Judge: How can FERC know pipeline impacts unless it asks?

By Pamela King | 04/12/2019 07:16 AM EDT

Federal judges yesterday questioned the Federal Energy Regulatory Commission’s assertion that emissions from gas projects it approves are too difficult to measure. The case could have far-reaching implications for FERC’s handling of climate change.

The E. Barrett Prettyman building in Washington, D.C., is home to the U.S. Court of Appeals for the District of Columbia Circuit.

The E. Barrett Prettyman building in Washington, D.C., is home to the U.S. Court of Appeals for the District of Columbia Circuit. Ellen M. Gilmer/E&E News

Critics of a plan to scale back federal climate analyses for pipelines had their day in court yesterday.

Three judges, all nominated by Democratic presidents, appeared skeptical of arguments by the Federal Energy Regulatory Commission that its assessments of climate impacts from natural gas consumption and production associated with the projects it authorizes are "generic" and "inherently speculative."

"How does the commission know unless it asks?" Judge David Tatel, a Clinton appointee, asked FERC General Counsel James Danly during oral arguments at the U.S. Court of Appeals for the District of Columbia Circuit.


It was an inquiry Tatel, who led the day’s questioning, constantly repeated during a pair of hearings in which landowners and a little-known nonprofit challenged FERC’s approval of infrastructure upgrades along the East Coast natural gas pipeline network.

One of the cases stems from FERC’s refusal last year to reconsider its approval of Dominion Energy Transmission Inc.’s New Market Project. The agency used a procedural document as a platform to announce a dramatic change in the agency’s approach to analyzing climate impacts from the projects under its jurisdiction (E&E News PM, May 18, 2018).

Democratic Commissioners Cheryl LaFleur and Richard Glick agreed with the majority’s decision not to revisit the project certificate but strongly dissented on the climate policy shift.

LaFleur used FERC’s order on the Broad Run infrastructure expansion, the project at the center of the second case on the D.C. Circuit’s docket yesterday, to crunch numbers on downstream greenhouse gas emissions in an effort to show her colleagues how easily those calculations can be done.

The New Market lawsuit, filed by the small New York environmental group Otsego 2000, appears to be a priority for FERC officials.

Chairman Neil Chatterjee, a Republican, this week spoke publicly about the lawsuit (Energywire, April 11).

Glick made a rare appearance at oral arguments yesterday. "The judges picked up on something Commissioner LaFleur and I had said in our dissents," he told reporters after court adjourned.

"At the very least, the commission should ask the questions."

Scope of NEPA review

Michael Sussman, representing Otsego 2000, came prepared to defend the group’s standing in the lawsuit, as requested by the judges prior to arguments.

Attorneys for FERC and Dominion, an intervenor in the case, failed to challenge the nonprofit’s standing, but legal experts say the court could still toss the case over this question.

If the court adopts too rigorous a standard, Sussman argued, "this issue will never be litigated."

The line of questioning over standing only emphasizes an issue at the heart of the merits dispute, said Natural Resources Defense Council attorney Gillian Giannetti, who attended the hearings.

"When FERC announced this broad, sweeping new policy for greenhouse gas emissions, it had to have known it was choosing to do so in a case that had very few intervenors and had been largely under the radar," she said.

"The questions highlight that FERC chose to make a very high-profile decision in a very low-profile case."

Judge Robert Wilkins, an Obama appointee, noted that the D.C. Circuit’s 2017 ruling in Sierra Club v. FERC required the agency to either review downstream climate impacts from the Sabal Trail pipeline or explain why it cannot complete that analysis.

FERC claims in the New Market order that asking pipeline applicants for the exact source of production — a key factor in determining upstream emissions — "would be an exercise in futility," the judges noted during Sussman’s arguments.

The National Environmental Policy Act "demands FERC to do a broad review," Sussman said, adding that the agency’s 3-2 split on the New Market order speaks to political influence on the climate shift.

Unlike Sabal Trail, which connected to a specific power plant, Danly argued, it’s not possible for FERC to identify an end user of gas transported through the New Market project.

"They would not buy the gas unless they were going to burn it," Tatel said, adding that FERC could ask its applicants to identify their customers.

"Maybe in the end you won’t get it, but ask," he said.

Tatel and Wilkins pushed back on arguments by Dominion counsel Cate Stetson, a partner with the law firm Hogan Lovells, that "NEPA is not a statute that asks for information for information’s sake."

"This is not information for information’s sake," Tatel said.

Second case

The same themes carried into arguments in the second case of the day.

Attorney Carolyn Elefant represented landowners in the Broad Run case, and Van Ness Feldman partner Brian O’Neill argued for intervenor Tennessee Gas Pipeline Co. Solicitor Bob Solomon stepped in for FERC.

At one point in the proceedings, Chief Judge Merrick Garland, a Clinton appointee, directed Solomon, who was on FERC’s brief in the New Market case, to return to a question raised in the first hearing.

The judges pointed out that Antero Resources Corp. had signed on to provide gas for the project. What if the company told FERC that it planned to build 10 new wells as a result of the Broad Run expansion? Garland asked.

"This is the kind of information that can make a difference," he said.

The panel pressed Solomon to draw a line between Broad Run and Sabal Trail.

Solomon argued that, through its "notice of inquiry" on pipeline certification policies, FERC "has asked the questions" at hand in these cases.

The agency has yet to make changes as a result of that inquiry.

"FERC initiated the notice of inquiry shortly before they made the decision in both the Broad Run and New Market cases," said Avi Zevin, an attorney for New York University School of Law’s Institute for Policy Integrity.

"The idea that they’re thinking hard about this question — but they still announced this policy — in my view undercut their argument that the court should be impressed that FERC is thinking about these questions now."

Analyst highlights group’s standing

The judges are expected to deliver decisions in the next few months.

Observers say FERC could hold back on issuing any major decisions until the D.C. Circuit hands down its ruling.

"Today’s oral argument leads us to conclude that Otsego may have failed to convince the court it has standing, even though we think that the judges seemed skeptical of FERC’s arguments on the merits," ClearView Energy Partners LLC analysts wrote yesterday.

"If the court does not dismiss the case for lack of standing, we think the appeal could be granted."

After yesterday’s proceedings, Glick declined to speculate on the outcome of the case.

"You can never have any takeaways until you see how the judges actually write their opinions," he said.

Reporter Rod Kuckro contributed.