Commissioner Richard Glick Dissent regarding Port Arthur LNG

Commissioner Richard Glick Statement

April 18, 2019

Docket No. CP17-20-000, CP17-21-000, CP17-21-001, CP18-7-000

Decision C-3

I dissent from today’s order because it violates both the Natural Gas Act1 (NGA) and the National Environmental Policy Act2 (NEPA). In particular, the Commission is again refusing to consider the consequences its actions have for climate change. Neither the NGA nor NEPA permit the Commission to assume away the climate change implications of constructing and operating this liquefied natural gas (LNG) facility. Yet that is precisely what the Commission is doing today.

In the order authorizing Port Arthur LNG, LLC’s LNG export terminal (LNG Terminal) pursuant to section 3 of the NGA and the associated natural gas pipelines (Pipeline Projects) pursuant to section 7 of the NGA (collectively, Project), the Commission treats GHG emissions differently than all other environmental impacts. By refusing to assess the significance of the impact of the Project’s GHG emissions, even after quantifying them, the Commission not only neglects its obligation to assess the environmental impacts, but also its concomitant duty to explore possible mitigation measures to reduce any significant adverse effects. This systematic failure to consider the Project’s impacts on climate change is what allows the Commission to misleadingly state that “[a]ll [environmental] impacts . . . will be reduced to less-than-significant levels”3 and, as a result, conclude that the Project satisfies the NGA’s public interest standards.4

I. The Commission’s Public Interest Determinations Are Not the Product of Reasoned Decisionmaking

The NGA’s regulation of LNG import and export facilities “implicate[s] a tangled web of regulatory processes” split between the U.S. Department of Energy (DOE) and the Commission.5 The NGA establishes a general presumption favoring the import and export of LNG unless there is an affirmative finding that the import or export “will not be consistent with the public interest.”6 Section 3 of the NGA, which governs LNG imports and exports, provides for two independent public interest determinations: one regarding the import or export of LNG itself and one regarding the facilities used for that import or export. DOE determines whether the import or export of LNG is consistent with the public interest, with transactions among free trade countries legislatively deemed to be “consistent with the public interest.”7 The Commission evaluates whether “an application for the siting, construction, expansion, or operation of an LNG terminal” is consistent with the public interest.8 Pursuant to that authority, the Commission must approve a proposed LNG facility unless the record shows that the facility would be inconsistent with the public interest.9

As part of that determination, the Commission must examine a proposed LNG facility’s impact on the environment and public safety. A facility’s impact on climate change must be part of a public interest determination under the NGA.10 Nevertheless, the Commission maintains that it need not consider whether the Project’s contribution to climate change is significant because it lacks a means to do so—or at least so it claims.11 However, the shocking part of the Commission’s rationale is what comes next. Based on this alleged inability to assess significance, the Commission concludes that the Project will have no significant environmental impact.12 That is the equivalent of saying that an action that is known to be dangerous is actually safe because we do not know exactly how dangerous it is. That is ludicrous and it certainly does not give climate change the serious consideration it deserves and that the law demands.

The Commission’s failure to consider the impact of the Project’s GHG emissions is all-the-more glaring given the volume of emissions at issue in this proceeding. The Commission points out that the operation of the Project will directly emit 4.77 million metric tons of GHGs annually.13 Given the Commission’s acknowledgment of that GHG emissions contribute to climate change,14 the decision to exclude GHG emissions from playing any role in the Commission’s public interest analysis is indefensible.

The implications of the Commission’s approach to evaluating the impacts of GHG emissions extend beyond any single proceeding under NGA section 3 or section 7. Taking the Commission’s approach to its logical conclusion, the Commission would approve any project regardless of the amount of GHGs emitted without ever determining the significance of their environmental impact. If the Commission’s assessment of that impact will not change no matter the volume of GHG emissions at issue, those emissions and their consequences cannot meaningfully factor into the public interest determination. Approving a project that may significantly contribute to the harms caused by climate change without meaningfully evaluating the significance of that impact or considering it as part of the public interest determination is contrary to law, arbitrary and capricious, and not the product of reasoned decisionmaking.15

II. The Commission Fails to Satisfy Its Obligations under NEPA

In order to evaluate the environmental consequences of the Project under NEPA, the Commission must consider the harm caused by the Project’s GHG emissions and “evaluate the ‘incremental impact’ that these emissions will have on climate change or the environment more generally.”16 As noted, the Final EIS states that the Project will directly emit 4.77 million metric tons of GHGs annually.17 Although that quantification of the Project’s GHG emissions is a necessary step toward meeting the Commission’s NEPA obligations, listing the volume of emissions alone is insufficient.18

As an initial matter, identifying the consequences that those emissions will have for climate change is essential if NEPA is to play the disclosure and good government roles for which it was designed. The Supreme Court has explained that NEPA’s purpose is to “ensure[] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts” and to “guarantee[] that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.”19 It is hard to see how hiding the ball on a project’s climate impacts is consistent with either of those purposes.

In addition, under NEPA, a finding of significance informs the Commission’s inquiry into potential ways of mitigating environmental impacts.20 The Supreme Court has held that an EIS must “contain a detailed discussion of possible mitigation measures” to address adverse environmental impacts.21 The Court explained that, “[w]ithout such a discussion, neither the agency nor other interested groups and individuals can properly evaluate the severity of the adverse effects” of a project, making an examination of possible mitigation measures necessary to ensure that the agency has taken a “hard look” at the environmental consequences of the action at issue.22 Consistent with this obligation, the Final EIS discusses mitigation measures to ensure that the Project’s adverse environmental impacts, excluding GHG emissions, are reduced to less than significant levels.23 For example, in order to find that the Project’s impacts on wetlands are not anticipated to be significant,24 the Commission relies on compensatory mitigation including the purchase of mitigation credits.25 The Commission not only has the obligation to discuss mitigation of adverse environmental impacts under NEPA, but also the authority to condition certificates under section 3 and 7 of the NGA.26 Once again, however, the Project’s climate change impacts are treated differently. By refusing to assess significance, the Commission escapes its obligation to consider mitigation measures for the Project’s GHG emissions.

In refusing to even assess the significance of the Project’s GHG emissions during the environmental review process, the Commission relegates climate change to a negligible role, at best, in its NEPA analysis. Nothing in today’s order justifies this result. The Commission argues that it cannot determine whether the Project’s contribution to climate change is significant, relying on the premise that there is no “generally accepted methodology” to estimate a project’s impact on climate change, either locally or nationally.27 As a logical matter, the argument that there is no single standard methodology for evaluating the significance of GHG emissions does not excuse the Commission from assessing the Project’s environmental impacts under NEPA. The claimed absence of a standard methodology is no justification for effectively ignoring those emissions.28

Moreover, the argument that there is no single standard methodology for evaluating the significance of GHG emissions is a red herring. The lack of any single methodology does not prevent the Commission from adopting a methodology, even if others are available. The Commission has several tools to assess the harm from the Project’s contribution to climate change. By measuring the long-term damage done by a ton of carbon dioxide, the Social Cost of Carbon links GHG emissions to actual environmental effects from climate change, thereby facilitating the necessary “hard look” at the Project’s environmental impacts that NEPA requires. Especially when it comes to a global problem like climate change, a measure for translating a single project’s climate change impacts into concrete and comprehensible terms plays a useful role in the NEPA process by putting the harm in terms that are readily accessible for both agency decisionmakers and the public at large. Yet, the Commission continues to ignore the Social Cost of Carbon, relying instead on deeply flawed reasoning that I have previously critiqued at length.29

Regardless of tools or methodologies available, the Commission can use its judgement and discretion to consider all factors and determine, quantitatively or qualitatively, whether the Project’s GHG emissions have a significant impact on climate change. After all, that is precisely what the Commission does in other aspects of its environmental review. For example, consider the Commission’s evaluation of the Project’s impact on the surrounding land. The Final EIS determines that a total of 992 acres of vegetation and upland forest will be permanently affected by the Project,30 but then concludes that the Project “will not have a significant impact on vegetation.”31 The Final EIS provides no “standard methodology” available to the Commission to evaluate this impact.32 Instead, the Commission uses its judgment to conduct a qualitative review to assess the Project’s impact on vegetation and conclude that the impact would not be significant based on the “minor nature of the impacts.”33 The Commission’s refusal to exercise similar qualitative discretion and judgment when it comes to evaluating the impacts of GHG emissions is arbitrary and capricious and willfully ignorant.

The Commission’s refusal to seriously consider the significance of the impact of the Project’s GHG emissions is even more mystifying because NEPA “does not dictate particular decisional outcomes.”34 NEPA “‘merely prohibits uninformed—rather than unwise—agency action.’”35 Taking the matter seriously—and rigorously examining a project’s impacts on climate change—does not necessarily prevent any of my colleagues from ultimately concluding that a project meets the public interest standard. Indeed, a thorough investigation of a project’s contribution to climate change would also help infrastructure developers by reducing their legal risk in the appeals that will inevitably follow. At the end of the day, no one benefits from the Commission’s refusal to consider a project’s impact on climate change.

For these reasons, I respectfully dissent.
 

• 11 15 U.S.C. §§ 717b, 717f (2012).
• 22 National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321 et seq.
• 33 Port Arthur LNG, LLC, 167 FERC ¶ 61,052, at P 101 (2019) (Certificate Order); see also Final Environmental Impact Statement at ES-10 (Final EIS).
• 44 Certificate Order, 167 FERC ¶ 61,052 at PP 29, 36.
• 55 Sierra Club v. FERC, 827 F.3d 36, 40 (D.C. Cir. 2016) (Freeport).
• 6615 U.S.C. §717b(a); see EarthReports, Inc. v. FERC, 828 F.3d 949, 953 (D.C. Cir. 2016) (citing W. Va. Pub. Servs. Comm’n v. Dep’t of Energy, 681 F.2d 847, 856 (D.C. Cir. 1982) (“NGA [section] 3, unlike [section] 7, ‘sets out a general presumption favoring such authorization.’”)). Under section 7 of the NGA, the Commission approves a proposed pipeline if it is shown to be consistent with the public interest, while under section 3, the Commission approves a proposed LNG import or export facility unless it is shown to be inconsistent with the public interest. Compare 15 U.S.C. § 717b(a) with 15 U.S.C. §717f(a), (e).
• 77 15 U.S.C. § 717b(c). The courts have explained that, because the authority to authorize LNG exports rests with DOE, NEPA does not require the Commission to consider the upstream or downstream GHG emissions that may be indirect effects of the export itself when determining whether the related LNG export facility satisfies section 3 of the NGA. See Freeport, 827 F.3d at 46-47; see also Sierra Club v. FERC, 867 F.3d 1357, 1373 (D.C. Cir. 2017) (Sabal Trail) (discussing Freeport). NEPA still requires, however, that the Commission consider the direct GHG emissions associated with a proposed LNG export facility. See Freeport, 827 F.3d at 41, 46.
• 88 15 U.S.C. § 717b(e). In 1977, Congress transferred the regulatory functions of NGA section 3 to DOE. DOE, however, subsequently delegated to the Commission authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG terminal, while retaining the authority to determine whether the import or export of LNG to non-free trade countries is in the public interest. See EarthReports, Inc., 828 F.3d at 952-53.
• 99 See Freeport, 827 F.3d at 40-41.
• 1010 See Sabal Trail, 867 F.3d at 1373 (explaining that the Commission may “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment”); see also Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959) (holding that the NGA requires the Commission to consider “all factors bearing on the public interest”).
• 1111 Certificate Order, 167 FERC ¶ 61,052 at P 138; see also Final EIS at 4-361-4-362 (explaining that “[t]here is no generally accepted methodology to estimate what extent a project’s incremental contribution to [GHG] emissions would result in physical effects on the environment”).
• 1212 Certificate Order, 167 FERC ¶ 61,052 at P 101; Final EIS at ES-10.
• 1313 Certificate Order, 167 FERC ¶ 61,052 at P 137; Final EIS at Table 4.11.1-7 (Carbon dioxide emissions in the Final EIS are expressed in short tons.).
• 1414 Final EIS at 4-360.
• 1515 As noted, the NGA “requires the Commission to evaluate all factors bearing on the public interest,” Atl. Ref. Co., 360 U.S. at 391, which Sabal Trail held includes a facility’s contribution to the harms caused by climate change, 867 F.3d at 1373.
• 1616 Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172, 1216 (9th Cir. 2008); WildEarth Guardians v. Zinke, No. CV 16-1724 (RC), 2019 WL 1273181, at *1 (D.D.C. Mar. 19, 2019) (explaining that the agency was required to “provide the information necessary for the public and agency decisionmakers to understand the degree to which [its] decisions at issue would contribute” to the “impacts of climate change in the state, the region, and across the country”).
• 1717 Supra note 13.
• 1818 See Ctr. for Biological Diversity, 538 F.3d at 1216 (“While the [environmental document] quantifies the expected amount of CO2 emitted . . . , it does not evaluate the ‘incremental impact’ that these emissions will have on climate change or on the environment more generally . . . .”); Klamath-Siskiyou Wildlands Ctr. v. Bureau of Land Mgmt., 387 F.3d 989, 995 (9th Cir. 2004) (“A calculation of the total number of acres to be harvested in the watershed is a necessary component . . . , but it is not a sufficient description of the actual environmental effects that can be expected from logging those acres.”).
• 1919 Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 768 (2004) (citing Robertson v. Methow Valley Citizens Coun., 490 U.S. 332, 349 (1989)).
• 2020 40 C.F.R. § 1502.16 (2018) (NEPA requires an implementing agency to form a “scientific and analytic basis for the comparisons” of the environmental consequences of its action in its environmental review, which “shall include discussions of . . . [d]irect effects and their significance.”).
• 2121 Robertson, 490 U.S. at 351.
• 2222 Id. at 352; see also 40 C.F.R. §§ 1508.20 (defining mitigation), 1508.25 (including in the scope of an environmental impact statement mitigation measures).
• 2323 Certificate Order, 167 FERC ¶ 61,052 at PP 102, 106, 109, 112, 114, 128 (The Commission states that adverse environmental impacts to geology, water, wetlands, vegetation, wildlife, and air quality will not be significant if the Applicant implements proposed mitigation measures.).
• 2424 Final EIS at ES-6.
• 2525 Id.; see also Final EIS at 4-58–4-59 (The U.S. Army Corp of Engineers has a goal of “no net loss” for wetlands and requires compensatory mitigation for all permanent wetland loss. The Final EIS relies on multiple mitigation measures including contributed dredging materials for emergent wetlands and wetland mitigation credit purchases.).
• 2626 15 U.S.C. § 717b(e)(3)(A); 15 U.S.C. § 717f(e); Certificate Order, 167 FERC ¶ 61,052 at P 141 (“[T]he Commission has the authority to take whatever steps are necessary to ensure the protection of environmental resources . . . , including authority to impose any additional measures deemed necessary . . . .”).
• 2727 Final EIS at 4-361–4-362; see also Certificate Order, 167 FERC ¶ 61,052 at P 138.
• 2828 My colleague, Commissioner LaFleur, wrestled with these questions and reached a judgment on both the significance of the impact of the GHG emissions and the merits of the Project notwithstanding the lack of analysis in the Commission’s order. Certificate Order, 167 FERC ¶ 61,052 (LaFleur, Comm’r, concurring at P 8). Providing additional context regarding the Project’s GHG emissions and their cumulative impact is a useful first step that promotes public disclosure and informed decisionmaking. But neither that context nor a concurrence assessing the significance of the impact of the Project’s GHG emissions can remedy the order’s erroneous conclusion that the Commission cannot evaluate the significance of the Project’s contribution to climate change or its assumption that such a contribution is insignificant. Nor can a concurrence remedy the absence of any discussion in the record of the significance of the Project’s contribution to climate change.
• 2929 See, e.g., Fla. Se. Connection, LLC, 164 FERC ¶ 61,099 (2018) (Glick, Comm’r, dissenting).
• 3030 Certificate Order, 167 FERC ¶ 61,052 at PP 110-111.
• 3131 Id. P 112.
• 3232 As compared to the Commission’s requirement for a “standard methodology” to determine the significance of the Project’s GHG emissions, as discussed in Certificate Order, 167 FERC ¶ 61,052 at P 138 (citing to Dominion Transmission, Inc., 163 FERC ¶ 61,128, at PP 67-70 (2018) (LaFleur, Comm’r, dissenting in part; Glick, Comm’r, dissenting in part)).
• 3333 Id. P 112.
• 3434 Sierra Club v. U.S. Army Corps of Engineers, 803 F.3d 31, 37 (D.C. Cir. 2015).
• 3535 Id. (quoting Robertson, 490 U.S. at 351).