Commissioner Richard Glick Partial Dissent regarding RH energytrans, LLC

Commissioner Richard Glick Statement

December 7, 2018

Docket No. CP18-6-000

In today’s order, the Commission authorizes RH energytrans, LLC’s (RH energytrans) proposed Risberg Line Project, which will allow RH energytrans to provide an additional 55,000 dekatherms per day (Dth/d) of firm transportation service to markets in northeast Ohio.1 In doing so, the Commission again refuses to consider whether the Project’s contribution to climate change from these emissions would be significant, even though it quantified the increase in greenhouse gas (GHG) emissions from the Project’s construction and operation. Moreover, the Commission fails to consider the Project’s contribution to climate change from upstream and downstream GHG emissions. The Commission’s refusal to evaluate and consider the Project’s harm from its contribution to climate change falls well short of our obligations under the Natural Gas Act (NGA)2 and the National Environmental Policy Act (NEPA).3 Because I believe the Commission cannot find that the Project is in the public interest without evaluating and determining the significance of this impact based on information in the record, I respectfully dissent in part.4

The Commission maintains that it need not consider the significance of the
Project’s contribution to climate change from increased GHG emissions because—the
Commission claims—it simply cannot do so.5 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. 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.

In the Project’s EA, the Commission quantified the Project’s GHG emissions from
construction and operation6 and acknowledged that GHG emissions due to human
activity are the “primary cause” of climate change.7 But the Commission nevertheless
refuses to consider whether the Project’s contribution to climate change from these
emissions is significant. Additionally, the Commission ignores the Project’s reasonably
foreseeable downstream GHG emissions, even though RH energytrans explains that the
Project is designed to serve Dominion Ohio’s “natural gas supply and delivery needs” in
northeast Ohio,8 including by “enabl[ing] load growth” among its residential,
commercial, and industrial customers and facilitating “new industrial/economic
development in the area.”9 The Commission also gives no consideration to whether the Project will lead to an increase in upstream GHG emissions from additional production.
The Commission adopts an overly narrow and circular definition of indirect effects10 and
disregards the Project’s central purpose—to facilitate additional natural gas
consumption.11 The Commission cannot ignore the fact that adding firm transportation
capacity is likely to “spur demand” for natural gas12 —a fact that RH energytrans,
Dominion Ohio, and the Public Utility Commission of Ohio each recognize13 —and, for that reason, the Commission must at least examine the effects that an expansion of
pipeline capacity might have on consumption and production.14 Indeed, if a proposed pipeline neither increases the supply of natural gas available to consumers nor decreases the price that those consumers would pay, it is hard to imagine why that pipeline would be “needed” in the first place.

Even where exact information regarding the source of the gas to be transported
and its end use is not available, the Commission will often be able to produce comparably
useful information based on reasonable forecasts of the GHG emissions associated with
production and consumption.15 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.16 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.17

Quantifying the Project’s GHG emissions is a necessary, but not sufficient, step in
meeting the Commission’s obligations to consider the Project’s environmental effects
associated with climate change. NEPA and the NGA’s public interest standard require
the Commission to consider not the GHG emissions themselves but the resulting
environmental impact.18 The Commission claims that it cannot determine whether the
Project’s contribution to climate change is significant,19 relying instead on a vague
assertion that “[t]here is no generally accepted significance criteria for GHG
emissions.”20 These bald conclusions are no substitute for fulfilling the Commission’s responsibility to carefully—and meaningfully—consider the public interest in the Project.

Under NEPA, the Commission must consider the harm from the Project’s GHG
emissions when the emissions are direct and indirect effects of the Project.21 Moreover, in
Sabal Trail, the court left no room to question that GHG emissions from the downstream
combustion of natural gas can be “an indirect effect of authorizing” a pipeline project,
which the Commission can reasonably foresee, and which the agency has a legal authority
to consider and mitigate.22 As the court explained, section 7 of the NGA requires the Commission to balance “‘the public benefits [of a proposed pipeline] against the adverse
effects of the project,’ including adverse environmental effects.”23 If a pipeline’s adverse
effects outweigh its public benefits, the project is not in the public interest and the
Commission must deny the section 7 certificate.24 As relevant here, that means that the
section 7 balancing test must incorporate an analysis of the environmental harms, including
those caused by a proposed pipeline’s contribution to climate change. The Commission’s
failure to consider the harm from the Project’s GHG emissions under NEPA and in its
public interest determination reveals a stubborn adherence to the views that the Sabal Trail
court rejected. It is also a feeble excuse for failing to use the Social Cost of Carbon to
assess the Project’s contribution to climate change.

Contrary to the Commission’s conclusion today, the Commission has the tools to
“determine the Project’s incremental physical impacts on the environment caused by
GHG emissions.”25 This is precisely what the Social Cost of Carbon delivers. By
measuring the long-term damage done by a ton of carbon dioxide, it provides a method
for linking GHG emissions to particular climate impacts, thereby providing both the
Commission and the public with the “hard look” required to assess the magnitude of a
proposed project’s impact on the climate. Especially when it comes to a global problem
like climate change, a measure for translating a discrete project’s climate impacts into
concrete and comprehensible terms can play a useful role in the NEPA process by putting
the harms caused by the project in terms that are readily accessible for both agency
decisionmakers and the public at large.

As in almost every aspect of the Commission’s regulation—from reviewing
environmental and safety impacts to calculating expected rates of return on investment
dollars—the Commission can manage uncertainty through probability and statistical
analyses. In this same vein, “NEPA does not demand that every federal decision be
verified by the reduction to mathematical absolutes for insertion into a precise
formula.”26 The fact that the Commission may not know the exact magnitude of the
Project’s contribution to climate change is no excuse for assuming the impact is zero.

Instead, the Commission must engage in a case-specific inquiry into the reasonably
foreseeable effects and estimate the potential impact—making assumptions where
necessary—and then give that estimate the weight it deserves.

The Commission has recognized that a variety of environmental impacts are best
considered qualitatively but once again provides no answer for why the Commission—as
the agency with both the mandate and technical expertise to consider the public interest in
the Project—cannot use a quantitative measure of the Project’s contribution to climate
change as input to making a qualitative determination of its significance.27 In effect, the
Commission maintains that it has satisfied its obligation under NEPA to consider the
harm caused by the Project’s contribution to climate change by providing a generic,
qualitative discussion that concludes it cannot accurately assess the impacts of GHG
emissions generally. The reality is the Commission has still failed to make an explicit
determination of whether the harm associated with the Project’s contribution to climate
change is significant. In order to satisfy NEPA, the environmental review documents
must both disclose direct and indirect impacts, which can include quantitative and
qualitative considerations, and disclose their significance.28

To support this directive, CEQ regulations expressly outline a framework for
determining whether the Project’s impacts on the environment will be considered
significant—and this CEQ framework requires considerations of both context and
intensity, noting that significance of an action must be analyzed in several contexts.29

The Commission can use these factors to develop a framework to consider the
significance of the Project’s impact. Its failure to do so is no excuse for neglecting to
consider the Project’s harm from its contribution to climate change.

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 RH energytrans, LLC, 165 FERC ¶ 61,218 (2018) (Certificate Order).
• 22 15 U.S.C. 717f (2012).
• 33 National Environmental Policy Act of 1969, Pub. L. No. 91–190, 83 Stat. 852.
• 44 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)). Today’s decision and the record omit any meaningful discussion of the Project’s contribution to climate change. That omission renders the Commission’s order arbitrary and capricious and not the product of reasoned decisionmaking.
• 55 Certificate Order, 165 FERC ¶ 61,218 at n.118; Risberg Line Project Environmental Assessment (EA) at 115.
• 66 EA at 83–87 & Tables B.8.4-1, B.8.5-1, & B.8.5-2 (estimating the Project’s proposed new GHG emissions from construction and operation).
• 77 Id. at 80.
• 88 RH energytrans Certificate Application at 3–4.
• 99 Id. at 8 (explaining that the Project will enable Dominion Ohio to “be in a position to grant requests for new service from potential large industrial and commercial customers”); see also RH energytrans July 23, 2018 Response to Commission Staff’s July 13, 2018 Data Request at 1.
• 1010 See San Juan Citizens All. et al. 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 it was arbitrary for the Bureau of Land Management to conclude “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’” as “this statement is circular and worded as though it is a legal conclusion”). The Commission must use its “best efforts” to identify and quantify the full scope of the environmental impacts and, as the U.S. Court of Appeals for the District of Columbia found in Sierra Club v. FERC, educated assumptions are inevitable in the process of emission quantification. See 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail).
• 1111 See supra notes 8 and 9.
• 1212 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 (distinguishing City of Carmel-by-the-Sea v. U.S. Dep’t of Transp., 123 F.3d 1142 (9th Cir. 1997), which the majority relies on in today’s order) (“[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.”); id. at 1139 (“[E]ven if the stated purpose of [a new airport runway project] is to increase safety and efficiency, the agencies must analyze the impacts of the increased demand attributable to the additional runway as growth-inducing effects.”).
• 1313 See Dominion Ohio November 15, 2017 Comments at 4–7; see also supra notes 8 and 9.
• 1414 As the United States Court of Appeals for the Eighth Circuit explained in Mid States Coal. for Progress v. Surface Transp. Bd.—a case that also involved the downstream emissions from new infrastructure for transporting fossil fuels—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. 345 F.3d 520, 549 (8th Cir. 2003).
• 1515 NEPA, after all, does not require exact certainty; instead, it requires that the Commission engage in reasonable forecasting and estimation of possible effects of a major federal action where doing so would further the statute’s two-fold purpose of ensuring that the relevant agency will “have available, and will carefully consider, detailed information concerning significant environmental impacts” and that this information will also be “available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.” 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)); Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1310 (2014).
• 1616 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, at 198 (D.C. Cir. 2017) (citing Pub. Citizen, 541 U.S. at 767).
• 1717 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).
• 1818 NEPA requires the Commission to reach a determination regarding the significance of the Projects’ indirect effects from upstream and downstream GHG emissions. Further, under section 7 of the NGA, the Commission must consider those harms as part of its determination whether the Projects are in the public interest. See Florida Southeast Connection, LLC, 164 FERC ¶ 61,099, at 2–3, 5–8 (Glick, Comm’r, dissenting).
• 1919 Certificate Order, 165 FERC ¶ 61,218 at n.118.
• 2020 EA at 115.
• 2121 40 C.F.R. § 1508.8 (defining direct effects and indirect effects).
• 2222 Sabal Trail, 867 F.3d at 1374 (citing the Commission’s authority, pursuant to the NGA, to “attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require,” 15 U.S.C. 717f(e)).
• 2323 Sabal Trail, 867 F.3d at 1373 (quoting Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)).
• 2424 See id. (explaining that the Commission may “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment”).
• 2525 Certificate Order, 165 FERC ¶ 61,132 at P 45.
• 2626 Sierra Club v. Lynn, 502 F.2d 43, 61 (5th Cir. 1974).
• 2727 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). In addition, the Council on Environmental Quality 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.
• 2828 40 C.F.R. § 1502.16.
• 2929 Id. § 1508.27 (setting forth a list of factors agencies should rely on when determining whether a project’s environmental impacts are “significant” considering both “context” and “intensity”); id. (“‘Context’ . . . means that the significance of an action must be analyzed in several contexts such as society as a whole (human, national), the affected region, the affected interests, and the locality.”); id. (“‘Intensity’ . . . refers to the severity of the impact, . . . [including t]he degree to which” it affects considerations including “public health or safety” and the environment).