By Karen Savage
The Federal Energy Regulatory Commission, a little-known agency that oversees energy infrastructure, receives far less attention when it comes to climate change than the Environmental Protection Agency. But a recent court ruling upheld that it must consider climate impacts in its decisions to approve certain natural gas infrastructure, hindering Trump administration efforts to speed construction on those projects with no regard to their impact on the climate.
The ruling, issued Monday by the District of Columbia Court of Appeals in Lori Birckhead et al v. FERC, emphasized that FERC must consider greenhouse gas emissions during its review process of fossil fuel projects. The court upheld that the commission is obligated by law to follow the National Environmental Policy Act (NEPA), which states that FERC must consider the “environmental and related social and economic effects” of a proposed project and disclose them to the public.
It added another court defeat to the Trump administration’s attempt to roll back regulation of the energy industry. The administration has been appointing industry-friendly commissioners to FERC’s five-member panel with the goal of approving more infrastructure, such as compressor stations and pipelines, with little to no regard to their climate impacts.
Perhaps most controversial was the nomination and approval of Commissioner Bernard McNamee, who formerly represented fossil fuel companies. McNamee drew sharp criticism during the nomination process for having said that carbon dioxide is “not a real pollutant” and fossil fuels are “key to our way of life.”
Despite Trump’s efforts, other appointees, including Neil Chatterjee and Richard Glick, have veered from the administration’s views on climate change. And the new ruling shows that courts will hold the agency accountable to its responsibilities under NEPA.
“This decision should be taken by FERC as a warning shot that its climate approach is incompatible with NEPA and that it needs to adopt a fulsome consideration of upstream and downstream emissions or it’s eventually going to find its approach knocked down at the court,” said Gillian Giannetti, an attorney with the Natural Resources Defense Council, who was not involved in the lawsuit.
The new ruling actually ruled against the environmental group challenging FERC’s approval of a part of the Broad Run Expansion Project near Nashville, but while the court declined to reverse the approval, it clarified a 2017 climate change-related ruling issued by the same court in Sierra Club v. FERC, which reversed approval of a different pipeline, Sabal Trail.
In that decision, the court said “downstream greenhouse gas emissions were a reasonably foreseeable” effect of the Sabal Trail project and should have been considered during the approval process.
FERC interpreted that to mean it was required to consider downstream emissions only when the applicant knows where the gas would be burned, such as a pipeline that is built specifically to serve a power plant or other facility. In all other cases, FERC took the position that it was not required to consider emissions.
Upstream emissions occur before the natural gas reaches the proposed pipeline infrastructure and downstream emissions occur after it leaves.
The most recent decision could also reverse the Commission’s declaration last year that it would not consider most greenhouse gas emissions during the approval process. In that announcement, FERC said it would limit consideration and public disclosure of impacts caused by upstream and downstream greenhouse gas emissions, because it was not required under NEPA. It also upheld its approval of the New Market Project, an upgrade to Dominion Energy’s natural gas infrastructure in New York.
Experts and environmental groups had anticipated the court would clarify the Sierra Club/Sabal Trail ruling during an appeal of the New Market decision, but last month, the D.C. Circuit denied the appeal on standing without considering FERC’s responsibility on greenhouse gas emissions and climate change.
That clarification came this week, in the Birckhead/Broad Run appeal, when the court said FERC “must consider not only the direct effects, but also the indirect environmental effects” during the NEPA review process.
Prior to the ruling, FERC maintained that it cannot consider greenhouse gas emissions because the project applicants do not provide FERC with that information. The Commission also said it did not need to consider greenhouse gas emissions from facilities outside its jurisdiction.
Both contentions were rejected by the court.
“Although the Commission asserts that the project applicant itself is unlikely to possess the needed information, we are skeptical of any suggestion that a project applicant would be unwilling or unable to obtain it if the Commission were to ask for such data as part of the certification process,” the court wrote in its ruling, adding that when it asked an attorney for Tennessee Gas, the applicant in the case, what it would have done if the commission had asked for that information, he said the company would have provided it.
“When the regulator asks us questions, we generally answer them as promptly and completely as possible,” the attorney said.
Commissioner Cheryl LaFleur, appointed to FERC by President Obama, quickly calculated emissions during the Birckhead/Broad Run hearing in April, demonstrating how easy it is to consider emissions once FERC has the appropriate data.
Giannetti said the decision clearly states it is FERC’s legal responsibility to consider climate change in its decisions and must disclose, calculate and analyze the reasonably foreseeable greenhouse gas emission effects of its projects.
“In terms of steps for advocates, this case is immediately applicable to projects that came after the [SierraClub]Sabal Trail decision because it says, albeit maybe as an aside, that FERC’s interpretation and limitation of that case to its facts is wrong and that has been the basis of a lot of its denials or refusals to analyze climate in a more robust manner,” said Giannetti.
Like LaFleur, Commissioner Richard Glick has also been vocal in his belief that FERC should consider climate change in its approval process.
Glick, who was appointed to the commission in 2017 by President Trump, has written dissenting opinions on several recent FERC decisions to approve natural gas projects and has said the commission is operating in violation of its mandate under NEPA.
FERC has “fallen short of its statutory obligations to consider the impact of its actions and climate change,” particularly in its permitting of certain types of natural gas infrastructure, Glick and his advisor Matthew Christiansen wrote in an article published last month in the Energy Law Review.
“Although the Commission is not a climate regulator, like the EPA, the scope of its statutory responsibilities means that its decisions will inevitably affect the nation’s greenhouse gas emissions, and, therefore, climate change,” Glick and Christiansen wrote.
Giannetti said she hopes FERC re-evaluates its decision to limit the consideration of greenhouse gas emissions as outlined in the New Market decision.
If that doesn’t happen, FERC could find itself inundated with appeals. Giannetti said that helps no one.
“It doesn’t help the project developers, it leaves legal limbo for FERC, it obviously doesn’t help the people who are directly affected by the project, and no one benefits from these cases being dragged out for years,” said Giannetti, adding that by the time a court rules, some projects are already built and in service.
Glick and Christiansen wrote that the urgent threat of climate change does not necessitate a wholesale reinterpretation of FERC’s responsibilities or a novel regulatory approach.
“Instead, climate change increases the stakes of many Commission actions, making it all the more important that the Commission carry out its existing obligations.”