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Commissioner Richard Glick Statement
December 12, 2018

Docket No. CP18-18-000
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Partial Dissent regarding Transcontinental Gas Pipe Line Gateway Expansion Project

In today’s order, the Commission authorizes Transcontinental Gas Pipe Line Company, LLC’s (Transco) proposed Gateway Expansion Project, which will permit Transco to provide an additional 65,000 dekatherms per day (Dth/d) of firm transportation service to existing interconnections in New Jersey to meet shippers’ incremental natural gas supply needs.1 In doing so, the Commission again refuses to consider whether the Project’s contribution to climate change from greenhouse gas (GHG) emissions would be significant, even though it quantified the Project’s emissions from construction and operation. Moreover, the Commission fails to consider the Project’s contribution to climate change from upstream and downstream GHG emissions. The Commission’s refusal to evaluate and consider the Project’s harm from its contribution to climate change falls well short of our obligations under the Natural Gas Act (NGA)2 and the National Environmental Policy Act (NEPA).3 Because I believe the Commission cannot find that the Project is in the public interest without evaluating and determining the significance of this impact based on information in the record, I respectfully dissent in part.4

The Commission maintains that it need not consider the significance of the Project’s contribution to climate change from increased GHG emissions because—the Commission claims—it simply cannot do so.5 We know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane, which can be released in large quantities through the production and the consumption of natural gas. It is therefore critical that the Commission carefully consider the Project’s contribution to climate change, both in order to fulfill NEPA’s requirements and to determine whether the Project is in the public interest under the NGA.

In the Project’s EA, the Commission quantified the Project’s GHG emissions from construction and operation6 and acknowledged that GHG emissions due to human activity “endanger public health and welfare by contributing to human-induced global climate change.”7 But the Commission nevertheless refuses to consider whether the Project’s contribution to climate change from these emissions is significant. Additionally, the Commission ignores the Project’s reasonably foreseeable downstream GHG emissions, even though Transco explains that “the additional firm natural gas transportation service on Transco’s mainline is intended for its shippers’ incremental supply needs beginning with the 2020/2021 winter heating season.”8 The Commission also gives no consideration to whether the Project will lead to an increase in upstream GHG emissions from additional production. The Commission adopts an overly narrow and circular definition of indirect effects9 and disregards the Project’s central purpose—to facilitate additional natural gas consumption.10 The Commission cannot ignore the fact that adding firm transportation capacity is likely to “spur demand” for natural gas11 and, for that reason, the Commission must at least examine the effects that an expansion of pipeline capacity might have on consumption and production.12 Indeed, if a proposed pipeline neither increases the supply of natural gas available to consumers nor decreases the price that those consumers would pay, it is hard to imagine why that pipeline would be “needed” in the first place.

Even where exact information regarding the source of the gas to be transported and its end use is not available, the Commission will often be able to produce comparably useful information based on reasonable forecasts of the GHG emissions associated with production and consumption.13 Forecasting environmental impacts is a regular component of NEPA reviews and a reasonable estimate may inform the federal decisionmaking process even where the agency is not completely confident in the results of its forecast.14 Similar forecasts can play a useful role in the Commission’s evaluation of the public interest, even in those instances when the Commission must make a number of assumptions in its forecasting process.15

Quantifying the Project’s GHG emissions is a necessary, but not sufficient, step in meeting the Commission’s obligations to consider the Project’s environmental effects associated with climate change. NEPA and the NGA’s public interest standard require the Commission to consider not the GHG emissions themselves but the resulting environmental impact.16 The Commission maintains the position that it need not determine whether the Project’s contribution to climate change is significant, relying instead on a vague assertion that “[t]here is no standard methodology” to determine whether the Project’s GHG emissions “would translate into physical effects on the global environment.”17 This bald conclusion is no substitute for fulfilling the Commission’s responsibility to carefully—and meaningfully—consider the public interest in the Project.

Under NEPA, the Commission must consider the harm from the Project’s GHG emissions when the emissions are direct and indirect effects of the Project.18 Moreover, in Sabal Trail, the court left no room to question that GHG emissions from the downstream combustion of natural gas can be “an indirect effect of authorizing” a pipeline project, which the Commission can reasonably foresee, and which the agency has a legal authority to consider and mitigate.19 As the court explained, section 7 of the NGA requires the Commission to balance “‘the public benefits [of a proposed pipeline] against the adverse effects of the project,’ including adverse environmental effects.”20 If a pipeline’s adverse effects outweigh its public benefits, the project is not in the public interest and the Commission must deny the section 7 certificate.21 As relevant here, that means that the section 7 balancing test must incorporate an analysis of the environmental harms, including those caused by a proposed pipeline’s contribution to climate change. The Commission’s failure to consider the harm from the Project’s GHG emissions under NEPA and in its public interest determination reveals a stubborn adherence to the views that the Sabal Trail court rejected. It is also an empty excuse for ignoring calls for the Commission to use the Social Cost of Carbon to assess the Project’s contribution to climate change.22

The Commission has the tools to determine the Project’s harm from its contribution to climate change due to incremental GHG emissions. This is precisely what the Social Cost of Carbon delivers. By measuring the long-term damage done by a ton of carbon dioxide, it provides a method for linking GHG emissions to particular climate impacts, thereby providing both the Commission and the public with the “hard look” required to assess the magnitude of a proposed project’s impact on the climate. Especially when it comes to a global problem like climate change, a measure for translating a discrete project’s climate impacts into concrete and comprehensible terms can play a useful role in the NEPA process by putting the harms caused by the project in terms that are readily accessible for both agency decisionmakers and the public at large.

As in almost every aspect of the Commission’s regulation—from reviewing environmental and safety impacts to calculating expected rates of return on investment dollars—the Commission can manage uncertainty through probability and statistical analyses. In this same vein, “NEPA does not demand that every federal decision be verified by the reduction to mathematical absolutes for insertion into a precise formula.”23 The fact that the Commission may not know the exact magnitude of the Project’s contribution to climate change is no excuse for assuming the impact is zero. Instead, the Commission must engage in a case-specific inquiry into the reasonably foreseeable effects and estimate the potential impact—making assumptions where necessary—and then give that estimate the weight it deserves.

The Commission has recognized that a variety of environmental impacts are best considered qualitatively but once again provides no answer for why the Commission—as the agency with both the mandate and technical expertise to consider the public interest in the Project—cannot use a quantitative measure of the Project’s contribution to climate change as input to making a qualitative determination of its significance.24 In effect, the Commission maintains that it has satisfied its obligation under NEPA to consider the harm caused by the Project’s contribution to climate change by providing a generic, qualitative discussion that concludes it cannot accurately assess the impacts of GHG emissions generally. The reality is the Commission has still failed to make an explicit determination of whether the harm associated with the Project’s contribution to climate change is significant. In order to satisfy NEPA, the environmental review documents must both disclose direct and indirect impacts, which can include quantitative and qualitative considerations, and disclose their significance.25

To support this directive, CEQ regulations expressly outline a framework for determining whether the Project’s impacts on the environment will be considered significant—and this CEQ framework requires considerations of both context and intensity, noting that significance of an action must be analyzed in several contexts.26 The Commission can use these factors to develop a framework to consider the significance of the Project’s impact. Its failure to do so is no excuse for neglecting to consider the Project’s harm from its contribution to climate change.

Climate change poses an existential threat to our security, economy, environment, and, ultimately, the health of individual citizens. Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane—which can be released in large quantities through the production and the consumption of natural gas. Congress determined under the NGA that no entity may transport natural gas interstate, or construct or expand interstate natural gas facilities, without the Commission first determining the activity is in the public interest. This requires the Commission to find, on balance, that a project’s benefits outweigh the harms, including the environmental impacts from climate change that result from authorizing additional transportation. Accordingly, it is critical that, as an agency of the federal government, the Commission comply with its statutory responsibility to document and consider how its authorization of a natural gas pipeline facility will lead to the emission of GHGs, contributing to climate change.

For these reasons, I respectfully dissent in part.

                                               

    1 Transcontinental Gas Pipe Line Company, LLC, 165 FERC ¶ 61, 221, at P 4 (2018) (Certificate Order).
    2 15 U.S.C. 717f (2012).
    3 National Environmental Policy Act of 1969, Pub. L. No. 91–190, 83 Stat. 852.
    4 Section 7 of the NGA requires that, before issuing a certificate for new pipeline construction, the Commission must find both a need for the pipeline and that, on balance, the pipeline’s benefits outweigh its harms. 15 U.S.C. § 717f (2012). Furthermore, NEPA requires the Commission to take a “hard look” at the environmental impacts of its decisions. See 42 U.S.C. § 4332(2)(C)(iii); Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). This means that the Commission must consider and discuss the significance of the harm from a pipeline’s contribution to climate change by actually evaluating the magnitude of the pipeline’s environmental impact. Doing so enables the Commission to compare the environment before and after the proposed federal action and factor the changes into its decisionmaking process. See Sierra Club v. FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail) (“The [FEIS] needed to include a discussion of the ‘significance’ of this indirect effect.”); 40 C.F.R. § 1502.16 (a)–(b) (An agency’s environmental review must “include the environmental impacts of the alternatives including the proposed action,” as well as a discussion of direct and indirect effects and their significance.) (emphasis added)). Today’s decision and the record omit any meaningful discussion of the Project’s contribution to climate change. That omission renders the Commission’s order arbitrary and capricious and not the product of reasoned decisionmaking.
    5 Gateway Expansion Project Environmental Assessment (EA) at 55 (stating, without further explanation, that there is “no standard methodology” to determine how a project’s contribution to GHG emissions “would translate into physical effects on the global environment”); Certificate Order, 165 FERC ¶ 61,221 at P 49 (noting that the Commission received numerous comments related to GHG emissions and climate impacts and that the EA, rather than the Certificate Order, discusses climate change). Commenters specifically challenge the adequacy of the environmental analysis in the EA of the Project’s climate change impact, arguing that the Commission should use the Social Cost of Carbon to “convert emissions estimates to quantifiable harms.” Michael Aucott Aug. 9, 2018 Comments at 1–3. Neither the EA nor the Certificate Order include a reasoned response to this challenge or address the significance of the Project’s climate change impact, and this omission renders the Commission’s decision arbitrary and capricious and not the product of reasoned decisionmaking.
    6 EA at 39–44 & Tables 6–7 (estimating the Project’s GHG emissions from construction and operation).
    7 Id. at 40.
    8 Certificate Order, 165 FERC ¶ 61,221 at P 4; see also Transco Certificate Application at 15 (The Project is designed to provide shippers “access to incremental supplies of natural gas” and enable shippers to meet growing market needs, including demands of “institutional, commercial, and industrial customers.”); PSEG Dec. 21, 2017 Comments at 1–2.
    9 See San Juan Citizens All. et al. v. U.S. Bureau of Land Mgmt., No. 16-CV-376-MCA-JHR, 2018 WL 2994406, at *10 (D.N.M. June 14, 2018) (holding that it was arbitrary for the Bureau of Land Management to conclude “that consumption is not ‘an indirect effect of oil and gas production because production is not a proximate cause of GHG emissions resulting from consumption’” as “this statement is circular and worded as though it is a legal conclusion”). The Commission must use its “best efforts” to identify and quantify the full scope of the environmental impacts and, as the U.S. Court of Appeals for the District of Columbia found in Sierra Club v. FERC, educated assumptions are inevitable in the process of emission quantification. See 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail).
    10 See supra note 8.
    11 Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1138 (9th Cir. 2011) (holding that it “is completely inadequate” for an agency to ignore a project’s “growth inducing effects” where the project has a unique potential to spur demand); id. at 1139 (distinguishing City of Carmel-by-the-Sea v. U.S. Dep’t of Transp., 123 F.3d 1142 (9th Cir. 1997), which the majority relies on in today’s order) (“[O]ur cases have consistently noted that a new runway has a unique potential to spur demand, which sets it apart from other airport improvements, like changing flight patterns, improving a terminal, or adding a taxiway, which increase demand only marginally, if at all.”); id. at 1139 (“[E]ven if the stated purpose of [a new airport runway project] is to increase safety and efficiency, the agencies must analyze the impacts of the increased demand attributable to the additional runway as growth-inducing effects.”).
    12 As the United States Court of Appeals for the Eighth Circuit explained in Mid States Coal. for Progress v. Surface Transp. Bd.—a case that also involved the downstream emissions from new infrastructure for transporting fossil fuels—when the “nature of the effect” (end-use emissions) is reasonably foreseeable, but “its extent is not” (specific consumption activity producing emissions), an agency may not simply ignore the effect. 345 F.3d 520, 549 (8th Cir. 2003).
    13 NEPA, after all, does not require exact certainty; instead, it requires that the Commission engage in reasonable forecasting and estimation of possible effects of a major federal action where doing so would further the statute’s two-fold purpose of ensuring that the relevant agency will “have available, and will carefully consider, detailed information concerning significant environmental impacts” and that this information will also be “available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.” Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 768 (2004) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989)); Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1310 (2014).
    14 In determining what constitutes reasonable forecasting, it is relevant to consider the “usefulness of any new potential information to the decisionmaking process.” Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189, at 198 (D.C. Cir. 2017) (citing Pub. Citizen, 541 U.S. at 767).
    15 In comments submitted in the Commission’s pending review of the natural gas certification process, the Environmental Protection Agency identified a number of tools the Commission can use to quantify the reasonably foreseeable “upstream and downstream GHG emissions associated with a proposed natural gas pipeline.” These include “economic modeling tools” that can aid in determining the “reasonably foreseeable energy market impacts of a proposed project.” U.S. Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 3–4 (filed June 21, 2018) (explaining that the “EPA has emission factors and methods” available to estimate GHG emissions—from activities upstream and downstream of a proposed natural gas pipeline—through the U.S. Greenhouse Gas Inventory and the Greenhouse Gas Reporting Program); see Certification of New Interstate Natural Gas Facilities, Notice of Inquiry, 163 FERC ¶ 61,042 (2018).
    16 NEPA requires the Commission to reach a determination regarding the significance of the Projects’ indirect effects from upstream and downstream GHG emissions. Further, under section 7 of the NGA, the Commission must consider those harms as part of its determination whether the Projects are in the public interest. See Florida Southeast Connection, LLC, 164 FERC ¶ 61,099, at 2–3, 5–8 (Glick, Comm’r, dissenting).
    18 40 C.F.R. § 1508.8 (defining direct effects and indirect effects).
    19 Sabal Trail, 867 F.3d at 1374 (citing the Commission’s authority, pursuant to the NGA, to “attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require,” 15 U.S.C. 717f(e)).
    20 Sabal Trail, 867 F.3d at 1373 (quoting Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)).
    21 See id. (explaining that the Commission may “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment”).
    22 See supra note 5 and accompanying text.
    23 Sierra Club v. Lynn, 502 F.2d 43, 61 (5th Cir. 1974).
    24 As the Environmental Protection Agency has explained, the Commission may use estimates of the Social Cost of Carbon “for project analysis when [the Commission] determines that a monetary assessment of the impacts associated with the estimated net change in GHG emissions provides useful information in its environmental review or public interest determination.” United States Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 4–5 (filed June 21, 2018). In addition, the Council on Environmental Quality recognized under a prior administration that monetizing an impact is appropriate in the NEPA document, if doing so is necessary for an agency to fully evaluate the environmental consequences of its decisions. See CEQ, Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews at 32-33 (Aug. 1, 2016), https://obamawhitehouse.archives.gov
    /sites/whitehouse.gov/files/documents/nepa_final_ghg_guidance.pdf
    PDF External Link .
    25 40 C.F.R. § 1502.16.
    26 Id. § 1508.27 (setting forth a list of factors agencies should rely on when determining whether a project’s environmental impacts are “significant” considering both “context” and “intensity”); id. (“‘Context’ . . . means that the significance of an action must be analyzed in several contexts such as society as a whole (human, national), the affected region, the affected interests, and the locality.”); id. (“‘Intensity’ . . . refers to the severity of the impact, . . . [including t]he degree to which” it affects considerations including “public health or safety” and the environment).
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