Commissioner Richard Glick Statement on Order on Remand Reinstating Certificate and Abandonment Authorization

Commissioner Richard Glick Statement

March 14, 2018

Docket Nos. CP14-554-002, CP15-16-003 & CP15-17-002

"In today’s order on remand from the United States Court of Appeals for the District of Columbia Circuit, 1 the Commission once again claims it cannot assess the significance of the downstream GHG emissions in its environmental review of the Southeast Markets Pipelines Project (SMP Project). Vacating the Commission’s prior decision granting the Project certificates under section 7 of the Natural Gas Act (NGA), the Sabal Trail Court held that FERC erred by failing to “either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.”2 In addition, the Court held that FERC must explain whether using the Social Cost of Carbon is a useful tool for evaluating the environmental impact of GHG emissions pursuant to the National Environmental Policy Act (NEPA). 3 I believe today’s order fails to provide a reasoned answer to either inquiry and, as such, does not adequately respond to the Court’s mandate. 4

While the Commission’s order includes quantitative estimates, the Commission refuses to actually consider the environmental impact from the GHG emissions. 5 Instead, the Commission hews to the view that these calculations provide “no basis for determining the significance of impacts from these emissions.” 6 The Commission argues that because there is no “widely accepted standard to ascribe significance to a given rate or volume” of GHG emissions, it cannot reach a finding. And for similar reasons, the Commission asserts that it is not appropriate to use the Social Cost of Carbon tool to evaluate the Project’s environmental impacts. The Commission’s refusal to incorporate the Social Cost of Carbon in the environmental review or even to assess the impact GHG emissions from the Project fails to fulfill its responsibilities under the NGA and NEPA.7 It also belies any assertion in the order that the Commission is actually “cognizant of the potentially severe consequences of climate change.”8

Climate change is the single most significant threat to humanity, fundamentally threatening our environment, economy, national security and human health. 9 It is difficult to understand how NEPA’s demand that an agency take a “hard look” 10 at the environmental impacts of its actions can be satisfied if the impacts of GHG emissions are ignored.

Under both the NGA and NEPA, the Commission is obligated to consider the environmental impacts of its decisions. In enacting the NGA, Congress determined that the “business of transporting and selling natural gas for ultimate distribution to the public is affected with the public interest.”11 As such, no entity may transport or sell 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 finding, on balance, that the benefits outweigh the harms, including impacts on the environment.12

Just as system reliability bears on the public interest in terms of the benefits and need for natural gas pipeline capacity, climate change bears on the public interest in terms of the adverse effects of that same pipeline capacity. It is imperative that the Commission disclose, weigh and balance such critical public interest impacts given our exclusive authority over the siting of interstate natural gas pipelines.

It is axiomatic that the Commission must consider the environmental impacts of its decisions under NEPA.13 As the D.C. Circuit explains in Sabal Trail “[o]ne of the most important procedures NEPA mandates is the preparation, as part of every ‘major Federal action[] significantly affecting the quality of the human environment,’ of a ‘detailed statement’ discussing and disclosing the environmental impact of the action.” 14 The environmental review has dual purposes: it forces an agency to take a “hard look” at the environmental consequences of its action, and it ensures that these environmental consequences, and the agency’s consideration of them, are fully disclosed to the public. 15

The Sabal Trail Court leaves no room to question that “greenhouse-gas emissions are an indirect effect of authorizing this project, which FERC could reasonably foresee, and which the agency has legal authority to mitigate.” 16 Nevertheless, the Commission, through today’s order, is engaging in a collateral attack on the Court’s decision by suggesting that it is not the Commission’s “job” to consider whether emissions from “the end use of the gas would be too harmful to the environment.”17 I disagree with the Commission and agree with the court.18  “What are the ‘reasonably foreseeable effects’ of authorizing a pipeline that will transport natural gas to Florida power plants?” the Court asks. First, “that the gas will be burned in those power plants” and, second, “that burning natural gas will release into the atmosphere the sorts of carbon compounds that contribute to climate change.”19 Both, the Court concludes, are reasonably foreseeable indirect effects from this project and, as such, the Commission has a duty to conduct a thorough evaluation of the consequent GHG effects pursuant to NEPA.20

In other words, the Commission must take a “hard look” at climate change – the ultimate environmental impact. The responsible way to do so today is by converting the GHG emissions estimates to concrete impacts by way of the Social Cost of Carbon. As the Sabal Trail Court explained, the Social Cost of Carbon tool values the long-term harm done by each ton of carbon emitted in dollar terms. The D.C. Circuit is not the first court to recognize an agency’s obligation to value the climate change impacts of its decisions,21 and I am confident that it will not be the last.

Quantifying and disclosing downstream GHG emission tonnage is a necessary step to value the environmental impacts of climate change, but does not actually assess the impact. As the courts note, the “the basic thrust of an agency’s responsibilities under NEPA is to predict the environmental effects of proposed action before the action is taken and those effects fully known.”22 Thus, inherent in our obligation to consider indirect environmental effects is the obligation to engage in reasonable forecasting and speculation.23 Therefore, the assessment of the GHG tonnage, using a widely available analytical tool adopted across government agencies delivering a “measure, in dollars, of the long-term damage done by a ton carbon dioxide”24 provides a meaningful method to convert the data input of GHG emission tonnage into a qualitative output demonstrating impact.

If we are to follow the logic of the Commission’s order, that the significance of GHG emissions cannot be assessed because there are no Federal or state emissions limits or goals, no Federal agency would ever be able to evaluate the impact of an agency action on climate change. It is absurd to even contemplate NEPA not applying to the most significant environmental issue of our time.

The Commission should not fear adding such transparency to its decisionmaking process. Rather, we should embrace the opportunity to disclose the effects which may not always be adverse. 25

The order also argues against the Social Cost of Carbon based on perceived technical challenges including the presence of assumptions or unknowns, such as discount rate, or absence of widely accepted standards to ascribe significance. However, this does not diminish the Commission’s responsibility to provide a qualitative assessment, rather the Commission simply must make a disclosure “so that readers can take the resulting estimates with the appropriate amount of salt.”26 In fact, NEPA reviews often include calculated estimates, modeling, and associated disclosures relevant to the qualitative assessment such as land use impacts and workforce impacts. Further, in cases where the Commission suffers from a lack of information, it is able to use the pre-filing process and subsequent data inquiries to gather critical information. Commissioner LaFleur stated the following in her partial dissent to the order, “the best way to address climate change and the Social Cost of Carbon in pipeline dockets would be for the Commission to develop a more complete record on costs and benefits of the proposed projects, including more information on the needs for a project” and I agree.

The SMP Project final environmental impact statement (EIS) takes this approach even for assessing indirect economic effects relying on a calculation tool and multiple assumptions.27 While no significance is ascribed to these figures built off of assumptions, the raw values are still provided as an “indicator of the economic impacts of a project,”28 and as such, part of the qualitative NEPA analysis. Further, the courts have held that where an agency’s EIS calculates the benefits of a proposed action, the EIS must use the Social Cost of Carbon to assess the impacts of GHG emissions.29

In this same spirit, the output from the Social Cost of Carbon tool can serve as an indicator of the climate change impact, as required in Sabal Trail, informing the overall qualitative evaluation under NEPA as well as the public interest balancing under the NGA. Rejecting this tool on the grounds that the Commission has “no basis for determining the significance” of the impact amounts is arbitrary and capricious, given that the Commission relies on similar analysis elsewhere in the EIS.

Willful ignorance of readily available analytical tools to support an enhanced qualitative assessment for the single largest environmental threat in our lifetime will undermine informed public comments and informed decisionmaking. Furthermore, the void in evaluating indirect environmental impacts from GHG emission while simultaneously concluding there is no significant impact means the Commission remains in the unstable position of granting certificates of public convenience and necessity without fully considering the public interest under the NGA.

Public confidence in the Commission’s approach to considering applications for interstate gas pipeline certificates of public convenience and necessity continues to wane. 30 I fear that today’s order, by limiting analysis of the environmental impacts of a proposed pipeline, will both increase the Commission’s litigation risk and contribute further to the cynicism of the pipeline siting process.

For these reasons, I respectfully dissent.

• 11 Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (Sabal Trail).
• 22 Sabal Trail, 867 F.3d at 1375 (emphasis added).
• 33 Id.; National Environmental Policy Act of 1969, Pub. L. No. 91-190, 83 State. 852 (1970).
• 44 See, e.g., Process Gas Consumers Grp. v. FERC, 292 F.3d 831, 840 (D.C. Cir. 2002) (In proceedings on remand, the court reviews the Commission’s determinations to ensure that they are responsive to its mandate.) Furthermore, as with all Commission orders, the Administrative Procedure Act’s arbitrary and capricious and reasoned decisionmaking standards apply to challenges under the NGA and NEPA. See Columbia Gas Transmission Corp. v. FERC, 628 F.2d 578, 593 (D.C. Cir. 1979); Nevada v. Dep’t of Energy, 457 F.3d 78, 87 (D.C. Cir. 2006).
• 55 Florida Southeast Connection, LLC, 162 FERC ¶ 61,233, at PP 2, 26 (affirming the conclusion that the Commission cannot “reach a finding whether downstream GHG emissions are significant”). In contrast, the D.C. Circuit in Sabal Trail held that the Commission is obligated not only to provide a quantitative estimate but also to discuss the significance of greenhouse-gas emissions. Sabal Trail, 867 F.3d at 1373 (citing Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101-02 (D.C. Cir. 2014) & Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)) (internal citations omitted).
• 66 Florida Southeast Connection, LLC, 162 FERC ¶ 61,233 at P 15; see id. P 51.
• 77 See Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 281 (D.C. Cir. 1990); Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 763 – 64 (2004). See also supra notes 12 – 16 and accompanying text.
• 88 Florida Southeast Connection, LLC, 162 FERC ¶ 61,233 at P 36.
• 99 Xu, Yangyang & Veerabhadran Ramanathan, Proceedings of the National Academy of Sciences, Well Below 2°C: Mitigation strategies for avoiding dangerous to catastrophic climate changes (2017), http://www.pnas.org/content/114/39/10315 (Researchers evaluating models of future climate scenarios identify that there is a one-in-20 chance of temperature increase causing catastrophic damage or worse by 2050 and unknown risks imply existential threats to humanity).
• 1010 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).
• 1111 15 U.S.C. § 717 (emphasis added).
• 1212 The Sabal Trail Court explicitly recognized this mandate, explaining that “Congress broadly instructed the agency to consider ‘the public convenience and necessity’ when evaluating applications to construct and operate interstate pipelines” and that, in doing so, the Commission “will balance ‘the public benefits against the adverse effects of the project,’ including adverse environmental effects.” 867 F.3d 1357, 1373 (citing Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101-02 (D.C. Cir. 2014) and Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)) (internal citations omitted); see also Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 281 (D.C. Cir. 1990) (The public interest standard under the NGA includes factors such as the environment and conservation, particularly as decisions concerning the construction, operation, and transportation of natural gas in interstate commerce “necessarily and typically have dramatic natural resource impacts.”).
• 1313 Congress, through its NEPA requirement, “declares a broad national commitment to protecting and promoting environmental quality,” and brings that commitment to bear on federal agency decisionmaking. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 348 (1989). As the Sabal Trail Court reiterates, NEPA “commands agencies to imbue their decisionmaking, through the use of certain procedures, with our country’s commitment to environmental salubrity.” 867 F.3d at 1367 (quoting Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 193-94 (D.C. Cir. 1991)).
• 1414 Sabal Trail, 867 F.3d at 1367 (citing WildEarth Guardians v. Jewell, 738 F.3d 298, 302 (D.C. Cir. 2013); id. (explaining that NEPA is “primarily information-forcing” and does not require agencies to take one type of action or another”).
• 15Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989) (The statutory requirement that a federal agency contemplating a major action prepare an environmental impact statement serves NEPA’s purpose of infusing federal agency decisionmaking with a “broad national commitment to protecting and promoting environmental quality” in two important respects. “It ensures that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts; it also guarantees that the relevant information will be made available to the largesr audience that may also play a role in both the decisionmaking process and the implementation of that decision.” (citing Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) & Weinberger v. Catholic Action of Hawaii/Peace Education Project, 454 U.S. 139, 143 (1981)); see also Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 768 (2004).
• 1616 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)).
• 1717 Florida Southeast Connection, LLC, 162 FERC ¶ 61,233 at P 29.
• 18 The Commission must fully comply with the court’s mandate in an order on remand, and the court “has the power to enforce its mandates, including the power to ‘correct any misconception of its mandate by a[n] . . . administrative agency subject to its authority.’” Atl. City Elec. Co. v. FERC, 329 F.3d 856 (D.C. Cir. 2003).
• 1919 Sabal Trail, 867 F.3d at 1371-72 (explaining that in this case the end use is not only reasonably foreseeable, but also is “the project’s entire purpose.”); id. at 1372 (“All the natural gas that will travel through these pipelines will be going somewhere: specifically, to power plants in Florida, some of which already exist, others of which are in the planning stages. Those power plants will burn the gas, generating both electricity and carbon dioxide. And once in the atmosphere, that carbon dioxide will add to the greenhouse gas effect, which the EIS describes as ‘the primary contributing factor’ in global climate change.”).
• 2020 Id. at 1374.
• 2121 See Montana Envt’l Info. Ctr. v. U.S. Office of Surface Mining, 274 F. Supp. 3d 1074, 1097 (D. Mont. 2017), amended in part, adhered to in part sub nom. Montana Envtl. Info. Ctr. v. United States Office of Surface Mining, No. CV 15-106-M-DWM, 2017 WL 5047901 (D. Mont. Nov. 3, 2017); High Country Conservation Advocates v. U.S. Forest Serv., 52 F. Supp. 3d 1174, 1193 (D. Colo. 2014) (requiring agency to use the Social Cost of Carbon protocol when calculating costs and benefits of action that would generate greenhouse gas emissions); see also Ctr. for Biological Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d 1172, 1217 (9th Cir. 2008) (holding that NEPA requires agencies to analyze the effects of its actions on global climate change).
• 2222 City of Davis v. Coleman, 521 F.2d 661, 677 (9th Cir.1975).
• 2323 Id. (as such “[r]easonable forecasting and speculation is thus implicit in NEPA”); see also Delaware Riverkeeper, 753 F.3d 1304, 1310 (D.C. Cir. 2014) (citing Scientists’ Inst. for Pub. Info., Inc. v. Atomic Energy Comm’n, 481 F.2d 1079, 1092 (D.C. Cir. 1973)); Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189, 198 (2017) (An agency “need not foresee the unforeseeable, but by the same token neither can it avoid [consideration of environmental impacts] simply because describing the environmental effects of and alternatives to particular agency action involves some degree of forecasting.”).
• 2424 EPA Fact Sheet Social Cost of Carbon, (Dec. 2016) available at https://www.epa.gov/sites/production/files/2016-12/documents/social_cost_of_carbon_fact_sheet.pdf.
• 2525 In some cases a proposed pipeline may reduce downstream greenhouse gas emissions, particularly in cases where expanded access to natural gas supports reducing reliance on other fossil fuel sources with higher greenhouse gas emission rates.
• 2626 Sabal Trail, 867 F.3d at 1374-75 (“We understand that ‘emission estimates would be largely influenced by assumptions rather than direct parameters about the project. . . but some educated assumptions are inevitable in the NEPA process. . . . And the effects of assumptions on estimates can be checked by disclosing those assumptions. . .”); id. (“Nor is FERC excused from making emissions estimates just because the emissions in question might be partially offset by reductions elsewhere.”); see also WildEarth Guardians v. Jewell, 738 F.3d 298, 309 (D.C. Cir. 2013).
• 2727 FEIS at 3-187.
• 2828 Id.
• 2929 See e.g., Montana Envt’l Info. Ctr. v. U.S. Office of Surface Mining, 274 F. Supp. 3d 1074, 1097 (D. Mont. 2017), amended in part, adhered to in part sub nom. Montana Envtl. Info. Ctr. v. United States Office of Surface Mining, No. CV 15-106-M-DWM, 2017 WL 5047901 (D. Mont. Nov. 3, 2017); High Country Conservation Advocates v. U.S. Forest Serv., 52 F. Supp. 3d 1174, 1193 (D. Colo. 2014).
• 3030 Masslive, U.S. Sen. Elizabeth Warren pushes bill to boost public access to FERC proceedings (May 2017), http://www.masslive.com/politics/index.ssf/2017/05/us_sens_elizabeth_warren_and_j.html.