Commissioner James Danly Statement
March 17, 2023
Docket No. CP21-498-000
I concur in the decision to grant Columbia Gas Transmission, LLC’s requested Natural Gas Act (NGA) section 7[1] authorization.
Although I agree that the Commission must act “in accordance with our . . . statutory duties,”[2] we must always begin by examining 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.”[3] 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.”[4] 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.”[5] To the extent to which any Commission issuance attempts to expand the 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),[6] I reiterate my view that any regime we institute must “take meaning” from the purpose of the NGA.
Second, the Commission states that because it is “conducting a generic proceeding to determine whether and how the Commission will conduct significance determinations for [greenhouse gas (GHG)] emissions going forward, the Commission is not herein characterizing these emissions as significant or insignificant.”[7] I continue to urge my colleagues to repudiate the misguided “eyeball” test established in Northern Natural[8] and to acknowledge that the now-draft Interim GHG Policy Statement should never have issued in the first place.[9] The Interim GHG Policy Statement has been in draft form for nearly a year. The regulated industry needs certainty that the Commission’s moment of misguided whim will not resurface. My colleagues should simply terminate the proceeding in Docket No. PL21-3-000.
We are not competent to declare our own threshold for the quantity of GHG emissions we would consider significant when determining whether a project is required by the public convenience and necessity.[10] While such an acknowledgement has yet to make an appearance in the Commission’s orders, the Commission’s actions in this proceeding, and other recent NGA section 7 proceedings,[11] speak volumes. The Commission neither applied its “eyeball” test nor any other Commission-declared threshold. The Commission makes no finding regarding the significance of the GHG emissions. Why? Because we have no means to do so.
Third, I also object to staff’s inclusion of a Social Cost of GHGs calculation in this proceeding’s Final Environmental Impact Statement.[12] The Commission has often—and extensively—discussed why the Social Cost of Carbon, and similar tools, are ill-suited to project-level NEPA review, and why such a tool cannot meaningfully inform the Commission’s decision to approve or reject natural gas infrastructure project applications under the NGA.[13] The U.S. Court of Appeals for the District of Columbia Circuit has previously upheld the Commission’s decision to decline to use the Social Cost of Carbon and has similarly upheld the Commission’s conclusion that there is “‘no scientifically-accepted methodology available to correlate specific amounts of [greenhouse-gas] emissions to discrete changes in’ the human environment.”[14] This remains true.[15] As the FEIS acknowledges, “we are not relying on or using the social cost of GHGs estimates to make any finding or determination regarding the impact of the GHG emissions” and “the Commission has not determined which, if any, modifications are needed to render the social cost of carbon tool useful for project-level analyses.”[16] Simply put, no valuable information can be gleaned from the numbers included in Commission staff’s FEIS and they serve merely to confuse the matter—they should be omitted from future issuances.[17]
Fourth, I disagree with the Commission’s determination that “the emissions from the downstream combustion of the gas transported by the project are reasonably foreseeable.”[18] The facts here, like in Food & Water Watch v. FERC,[19] involve adding capacity to provide incremental transportation service to a local distribution company shipper. I recognize that the court “concluded that the end use of the transported gas is reasonably foreseeable.”[20] Nonetheless, the court also stated that “[o]n remand, the Commission remains free to consider whether there is a reasonable end-use distinction based on additional evidence, but it has not carried its burden before us at this stage,” and “remand[ed] to the agency to perform a supplemental environmental assessment in which it must either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.”[21] The local distribution company at issue here and the discrete, known generators in Sierra Club v. FERC (Sabal Trail)[22] are dissimilar enough that the Sabal Trail precedent cannot directly apply. We have not yet acted on the Food & Water Watch remand and, even according to the court, the question remains open. Additionally, as I have said before, Sabal Trail, which Food & Water Watch applies, is inconsistent with the Supreme Court’s holding in Department of Transportation v. Public Citizen (Public Citizen).[23] My views are not idiosyncratic. Both the partial dissenting statement in Sabal Trail and the Court of Appeals for the Eleventh Circuit agree.[24]
For these reasons, I respectfully concur in the result.
[1] 15 U.S.C. § 717f.
[2] Columbia Gas Transmission, LLC, 182 FERC ¶ 61,171, at P 49 n.98 (2023) (emphasis added) (“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, guidance, and statutory duties.”) (citing 15 U.S.C. § 717f; 18 C.F.R. § 380.12(g) (requiring applicants to submit information about the socioeconomic impact area of a project for the Commission’s consideration during [National Environmental Policy Act of 1969 (NEPA)] review); Commission, 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).
[3] Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959).
[4] NAACP v. FPC, 425 U.S. 662, 669 (1976) (NAACP).
[5] Id. at 669-70; accord Myersville Citizens for a Rural Cmty., 783 F.3d 1301, 1307 (D.C. Cir. 2015) (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.
[6] 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) (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).
[7] Columbia Gas Transmission, LLC, 182 FERC ¶ 61,171 at P 46(emphasis added).
[8] N. Nat. Gas Co., 174 FERC ¶ 61,189 (2021) (Northern Natural). In Northern Natural, 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.”’).
[9] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 at P 79 (“To determine the appropriate level of [National Environmental Policy Act (NEPA)] review, the Commission is establishing a significance threshold of 100,000 metric tons or more per year of CO2e.”). The Interim GHG Policy Statement was converted to a draft on March 24, 2022. See Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,197 at P 2 (converting the two policy statements issued on February 18, 2022, Updated Certificate Policy Statement, 178 FERC ¶ 61,107 and Interim GHG Policy Statement, 178 FERC ¶ 61,108, to “draft” policy statements).
[10] See West Virginia v. Env’tl. Prot. Agency, 142 S. Ct. 2587, 2609 (2022) (“Agencies have only those powers given to them by Congress, and ‘enabling legislation’ is generally not an ‘open book to which the agency [may] add pages and change the plot line.’”) (citation omitted).
[11] See, e.g., Gas Transmission Nw. LLC, 181 FERC ¶ 61,234, at P 32 (2022) (“The Commission explained it is not characterizing these emissions as significant or insignificant because it is currently considering in a generic proceeding issues that include whether and how to assess the significance of GHG emissions.”) (citation omitted).
[12] See Commission Staff, Final Environmental Impact Statement for the Virginia Electrification Project, Docket No. CP21-498-000, at 3-63 – 3-64 (Dec. 16, 2022) (FEIS).
[13] 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.”) (citation omitted).
[14] Del. Riverkeeper Network v. FERC, 45 F.4th 104, 111 (D.C. Cir. 2022) (citing EarthReports, Inc. v. FERC, 828 F.3d 949, 956 (D.C. Cir. 2016)) (citation omitted); see id. at 112 (finding that because petitioners “did not argue before the Commission that section 1502.21(c) required the use of the Social Cost of Carbon tool,” the court lacked jurisdiction to consider that argument). But see Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1329-30 (D.C. Cir. 2021) (remanding the Commission’s decision to not use the Social Cost of Carbon because the court found that the Commission failed to respond to an argument raised on rehearing that 40 C.F.R. § 1502.21(c) calls for the Commission to apply the social cost of carbon).
[15] See, e.g., LA Storage, LLC, 182 FERC ¶ 61,026, at P 11 (2023) (recognizing that the Commission does “not rely on, the results of the social cost of GHG methodology.”) (citation omitted); id. P 14 (“[T]here are currently no criteria to identify what monetized values are significant for NEPA purposes, and we are currently unable to identify any such appropriate criteria.”) (citation omitted).
[16] FEIS at 3-63 n.40.
[17] 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 Council on Environmental Quality’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).
[18] Columbia Gas Transmission, LLC, 182 FERC ¶ 61,171 at P 41.
[19] 28 F.4th 277 (D.C. Cir. 2022) (Food & Water Watch).
[20] Id. at 289.
[21] Id. (emphasis added).
[22] 867 F.3d 1357 (D.C. Cir. 2017).
[23] 541 U.S. 752, 767 (2004) (“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).
[24] See 867 F.3d at 1383 (Brown, J., concurring in part and dissenting in part) (“Thus, just as FERC in the [Department of Energy] cases and the Federal Motor Carrier Safety Administration in Public Citizen did not have the legal power to prevent certain environmental effects, the Commission here has no authority to prevent the emission of greenhouse gases through newly-constructed or expanded power plants approved by the Board.”); Ctr. for Biological Diversity v. U.S. Army Corps of Eng’rs, 941 F.3d 1288, 1300 (11th Cir. 2019) (“[T]he legal analysis in Sabal Trail is questionable at best. It fails to take seriously the rule of reason announced in Public Citizen or to account for the untenable consequences of its decision.”).