Commissioner James Danly Statement
October 20, 2022
CP21-467-000
I concur in the decision to grant Texas Gas Transmission, LLC’s (Texas Gas) requested Natural Gas Act (NGA) section 7 authorizations.[1] I write separately to highlight several aspects of this order and the Commission’s recent NGA sections 3 and 7[2] authorizations more broadly.
First, although I agree that the Commission must act “in accordance with our . . . statutory duties,”[3] we must first examine the scope of our inquiry under the public convenience and necessity standard. The Supreme Court has found that NGA section “7(e) requires the Commission to evaluate all factors bearing on the public interest.”[4] This obligation, however, is not unlimited in scope and this requirement cannot be read in a vacuum. The Supreme Court has explained that the inclusion of the term “public interest” in our statute is not “a broad license to promote the general public welfare”—instead, it “take[s] meaning from the purposes of the regulatory legislation.”[5] The purpose of the NGA, as the Supreme Court has instructed us, is “to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[6] To the extent to which any Commission issuance attempts to expand the range of subjects we consider in our inquiry under the public convenience and necessity standard (as, for example, is contemplated by the now-draft Updated Certificate Policy Statement),[7] I reiterate my view that any regime we institute must “take meaning” from the purpose of the NGA.
Second, I would like to take a moment to address the Commission’s assertion that “the emissions from the downstream combustion of the gas transported by the project are reasonably foreseeable emissions.”[8] I recognize that the Commission’s determination is based on the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Sabal Trail.[9] And I also acknowledge that, recently, the D.C. Circuit recognized the court’s conclusion in Sabal Trail, stating that “[g]reenhouse gas emissions are reasonably foreseeable effects of a pipeline project when the project is known to transport natural gas to particular power plants.”[10] I would be remiss, however, if I failed to point out that both the partial dissent in Sabal Trail,[11] and a case from the U.S. Court of Appeals for the Eleventh Circuit cast serious doubt on Sabal Trail’s holding.[12] Sabal Trail is also in obvious conflict with the Supreme Court’s holding in Public Citizen.[13]
Third, as I have explained in recently-issued certificate orders,[14] while not fatal to the durability of the order, I would have explicitly repudiated Northern Natural Gas Company (Northern)[15] and reaffirmed the Commission’s prior position that “[w]ithout an accepted methodology, the Commission cannot make a finding whether a particular quantity of greenhouse gas [(GHG)] emissions poses a significant impact on the environment, whether directly or cumulatively with other sources, and how that impact would contribute to climate change.”[16] This is because, as the Commission has stated, it is unable to connect a particular project’s GHG emissions to discrete, physical effects on the environment.[17] Instead, the Commission does not even acknowledge its Northern precedent in today’s order. And while it has, in recent proceedings, acknowledged the precedent and stated that “the Commission has previously assessed the ‘significance’ of GHGs,”[18] it neither acknowledges that precedent nor announces a departure in today’s order. There is, however, no standard by which the Commission could, consistent with our obligations under the law, ascribe significance to a particular rate or volume of GHG emissions.[19] The Commission’s recent attempts to do so, absent the expertise to make such a determination and the statutory authority to impose it, have amounted to little more than picking arbitrary numbers.[20]
Therefore, it is no surprise that the Commission asserts in today’s order that “because we are conducting a generic proceeding to determine whether and how the Commission will conduct significance determinations for GHG emissions going forward, the Commission is not herein characterizing these emissions as significant or insignificant.”[21] My colleagues are trying to preserve the option to employ a new version of their flawed “eyeball” test, perhaps with a new arbitrary threshold. We have no authority to establish arbitrary significance thresholds. We also have no expertise. How exactly would my colleagues propose to establish such a threshold and then support it with the substantial evidence and reasoned decision making required to survive judicial review?
As I have said before, we have a mess on our hands because of changing, inconsistent practice and because the Commission has been picking numbers out of thin air. Any process in which we declare arbitrary, unsupported thresholds will subject our issuances to significant—and wholly unnecessary—legal risk.[22] Recently, Commission staff has made significance determinations in NEPA documents[23] published after the issuance of the Commission’s Interim GHG Policy Statement[24] but before the policy statement was changed into a draft policy statement.[25] In three of those cases, the Commission’s order neither acknowledged nor adopted staff’s significance determination.[26] In one order, the Commission acknowledged that staff had assessed significance, and then declined to adopt staff’s determination.[27] We should stop issuing confusing, inconsistent statements and we should no longer attempt to preserve our ability to set arbitrary thresholds. We should never have articulated the 100,000 metric tons per year significance threshold in the now-draft Interim GHG Policy Statement.[28] That was a mistake, and we should not repeat it.
Aside from the legal risk that would attend the establishment of any unsupported, arbitrary threshold, we have recently been reminded by the Supreme Court that caution is necessary when contemplating the regulation of subjects that have not been clearly placed within our jurisdiction by Congress, especially when our actions could have a profound effect on an industry that is critical to the wellbeing of all Americans. West Virginia v. Environmental Protection Agency (West Virginia)[29] perfectly reinforces Commissioner Christie’s dissent regarding the major questions doctrine in the Interim GHG Policy Statement proceeding.[30] The Commission is charged under the NGA with “encourag[ing] the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[31] The NGA’s purpose, established by Congress and articulated by the Supreme Court, is for the Commission to promote the development of natural gas infrastructure. It is not an environmental statute and to adopt mitigation policies or establish thresholds, the effect of which would be to frustrate the primary purpose of the statute, in order to pursue policy goals in an arena not delegated by Congress, invites challenges under West Virginia. “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”[32] In light of the Supreme Court’s reinvigoration of the major questions doctrine, we should abandon a project that clearly exceeds the boundaries of our delegated authority and proceed by simply terminating Docket No. PL21-3-000 (Consideration of GHG Emissions in Natural Gas Infrastructure Project Reviews).
Fourth, I object to staff’s inclusion of a Social Cost of GHGs calculation based on the estimated emissions from the project’s construction and operation in this proceeding’s Final Environmental Impact Statement (Final EIS).[33] The Commission has often—and extensively—discussed why the Social Cost of Carbon is ill-suited to project-level NEPA review, and why the Social Cost of Carbon cannot meaningfully inform the Commission’s decision to approve or disapprove natural gas infrastructure projects under the NGA.[34] No valuable information can be gleaned from the numbers included in Commission staff’s Final EIS and they serve merely to confuse the matter—they should be omitted from future issuances.[35]
Fifth, I disagree with the part of the Commission’s Environmental Condition 14 that requires that “Texas Gas . . . file with the Secretary, for review and written approval by the Director of OEP or the Director’s designee, documentation of its revised water use plans and the results of the consultation with [Kentucky Energy and Environment Cabinet, Division of Water (KDOW)] and the mitigation measures it will adopt to minimize impacts on Pond Bayou.”[36] This condition suggests, that “if Texas Gas obtains approval from the . . . [KDOW] for water withdrawals from Pond Bayou,” that the Commission is reserving authority to determine whether additional mitigation measures are needed.[37] Texas Gas will need to adhere to the requirements of the authorization from KDOW for any water withdrawals from the Pond Bayou. I do not see the need for the Commission to weigh in on the adequacy of any mitigation measures that may be part of that authorization and disagree to the extent to which the condition suggests that Texas Gas should propose mitigation measures for the Commission’s approval. NEPA “not only does not require agencies to discuss any particular mitigation plans that they might put in place, it does not require agencies—or third parties—to effect any.”[38]
Finally, I would like to end this statement on a positive note. I am pleased that the timing of the issuance of this order is much improved compared to many other recent NGA authorizations.[39] Consistent with our regulations,[40] the Commission issued the notice of intent to prepare an environmental impact statement (EIS) on October 7, 2021,[41] i.e., 90 days after the July 9, 2021 issuance of the notice for this application. In my view, an Environmental Assessment would have sufficed for this proceeding and perhaps would have even allowed the Commission to have met the applicant’s requested action date, i.e., September 16, 2022.[42] The Commission is acting on this application a little more than a month after the date requested by Texas Gas.[43] It is my hope that the remaining NGA authorizations pending before the Commission are similarly spared what have unfortunately become common delays.
For these reasons, I respectfully concur in the judgment.
[1] 15 U.S.C. § 717f.
[3] Tex. Gas Transmission, LLC, 181 FERC ¶ 61,049, at P 49 n.92 (2022) (Texas Gas) (“While the Commission is not one of the specified agencies in Executive Order 12898, the Commission nonetheless addresses environmental justice in its analysis, in accordance with our governing regulations and guidance, and statutory duties.”) (citing 15 U.S.C. § 717f; 18 C.F.R. § 380.12(g) (2021); FERC, Guidance Manual for Environmental Report Preparation at 4-76 to 4-80 (Feb. 2017), https://www.ferc.gov/sites/default/files/2020-04/guidance-manual-volume-1.pdf).
[4] Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959).
[5] NAACP v. FPC, 425 U.S. 662, 669 (1976) (NAACP).
[6] Id. at 669-70; accord Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1307 (D.C. Cir. 2015) (Myersville) (quoting NAACP, 425 U.S. at 669-70). I note that the Supreme Court has also recognized the Commission has authority to consider “other subsidiary purposes,” such as “conservation, environmental, and antitrust questions.” NAACP, 425 U.S. at 670 & n.6 (citations omitted). But all subsidiary purposes are, necessarily, subordinate to the statute’s primary purpose.
[7] Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,107 (2022) (Updated Certificate Policy Statement); see Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,197, at P 2 (2022) (Order on Draft Policy Statements) (converting the two policy statements issued on February 18, 2022, Updated Certificate Policy Statement, 178 FERC ¶ 61,107, and Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Revs., 178 FERC ¶ 61,108 (2022) (Interim GHG Policy Statement), to “draft” policy statements).
[8] Texas Gas, 181 FERC ¶ 61,049 at P 47 (citing Food & Water Watch v. FERC, 28 F.4th 277, 288 (D.C. Cir. 2022) (“Foreseeability depends on information about the ‘destination and end use of the gas in question.’”) (citation omitted); Sierra Club v. FERC, 867 F.3d 1357, 1371 (D.C. Cir. 2017) (Sabal Trail) (“FERC should have estimated the amount of power-plant carbon emissions that the pipelines will make possible.”)).
[9] 867 F.3d 1357.
[10] Del. Riverkeeper Network v. FERC, 45 F.4th 104, 109 (D.C. Cir. 2022) (citing Sabal Trail, 867 F.3d at 1371-74).
[11] See 867 F.3d at 1379-83 (Brown, J., concurring in part and dissenting in part).
[12] See Ctr. for Biological Diversity v. U.S. Army Corps of Eng’rs, 941 F.3d 1288, 1299-1300 (11th Cir. 2019) (referring to Sabal Trail as “questionable”).
[13] See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) ( “[The National Environmental Policy Act (NEPA)] requires ‘a reasonably close causal relationship’ between the environmental effect and the alleged cause. The Court analogized this requirement to the ‘familiar doctrine of proximate cause from tort law.’”) (citation omitted) (Public Citizen).
[14] See, e.g., Columbia Gulf Transmission, LLC, 178 FERC ¶ 61,198 (2022) (Danly, Comm’r, concurring in the judgment at PP 2-4) (Columbia Gulf).
[15] 174 FERC ¶ 61,189 (2021). In Northern, a majority of my colleagues established what has been referred to (by some) as the “eyeball” test. See Catherine Morehouse, Glick, Danly spar over gas pipeline reviews as FERC considers project’s climate impacts for first time, Util. Dive, Mar. 19, 2021, https://www.utilitydive.com/news/glick-danly-spar-over-gas-pipeline-reviews-as-ferc-considers-projects-cli/597016/ (“‘We essentially used the eyeball test,’ [Chairman Glick] said, adding that based on that analysis, ‘it didn’t seem significant in terms of the impact of those emissions on climate change.’”).
[16] Dominion Transmission, Inc., 163 FERC ¶ 61,128, at P 67 (2018) (footnote omitted).
[17] See, e.g., Nat’l Fuel Gas Supply Corp., 158 FERC ¶ 61,145, at P 188 (2017).
[18] See, e.g., Tex. E. Transmission, LP, 180 FERC ¶ 61,186, at P 27 n.42 (2022) (“We acknowledge that the Commission has previously assessed the ‘significance’ of GHGs, see N. Nat. Gas Co., 174 FERC ¶ 61,189 (2021). However, we do not do so here because the Commission is considering approaches for assessing significance in a pending proceeding.”) (citation omitted).
[19] See, e.g., Mountain Valley Pipeline, LLC, 163 FERC ¶ 61,197, at P 292 (2018).
[20] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 at PP 79-81 (establishing a significance threshold of 100,000 metric tons per year (tpy) of CO2e); id. (Danly, Comm’r, dissenting at PP 32-36) (explaining why the majority’s presumptive significance threshold is illogical); see also Northern, 174 FERC ¶ 61,189 (Danly, Comm’r, concurring in part and dissenting in part at P 16) (comparing the Northern test to “like posting a speed limit sign with a question mark instead of a number, leaving it to the police officer to decide arbitrarily whether you were speeding”).
[21] Texas Gas, 181 FERC ¶ 61,049 at P 50.
[22] The Commission is authorized to make a “‘rational legislative-type judgment’” but may not “pluck a number out of thin air when it promulgates rules.” WJG Tel. Co., Inc. v. FCC, 675 F.2d 386, 388-89 (D.C. Cir. 1982) (quoting FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775, 814 (1978)); see also LeMoyne-Owen Coll. v. NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004) (“In the absence of an explanation, the ‘totality of the circumstances’ can become simply a cloak for agency whim—or worse.”) (citation omitted).
[23] See, e.g., Commission Staff, Environmental Assessment for Golden Pass LNG Terminal LLC Variance Request No. 15, Docket No. CP14-517-001, at 25 (Mar. 22, 2022) (“In order to assess impacts on climate change associated with the Project, we applied the Commission’s Interim Policy Statement on ‘Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews’ issued on February 18, 2022 in Docket No. PL21-3-000 that established a significance threshold of 100,000 metric tpy of CO2e. The Amendment’s construction emissions of 93,642 metric tpy of CO2e would not exceed the Commission’s presumptive significance threshold.”) (citing Interim GHG Policy Statement, 178 FERC ¶ 61,108); Commission Staff, Environmental Assessment for Equitrans L.P. Truittsburg Well Conversion Project, Docket No. CP22-24-000, at 29 (Mar. 7, 2022) (finding that the “Project’s construction and operation emissions would fall below the Commission’s presumptive [100,000 metric tpy] significance threshold”); Commission Staff, Final Environmental Impact Statement for Kern River Transmission Company Delta Lateral Project, Docket No. CP21-197-000, at 4-75 (Feb. 25, 2022) (finding that “[t]he Project operations and downstream combustion of gas transported by the Project could potentially increase emissions by over 2.7 million metric tpy of CO2e, which exceeds the Commission’s presumptive threshold of significance”).
[24] Interim GHG Policy Statement, 178 FERC ¶ 61,108.
[25] See Order on Draft Policy Statements, 178 FERC ¶ 61,197 at P 2.
[26] Compare ANR Pipeline Co., 179 FERC ¶ 61,122, at P 35 (2022) (“The Commission is not herein characterizing these emissions as significant or insignificant because we are conducting a generic proceeding to determine whether and how the Commission will conduct significance determinations going forward.”), and id. P 35 n.42 (“Although we acknowledge that the Commission has previously assessed the ‘significance’ of GHGs, see N. Nat. Gas Co., 174 FERC ¶ 61,189 (2021), we do not do so here. The Commission is considering approaches for assessing significance in a pending proceeding.”) (citing Order on Draft Policy Statements, 178 FERC ¶ 61,197), with Commission Staff, Final Environmental Impact Statement for ANR Pipeline Co. Wisconsin Access Project, Docket No. CP21-78-000, at 53-54 (Mar. 18, 2022) (“In order to assess impacts on climate change associated with the Project, Commission staff applied the Commission’s Interim Policy Statement on ‘Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews’ issued on February 18, 2022 in Docket No. PL21-3-000 that established a significance threshold of 100,000 metric tpy of CO2e. The Project’s operational and downstream emissions would exceed the Commission’s presumptive significance threshold based on 100 percent utilization.”) (citing Interim GHG Policy Statement, 178 FERC ¶ 61,108). See also Golden Pass LNG Terminal LLC, 180 FERC ¶ 61,058, at P 20 (2022) (stating that “[t]he Commission is not herein characterizing these emissions as significant or insignificant because we are conducting a generic proceeding to determine whether and how the Commission will conduct significance determinations going forward” even though staff previously applied a significance threshold in the Environmental Assessment); Rover Pipeline LLC, 179 FERC ¶ 61,043, at P 18 (2022) (same).
[27] See Spire Storage W. LLC, 179 FERC ¶ 61,123, at P 52 n.106 (2022) (“acknowledg[ing] that the Commission has previously assessed the ‘significance’ of GHGs, see N. Nat. Gas Co., 174 FERC ¶ 61,189 (2021), and Commission staff assessed the significance of GHGs for the project in the final EIS by applying the Commission’s February 17, 2022 Interim Policy Statement”).
[28] But see Columbia Gulf Transmission, LLC, 178 FERC ¶ 61,198 (2022) (Glick, Chairman, concurring at P 5 n.14) (“I recognize the now-draft GHG policy statement proposes 100,000 metric tons as a threshold over which a project’s GHG emissions would be presumed significant. In my view, that is a deliberately conservative number intended to ensure that the Commission did not lead projects developers down the path of an environmental assessment, only to subsequently change course and require an environmental impact statement in the event that the Commission were to establish a lower threshold in a final GHG policy statement than it did in the then-interim, now-draft policy statement. I remain open to reviewing the comments submitted in response to that draft statement, as well as guidance we may receive from other federal agencies, in considering what threshold would be appropriate in a final policy statement.”) (emphasis added) (citation omitted).
[29] West Virginia v. EPA, 142 S. Ct. 2587 (2022) (West Virginia).
[30] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Christie, Comm’r, dissenting at PP 3, 22-28); Updated Certificate Policy Statement, 178 FERC ¶ 61,107 (2022) (Christie, Comm’r, dissenting at PP 3, 22-28).
[31] NAACP, 425 U.S. at 669-70 (citation omitted); accord Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669-70).
[32] West Virginia, 142 S. Ct. at 2616.
[33] See Commission Staff, Final Environmental Impact Statement for the Henderson County Expansion Project, Docket No. CP21-467-000, at 4-129, 4-130 (Aug. 25, 2022).
[34] See, e.g., Mountain Valley Pipeline, LLC, 161 FERC ¶ 61,043, at P 296 (2017), order on reh’g, 163 FERC ¶ 61,197, at PP 275-97 (2018), aff’d sub nom. Appalachian Voices v. FERC, No. 17-1271, 2019 WL 847199, at *2 (D.C. Cir. 2019) (“[The Commission] gave several reasons why it believed petitioners’ preferred metric, the Social Cost of Carbon tool, is not an appropriate measure of project-level climate change impacts and their significance under NEPA or the Natural Gas Act. That is all that is required for NEPA purposes.”).
[35] Because the Social Cost of Carbon was not developed for project-level review, its use is not required for the evaluation of impacts under section 1502.21 of the CEQ’s regulations. 40 C.F.R. § 1502.21(c). This reasoning is consistent with Florida Southeast Connection, LLC where the Commission stated, “[a]nd we do not dispute that [the Social Cost of Carbon] is generally accepted in the scientific community and can play an important role in different contexts, such as rulemaking proceedings.” 164 FERC ¶ 61,099, at P 35 (2018) (emphasis added) (footnote omitted).
[36] Texas Gas, 181 FERC ¶ 61,049 at Environmental Condition 14.
[37] Id.
[38] Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 206 (D.C. Cir. 1991) (citation omitted).
[39] See, e.g., LA Storage, LLC, 180 FERC ¶ 61,188 (2022) (Danly, Comm’r, concurring at PP 9-11) (disagreeing with the delay in the issuance of the authorization for a proposed project that went through the Commission’s pre-filing process and explaining the costs that may attend delay in Commission action).
[40] See 18 C.F.R. § 157.9(b) (“For each application that will require an environmental assessment or an environmental impact statement, notice of a schedule for the environmental review will be issued within 90 days of the notice of the application, and subsequently will be published in the Federal Register.”).
[41] See Commission October 7, 2021 Notice of Intent to Prepare an Environmental Impact Statement for the Proposed Henderson County Expansion Project, Request for Comments on Environmental Issues, and Schedule for Environmental Review re Texas Gas Transmission, LLC under CP21-467.
[42] I pause to note that my colleagues can point to no court decision finding that the Commission should have determined the significance of the GHG emissions or that the Commission should have prepared an EIS due to its inability to determine the significance of GHG emissions. No such judicial decision exists. We therefore have no such obligation. Nor has there ever been a remand or vacatur of a certificate order on that basis.
[43] Application at 5 (“Texas Gas requests that the Commission complete its review of the Application and grant the requested authorizations in this Application on or before September 16, 2022.”).