Commissioner James Danly Statement
June 17, 2022
Docket Nos. CP20-312-000, RP21-882-000
I concur with today’s order but write separately to raise a handful of issues.
As an initial matter, I would have preferred that the Commission act much sooner than the 777 days it took to act in Docket No. CP20-312-000.[1] Equitrans, L.P. (Equitrans) filed its application for authority to abandon gathering facilities on April 30, 2020. As the Commission recognizes, “the Commission has no authority to deny a proposed abandonment of facilities the primary function of which is gathering.”[2] I recognize that the delay was perhaps due, at least in part, to a need to take more time to consider the arguments raised by parties in this proceeding as well as uncertainty regarding how to treat the proposal under the National Environmental Policy Act (NEPA).[3] Nonetheless, for the reasons discussed below, I think that this proceeding allows for one result and that the delay could have been minimized.
As today’s order correctly explains: “the D.C. Circuit has held that, since the Commission has no section 1(b) jurisdiction over gathering facilities, the Commission also lacks discretion to examine under section 7(b) whether a pipeline’s proposed abandonment of certificated gathering facilities is in the public interest or to deny a requested abandonment as a result of any such analysis.”[4] Therefore, the decision regarding the abandonment of the certificated gathering facilities is a simple one because the Commission’s jurisdiction provides for only one option: to grant the abandonment of the certificated gathering facilities.[5] Since the result may well be foreordained as a legal matter, I cannot understand why it took so long for the Commission to come to today’s result which really does no more than ask for a bit more information, something that could have been done any time in the previous two-plus years.
But even the step we take today is probably unnecessary and will cause further, unwarranted delay. I question the Commission’s decision to require Equitrans to show cause why it should not be required to file an application seeking a certificate under NGA section 7[6] to operate the Taylor County Field facilities.[7] The Commission could have found, based on the facts in the record as it is currently before us, that the Taylor County Field facilities are non-jurisdictional. Perhaps we will see something enlightening in their submission, should Equitrans choose to show cause why it should not be required to file an application seeking a certificate under NGA section 7 to operate the Taylor County Field facilities.[8] But I am not convinced that the periodic backflow of gas from Equitrans’ transmission system to its gathering system changes the “primary function” of the facilities from gathering.[9] According to the Commission, it appears that on 585 days during the ten-year period, i.e., approximately 16 percent of the time, the volume of interstate gas received into the system was larger than the volume of local production received.[10] This, on its face, does not appear to transform the “primary function” of these facilities from conducting gathering to providing jurisdictional interstate transmission service. I would have simply found that the Taylor County Field facilities are non-jurisdictional gathering facilities.
Finally, I would like to take a moment to clarify that NEPA requires the Commission to analyze the impacts of a proposal when there is a major federal action.[11] While I agree that there is a categorical exclusion that appears to be applicable at first glance,[12] I do not think the Commission’s reliance on a categorical exclusion is necessary in this proceeding. In my view, the Commission’s approval of the instant proposal is most likely ministerial and does not appear to be a major federal action that is subject to NEPA. This is because, based on the current record, these are non-jurisdictional facilities and the Commission therefore lacks discretion in granting the requested abandonment of the certificated facilities.[13] As explained above, the Commission does not have authority to deny a proposed abandonment of facilities which serve a primary function of gathering since NGA section 1(b) exempts the “gathering of natural gas” from the Commission’s jurisdiction.[14] And “when the Commission lacks jurisdiction under section 1(b) to regulate gathering facilities, it cannot then impose conditions on any grant of an abandonment of gathering facilities or services, whether under section 4 or section 7(b).”[15] Therefore, regardless of whether there is a categorical exclusion, the consideration of environmental impacts would not inform the Commission’s decision making because the Commission could neither condition the abandonment of certificated gathering facilities nor deny the abandonment as a result of any environmental analysis. As a reminder,
it is not better documents but better decisions that count. NEPA’s purpose is not to generate paperwork—even excellent paperwork—but to foster excellent action. The NEPA process is intended to help public officials make decisions that are based on understanding of environmental consequences, and take actions that protect, restore, and enhance the environment.[16]
But here, the Commission’s understanding of the environmental consequences of the abandonment of certificated gathering facilities has no bearing on its decision of whether to grant the abandonment because it has no choice in the matter. This observation further underscores my suggestion that the Commission could have perhaps acted sooner in the instant dockets.
For these reasons, I respectfully concur.
[1] I acknowledge that I was Chairman for 77 of those days.
[2] Equitrans, L.P., 179 FERC ¶ 61,204, at P 55 (2022) (emphasis added).
[3] See id. PP 85-86 (“Since Equitrans has now provided the Commission with enough information to determine the extent to which, if at all, our grant of its proposal would affect the environment, the Commission denies the requests of Peoples, GO-WV, and the WV Consumer Advocate that we withhold action until the West Virginia PSC proceedings conclude or the PSC takes action. As described above, Equitrans has now specified that all of its Gathering System facilities, with the exception of two compressor units at the West Union Compressor Station in Doddridge County, West Virginia, will be abandoned by sale to Peoples and Big Dog Midstream.”).
[4] Id. P 67 (citing Williams Gas Processing-Gulf Coast Co., L.P. v. FERC, 331 F.3d 1011, 1022 (D.C. Cir. 2003) (finding “FERC properly determined that under NGA section 7(b) it had no discretion to deny abandonment of Transco’s facilities that it found were primarily functioning as gathering,” and that “once FERC determines that a facility is not dedicated to a jurisdictional function, it has no authority to exercise jurisdiction over that facility by denying the certificate of abandonment for that facility”)). Natural Gas Act section 1(b) exempts from our jurisdiction production, gathering and local distribution. 15 U.S.C. § 717(b) (“The provisions of this chapter . . . shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.”).
[5] See Equitrans, L.P., 179 FERC ¶ 61,204 at P 67 (explaining that “the Commission is not at liberty to deny” the abandonment of certificated gathering facilities).
[6] 15 U.S.C. § 717f.
[7] Equitrans, L.P., 179 FERC ¶ 61,204 at P 97.
[8] See id. P 97 & para. (D) (requiring Equitrans to either “1) show cause why it should not be required to file an application seeking a certificate under NGA section 7 to operate the Taylor County Field facilities (i.e., that all or any portion of those facilities do not function primarily as jurisdictional transmission facilities), 2) file an application for such a certificate, or 3) file information demonstrating that its proposal to abandon the Taylor County Field facilities to Big Dog Midstream is permitted by the present or future public convenience or necessity as required by NGA section 7(b)”).
[9] The Commission relies on the “primary function test” to determine whether facilities are non-jurisdictional gathering facilities or jurisdictional transmission facilities. See, e.g., Roaring Fork Midstream, LLC, 179 FERC ¶ 61,189, at P 6 & n.7 (2022) (explaining that “[t]he primary function test was established in Farmland Indus., Inc., 23 FERC ¶ 61,063, at 61,143 (1983) and modified in Amerada Hess Corp., 52 FERC ¶ 61,268, at 61,987-88 (1990),” and in applying the test, the Commission “considers the physical and geographical attributes of a facility, including: (1) the length and diameter of the pipeline; (2) the facilities’ geographical configuration; (3) the extension of the facilities beyond the central point in the field; (4) the location of compressors and processing plants; (5) the location of the wells along all or part of a facility; and (6) the operating pressures of the pipeline”).
[10] Equitrans, L.P., 179 FERC ¶ 61,204 at PP 95-96.
[11] See, e.g., Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144, 1150 (D.C. Cir. 2001) (“NEPA requires agencies to prepare an environmental evaluation for all proposals for ‘major Federal actions significantly affecting the quality of the human environment.’”) (quoting 42 U.S.C. § 4332(2)(C)); see also 40 C.F.R. § 1508.18 (1979) (defining “major federal action”).
[12] See Equitrans, L.P., 179 FERC ¶ 61,204 at P 86 (citing 18 C.F.R. § 380.4(a)(31)).
[13] See Citizens Against Rails-to-Trails, 267 F.3d at 1151 (“The touchstone of whether NEPA applies is discretion. The twofold purpose of NEPA is ‘to inject environmental considerations into the federal agency’s decisionmaking process and to inform the public that the federal agency has considered environmental concerns in its decisionmaking process.’ . . . Such information may cause the agency to modify its proposed action. . . . If, however, the agency does not have sufficient discretion to affect the outcome of its actions, and its role is merely ministerial, the information that NEPA provides can have no affect on the agency’s actions, and therefore NEPA is inapplicable.”) (citations omitted); Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1262 (10th Cir. 2001) (listing cases where “[s]everal circuits have held that NEPA compliance is unnecessary where the agency action at issue involves little or no discretion on the part of the agency”) (citations omitted); Am. Airlines, Inc. v. Dep’t of Transp., 202 F.3d 788, 803 (5th Cir. 2000) (finding that the Department of Transportation’s “‘decision’ to allow increased flights” did not constitute a “major Federal action” under NEPA because it did not have discretion in the decision); Goos v. I.C.C., 911 F.2d 1283, 1295 (8th Cir. 1990) (recognizing that a “major federal action occurs when a federal agency ‘has discretion in its “enabling” decision to consider environmental consequences and that decision forms the legal predicate for another party’s impact on the environment’”) (quoting NAACP v. Med. Ctr., Inc., 584 F.2d 619, 633 (3d Cir. 1978)); Sugarloaf Citizens Ass’n v. FERC, 959 F.2d 508, 513-14 (4th Cir. 1992) (finding that “FERC’s determination that certification of the Facility was not a ‘major Federal action’ under NEPA was reasonable” and explaining that because “FERC does not have discretion to deny certification to any facility which meets the enumerated criteria . . . its certification of th[e] project was therefore merely a ministerial act”); cf. Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 770 (2004) (finding that because the Federal Motor Carrier Safety Administration had “no discretion to prevent the entry of Mexican trucks,” it “did not need to consider the environmental effects arising from the entry”).
[14] 15 U.S.C. § 717(b) (“The provisions of this chapter . . . shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.”) (emphasis added).
[15] Equitrans, L.P., 179 FERC ¶ 61,204 at P 67.
[16] 40 C.F.R. § 1500.1(c) (1979).