FERC critics gear up for round 2 in pipeline court battle

By Pamela King | 05/10/2019 07:01 AM EDT

Challengers of a drastic shift in pipeline regulators’ approach to climate analysis may take their case back to court after facing defeat yesterday. The outcome could have far-reaching implications for the government’s handling of greenhouse gas emissions.

The U.S. Court of Appeals for the District of Columbia Circuit.

The U.S. Court of Appeals for the District of Columbia Circuit. Ellen M. Gilmer/E&E News

Challengers of a drastic shift in pipeline regulators’ approach to climate analysis could take their case back to court.

A panel of judges for the U.S. Court of Appeals for the District of Columbia Circuit yesterday issued a two-page order finding that the New York nonprofit Otsego 2000 lacked standing to file its lawsuit against the Federal Energy Regulatory Commission (Energywire, May 9).

The judges did not address the merits of the case, which centered on FERC’s decision last year to limit analysis and disclosure of greenhouse gas emissions from projects the commission authorizes.


"We believe the decision is erroneous and the issue of standing should have been fully briefed," Michael Sussman, counsel for Otsego 2000, told E&E News yesterday.

Even if the D.C. Circuit declines to revisit its decision, the issues at the heart of the challenge will continue to spread into future litigation, experts said yesterday.

The lawsuit stems from FERC’s final approval last year of Dominion Energy Transmission Inc.’s New Market Project, a relatively low-profile effort to upgrade natural gas infrastructure in the Empire State.

New Market gained notoriety in the energy world after FERC’s Republican majority used a procedural order to deem the commission’s analysis of upstream and downstream emissions "generic" and "inherently speculative" and halt the agency’s practice of tallying those impacts (E&E News PM, May 18, 2018).

Democratic Commissioners Cheryl LaFleur and Richard Glick vehemently opposed the change.

Glick last month co-authored an article in a legal journal in which he said FERC had "fallen short of its statutory obligations" on climate.

LaFleur used a subsequent order on the Broad Run infrastructure expansion to run the numbers on downstream greenhouse gas emissions — an attempt to demonstrate to her GOP colleagues how simple the process can be.

But even LaFleur’s back-of-the-envelope calculation wouldn’t be possible if the key data were not collected in an environmental review, said Gillian Giannetti, an attorney for the Natural Resources Defense Council.

"If this policy is taken to its logical end, that means that information won’t be available anymore," she said.

The D.C. Circuit heard arguments in the Broad Run case the same day as the New Market challenge.

During arguments, the judges — all appointed to the court by Democratic presidents — appeared skeptical of FERC’s approach (Energywire, April 12).

The court could choose to address upstream emissions in Broad Run, which has not yet been decided, said analysts for ClearView Energy Partners LLC.

"Overall, we still think that the court does not favor FERC’s new ‘don’t ask, don’t evaluate’ approach to its GHG reviews, and its inability to consider Otsego’s appeal for lack of standing deprived the court of an opportunity to render an assessment at this time," the firm said in a note yesterday.

A grant of the Broad Run appeal could pave the way for the upstream emissions question in a challenge of FERC’s certificate for the PennEast pipeline through Pennsylvania and New Jersey, ClearView predicted.

‘Everyone will be back in court’

The court’s decision, which came in an unpublished order, does not create binding precedent from the court on the substance of the policy, said Avi Zevin, an attorney for New York University School of Law’s Institute for Policy Integrity.

"This decision has a big effect on the individuals who are upset about the outcome of this particular project, but as a more general legal principle, it doesn’t foreclose challenges to the policy decision as to how FERC is going to do greenhouse gas analysis for future pipeline projects," he said.

A different element of the multifaceted policy — the commission’s abandonment of the social cost of carbon tool to estimate the economic impact of emissions — is still ripe for review in the PennEast certificate challenge, he said.

"That’s still going to go forward," Zevin said.

The Grow America’s Infrastructure Now Coalition yesterday celebrated the D.C. Circuit’s finding.

"Regulatory certainty is key for much-needed growth in midstream infrastructure," Craig Stevens, a spokesman for the group, said in a statement.

"A rigorous, yet straightforward and streamlined permitting process encourages investment in our pipeline network while maintaining critical safety standards."

While judges sitting on the D.C. Circuit panel asked Otsego 2000 to come to arguments prepared to defend its standing, FERC and Dominion, an intervenor in the case, did not raise the issue during briefing.

FERC’s venue of choice for unveiling its policy shift robbed the public and the judiciary of its opportunity to weigh in on the change, said NRDC’s Giannetti.

"This will happen again if FERC decides to go forward with this policy," she said.

"Everyone will be back in court."

Reporter Jennifer Hijazi contributed.