Commenters swarm FERC to push reform — and status quo

By Ellen M. Gilmer, Sam Mintz, Rod Kuckro | 07/27/2018 07:20 AM EDT

Environmentalists have dominated the docket in the Federal Energy Regulatory Commission’s review of how it analyzes natural gas pipelines. Energy companies and trade groups showed up en masse, too, but said they were generally pleased with how FERC’s process works.

The Federal Energy Regulatory Commission in Washington, D.C.

The Federal Energy Regulatory Commission in Washington, D.C. Ellen M. Gilmer/E&E News

Environmentalists have dominated the docket in the Federal Energy Regulatory Commission’s review of how it analyzes natural gas pipelines.

As the comment period closed this week on FERC’s ongoing policy review, thousands of letters poured in from environmental groups, state officials and individuals concerned about impacts from gas infrastructure.

"By submitting more than 25,000 comments, the public is showing they want the Commission to ensure ample opportunities for public input, confirm demand for gas isn’t being inflated, and account for the wide-ranging impacts of pipelines on our climate and communities," the Sierra Club’s Joan Walker said in a statement.


Energy companies and trade groups showed up en masse, too, but said they were generally pleased with how FERC’s process works. Others knocking on FERC’s door: academics, tribes and a couple of other federal agencies — including EPA, which delivered somewhat mixed messages (Greenwire, July 26).

FERC’s pipeline policy hasn’t been updated since 1999. Kevin McIntyre announced the review in a surprise move at the end of his first meeting as chairman in December.

"Much has changed in the energy world since 1999, and it is incumbent upon us to take another look at the way in which we assess the value and the viability of our pipeline application," he said at the time (Energywire, Dec. 22, 2017).

The commission asked for input on specific issues: FERC’s assessment of project need, landowner protections, environmental impacts and permitting efficiency.

Any changes to FERC’s policy could be delayed after Republican Commissioner Robert Powelson leaves his post next month. McIntyre has stressed that it’s also possible the commission will opt to leave the current policy intact.

"You didn’t hear any gripe from me about the current handling of the specific issues that are addressed in our policy today on processing infrastructure applications," he said last year.

Pushing for reform

Environmentalists have become increasingly frustrated with FERC’s review process during the fast build-out of gas infrastructure in recent years.

Their comments raised concerns about the local effects of pipelines and the cumulative impacts of criss-crossing projects on rivers, wetlands, wildlife and other resources. More than anything, though, they pushed FERC to consider how its pipelines contribute to climate change.

The agency has been under fire recently for its waffling approach to gauging projects’ indirect climate impacts — emissions from gas production and eventual combustion at power plants. FERC had been slowly moving toward expanded analysis over the past two years but abruptly changed course in May, announcing plans to tally indirect emissions only in limited circumstances when the commission is certain where gas will be burned.

"Grappling with uncertainty is the purpose of [the National Environmental Policy Act], so that agencies can anticipate and minimize adverse environmental impacts to the greatest extent possible," wrote a coalition of groups led by the Natural Resources Defense Council. "The Commission cannot hide behind uncertainty and ignore the potential adverse effects of its actions."

New York University’s Institute for Policy Integrity outlined several specific changes FERC should make: commit to analyzing upstream and downstream emissions, determine the significance of those emissions by using the "social cost of carbon" or another tool, request more information from pipeline applicants about how gas will be used, and conduct a broad cost-benefit analysis for pipelines.

EPA submitted comments in June explaining how FERC could use tools to better understand the impacts of pipeline-related emissions. A political appointee sent additional comments this week clarifying that the agency does not think FERC is obligated to take those steps.

Many Democratic attorneys general — those from New York, Illinois, Maryland, Massachusetts, New Jersey, Rhode Island, Washington state and the District of Columbia — and other state officials filed comments that largely followed the tack of environmental groups, asking for broader considerations of public interest and expanded analysis of emissions and climate impacts.

Finally, pipeline critics urged FERC to beef up protections for landowners affected by pipelines. Commenters asked the commission to restrict the use of eminent domain for land acquisition and reduce the use of tolling orders, which extend the time FERC has to consider complaints but often keeps landowners from going to court before construction begins.

The right-leaning Niskanen Center recommended that FERC give landowners clearer notice of projects that could affect them and options they have to get involved in during the commission’s process.

Existing policy a ‘resounding success’

The arguments from pipeline companies can be summed up for the most part as: "Don’t change. We like things as they are."

The companies don’t want any changes to the way FERC determines project need, they don’t want changes to the way the agency allows for eminent domain use, and they especially don’t want any adjustments to the way FERC considers greenhouse gas emissions.

In general, they say the 1999 policy is already broad enough to allow FERC all the authority it needs to analyze every aspect of a proposed project.

"The Commission must recognize, as the starting point of its analysis, that the 1999 Policy Statement has worked very well," Dominion Energy Inc. wrote in its comments. TransCanada Corp. called the document a "resounding success."

On the issue of climate change and emissions analysis, the companies argue that FERC’s current evaluation of potential upstream and downstream greenhouse gas emissions is adequate.

TransCanada wrote that if FERC decides to return to using the "upper bound" approach, a sort of worst-case scenario emissions estimate the commission moved away from in May, it needs to "qualify and disclose the overly conservative assumptions on which such estimates are based."

In general, the companies are averse to FERC considering climate change in its decisions.

In contrast to local environmental effects, which the companies argue can typically be mitigated, some environmental factors are "clearly beyond the scope of the public convenience and necessity," wrote NextEra Energy Inc., which has a stake in the Southeast’s Sabal Trail pipeline, the subject of a lengthy legal battle focused on climate issues.

Climate change, the company says, is "not directly related to the environmental impacts associated with project construction and operation." And it’s a problem for which "the Commission cannot realistically impose any conditions to mitigate."

Industry groups representing natural gas, electric power and industrial consumer interests largely echoed those sentiments, maintaining that the 1999 policy works well and doesn’t need any significant changes.

"The current process provides an opportunity for input from all affected parties and provides the Commission the flexibility to balance the different interests in determining whether a project is needed. Accordingly … substantial changes to the Policy Statement and the Commission’s current approach are not necessary at this time," said the Edison Electric Institute, which noted that its members are more dependent than ever on natural gas as a generation fuel, with gas having overtaken coal in 2016 as the dominant fuel for electric generation.

The American Petroleum Institute likewise said the "existing certificate policy provides an adequate framework" to meet market demands and protect stakeholder interests.

One area companies would like to see significant change? The efficiency of FERC’s reviews.

Duke Energy Corp. called on FERC to consider taking advantage of its status as the lead agency for pipeline reviews adopting mandatory deadlines for other state and federal agencies, a call that has been made frequently by the industry and Republicans in Congress.

"While FERC attempts to follow presumptive and permissive timelines, Duke Energy suggests that efficiencies could be achieved by FERC exercising its inherent power to control the pace of review by adopting firmer deadlines in collaboration with other government agencies involved in pre-certification review of proposed natural gas infrastructure projects," the company wrote.