On June 12, 2018, FERC Commissioner Cheryl LaFleur, through a concurrence in an order denying rehearing (“Rehearing Order”), announced that going forward she will try to consider and disclose the upstream and downstream greenhouse gas (“GHG”) impacts of proposed pipeline projects, even if such information is generic and ignored, as part of FERC’s public interest determination. In the Rehearing Order, Commissioner LaFleur calculated her own estimation of the total downstream GHG emissions as part of her environmental review in the proceeding, even though the majority did not.
In September 2016, FERC originally approved Tennessee Gas Pipeline Company’s proposed Broad Run Expansion Project (“Project”). On rehearing, intervenors argued that FERC’s GHG impacts analysis for the Project was inadequate because the Commission failed to sufficiently consider the upstream and downstream GHG impacts of the Project. According to the intervenors, FERC failed to properly evaluate the cumulative impacts of the Project as is required by FERC to meet the public interest standards of the National Environmental Policy Act and the Natural Gas Act.
On rehearing, FERC upheld its prior order approving the Project and concluded that it did not need to consider either the upstream production or downstream consumption of natural gas as indirect effects of the Project, consistent with prior FERC policy (see May 29, 2018 edition of the WER). With regard to upstream production, FERC held that there was nothing in the record to indicate that approving the Project would induce the production of natural gas. As for downstream consumption, FERC distinguished the Project from a recent U.S. Court of Appeals for the District of Columbia Circuit case (Sierra Club v. FERC) requiring estimated downstream GHG emissions where natural gas transported by a proposed “project will be used for a specific end-use combustion.” FERC reiterated that the gas transported by the proposed Project will not be delivered to a specific end user. FERC reasoned that because it does not know where the gas will ultimately be consumed, FERC is “unable to estimate with any precision the level of GHG emissions” associated with the Project.
In her concurrence, Commissioner LaFleur announced that, while she agreed that the Project was in the public interest, she argued that FERC did not sufficiently consider the downstream GHG effects of the Project in its environmental review. Instead of dissenting from FERC’s order, Commissioner LaFleur presented her own analysis of the downstream GHG emissions as part of her public interest determination for the Project. In doing so, Commissioner LaFleur utilized a methodology developed by the Environmental Protection Agency to estimate the upper bound limit of downstream GHG emissions associated with the Project. Regarding upstream effects, Commissioner LaFleur acknowledged that it is less evident that upstream effects are caused by a proposed pipeline. However, Commissioner LaFleur insisted that for future environmental reviews for proposed pipeline projects, FERC should respond to concerns related to upstream GHG impacts by disclosing the “best available information.” More generally, Commissioner LaFleur stated that for future pipeline projects, her determination will be based “on the facts in the record – even ones overlooked by the majority – and the governing law as I read it.”
The Rehearing Order, including Commissioner LaFleur’s concurrence, is available here.