Commissioner Richard Glick Dissent on Venture Global Calcasieu Pass and TransCameron Pipeline

Commissioner Richard Glick Statement

February 21, 2019

Docket No. CP15-550

I dissent from today’s order because it fails to meet the requirements of both the Natural Gas Act1 (NGA) and the National Environmental Policy Act2 (NEPA). In particular, the Commission is again deliberately ignoring the consequences that 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 an LNG facility that will directly emit large volumes of greenhouse gas (GHG) emissions. Yet that is precisely what is happening today.

In authorizing Venture Global Calcasieu Pass, LLC’s liquefied natural gas export terminal (LNG Terminal) and TransCameron Pipeline, LLC’s associated natural gas pipeline (Pipeline Project) (collectively, the Project) the Commission again refuses to even consider the climate change implications of the Project’s direct GHG emissions when conducting its public interest determinations under sections 3 and 7 of the NGA. 3 Similarly, the Commission’s NEPA analysis ignores the Project’s potential contribution to climate change, enabling the Commission to misleadingly conclude that its environmental “impacts will be reduced to less than significant levels.”4 As a result, I have no choice but to dissent.

I. The Commission’s Public Interest Determination Is 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 Department of Energy (DOE) and the Commission.5 The NGA establishes a general presumption favoring imports and exports of LNG unless there is an affirmative finding that the import or export “will not be consistent with the public interest.”6 Section 3 provides for two independent public interest determinations: One regarding the import or export of LNG and one regarding the facilities used to import or export LNG. First, the DOE determines whether the import or export of LNG is in the public interest, with transactions among free trade countries legislatively deemed to be “consistent with the public interest.”7 Second, the Commission determines whether “an application for the siting, construction, expansion, or operation of an LNG terminal”8 is consistent with the public interest. Pursuant to that authority, the Commission must approve the LNG export facility unless the record shows that the proposed facility would be inconsistent with the public interest.9

In making that determination, the Commission must find that a proposed LNG facility’s impact on the environment and public safety would not be not contrary to the public interest. I do not believe that the Commission can make that finding without duly considering the harm caused by GHG emissions that are a direct result of authorizing the Project. The final environmental impact statement (EIS) finds that the Project will directly emit nearly 4 million tons of GHGs annually.10 Unfortunately, as discussed below, the Commission once again refuses to assess the significance of those emissions or evaluate the harm they will cause. Today’s order even goes so far as to effectively assume that the resulting harm to the environment will not be significant.11 The result is that climate change plays no meaningful role in the Commission’s public interest determination. I cannot countenance an approach that acts as if climate change is not relevant to the public interest. So long as the Commission adheres to such a deeply misguided approach, I have no choice but to dissent from its orders, regardless of what I might otherwise think about the benefits of a project.

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.”12 As noted, the EIS concludes that the Project will directly emit nearly 4 million tons of GHGs annually.13 Although that quantification of the Project’s GHG emissions is a necessary step toward meeting the Commission’s NEPA obligations, counting the volume of emissions is insufficient.14

That approach entirely sidesteps the question of whether the Project’s contribution to climate change is significant. Addressing the significance of that contribution (and the resulting harm to the public welfare) is essential because a finding of significance informs the government’s and the public’s review of the proposed project and also triggers an inquiry into potential ways of mitigating the impacts.15 In addition, recognizing the impacts as significant ensures that those impacts factor into the Commission’s public interest determination. In refusing to assess the significance of the Project’s GHG emissions, today’s order effectively writes climate change out of the public interest determination entirely.

Nothing in today’s order justifies that result. The Commission concludes that it need not determine whether the Project’s contribution to climate change is significant because “[t]here is no standard methodology” to determine whether the GHG emissions “would result in physical effects on the environment for the purposes of evaluating the Project’s impact on climate change, either locally or nationally.”16 As a logical matter, the argument that there is no single standard methodology for evaluating the significance of GHG emissions does not prevent the Commission from adopting a methodology, even if other potential methods are available.

In any case, the absence of a standard methodology for evaluating the significance of GHG emissions is not a reason to effectively ignore those emissions and act as if the Project will not have a significant impact on the harms caused by climate change.17 Yet that is precisely what the Commission does here when it concludes that the Project’s impacts, including its environmental impacts, “will be reduced to less than significant levels.”18 The bottom line is that the Commission is finding that its choice not to evaluate the significance of the environmental harm caused by the Project’s GHG emissions supports the conclusion that the Project will not cause significant environmental harm. That Kafkaesque approach is not the “hard look” that NEPA requires.

The Commission’s rationale is all-the-more bewildering because the Commission has a useful tool to evaluate 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. Especially when it comes to a global problem like climate change, a measure for translating a single project’s climate 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.

Buried in an appendix to the EIS, the Commission rejects using the Social Cost of Carbon relying on deeply flawed reasoning that I have previously critiqued at length.19 It bears repeating that the courts have held it arbitrary and capricious for an agency to monetize certain benefits of a project while ignoring its harms, including the harm caused by the Project’s contribution to climate change.20 The courts’ concern that an agency must not “unfairly place a ‘thumb on the scale by inflating the benefits of the action while minimizing its impacts’” holds true regardless whether the Commission considers the effects quantitatively or qualitatively.21 The Commission’s rigid refusal to monetize the harms of climate change using the Social Cost of Carbon while simultaneously monetizing the Project’s long-term socioeconomic benefits—including direct, indirect, and induced benefits from employment, investments, and local taxes—is arbitrary and capricious.22

The Commission’s refusal to seriously consider the significance of the Project’s GHG emissions is even more mystifying because NEPA “does not dictate particular decisional outcomes.”23 NEPA “‘merely prohibits uninformed—rather than unwise—agency action.’”24 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 even help infrastructure developers by reducing their legal risk in the appeals that will inevitably follow many of our orders. At the end of the day, no one benefits from the Commission’s refusal to take climate change seriously and I will continue to advocate for an approach that gives climate change the consideration that it demands.

For these reasons, I respectfully dissent.

 

• 11 15 U.S.C. § 717b (2012).
• 22 National Environmental Policy Act of 1969, Pub. L. No. 91-190, 83 Stat. 852.
• 33 We evaluate the LNG Terminal pursuant to section 3 of the NPA and the Pipeline Project pursuant to section 7. As discussed below, the public interest standards in NGA sections 3 and 7 differ in both their scope and burden of proof. See infra notes 6-7 and accompanying text. Nevertheless, climate change remains a relevant—and essential—consideration in evaluating whether an energy infrastructure project is or is not consistent with the public interest.
• 44 Venture Global Calcasieu Pass, LLC, 166 FERC ¶ 61,144, at P 16 (2019) (Certificate Order).
• 55 Sierra Club v. FERC, 827 F.3d 36, 40 (D.C. Cir. 2016) (Freeport).
• 66 15 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, 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 the exports of LNG rests with the DOE, NEPA does not require the Commission to consider the upstream or downstream GHG emissions that are indirect effects of the exports themselves when determining whether the export facilities satisfy section 3’s public interest standard. See Freeport, 827 F.3d at 46-47; see also Sierra Club v. FERC, 867 F.3d 1357, 1373 (D.C. Cir. 2017) (discussing Freeport). The Commission must, however, still consider the direct emissions associated with a proposed 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 the DOE. The DOE, however, subsequently delegated to the Commission authority to approve or deny an application for the siting, construction, expansion, or operation of a 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 36, 40-41.
• 1010EIS at 4-143, tbl. 4.11.1.3-1; id. at 4-297 (“Based on the total annual potential emissions for the constructed terminal site, Project operations would increase [carbon dioxide equivalent] emissions by 3,915,514 [tons per year].”); see also Certificate Order, 166 FERC ¶ 61,144 at P 113 (“The Final EIS acknowledges that the quantified greenhouse gas emissions from the construction and operation of the project will contribute incrementally to climate change.”).
• 1111 Certificate Order, 166 FERC ¶ 61,144 at PP 16, 76.
• 1212 Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172, 1216 (9th Cir. 2008).
• 1313 EIS at 4-143, tbl. 4.11.1.3-1.
• 1414 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.”).
• 1515 40 C.F.R. § 1502.16 (NEPA requires an implementing agency to form a “scientific and analytic basis for comparison” of the environmental consequences of its action in its environmental review, which “shall include a discussion of direct effects and their significance.”).
• 1616 EIS at 4-298–4-299; see also Certificate Order, 166 FERC ¶ 61,144 at P 113 (acknowledging that the Project will contribute to climate change but claiming that it cannot determine whether that contribution—or the resulting harm—will be significant).
• 1717 My colleague, Commissioner LaFleur, wrestled with these questions and reached a judgment on the merits of the Project notwithstanding the lack of analysis in the Commission’s order. Providing context for the Project’s GHG emissions is a useful first step that promotes public disclosure and informed decisionmaking. But neither that context nor a concurrence recognizing the seeming significance 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 apparent belief that this contribution is irrelevant to the public interest.
• 1818 Certificate Order, 166 FERC ¶ 61,144 at PP 16, 76.
• 1919 See, e.g., Fla. Se. Connection, LLC, 164 FERC ¶ 61,099 (2018) (Glick, Comm’r, dissenting).
• 2020 See Mont. Envt’l Info. Ctr. v. U.S. Office of Surface Mining, 274 F. Supp. 3d 1074, 1097 (D. Mont. 2017) (finding it arbitrary and capricious for the agency to quantity the benefits of its decision and then explain that a similar analysis of the costs was impossible given the availability of the Social Cost of Carbon); High Country Conservation Advocates v. U.S. Forest Serv., 52 F. Supp. 3d 1174, 1193 (D. Colo. 2014) (finding that the agency was arbitrary and capricious in refusing to use the Social Cost of Carbon protocol when calculating costs and benefits of an action that would generate GHG emissions).
• 2121 Mont. Envt’l Info. Ctr., 274 F. Supp. 3d at 1098. In any case, the fact that the Commission has concluded that certain environmental impacts are “best” considered qualitatively is no answer for why the Commission cannot use a quantitative measure of the Project’s contribution to climate change as an input to making a qualitative determination of its significance. 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). Even assuming, arguendo, that climate change can be adequately considered qualitatively, that does not excuse the Commission’s outright refusal to utilize quantitative methods as well.
• 2222 The EIS recognizes Venture Capital’s claim that the “Project would result in beneficial cumulative impacts on the local economy and tax revenues based on its estimated investment of $4.25 billion.” EIS at 4-118. Nevertheless, the Commission argues that neither it nor Commission staff “use[s]” those quantified benefits. Instead, that information is disclosed to the public because it may be useful in making an informed judgment about the Project. But when it comes to the Social Cost of Carbon, the Commission’s preference for disclosing potentially useful information seems to vanish. The Commission argues that there is “no basis to designate a particular dollar figure calculated from the [Social Cost of Carbon] tool as significant” and so disclosing that information “would be arbitrary and would not meaningfully inform either the NEPA conclusions or the public.” See EIS App. N at N-53. Disclosing information only when it supports an agency’s preferred outcome is consistent with neither good government nor NEPA’s purpose of ensuring that “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,” Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989).
• 2323 Sierra Club v. U.S. Army Corps of Engineers, 803 F.3d 31, 37 (D.C. Cir. 2015).
• 2424 Id. (quoting Robertson, 490 U.S. at 351).