable for any damage done to endangered species or habitat. Dominion responded that the ruling only affected 10 miles of its construction and has planned on moving forward with construction. Even before the appellate court’s ruling, the Atlantic Coast Pipeline had been caught up in controversy. As part of the deal, North Carolina Governor Roy Cooper received control of a $57.8 million mitigation fund, which has raised ethics concerns, and there have been lawsuits surrounding land seizures through eminent domain.

Dominion Energy and Duke Energy are already bracing themselves for a lawsuit from the NAACP alleging that the pipeline would have a worse impact on communities of color, which have historically been more affected by the construction of environmentally detrimental infrastructure. Of course, the Atlantic Coast Pipeline is not the first pipeline to incite resistance on this front; the Dakota Access Pipeline was met with historic protests by the Standing Rock Sioux, who were concerned that the pipeline would endanger their water supply and environment. Five leaks from the Dakota Access pipeline in its first six months of operation quickly proved the protesters’ concerns prescient and justified. More and more activist groups are rising up to protest unwanted pipelines in their communities.

Pipelines have long depended on the political weakness of poor and minority communities to get building permits, according to a 2017 NAACP report. Increasingly, such projects also rely on narrow economic arguments. A projection based off of an independent study by PJM, the company that runs the grid to which the pipeline will provide gas, found that Dominion’s estimates for the natural gas markets the Atlantic Coast pipeline would serve were far above what they likely would be.

Courtesy of: Southern Environmental Law Center

FERC has its roots in the Federal Power Commission (FPC), which was created in 1920. The FPC was later converted into the FERC with the creation of the Department of Energy. Among its current responsibilities is the approval of pipeline projects; in 2017 more pipelines were approved than in any other year on record, bringing criticism from activists and progressive groups for both their environmental and health impacts. Besides their contributions to America’s carbon output, oil and gas facilities have been found to contribute to a heightened risk of cancer and respiratory health problems in adjacent communities. And, these affected communities are overwhelmingly poor and African American.FERC justifies its approval of pipelines in part through old precedents, even for pipelines with questionable economic value and contested ethical standing. NEPA requires that the Federal Government considers environmental impacts that are “reasonably foreseeable.” The FERC recently ruled that, as a group that evaluates only the transportation of natural gas, whether or not it approves a project has no impact on the production of natural gas and therefore, “if the Commission does not have meaningful information about future power plants, storage facilities, or distribution networks, within the geographic scope of a project-affected resource, then these impacts are not reasonably foreseeable for inclusion in the cumulative impacts analysis.” In other words, if the FERC cannot identify exactly where the gas transported will be consumed, it does not consider the impact of the gas “reasonably foreseeable” and will not include it in its calculation. In recent rulings, this has allowed FERC to exclude carbon emissions from the environmental factors it considers.

FERC uses a definition of the “public interest” taken from a ruling on Docket No. 18-1-000 that established that the Commission must consider the “public interest” as understood in the Natural Gas Act of 1938, long before the Clean Air Act, the Kyoto Protocol, or any mainstream awareness of the adverse effects of burning fossil fuels. The definition limits the idea of public interest to primarily encompass access to natural gas, ignoring aspects like impacts on public health or quality of life. Now, in an era where the continued burning of fossil fuels is considered likely to “fuel economic and social discontent—and possibly upheaval” by the U.S. National Intelligence Community, this antiquated take on the relationship between the public interest and natural gas promotes the construction of more pipelines.

In its adherence to the 1938 conception of the “public interest,” FERC ignores the shift marked by NEPA. NEPA orders the Federal Government to “fulfill the responsibilities of each generation as trustee of the environment for succeeding generation” and “attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences.” Scientists, environmental justice groups, and environmental activists have not only discovered the dangers of fossil fuels and a fossil-fuel based economy but have also presented pathways to a renewable, green, sustainable future. FERC’s adherence to the rulings of a bygone era are delaying the arrival of that future.

Author: Tim Manning