Media Statements & Speeches
Commissioner Cheryl A. LaFleur Statement
December 12, 2018
Docket No. CP18-18-000
Concurrence regarding Transcontinental Gas Pipe Line Gateway Expansion Project
Today’s order grants Transcontinental Gas Pipe Line Company, LLC’s (Transco) request for authorization to construct and operate the Gateway Expansion Project.1 I believe the project is in the public interest after carefully balancing the need for the project and its environmental impacts. For the reasons discussed below, I concur.
The proposed Gateway Expansion Project will provide up to 65,000 dekatherms per day (Dth/day) of firm transportation service for PSEG Power LLC and UGI Energy Services to serve their industrial, commercial and residential customers.2 I believe it is reasonably foreseeable that the gas being transported will be burned and that downstream greenhouse gas (GHG) emissions will result from burning that gas.3
The Project’s Environmental Assessment (EA) quantified the direct GHG emissions from the Project’s construction and operation,4 but the EA did not consider the downstream emissions impacts.5 To address my concerns about the failure to consider downstream emissions impacts in this proceeding, I have myself considered the downstream GHG emissions as part of my public interest determination. Using a methodology developed by the Environmental Protection Agency to estimate the downstream GHG emissions from the Gateway Expansion Project, and assuming as an upper-bound estimate that all of the gas to be transported is eventually combusted, 65,000 Dth/d of natural gas service would result in the emission of approximately 1.258 million metric tons per year of downstream CO2 emissions. This figure represents a 1.1 percent increase in GHG emissions within New Jersey6 and 0.02 percent increase nationally.7
I acknowledge that the disclosure of state and national comparison data is only the first step to assist the Commission in ascribing significance to a given rate or volume of GHG emissions. However, to date, the Commission has not identified a framework for reaching a significance determination. The primary argument against using the Social Cost of Carbon metric is that monetized climate damages does not readily lend itself to the Commission’s environmental review of natural gas facilities.8 I am confident that, given the importance of this issue, the Commission could find a way to adapt and apply a metric such as the Social Cost of Carbon to reach a significance threshold determination. The concern that making a significance determination on downstream GHG emissions would be difficult does not relieve the Commission of its responsibility to work on this issue. The Commission makes challenging determinations on quantitative and qualitative issues in many other areas of our work.9
Using the approach I originally articulated in Broad Run,10 I find the Gateway Expansion Project to be in the public interest.11 I share many of the concerns voiced by Commissioner Glick in his dissent. The Commission must do its best to take climate change impacts into account in our proceedings. I appreciate that there is work to do to address this issue, but I believe it is work that must be done.
For all of these reasons, I concur.
- 1 Transcontinental Gas Pipe Line Company, LLC, 165 FERC ¶ 61,221
- 2 Transco’s July 25, 2018 Response to Commission Staff’s July 13, 2018 Data Request at 2 (explaining that UGI Energy Services intends to use the 11,000 Dth/day to support the daily consumption of commercial and industrial customers, and PSEG Power LLC will use its 54,000 Dth/day for general system supply).
- 3 See Mid States Coalition for Progress v. Surface Transportation Board, 345 F.3d 520, 549 (8th Cir. 2003) (Mid States). In Mid States, the Court concluded that the Surface Transportation Board erred by failing to consider the downstream impacts of the burning of transported coal. Even though the record lacked specificity regarding the extent to which the transported coal would be burned, the Court concluded the nature of the impact was clear.
- 4 EA at 39-44 & Tables 6 & 7.
- 5 This decision is consistent with the Commission’s policy, with which I disagree, announced in New Market limiting the disclosure and consideration of downstream and upstream GHG emissions impacts in our project review. See Dominion Transmission Inc., 163 FERC ¶ 61,128 (2018) (LaFleur, Comm’r, dissenting in part).
- 7 U.S. Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2016, (April 2018).
Docket No.: CP18-18-000
Date: December 11, 2018
- 8 https://www.epa.gov/sites/production/files/2016-12/documents/social_cost_of_carbon_fact_sheet.pdf
- 9 Many of the core areas of the Commission’s work have required the development of analytical frameworks, often a combination of quantitative measurements and qualitative assessments, to fulfill the Commission’s responsibilities under its broad authorizing statutes. This work regularly requires that the Commission exercise judgment, based on its expertise, precedent, and the record before it. For example, to help determine just and reasonable returns on equity (ROEs) under the Federal Power Act, Natural Gas Act, and Interstate Commerce Act, the Commission identifies a proxy group of comparably risky companies, applies a discounted cash flow method to determine a range of potentially reasonable ROEs (i.e., the zone of reasonableness), and then considers various factors to determine the just and reasonable ROE within that range. See also, e.g., Promoting Transmission Investment through Pricing Reform, Order No. 679, FERC Stats. & Regs. ¶ 31,222, order on reh’g, Order No. 679-A, FERC Stats. & Regs. ¶ 31,236 (2006), order on reh’g, 119 FERC ¶ 61,062 (2007) (establishing Commission regulations and policy for reviewing requests for transmission incentives); Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, FERC Stats. & Regs. ¶ 31,323 (2011), order on reh’g, Order No. 1000-A, 139 FERC ¶ 61,132, order on reh’g and clarification, Order No. 1000-B, 141 FERC ¶ 61,044 (2012), aff’d sub nom. S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41 (D.C. Cir. 2014) (requiring, among other things, the development of regional cost allocation methods subject to certain general cost allocation principles); BP Pipelines (Alaska) Inc., Opinion No. 544, 153 FERC ¶ 61,233 (2015) (conducting a prudence review of a significant expansion of the Trans Alaska Pipeline System). I also note that the Commission is currently actively considering a broad topic – resilience – whose scope and complexity might similarly require the development of new analytical frameworks for conducting the Commission’s work.
- 10 Tennessee Gas Pipeline Company, 163 FERC ¶ 61,190 (2018) (LaFleur, Comm’r, concurring).
- 11 See RH enerytrans, LLC, 165 FERC ¶ 61,218 (2018) (LaFleur, Comm’r, concurring) (“I am trying to move beyond my disagreement with the Commission’s approach to its environmental review of proposed pipeline projects, and base my public interest determination on the facts in the record—even ones not discussed in our environmental documents or in the certificate order.”). See also Texas Eastern Transmission, LP, 165 FERC ¶ 61,132 (2018) (LaFleur, Comm’r, concurring); and PennEast Pipeline Company, LLC., 164 FERC ¶ 61,098 (2018) (LaFleur, Comm’r, concurring in part and dissenting in part).
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