Docket Nos. CP20-50-001, CP20-51-001
I concur in the judgment in this order addressing the arguments raised in the rehearing requests.[1] I pause to note that I wrote separately in the underlying order in this proceeding.[2] In my separate statement to the Certificate Order, I concurred in the judgment,[3] agreeing with the Commission’s decision to issue Natural Gas Act (NGA) section 7[4] authorizations to Tennessee Gas Pipeline Company, L.L.C. and Southern Natural Gas Company, L.L.C. There, I highlighted several flaws in the Commission’s issuance.[5]
Many of these flaws have persisted and now appear in this order addressing arguments on rehearing. For example, the Commission states that it has a “responsibility under NGA section 7 to consider all factors bearing on the public interest when the Commission decides whether a proposed project is required by the public convenience and necessity.”[6] As I explained in my separate statement for the Certificate Order,[7] while the Supreme Court has found that NGA section “7(e) requires the Commission to evaluate all factors bearing on the public interest,”[8] the Supreme Court has also 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.”[9] And with regard to the NGA, the Supreme Court has instructed us that the purpose of the NGA is “to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[10] Accordingly, when the Commission applies the public convenience and necessity standard, its balancing under that standard must “take meaning” from the purpose of the NGA.
In addition, the Commission makes several errors in responding to arguments regarding GHG emissions and the significance of the GHG emissions. The Commission states that “in light of [the] factual record, and the Commission’s continued consideration of issues that include whether and how to assess the significance of GHG emissions, we disagree with Sierra Club that more was required of the Commission in this case.”[11] Indeed, nothing more was required of the Commission, but that is not because there is a pending proceeding in which my colleagues have toyed with the idea of declaring a threshold to establish significance of GHG emissions.[12] Rather, nothing more is required of the Commission because—aside from the Commission’s flawed “eyeball” test[13]—there is no means by which the Commission can assess the significance of GHG emissions. Therefore, the Commission had no choice but to find that it “appropriately did not characterize the emissions as significant or insignificant.”[14] Doing otherwise would have required the Commission to have announced a threshold absent the requisite factual and analytical support necessary to comply with the Administrative Procedure Act’s requirement to engage in reasoned decision making and the requirement that the Commission’s decisions be based upon substantial evidence.
Therefore, it is no surprise that the Commission asserted in the Certificate Order that it “is not herein characterizing [the] 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.”[15] 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 the Commission recognizes in this very order, the Social Cost of Carbon is not useful in project-level analysis.[16]
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 practice of declaring arbitrary, unsupported thresholds subjects our issuances to significant—and wholly unnecessary—legal risk.[17] Recently, Commission staff has made significance determinations in NEPA documents[18] published after the issuance of the Commission’s Interim GHG Policy Statement[19] and before the policy statement was changed into a draft policy statement.[20] In three of those cases, the Commission’s order neither acknowledged nor adopted staff’s significance determination.[21] But in one order, the Commission acknowledged that staff had assessed significance, and then declined to adopt staff’s determination.[22] 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.[23] 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)[24] perfectly reinforces Commissioner Christie’s dissent regarding the major questions doctrine.[25] The Commission is charged under the NGA with “encourag[ing] the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[26] 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.”[27] 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).
This order, however, is evidence that the Commission continues to navigate towards, rather than away from, the misguided policies set forth in the now-draft Updated Certificate Policy Statement and now-draft Interim GHG Policy Statement.[28] In issuing the policy statements, the Commission exceeded its authority and arrogated to itself the role of an environmental regulator—a role that Congress almost certainly did not intend, and certainly has not clearly assigned.[29]
In today’s order, the Commission attempts to recast its balancing under the public convenience and necessity standard. To what end? The Commission now includes GHG emissions in that balancing and goes on to gesture towards what is obviously its ultimate goal: mitigation of GHG emissions. In the section titled “Significance of Project-related GHG Emissions,” the Commission states that “[a]s the Commission explained in the 1999 Certificate Policy Statement, the environmental analysis under NEPA is one part of the Commission’s analysis used to decide whether and under what terms to authorize the construction of major new pipeline facilities”[30] and that “[u]nder the 1999 Certificate Policy Statement, the Commission may, after considering the proposed project’s environmental impacts, ‘identify conditions that it could impose on the certificate that would further minimize or eliminate adverse impacts and take those into account in balancing the benefits against the adverse effects.’”[31]
For the Commission to suggest that it may “identify conditions that it could impose on the certificate”[32] to mitigate GHG emissions, amounts to an assertion that it has the power to expand its conditioning authority.[33] But the Commission’s conditioning authority cannot extend beyond the authority conferred by the NGA, which states that “[t]he Commission shall have the power 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.”[34] Not only must the conditions be reasonable (an obvious limitation on our powers), but the power to impose conditions does not, itself, expand our substantive authority under the NGA. After all, “[w]hat the Commission is prohibited from doing directly it may not achieve by indirection.”[35]
The same can be said for the Commission’s occasional inferences that it is required to take one action or another because of our obligations under NEPA,[36] a statute that imposes only procedural requirements.[37] 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]
The bottom line is this: “[t]he Commission may not . . . when it lacks the power to promote the public interest directly, do so indirectly by attaching a condition to a certificate that is, in unconditional form, already in the public convenience and necessity.”[39] The Commission’s attempt to shoehorn its policy preferences into our existing authorities will ultimately fail. And the majority recognizes this to some degree. It explains why they are attempting to achieve their goal, not through generic proceedings like the Updated Certificate Policy Statement and the Interim GHG Policy Statement, but instead are doing so incrementally and iteratively in individual certificate proceedings. There, the Commission will find fewer eyes to scrutinize its actions and fewer parties to appeal its decisions.
We cannot regulate fields outside our jurisdiction, and we should stop issuing orders that seek to lay the groundwork for such a power grab. And we should take the lesson offered by West Virginia: to the extent that we seek to enter any new territory, we should proceed “[w]isely, and slow; they stumble that run fast.”[40] We have already stumbled once.[41]
For these reasons, I respectfully concur in the judgment.
[1] Tenn. Gas Pipeline Co., L.L.C., 180 FERC ¶ 61,205 (2022) (Tennessee Gas).
[2] See Tenn. Gas Pipeline Co., L.L.C., 178 FERC ¶ 61,199 (2022) (Certificate Order); id. (Danly, Comm’r, concurring in the judgment).
[3] Id. (Danly, Comm’r, concurring in the judgment).
[4] 15 U.S.C. § 717f.
[5] See, e.g., Certificate Order, 178 FERC ¶ 61,199 (Danly, Comm’r, concurring in the judgment at P 2) (stating that the Commission should repudiate the eye-ball test established in Northern Natural Gas Co., 174 FERC ¶ 61,189, at PP 29-36 (2021) (Northern)); id. (Danly, Comm’r, concurring in the judgment at P 3) (explaining that there is no standard by which the Commission could, consistent with our obligations under the law, ascribe significance to a particular rate or volume of greenhouse gas (GHG) emissions); id. (Danly, Comm’r, concurring in the judgment at P 5) (explaining that nothing can be gleaned from the Social Cost of Carbon calculation and that the Commission has provided extensive discussion on why the use of the Social Cost of Carbon is not appropriate in project-level National Environmental Policy Act (NEPA) review); id. (Danly, Comm’r, concurring in the judgment at P 6) (explaining the scope of the Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321 (D.C. Cir. 2021) decision and that the U.S. Court of Appeals for the District of Columbia Circuit admonished the Commission, not for failing to use the Social Cost of Carbon, but for failing to respond to an argument); id. (Danly, Comm’r, concurring in the judgment at P 7) (discussing the breadth of the public interest standard under the NGA).
[6] Tennessee Gas, 180 FERC ¶ 61,205 at P 64.
[7] See Certificate Order, 178 FERC ¶ 61,199 (Danly, Comm’r, concurring in the judgment).
[8] Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959).
[9] NAACP v. Fed. Power Comm’n, 425 U.S. 662, 669 (1976) (NAACP).
[10] Id. at 669-70 (citations omitted); accord Myersville Citizens for a Rural Cmty. v. FERC, 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.
[11] Tennessee Gas, 180 FERC ¶ 61,205 at P 72 (citing Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Revs., 178 FERC ¶ 61,108 (2022) (Interim GHG Policy Statement); see Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,197 (2022) (Order on Draft Policy Statements)).
[12] Indeed, the Commission already attempted this in the Interim GHG Policy Statement (Docket No. PL21-3-000) prior to the policy statement being converted to a draft. See Interim GHG Policy Statement, 178 FERC ¶ 61,108.
[13] 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.’”).
[14] Tennessee Gas, 180 FERC ¶ 61,205 at P 75. 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.
[15] Certificate Order, 178 FERC ¶ 61,199 at P 88 (footnotes omitted).
[16] See Tennessee Gas, 180 FERC ¶ 61,205 at P 75 (“We note that there 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.”).
[17] 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).
[18] 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”).
[19] Interim GHG Policy Statement, 178 FERC ¶ 61,108.
[20] See Order on Draft Policy Statements, 178 FERC ¶ 61,197 at P 2.
[21] 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).
[22] 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”).
[23] 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).
[24] West Virginia v. EPA, 142 S. Ct. 2587 (2022) (West Virginia).
[25] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Christie, Comm’r, dissenting at PP 3, 22-28); Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,107 (2022) (Updated Certificate Policy Statement) (Christie, Comm’r, dissenting at PP 3, 22-28).
[26] NAACP, 425 U.S. at 669-70 (citations omitted); accord Myersville Citizens for a Rural Cmty., 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669-70).
[27] West Virginia, 142 S. Ct. at 2616.
[28] See Updated Certificate Policy Statement, 178 FERC ¶ 61,107; Order on Draft Policy Statements, 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).
[29] See Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (“As a federal agency, FERC is a ‘creature of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.”’) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in Atl. City Elec. Co.); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“It is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.”); see also Senate Energy & Nat. Res. Committee, Full Committee Hearing To Review FERC’s Recent Guidance On Natural Gas Pipelines, https://www.energy.senate.gov/hearings/2022/3/full-committee-hearing-to-review-ferc-s-recent-guidance-on-natural-gas-pipelines, at 00:58:30 (Mar. 3, 2022) (questioning by Chairman Manchin regarding the recent policy statements: “The Commission, you all acknowledge, that . . . no federal agency, including this Commission has established a threshold for determining what level of project-induced greenhouse gas emissions is significant. Why do you all think that FERC, whose primary purpose is to regulate efficient and reliable energy, should be the first agency, the first to set such a standard rather than the environmental agencies?”); see generally Updated Certificate Policy Statement, 178 FERC ¶ 61,107 (Danly, Comm’r, dissenting); Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Danly, Comm’r, dissenting).
[30] Tennessee Gas, 180 FERC ¶ 61,205 at P 71 (citing Certification of New Interstate Nat. Gas Pipeline Facilities, 88 FERC ¶ 61,227, at 61,749 (1999)) (citations omitted).
[31] Id. (quoting Certification of New Interstate Nat. Gas Pipeline Facilities, 88 FERC ¶ 61,227 at 61,745) (citations omitted).
[32] Id.
[33] See Updated Certificate Policy Statement, 178 FERC ¶ 61,107 (Danly, Comm’r, dissenting at P 36).
[34] 15 U.S.C. § 717f(e) (emphasis added).
[35] See Richmond Power & Light of City of Richmond, Ind. v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (footnote omitted).
[36] See generally Tennessee Gas, 180 FERC ¶ 61,206 at P 71 (suggesting in the section of the order discussing GHG emissions that the NEPA analysis informs whether to grant the issuance of a certificate and that the Commission, as part of its determination, can impose mitigation). But see 15 U.S.C. § 717f(e) (“[A] certificate shall be issued to any qualified applicant therefor . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. The Commission shall have the power 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.”) (emphasis added).
[37] See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 756-57 (2004) (citation omitted) (explaining that NEPA is not a means of mandating that agencies achieve particular substantive environmental results); accord Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 23 (2008) (“NEPA imposes only procedural requirements to ‘ensur[e] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts.’”) (citation omitted); see also Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (Methow Valley) (“[I]t is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process.”); Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (“Congress in enacting NEPA . . . did not require agencies to elevate environmental concerns over other appropriate considerations.”); Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 558 (1978) (“NEPA does set forth significant substantive goals for the Nation, but its mandate to the agencies is essentially procedural.”) (citations omitted).
[38] Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 206 (D.C. Cir. 1991) (citing Methow Valley, 490 U.S. at 353 & n.16).
[39] Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (citing Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137, 152 (1960) (“once want of power to do this directly were established, the existence of power to achieve the same end indirectly through the conditioning power might well be doubted”); Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (the Commission may not achieve indirectly through conditioning power of Federal Power Act what it is otherwise prohibited from achieving directly)); see also Am. Gas Ass’n v. FERC, 912 F.2d 1496, 1510 (D.C. Cir. 1990) (“[T]he Commission may not use its § 7 conditioning power to do indirectly . . . things that it cannot do at all.”).
[40] William Shakespeare, Romeo and Juliet, Act II, Scene II (The Complete Works of William Shakespeare 257 (Barnes & Noble, Inc. ed., Sterling Publishing Co., Inc. 2015)) (quoting Friar Laurence).
[41] See Order on Draft Policy Statements, 178 FERC ¶ 61,197 at P 2 (“Upon further consideration, we are making the Updated Policy Statement and the Interim GHG Policy Statement draft policy statements.”).