Commissioner Richard Glick Dissent regarding Transcontinental Gas Pipe Line Company, LLC

Commissioner Richard Glick Statement

May 3, 2019

Docket No. 17-101-000

I dissent in part from today’s order because it violates both the Natural Gas Act1 (NGA) and the National Environmental Policy Act2 (NEPA). Once again, the Commission refuses 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 pipeline project. Yet that is precisely what the Commission is doing today.

In today’s order, the Commission authorizes Transcontinental Gas Pipe Line Company’s (Transco) proposed Northeast Supply Enhancement Project (Project), which will provide an additional 400,000 dekatherms per day of firm transportation service to residential and commercial customers in the New York City area.3 Today’s order suffers from two fatal flaws, both of which are a function of the Commission’s continued refusal to consider the environmental consequences of natural gas infrastructure projects. First, the Commission again refuses to assess the significance of the Project’s contribution to climate change, while at the same time asserting that the Project in its entirety will not have significant environmental impacts. In so doing, the Commission writes the Project’s actual climate impacts out of its analysis. Second, the Commission refuses to identify or consider the Project’s reasonably foreseeable impacts on upstream or downstream GHG emissions. Each flaw is sufficient in itself to render today’s order inconsistent with the law, arbitrary and capricious, and not the product of reasoned decisionmaking.

I. The Commission’s refusal to consider the significance of the Project’s contribution to climate change is arbitrary and capricious.

We know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane, that can be released in large quantities through the production, transportation, and the consumption of natural gas and other fossil fuels. The Commission recognizes this relationship in the record before us today, acknowledging that climate change is “driven by accumulation of GHG in the atmosphere” and that emissions from the Project’s construction and operation, in combination with emissions from other sources, would “contribute incrementally to future climate change impacts.”4 It is therefore critical that the Commission carefully consider the Project’s contribution to climate change, both in order to fulfill NEPA’s requirements and to determine whether the Project is in the public interest under the NGA.5

Today’s order misses that mark by a mile. The Commission insists that it need not consider whether the Project’s contribution to climate change from increased GHG emissions6 is significant because it lacks a “widely accepted standard” for doing so.7 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.8 That is the equivalent of concluding that an action known to be dangerous is actually safe because the majority claims not to know exactly how dangerous it is.9 In addition to being ludicrous, that reasoning fails to give climate change the serious consideration it deserves and that the law demands.

The implications of the Commission’s approach to evaluating the impacts of GHG emissions extend beyond this proceeding. 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 continues to assume that a project will not have a significant environmental impact no matter the volume of GHG emissions it causes, 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 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. 10

In addition, the Commission’s assertion that it cannot assess the significance of a project’s contribution to climate change is itself not the product of reasoned decisionmaking. The claim that the Commission lacks a widely accepted standard for evaluating the significance of GHG emissions is a red herring. The lack of any single “standard” methodology does not prevent the Commission from adopting a methodology, even if others are available. In any case, the Commission has several tools to assess the harm from the Project’s contribution to climate change. The Social Cost of Carbon, for example, measures the long-term damage inflicted by a ton of carbon dioxide. This tool provides the “hard look” required by NEPA, and gives both the Commission and the public a means to translate a discrete project’s climate impacts into concrete and comprehensible terms. 11

Besides particular methodologies, the Commission also can use its expertise and discretion to consider all factors and determine, quantitatively or qualitatively, whether the Project’s GHG emissions have a significant impact on climate change. That is precisely what the Commission does in other aspects of its environmental review. Take, for example, the Commission’s evaluation of the Project’s impact on migratory birds. The EIS determined that 13.5 acres of upland forest and 2.6 acres of forested wetlands that serve as bird habitat would be permanently lost, yet found these impacts not significant.12 Notwithstanding the lack of any “widely accepted standard” 13 as to this particular environmental impact, the Commission still uses its judgment to conduct a qualitative review of the Project’s impact on bird habitat. The Commission’s refusal to even attempt a similar qualitative judgment on the significance of GHG emissions is willfully ignorant, and certainly arbitrary and capricious.

II. The Commission's failure to identify the reasonably foreseeable indirect effects of the Project is arbitrary and capricious.

The Commission also ignores the Project’s reasonably foreseeable GHG emissions from downstream combustion and upstream production. In so doing, the Commission adopts an overly narrow and circular definition of indirect effects and disregards the Project’s central purpose—to facilitate natural gas consumption by residential and commercial customers in New York City.

With regard to downstream emissions, Sabal Trail held the reasonably foreseeable combustion of gas transported through a pipeline was an indirect effect.14 There is no real question that the natural gas to be transported by the Project will be combusted. Indeed, the very purpose of the Project is to provide natural gas to residential and commercial customers in New York City.15 Transco states in its application that it needs the Project “to meet customer demand in time for the 2019/2020 winter heating season.” 106 And none of the Project’s alleged benefits—improved reliability and access to economic supplies of natural gas—will occur unless the natural gas is actually used, and that use will largely (if not entirely) entail combustion.16 In fact, as the Commission recognizes, Transco has stated in the record that the Project would transport natural gas to replace fuel oil heating systems in New York City, potentially displacing up to 900,000 barrels of oil per year.17 But even with this record that demonstrates that the natural gas transported by the Project will be combusted, releasing GHG emissions, the Commission still refuses to acknowledge those downstream emissions as a reasonably foreseeable indirect effect of the Project.18 The failure to consider that indirect effect is arbitrary and capricious.

The Commission’s approach effectively confines Sabal Trail to its facts. Here, we know the location (New York City) and the end-use (a replacement heating source) of the natural gas to be transported, and yet the Commission mysteriously concludes that it cannot reasonably foresee the GHG emissions released when the gas is burned—which is, to my knowledge, the only way that natural gas is used to provide heating. The Commission appears to be taking the position that GHG emissions from burning natural gas will only be reasonably foreseeable if we know the specific power plant in which the gas will be used.19 But nothing in Sabal Trail supports such a narrow and myopic view. Rather, the court’s holding that downstream emissions were reasonably foreseeable was based on the purpose of that project—i.e., transporting gas to Florida power plants so that gas can be burned. 20

In any event, even if the Commission does not have exact information about the source or end use of the gas to be transported, it still can produce comparably useful information based on reasonable forecasts of the GHG emissions associated with production and consumption. NEPA does not require exact certainty—rather, it requires only reasonable forecasting.21 Forecasting environmental impacts is a regular component of NEPA reviews and a reasonable estimate may inform the federal decisionmaking process even where the agency is not completely confident in the results of its forecast.22 Similar forecasts can play a useful role in the Commission’s evaluation of the public interest, even in those instances when the Commission must make a number of assumptions in its forecasting process. 23

The Commission’s refusal to consider the significance of the reasonably foreseeable indirect effects of downstream emissions is particularly vexing here because the Commission notes—without any verification—the “hypothetical scenario” posited by Transco that would cause the Project to “more than offset net GHG emissions.” 24

If, instead of taking a results-oriented approach, the Commission had bothered to evaluate the Project’s downstream emissions, it could have pointed out that Transco’s hypothetical statement was just that—hypothetical. As Commissioner LaFleur notes in her concurring statement, even if we take Transco’s assumption that the Project would result in conversion of 8,000 customers per year from heating oil to natural gas and displace 900,000 barrels of heating oil per year, it would only reduce the Project’s downstream GHG emissions by a small amount.25

The Commission compounds this error by failing to evaluate how the Project’s downstream emissions will impact climate change. By not considering any of the Project’s downstream effects, there is no place to consider benefits from the Project. 26 While Commissioner LaFleur wrestled with the significance of the impact of the Project’s downstream GHG emissions, her concurring statement does not remedy the Commission’s refusal to evaluate the significance of the Project’s contribution to climate change; nor can that concurrence remedy the Commission’s assumption that, regardless of what that contribution is, the Project has no significant environmental impact.

The Commission’s failure to evaluate upstream GHG emissions caused by the Project is equally frustrating. The Commission cannot ignore the fact that adding firm transportation capacity is likely to “spur demand” for natural gas.27 As noted, one of the purposes of the Project is to expand the supplies of economic natural gas, which, by the law of supply and demand, ought to put downward pressure on the price of natural gas in the region, potentially increasing demand. Given this potential to affect upstream emissions, the Commission must at least examine the effects that an expansion of pipeline capacity might have on consumption and production. 28

Climate change poses an existential threat to our security, economy, environment, and, ultimately, the health of individual citizens. Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane—which can be released in large quantities through the production and the consumption of natural gas. Congress determined under the NGA that no entity may transport natural gas interstate, or construct or expand interstate natural gas facilities, without the Commission first determining the activity is in the public interest. This requires the Commission to find, on balance, that a project’s benefits outweigh the harms, including the environmental impacts from climate change that result from authorizing additional transportation. Accordingly, it is critical that, as an agency of the federal government, the Commission comply with its statutory responsibility to document and consider how its authorization of a natural gas pipeline facility will lead to the emission of GHGs, contributing to climate change.

For these reasons, I respectfully dissent in part.
 

• 11 15 U.S.C. § 717f (2012).
• 22 National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321 et seq.
• 33 Northeast Supply Enhancement Project Final Environmental Impact Statement (EIS) at ES-1.
• 44 EIS at 4-387, 4-389.
• 55 Section 7 of the NGA requires that, before issuing a certificate for new pipeline construction, the Commission must find both a need for the pipeline and that, on balance, the pipeline’s benefits outweigh its harms. 15 U.S.C. § 717f (2012). Furthermore, NEPA requires the Commission to take a “hard look” at the environmental impacts of its decisions. See 42 U.S.C. § 4332(2)(C)(iii); Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). This means that the Commission must consider and discuss the significance of the harm from a pipeline’s contribution to climate change by actually evaluating the magnitude of the pipeline’s environmental impact. Doing so enables the Commission to compare the environment before and after the proposed federal action and factor the changes into its decisionmaking process. See Sierra Club v. FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail) (“The [FEIS] needed to include a discussion of the ‘significance’ of this indirect effect.”); 40 C.F.R. § 1502.16 (a)–(b) (An agency’s environmental review must “include the environmental impacts of the alternatives including the proposed action,” as well as a discussion of direct and indirect effects and their significance.) (emphasis added)).
• 66 The EIS quantified the Project’s GHG emissions from construction and operation. EIS at 4-309 – 4-310 & Tables 4.10.1-4 & 4.10.1-5.
• 77 See EIS at 4-389 – 4-390 (explaining that “we cannot determine whether the NESE’s Project’s contribution [to cumulative impacts on climate change] would be significant,” purportedly because “there is no widely accepted standard, per international, federal, or state policy, or as a matter of physical science, to determine the significance of the Project’s GHG emissions”).
• 88 See, e.g., EIS at ES-14; see also Transcontinental Gas Pipe Line Co., LLC, 167 FERC ¶ 61,110, at P 29 (2019) (Certificate Order) (noting EIS conclusion that the Project’s adverse environmental impacts will be reduced to less than significant levels through implementation of certain mitigation measures).
• 99 See, e.g., Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015) (“Not only must an agency’s decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.”) (internal quotation marks omitted); see also Motor Vehicle Mfrs. Ass’n, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (Agency action is “arbitrary and capricious if the agency has . . . entirely failed to consider an important aspect of the problem, [or] offered an explanation for its decision that runs counter to the evidence before the agency.”); cf. Soundboard Ass’n v. FTC, 888 F.3d 1261, 1274 (D.C. Cir. 2018) (Millett, J., dissenting) (“Why let reality get in the way of a good bureaucratic construct?”).
• 1010 As noted, the NGA “requires the Commission to evaluate all factors bearing on the public interest,” Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959), which Sabal Trail held includes a facility’s contribution to the harms caused by climate change, 867 F.3d at 1373.
• 1111 As the Environmental Protection Agency has explained, the Commission may use estimates of the Social Cost of Carbon “for project analysis when [the Commission] determines that a monetary assessment of the impacts associated with the estimated net change in GHG emissions provides useful information in its environmental review or public interest determination.” United States Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 4–5 (filed June 21, 2018). The Council on Environmental Quality also recognized under a prior administration that monetizing an impact is appropriate in the NEPA document, if doing so is necessary for an agency to fully evaluate the environmental consequences of its decisions. See CEQ, Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews at 32-33 (Aug. 1, 2016), https://obamawhitehouse.archives.gov/ sites/whitehouse.gov/files/documents/nepa_final_ghg_guidance.pdf.
• 1212 EIS at 4-85 – 4-86, 5-9; see also id. at 4-64 & 4-68 (noting that recovery of forested wetlands “may take up to 30 years or more,” but concluding that the Project would not result in significant impact on wetland resources).
• 1313 See EIS at 4-389 (referencing lack of a “widely accepted standard” for assessing the significance of GHG emissions).
• 1414 See Sabal Trail, 867 F.3d at 1371-72.
• 1515 Certificate Order P 90; EIS at ES-1, 1-3, 1-15.
• 1617 See EIS at 1-3 (explaining that the purpose and need of the Project is to provide incremental interstate pipeline transportation service to Brooklyn Union Gas Company and KeySpan Gas East Corporation to serve National Grid’s residential and commercial customers in New York City, ensure diverse sources of natural gas supply, and improve system reliability); Transco Certificate Application at 14 (noting National Grid’s forecast of need for additional natural gas supply to meet “residential and commercial demands due to population and market growth within its service territory,” in particular “beginning in the 2019/2020 heating season because current forecast models . . . indicate an increasing peak day demand year over year”); see also Jayni Hein et al., Institute for Policy Integrity, Pipeline Approvals and Greenhouse Gas Emissions 25 (2019) (explaining that, in 2017, 97% of all natural gas consumed was combusted).
• 1718 Certificate Order P 90 (referencing Transco February 27 and April 24, 2019 filings); EIS at 4-389; see also Transco Letter at 2 (Apr. 24, 2019) (disclosing estimate of reduced GHG emissions from downstream combustion of Project capacity replacing No. 2 fuel oil).
• 1819 See, e.g., Sabal Trail, 867 F.3d at 1372 (“It is just as foreseeable, and FERC does not dispute, that burning natural gas will release into the atmosphere the sorts of carbon compounds that contribute to climate change.”); WildEarth Guardians v. Zinke, No. 16-1724 (RC), 2019 WL 1273181, at *18 (D.D.C. Mar. 19, 2019) (holding that the Bureau of Land Management was required to consider downstream GHG emissions as an indirect effect of oil and gas leasing because downstream use and resulting GHG emissions were reasonably foreseeable effects of oil and gas leasing); San Juan Citizens All. v. U.S. Bureau of Land Mgmt., No. 16-cv-376-MCA-JHR, 2018 WL 2994406, at *10 (D.N.M. June 14, 2018) (holding that the agency’s conclusion “that consumption is not ‘an indirect effect of oil and gas production because production is not a proximate cause of GHG emissions resulting from consumption’” was arbitrary as well as “circular and worded as though it is a legal conclusion”).
• 1920 See, e.g., FERC Brief at 23-24, Otsego 2000, Inc. v. FERC, D.C. Cir. No. 18-1188 (filed Jan. 25, 2019).
• 2021 Sabal Trail, 867 F.3d at 1371-72 (“What are the ‘reasonably foreseeable’ effects of authorizing a pipeline that will transport natural gas to Florida power plants? First, that gas will be burned in those power plants. This is not just ‘reasonably foreseeable,’ it is the project’s entire purpose, as the pipeline developers themselves explain.”).
• 2122 See, e.g., Sabal Trail, 867 F.3d at 1374 (“[W]e have previously held that NEPA analysis necessarily involves some ‘reasonable forecasting,’ and that agencies may sometimes need to make educated assumptions about an uncertain future.”) (citing Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1310 (D.C. Cir. 2014)); see also Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 768 (2004) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989)).
• 2223 In determining what constitutes reasonable forecasting, it is relevant to consider the “usefulness of any new potential information to the decisionmaking process.” Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189, 198 (D.C. Cir. 2017) (quoting Pub. Citizen, 541 U.S. at 767).
• 2324 In comments submitted in the Commission’s pending review of the natural gas certification process, the Environmental Protection Agency identified a number of tools the Commission can use to quantify the reasonably foreseeable “upstream and downstream GHG emissions associated with a proposed natural gas pipeline.” These include “economic modeling tools” that can aid in determining the “reasonably foreseeable energy market impacts of a proposed project.” U.S. Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 3–4 (filed June 21, 2018) (explaining that the “EPA has emission factors and methods” available to estimate GHG emissions—from activities upstream and downstream of a proposed natural gas pipeline—through the U.S. Greenhouse Gas Inventory and the Greenhouse Gas Reporting Program); see Certification of New Interstate Natural Gas Facilities, Notice of Inquiry, 163 FERC ¶ 61,042 (2018).
• 2425 See Certificate Order P 90.
• 2526 Certificate Order, 167 FERC ¶ 61,110 (LaFleur, Comm’r, concurring at P 4).
• 2627 Sabal Trail, 867 F.3d at 1374-75 (“Nor is FERC excused from making emissions estimates just because the emissions in question might be partially offset by reductions elsewhere. . . . The effects an EIS is required to cover ‘include those resulting from actions which may have both beneficial and detrimental effects, even if on balance the agency believes that the effect will be beneficial.’ In other words, when an agency thinks the good consequences of a project will outweigh the bad, the agency still needs to discuss both the good and the bad.”) (quoting 40 C.F.R. § 1508.8).
• 2728 Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1138 (9th Cir. 2011) (holding that it “is completely inadequate” for an agency to ignore a project’s “growth inducing effects” where the project has a unique potential to spur demand); id. at 1139(“[O]ur cases have consistently noted that a new runway has a unique potential to spur demand, which sets it apart from other airport improvements, like changing flight patterns, improving a terminal, or adding a taxiway, which increase demand only marginally, if at all.”).
• 2829 See, e.g., Mid States Coal. for Progress v. Surface Transp. Bd., 345 F.3d 520, 549 (8th Cir. 2003) (when the “nature of the effect” (end-use emissions) is reasonably foreseeable, but “its extent is not” (specific consumption activity producing emissions), an agency may not simply ignore the effect).