Docket No. CP22-486-000
I write separately to identify those aspects of the Commission’s order with which I concur and those from which I dissent.
I Concur in Part with the Commission’s Order.
I concur in the Commission’s decision to grant Texas Eastern Transmission, LP’s (Texas Eastern) requested authorizations under Natural Gas Act (NGA) sections 7(b) and (c)[1] for authorization to construct and operate the Appalachia to Market II Project (A2M II Project) and the proposed Armagh and Entriken HP Replacement Projects (Replacement Projects). The need for the projects is amply demonstrated by the long-term precedent agreements for 100% of the project’s capacity.[2]
Additionally, I concur in the determinations in paragraphs 50 and 51: the social cost of greenhouse gases (GHG) is neither useful nor is it part of the Commission’s decision making and the Commission offers no means by which to assess the significance of GHG emissions.[3] Specifically, paragraphs 50 and 51 explain: (1) the disclosure of the social cost of GHG emissions is “for informational purposes”; (2) for the social cost of GHGs, “there are no criteria to identify what monetized values are significant for [National Environmental Policy Act (NEPA)] purposes”; (3) the Commission is not “aware of any . . . method,” including the social cost of GHGs, “that would enable the Commission to determine the significance of reasonably foreseeable GHG emissions”; and (4) therefore, there are “no accepted tools or methods for the Commission to use to determine significance.”[4] This language made its first appearance in orders on the April 20, 2023 open meeting.[5] I voted for this language, as did two of my colleagues, Chairman Phillips and Commissioner Christie.[6]
Additionally, I concur in the Commission’s declaration that it is the Commission’s order that controls and therefore any language in the Environmental Assessment (EA) that is in tension with the Commission’s order is not relied upon or adopted by the Commission.[7] We have had to resort to this language due to inconsistencies between the environmental documents issued by staff and the contents of the Commission’s orders.[8]
I am Compelled to Dissent in Part.
I start, as I have in several recent issuances, with a warning to all who take an interest in the Commission’s NGA section 7 issuances. Every such reader should pay close attention to our orders. Language in the Commission’s orders is changing—and over my objection. While drastic and profound changes were attempted by means of dramatic policy statements less than two years ago, the orders that were voted upon at the October 19, 2023 Commission meeting and over the last few months have been putting in place much of the groundwork necessary for the later implementation of the very policies set forth in the now-draft policy statements. In particular, pay attention in every issuance to the description of need, my colleagues’ discussions on upstream GHG emissions, downstream GHG emissions, and any articulation of standards. Pay attention to the arguments my colleagues intentionally fail to address. Not only do those failures to respond to well-pleaded arguments expose our issuances to remand and possible vacatur under the APA upon appeal, they also are quite instructive to the public by exposing the locus of the greatest disagreements among the Commissioners. Ask yourself, in each case, why would at least one of the non-dissenting Commissioners be reluctant (or, for that matter, adamantly refuse) to allow a discussion of that topic in a Commission issuance when failure to respond exposes our order to such peril on appeal. Finally, pay attention to Commission staff’s environmental documents and whether such documents accurately implement the Commission’s position regarding GHG emissions and the social cost of carbon or whether it is more likely an example of staff drafting contrary to the Commission’s will. In every case, ask yourself, were we to take this new language and extend its effects to its logical limits, what policy objectives would be achieved. I fear that the Commission is now attempting to pursue by seriatim adjudication that which it was unable to achieve through a generic proceeding. At a minimum, the Commission is preserving its ability to do so in the future.
Before turning to specifics, while there are various individual statements and determinations in this order with which I disagree, there are also larger, more substantial problems which expose this order to profound risk on petition for review. While this issuance, unlike the orders on the July 2023 Commission meeting, at least now acknowledges Congress’ recent enactment amending the NEPA, the Commission continues to avoid the implementation of the Fiscal Responsibility Act of 2023, and more specifically the “Builder Act.”[9] The Commission’s order also violates the APA, is inconsistent with Supreme Court precedent regarding the implementation of NEPA, and it unwisely abandons recent Commission practice in our treatment of the social cost of GHGs.
Pausing (again) to remind the reader of fundamentals, 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.”[10] The scope of this obligation, however, is not unlimited, and this requirement cannot be read in a vacuum. The Supreme Court has instructed us that 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.”[11] The purpose of the NGA, as the Supreme Court has declared, is “to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[12] 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, the Commission attempted to do in the now-draft Updated Certificate Policy Statement),[13] I reiterate my view that any regime we institute must “take meaning” from the purpose of the NGA.
The Commission Should Implement the Builder Act in its NGA Authorizations.
I dissent from the order to the extent that it does not implement the terms of the FRA. While this order, unlike earlier issuances in July, at least now acknowledges the fact that Congress recently amended the NEPA, the Commission continues to avoid the implementation of the FRA, and more specifically the “Builder Act.”[14] Congress made the first revisions to NEPA since the statute’s enactment when it passed the FRA, in particular, that part of the FRA known as the “Builder Act.”[15] The Commission should not be so reticent to pursue substantial changes to the process by which it discharges its duties under NEPA. The Builder Act does not include an implementation period provision, so the statute became effective when the President signed it into law. While the order hints that the Commission will wait for CEQ to offer its interpretation of the statute, there is certainly no legal reason that it must (or can) await CEQ’s determinations. Besides which, whether CEQ’s interpretations of NEPA in guidance documents or regulations bind independent agencies is a “thorny question,”[16] and there is ample reason to doubt that they do.
Among other revisions, the Builder Act changed the requirement that agencies include in environmental documents an analysis of the “environmental impact of the proposed action”[17] to an analysis of the “reasonably foreseeable environmental effects of the proposed agency action.”[18] In my view, Congress’s revisions reaffirm Public Citizen[19] which held that under NEPA, agencies are only obligated to consider environmental effects for which the agency action itself is the legal proximate cause.[20]
Given this new statutory language, FERC has an opportunity to clarify the appropriate metes and bounds of its obligations under NEPA consistent with the jurisdictional limits of the NGA. Such clarification is particularly called for given the U.S. Court of Appeals for the District of Columbia Circuit’s (D.C. Circuit) mischaracterization of the scope of FERC’s authority in Sabal Trail[21] and its progeny. Sabal Trail miscasts the nature of FERC’s analysis of the public convenience and necessity under section 7 of the NGA[22] to hold that the Commission has an obligation to consider the GHG emissions from the end use of the gas transported by certificated pipelines.[23] The NGA, however, confers no authority upon FERC to regulate the end use or local distribution of natural gas.[24] Rather, when deciding whether to approve a pipeline, the Commission determines whether there is a demonstrated need for interstate natural gas transportation capacity. Based on this misunderstanding of FERC’s authority, the Sabal Trail court concludes that FERC must include estimates of the GHG emissions from the end use of the gas or explain why it is unable to do so,[25] and goes even further, in dicta, to assert, without any explanation, that FERC has “legal authority to mitigate” the environmental effects that result from that end use.[26]
This mistake provided one (albeit insufficient) rationale for the Commission’s now-draft Updated Certificate Policy Statement[27] and Interim GHG Policy Statement,[28] which envisioned a mitigation scheme for the GHG emissions from the end use of gas transported on the interstate natural gas system.[29] The Builder Act offers the Commission a rare opportunity to clarify the limits of its authority and move beyond the shadow that the now “draft” policy statements continue to cast over the development of critically needed natural gas infrastructure.
The Downstream GHG Emissions are Not Reasonably Foreseeable.
Two of the shippers for the project are local distribution companies (LDCs).[30] The Commission’s order finds that downstream emissions from the LDC shippers are reasonably foreseeable.[31] I dissent from this finding. Calculating the downstream GHG emissions based on a full burn calculation cannot accurately determine reasonably foreseeable GHG emissions. And the downstream GHG emissions from LDCs are not reasonably foreseeable.
The Commission is obligated under the APA to engage in reasoned decision making. It is black letter law that reasoned decision making requires responding to the substance raised in litigants’ submissions. My colleagues’ insistence that all downstream emissions from LDCs are reasonably foreseeable does not amount to reasoned decision making. An agency’s decision is
arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.[32]
The Commission “must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’”[33] The Commission must also base its decisions on substantial record evidence. Substantial evidence means “more than a mere scintilla,” that is, “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”[34]
Nowhere in the Commission’s order does the Commission explain why it finds the full burn calculation an accurate basis upon which to estimate reasonably foreseeable downstream GHG emissions. Texas Eastern stated in a filing that “purported downstream GHG emissions,” that were calculated in Commission staff’s EA, “are not caused by the Project or reasonably foreseeable[;] nor are there any reasonably foreseeable upstream emissions that are caused by the Project.”[35] In Texas Eastern’s application, Texas Eastern states that “none of the downstream emissions associated with the Project’s incremental increase in capacity are caused by the Project or reasonably foreseeable.”[36] Texas Eastern explains that there is “an average historical LDC usage of 66 percent during winter months and 40 percent during summer months, as provided by PSEG Power, LLC,” and that “[t]he Project’s incremental increase in capacity is needed to meet peak delivery demands, even though the ultimate average use across the year will be less than the full incremental capacity.”[37] Texas Eastern further underscores this in a response to a data request, again stating that “none of the downstream emissions associated with the Project’s incremental increase in capacity are caused by the Project or are reasonably foreseeable.”[38] Texas Eastern also explains that “[q]uantification of emissions from downstream use of the gas is not feasible without knowing additional information about the end-use of gas (e.g., combustion or use as a feedstock) and whether it results in displacement of more energy-intensive sources of energy (e.g., coal or fuel oil),” recognizes that a full burn calculation “assumes 100% utilization of the entire incremental capacity for 365 days of the year, which is not a realistic outcome,” and submits that “[a] more appropriate estimate would be . . . based on an average historical LDC usage of 66 percent during winter months and 40 percent during summer months . . . .”[39]
The Commission does not even acknowledge this record evidence in its order. And despite the Commission recognizing in its order that “[f]ull burn calculations are, in most cases, an overestimate because pipelines only operate at full capacity during limited periods of full demand,”[40] the Commission still finds that “the emissions from the downstream combustion of the gas transported by the A2M II Project are reasonably foreseeable.”[41] This cannot be reasoned decision making. Moreover, the Commission appears to be establishing a new policy, sub silentio, in which, for LDC shippers, the Commission will find, as a categorical matter, and even in cases where the Commission has been presented with unrebutted, contrary record evidence, that a full burn calculation can be used to estimate reasonably foreseeable downstream GHG emissions.[42] This is bad policy, it is factually unsupportable, and is a violation of the APA.[43] It affirmatively misleads the public.
Despite the insistence of my colleagues, past and present, that we have been instructed to find downstream GHG emissions from LDC shippers to be reasonably foreseeable, the reality is that such a finding is not legally required. As in Food & Water Watch v. FERC,[44] this case involves adding capacity to provide incremental transportation service to shippers, including LDCs. In Food & Water Watch, the court did conclude “that the end use of the transported gas is reasonably foreseeable”[45] but went on to state 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 the court explained that it “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.”[46] We have not yet acted on the Food & Water Watch remand and, even according to the court, the question remains open. There are explanations that the Commission can—and should—rely upon to provide “a reasonable end-use distinction”[47] when shippers are LDCs.[48]
As a factual matter, it is impossible to find any LDC’s downstream GHG emissions reasonably foreseeable based on a full burn calculation. Suggestions to the contrary display a total misunderstanding of how LDCs and the interstate natural gas pipeline system work and, worse, ignore the basis upon which LDCs contract for capacity.[49]
Residential and commercial demand for natural gas is highly dependent upon weather. No LDC expects contracted capacity to match actual utilization rates. Typically, LDCs do not contract for capacity to meet routine needs but instead, because of their legal obligation to serve their customers at all times, under all conditions, they instead contract to meet peak demand. They also contract for peak demand as a hedge in order to avoid having to pay market prices at times of scarcity. Such planning is obviously more prudent than for LDCs to attempt to ensure the reliability of their systems through rain dances and hopes for a mild winter.[50]
The irony, of course, is that we need not luxuriate in the facts of this (or any other) case in order to decline to assess downstream GHG emissions. In his prior separate statements, Commissioner Christie has pointed to the limits of our jurisdiction as the basis upon which to find that upstream GHG emissions are not reasonably foreseeable, arguing that upstream activities are non-jurisdictional; therefore, we have no legal obligation to either estimate the upstream GHG emissions or consider them.[51] He is absolutely correct. But the same logic applies, with equal force, to downstream GHG emissions. The Commission has no jurisdiction over the LDCs. Those are licensed and regulated by the states, and we should not consider the Commission to be the legal proximate cause of the GHG emissions of the gas ultimately used by their consumers. The Commission should not find jurisdiction in one case and not in the other. This is plainly contradictory and illogical. There is no principled distinction between the two.
There is a Logical Flaw in the Commission’s Order.
Commission staff’s EA states that “[m]odification and installation of Project facilities would increase the atmospheric concentration of GHGs during construction, in combination with past and future emissions from all other sources globally and would contribute incrementally to future climate change impacts.”[52] My colleagues, in the order, acknowledge this statement found in the EA and then go on to state (in the order itself) that “[w]e clarify that, assuming that the transported gas is not displacing equal- or higher-emitting sources, we recognize that the projects’ contributions to GHG emissions globally contribute incrementally to future climate change impacts, including impacts in the region.”[53]
But the declaration that the project will “contribute incrementally to future climate change impacts”[54] appears at the same time as we say that we have no means by which to assess the significance of GHG emissions. This is obviously problematic. First, it is unclear what, exactly, the majority means when it says that “the projects’ contributions to GHG emissions globally contribute incrementally to future climate change impacts.”[55] Second, this statement is only offered to respond to Commission staff’s inclusion of statements in their NEPA documents indicating that the proposed project “would increase the atmospheric concentration of GHGs during construction, in combination with past and future emissions from all other sources globally and would contribute incrementally to future climate change impacts.”[56] The reality of the matter is that staff has no idea whether that is the case. The Commission has declared as much. So why repeatedly include such statements? How does such speculation inform the Commission’s decision making? Quite simply, it does not.
The Commission Should Not Include Calculations of the Social Cost of GHGs in its Orders.
I would not have included the calculations of the social cost of GHGs in the Commission’s order.[57] As I explained in my separate statement in Boardwalk, that issuance marked a change in the Commission’s approach to the social cost of GHGs in its orders.[58] In a break with this recent practice, Boardwalk and the orders voted on at the September 21, 2023 Commission meeting, while including language from the April Orders, also include calculations for the social cost of GHGs.[59] I do not support their inclusion in this order both because their inclusion breaks with recent practice and because the calculations are meaningless in light of the very finding, stated explicitly in the text of the Commission’s order, that the social cost of GHGs cannot be used for any meaningful purpose to inform project-level analysis, including the assessment of significance. That is why those calculations are being disclosed solely “for informational purposes.” Though I object to their inclusion, surplusage, even when specifically declared to be irrelevant to the reasoning of an order, is not, in itself, unlawful. The Commission has acknowledged, time and again, that the inclusion of these calculations in an environmental document is “[f]or informational purposes” only and has not included the calculations in several orders when they already appear in the NEPA document.[60] The Commission should not have changed course.
Conclusion
When drafting our orders we must bear in mind—at all times—fidelity to the law, the timely discharge of the duties assigned to us by Congress, and the legal durability of our issuances so as to ensure that the industry we are charged with overseeing can operate free of the burdens (and costs) of regulatory uncertainty and litigation risk. Sadly, the Commission’s order falls short in all three respects.
For these reasons, I respectfully concur in part and dissent in part.
[1] 15 U.S.C. §§ 717f(b), 717f(c).
[2] See Tex. E. Transmission, LP, 185 FERC ¶ 61,038, at P 17 (2023) (Texas Eastern) (“Texas Eastern has demonstrated a need for the projects. The A2M II Project is designed to provide additional firm transportation service to the project shippers, who have entered into long-term precedent agreements for all of the project’s capacity. . . . The Replacement Projects will provide the additional compression necessary for the A2M II Project service, while at the same time ensuring reliability of existing services and reducing emissions. We find long-term precedent agreements for 100% of the projects’ capacity is significant evidence of the need for the proposed projects.”) (citations omitted); id. P 6 (“As a result of the open season, Texas Eastern entered into binding, long-term precedent agreements with PSEG Power, LLC (PSEG) and Pivotal Utility Holdings d/b/a Elizabethtown Gas Company (ETG), for the full project capacity.”).
[3] See id. PP 50-51.
[4] Id.
[5] See Driftwood Pipeline LLC, 183 FERC ¶ 61,049, at PP 61, 63 (2023); Tex. LNG Brownsville LLC, 183 FERC ¶ 61,047, at PP 20-21, 25 (2023); Rio Grande LNG, LLC, 183 FERC ¶ 61,046, at PP 92-94, 101 (2023); see also Tex. LNG Brownsville LLC, 183 FERC ¶ 61,047 at P 20 (“although we are including the social cost of GHG figures for informational purposes, we find that because the social cost of GHGs tool was not developed for project level review and, as discussed below, does not enable the Commission to credibly determine whether the GHG emissions are significant, section 1502.21 of the [Council on Environmental Quality (CEQ)] regulations does not require its use in this proceeding”); Rio Grande LNG, LLC, 183 FERC ¶ 61,046 at P 92 (same) (collectively, “April Orders”).
[6] I pause to note that the referenced language was not included in an order voted on at the July 27, 2023 Commission meeting. See Transcon. Gas Pipe Line Co., LLC, 184 FERC ¶ 61,066 (2023). I am pleased that the language is included in this issuance, and I want to emphasize that the language, as included in this order, does not intertwine my colleagues’ view that downstream GHG emissions from local distribution companies are reasonably foreseeable—a position that I have consistently disagreed with and continue to disagree with, as explained below—with the language explaining that there is no means by which the Commission can determine the significance of an amount of GHG emissions.
[7] See Texas Eastern, 185 FERC ¶ 61,038 at P 68 (“We note that the analysis in the EA provides substantial evidence for our conclusions in this order, but that it is the order itself that serves as the record of decision, consistent with the Commission’s obligations under NEPA and the Administrative Procedure Act [(APA)]. For that reason, to the extent that any of the analysis in the EA is inconsistent with or modified by the Commission’s analysis and findings in the order, it is the order that controls and we do not rely on or adopt any contrary analysis in the EA.”).
[8] See Transcon. Gas Pipe Line Co., LLC, 184 FERC ¶ 61,066 (Danly, Comm’r, dissenting in part at P 14) (“We have witnessed environmental documents including language that runs contrary to Commission orders.”) (citations omitted). Compare WBI Energy Transmission, Inc. Wahpeton Expansion Project Final EIS, Docket No. CP22-466-000, at 4-118 (Apr. 7, 2023) (“The Commission stated in a recent Order that a project’s share of contribution to GHG emissions at the national level provides a reasoned basis to consider the significance of the Project’s GHG emissions and their potential impact on climate change; and when states have GHG emissions reduction targets, the Commission will endeavor to consider the GHG emissions of a project on those state goals (or state inventories if the state does not have emissions targets.)”) (citing N. Nat. Gas Co., 174 FERC ¶ 61,189, at P 29 (2021) (Northern Natural)), with Tenn. Gas Pipeline Co., L.L.C., 178 FERC ¶ 61,199 (2022) (Danly, Comm’r, concurring in the judgment at PP 2-3) (disagreeing with Northern Natural and 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 GHG emissions”) (citation omitted), and with Tenn. Gas Pipeline Co., L.L.C., 178 FERC ¶ 61,199 (Phillips & Christie, Comm’rs, concurring at P 2) (“depart[ing] from Northern Natural, where the Commission stated that emissions for a project were not significant,” explaining that “[i]n Northern Natural, the Commission disclosed the yearly emissions volumes and the estimated contribution to national and state emissions estimates, and then stated that, based on this record, that the emissions were not significant,” and stating that “[i]t is not clear how this determination was made or how a finding of ‘significance’ would have affected our duties and authority under the Natural Gas Act”) (citations omitted). Compare Boardwalk Storage Co. LLC BSC Compression Replacement Project Environmental Assessment, Docket No. CP22-494-000, at 48 (Mar. 13, 2023) (“We include a disclosure of the social cost of GHGs (also referred to as the [‘]social cost of carbon’ [SCC]) to assess climate impacts generated by each additional metric ton of GHGs emitted by the Project.”), with Golden Pass LNG Terminal LLC, 180 FERC ¶ 61,058, at P 24 (2022) (rejecting an argument raised in a comment that “the EA should use the social cost of GHGs (also referred to as the ‘social cost of carbon’ [SCC]) to assess climate impacts generated by each additional ton of GHGs that would be emitted or saved as a result of authorizing the proposed amendment, and that all GHG emissions are significant” by explaining that “we are not relying on or using the social cost of GHGs estimates to make any finding or determination regarding either the impact of the project’s GHG emissions or whether the project is in the public convenience and necessity”) (citations omitted). Notably, the Commission does not review or approve the contents of the EAs and Environmental Impact Statements (EIS) issued by staff. Staff, for those documents, act under the supervision of the Chairman. See also 42 U.S.C. § 7171(c) (explaining that “[t]he Chairman shall be responsible on behalf of the Commission for the executive and administrative operation of the Commission, including functions of the Commission with respect to . . . the supervision of personnel employed by or assigned to the Commission, except that each member of the Commission may select and supervise personnel for his personal staff . . . .”) (emphasis added). But great care must be exercised to ensure that environmental documents adhere to Commission precedent. Cf. Great River Hydropower, LLC, 135 FERC ¶ 61,151, at P 44 (2011) (explaining that if a delegated order “is inconsistent with [Commission] precedent . . . , it was wrongly decided”).
[9] See Fiscal Responsibility Act of 2023, Pub. L. 118-5, 137 Stat 10, at § 321 (June 3, 2023) (providing the “Builder Act”) (FRA).
[10] Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959).
[11] NAACP v. FPC, 425 U.S. 662, 669 (1976) (NAACP).
[12] Id. at 669-70; accord Myersville Citizens for a Rural Cmty., Inc. 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.
[13] 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).
[14] See FRA, Pub. L. 118-5, 137 Stat 10, at § 321 (providing the “Builder Act”).
[15] See id.
[16] Oglala Sioux Tribe v. U.S. Nuclear Regulatory Comm’n, 45 F.4th 291, 300 (D.C. Cir. 2022) (citing Food & Water Watch v. U.S. Dep’t of Agric., 1 F.4th 1112, 1119 (D.C. Cir. 2021) (Randolph, J., concurring) (questioning CEQ’s authority to promulgate binding regulations)).
[17] 42 U.S.C. § 4332(c)(i) (1970).
[18] 42 U.S.C. § 4332(c)(i) (2023) (emphasis added).
[19] Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752 (2004) (Public Citizen).
[20] See id. at 767.
[21] Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (Sabal Trail).
[22] 15 U.S.C. § 717f.
[23] See Sabal Trail, 867 F.3d at 1373 (“Because FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines it approves. Public Citizen thus did not excuse FERC from considering these indirect effects.”) (citation & footnote omitted). I note, however, that National Cable & Telecommunications Association v. Brand X Internet Services holds that even following a binding judicial issuance, agencies remain free in subsequent proceedings to offer reasonable interpretations of the jurisdiction conferred upon them by their organic statutes. 545 U.S. 967, 982-83 (2005) (Brand X). This proposition, for better or for worse, is now black letter administrative law. Far from flouting the authority of the courts, I suggest no more than that the Commission act within the remit confirmed in Brand X by offering a reasonable interpretation of our statute which would limit our jurisdiction consistent with the NGA’s purpose and its plain text. See 15 U.S.C. § 717(b) (listing the exemptions from the Commission’s jurisdiction). And we can do so secure in the knowledge that such an interpretation—again, for better or for worse—will be accorded the deference guaranteed by Chevron. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984) (Chevron) (“[I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”) (footnote omitted).
[24] See 15 U.S.C. § 717(b) (“The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.”) (emphasis added).
[25] See Sabal Trail, 867 F.3d at 1374 (“We conclude that the EIS for the Southeast Market Pipelines Project should have either given a quantitative estimate of the downstream greenhouse emissions that will result from burning the natural gas that the pipelines will transport or explained more specifically why it could not have done so.”) (emphasis added); id. at 1375 (“Our discussion so far has explained that FERC must either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.”) (emphasis added).
[26] Id. at 1374.
[27] Updated Certificate Policy Statement, 178 FERC ¶ 61,107.
[28] Interim GHG Policy Statement, 178 FERC ¶ 61,108.
[29] See Order on Draft Policy Statements, 178 FERC ¶ 61,197 at P 2 (converting the Updated Certificate Policy Statement and the Interim GHG Policy Statement to “draft policy statements”).
[30] Texas Eastern, 185 FERC ¶ 61,038 at P 6 & n.5 (explaining that “Texas Eastern entered into binding, long-term precedent agreements with PSEG Power, LLC (PSEG) and Pivotal Utility Holdings d/b/a Elizabethtown Gas Company (ETG), for the full project capacity” and that PSEG and ETG are local distribution companies).
[31] Id. P 43 (“For the Replacement Projects and the A2M II Project, we find that . . . the emissions from the downstream combustion of the gas transported by the A2M II Project are reasonably foreseeable.”) (footnote omitted).
[32] Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (emphasis added).
[33] Id. at 43 (quoting Burlington Truck Lines, Inc. v. U.S., 371 U.S. 156, 168 (1962)); see also id. at 56 (“failed to offer the rational connection between facts and judgment required to pass muster under the ‘arbitrary and capricious’ standard”).
[34] Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938).
[35] Texas Eastern March 31, 2023 Response to EPA’s March 17, 2023 Comments on the EA at 5.
[36] Application at Resource Report 1, at 1-38 (July 7, 2022).
[37] Id.
[38] Texas Eastern October 24, 2022 Response Commission Staff’s October 14, 2022 Data Request at 39.
[39] Id.
[40] Texas Eastern, 185 FERC ¶ 61,038 at P 44 n.87.
[41] Id. P 43.
[42] See Transcon. Gas Pipe Line Co., LLC, 184 FERC ¶ 61,066 (Danly, Comm’r, dissenting in part at P 8) (disagreeing with the Commission that a full burn calculation of downstream GHG emissions reflects reasonably foreseeable GHG emissions and explaining that the applicant argued that a full burn estimate for downstream GHG emissions was “grossly inaccurate” and that a utilization rate of 38.6% should be used instead) (citation omitted); see also N. Nat. Gas Co., 184 FERC ¶ 61,186 (2023) (Danly, Comm’r, concurring in part & dissenting in part at P 16). Cf. Tenn. Gas Pipeline Co., L.L.C., 179 FERC ¶ 61,041, at PP 49-51 (2022) (“For the proposed project, we find that the construction emissions, direct operational emissions, and the emissions from the downstream combustion of the gas transported by the project are reasonably foreseeable emissions. With respect to downstream emissions, the record in this proceeding demonstrates that the natural gas to be transported by the project will be combusted by end-use customers . . . . With respect to downstream emissions, the EIS calculates a full-burn of the project’s design capacity would result in 2.22 million metric tpy of CO2e. However, Tennessee urges the Commission to estimate the potential downstream GHG emissions using the ‘average utilization rate’ in the relevant market area on Tennessee’s system, Zone 5, which Tennessee states has a 77% utilization rate. We decline to accept Tennessee’s 77% average utilization rate without additional substantiation, especially in light of the contradictory 85% historical utilization rate provided in Tennessee’s application used to support its proposed commodity charge. Based on an assumed 85% utilization rate, the estimated GHG emissions related to the downstream use of the incremental capacity provided by the project is approximately 1,887,000 metric tpy.”).
[43] It is beyond cavil that an agency must explain its departure from prior precedent and “may not . . . depart from a prior policy sub silentio or simply disregard rules that are still on the books.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (“[T]he requirement that an agency provide reasoned explanation for its action would ordinarily demand that it display awareness that it is changing position.”) (emphasis in original) (citation omitted).
[44] 28 F.4th 277 (D.C. Cir. 2022) (Food & Water Watch).
[45] 28 F.4th at 289.
[46] Id. (emphasis added).
[47] Id.
[48] The LDCs at issue here and the discrete, known generators in Sierra Club v. FERC, are dissimilar enough that the Sabal Trail precedent cannot directly apply. Sabal Trail, 867 F.3d 1357. Additionally, as I have said before, Sabal Trail, which Food & Water Watch applies, is inconsistent with the Supreme Court’s holding in Public Citizen. See 541 U.S. at 767 (“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); see also id. at 770 (holding that “where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant ‘cause’ of the effect” and “under NEPA and the implementing CEQ regulations, the agency need not consider these effects in its EA when determining whether its action is a ‘major Federal action.’”). My views are not idiosyncratic. Both the partial dissenting statement in Sabal Trail and the U.S. Court of Appeals for the Eleventh Circuit agree. See 867 F.3d at 1383 (Brown, J., concurring in part and dissenting in part) (“Thus, just as FERC in the [Department of Energy (DOE)] 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.”). Moreover, as I have previously explained, we could no more reasonably deny a pipeline for the effects of induced upstream production, which the statute places outside of our jurisdiction, than we could deny an NGA section 3 authorization, 15 U.S.C. § 717b, for an LNG export terminal because we do not like the effects that the expected exports would have on international gas markets. Transcon. Gas Pipe Line Co., LLC, 182 FERC ¶ 61,148 (2023) (Danly, Comm’r, concurring at P 5) (citing Port Arthur LNG, LLC, 181 FERC ¶ 61,024, at P 12 & n.35 (2022) (stating in an extension of time proceeding that “[t]he Commission will not consider Sierra Club’s assertion that we must examine the project’s impact on domestic prices and supply as it is an attempt to re-litigate the issuance of the Authorization Order” and that “[n]or could we consider impacts on domestic prices and supply as the Commission’s authority under the Natural Gas Act is limited to the authorization of the siting, construction, and operation of LNG export facilities, while the consideration of the impact of export of LNG as a commodity is solely under the Department of Energy’s authority”) (emphasis added) (citation omitted); Commonwealth LNG, LLC, 181 FERC ¶ 61,143, at P 13 (2022) (Commonwealth) (“The Commission’s authority under NGA section 3 applies ‘only to the siting and the operation of the facilities necessary to accomplish an export[,]’ while ‘export decisions [are] squarely and exclusively within the [DOE]’s wheelhouse.’ Similarly, issues related to the impacts of natural gas development and production are related to DOE’s authorization of the export and not the Commission’s siting of the facilities . . . .”) (citations omitted); Columbia Gulf Transmission, LLC, 180 FERC ¶ 61,206, at PP 78, 80 (2022) (explaining for a NGA section 7 project that would provide incremental firm interstate natural gas transportation service to an LNG export facility that “the downstream GHG emissions are attributable to DOE’s ‘independent decision to allow exports—a decision over which the Commission has no regulatory authority’” and that “[w]e see no basis in the NGA for the Commission to encroach upon DOE’s sole authority over the review and authorization of exports of natural gas”); Tenn. Gas Pipeline Co., L.L.C., 180 FERC ¶ 61,205, at PP 62, 64 (2022) (same)). That determination rests solely with the DOE, which is charged with authorizing “the export of natural gas as a commodity.” EarthReports, Inc. v. FERC, 828 F.3d 949, 952-53 (D.C. Cir. 2016) (explaining that the DOE has “exclusive authority over the export of natural gas as a commodity”). The same holds for any induced upstream effects on production, even if they could be found traceable to the proposed project. In my view, this also applies to downstream end use, such as local distribution. The statute reserves those powers to the states. And it does so explicitly:
The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.
15 U.S.C. § 717(b).
[49] As an aside, were the Commission to find that downstream GHG emissions are not reasonably foreseeable or otherwise depart from using a full burn estimate of downstream GHG emissions, such a decision would not undercut the Commission’s need determination. Any suggestion along those lines is ridiculous. Here, we have a project that has significant evidence of need demonstrated by precedent agreements for the project’s full capacity. The inquiry under NEPA as to whether the downstream GHG emissions are reasonably foreseeable has nothing to do with the need inquiry. As the Commission has explained, NEPA and the NGA are distinct. Commonwealth LNG, LLC, 183 FERC ¶ 61,173, at P 37 (2023) (“[T]he Commission’s NGA and NEPA responsibilities are separate and distinct.”) (citation omitted); Transcon. Gas Pipe Line Co., LLC, 182 FERC ¶ 61,148 at P 101 (“The NGA analysis is distinct from the NEPA analysis . . . .”).
[50] Cf. New England’s Power Grid Prepared for Winter, ISO New England (Dec. 5, 2022), https://www.iso-ne.com/static-assets/documents/2022/12/20221205_pr_winteroutlook_final.pdf (“‘Based on seasonal weather forecasts and information provided by generators about their fuel arrangements, the region’s power system is prepared for mild and moderate weather conditions,’ said Gordon van Welie, ISO New England’s president and CEO. ‘If long periods of severely cold weather develop, we’ll lean on our forecasting tools to identify potential problems early enough to take proactive measures, such as calling for increased fuel deliveries or asking for public conservation.’”).
[51] See, e.g., N. Nat. Gas Co., 184 FERC ¶ 61,186 (Christie, Comm’r, concurring at P 9) (“Today’s order makes a finding of fact that the upstream GHG emissions are not reasonably foreseeable . . . . [T]he Commission has no legal obligation to estimate emissions from upstream, non-jurisdictional activities anyway . . . .”) (citation omitted).
[52] EA at 102 (issued Feb. 10, 2023).
[53] See Texas Eastern, 185 FERC ¶ 61,038 at P 44 (citations omitted). I acknowledge that various formulations of this language have been included in orders that I have previously voted for, but I no longer support this language and object to its inclusion.
[54] Id.
[55] Id.
[56] EA at 102.
[57] See Texas Eastern, 185 FERC ¶ 61,038 at P 44.
[58] See generally Boardwalk Storage Co., LLC, 184 FERC ¶ 61,062 (2023) (Boardwalk) (Danly, Comm’r, concurring at PP 1-7).
[59] See Boardwalk, 184 FERC ¶ 61,062 at P 24. Following the Commission’s adoption at the April open meeting of our new social cost of GHGs language, our orders have not included those calculations when they have appeared in the Commission staff’s environmental documents. See Equitrans, L.P., 183 FERC ¶ 61,200, at P 47 (2023) (Equitrans) (explaining that “[f]or informational purposes, Commission staff estimated the social cost of GHGs associated with reasonably foreseeable emissions from the project.”). Even before the April 20, 2023 Commission meeting, the calculations were not included in several orders where the environmental document already contained the calculations. See, e.g., Cameron LNG, LLC, 182 FERC ¶ 61,173, at P 37 (2023) (“Further, the EA, for informational purposes, disclosed the social cost of GHGs associated with the project’s reasonably foreseeable GHG emissions.”) (footnote omitted); Commonwealth, 181 FERC ¶ 61,143 at P 75 (stating that “the final EIS disclosed the social cost of GHGs associated with the project’s reasonably foreseeable GHG emissions” and not including the calculations in the order) (citation omitted). I note that there are some inconsistencies in this prior to the issuance of the orders voted on at the April open meeting, with occasional orders including the calculations. In every circumstance, though, I have objected to the inclusion of the social cost of GHGs calculations in our orders and will continue to do so. Instead, the Commission has included the disclosure of the social cost of GHGs in its orders “for informational purposes” when those calculations were not included as part of the EAs or EISs or when the calculation in the staff’s environmental document included (improperly) downstream emissions that are not reasonably foreseeable, e.g., the downstream emissions from exports. See Tex. LNG Brownsville LLC, 183 FERC ¶ 61,047 at P 24 (including the calculations in the remand order because they were not in the environmental document); Rio Grande LNG, LLC, 183 FERC ¶ 61,046 at PP 98-99 (same); Driftwood Pipeline LLC, 183 FERC ¶ 61,049 at PP 57 nn.109 & 112, 61-62 (disclosing a “revised estimate of the social cost of GHGs associated with the reasonably foreseeable emissions” in the Commission’s order because the calculation in the final EIS included in the calculation downstream GHG emissions from exports, which are not reasonably foreseeable).
[60] E.g., Equitrans, 183 FERC ¶ 61,200 at P 47.