Commissioner James Danly Statement
April 21, 2022
Docket Nos. CP20-484-000, CP20-485-000
I concur with the decision to grant the Natural Gas Act (NGA) section 7[1] authorizations requested by ANR Pipeline Company (ANR) and Great Lakes Transmission Gas Limited Partnership (collectively, Applicants).[2] I write separately to express a handful of points.
First, as I previously stated,[3] while not fatal to this order’s durability, I would have explicitly repudiated Northern Natural Gas Company[4] and reaffirmed the Commission’s prior position that “[w]ithout an accepted methodology, the Commission cannot make a finding whether a particular quantity of greenhouse gas [GHG] emissions poses a significant impact on the environment, whether directly or cumulatively with other sources, and how that impact would contribute to climate change.”[5] This is because, as the Commission has stated, it is unable to connect a particular project’s GHG emissions to discrete, physical effects on the environment.[6] The Council on Environmental Quality (CEQ) has found similarly.[7] Moreover, there is no standard by which the Commission could, consistent with our obligations under the law, ascribe significance to a particular rate or volume of GHG emissions.[8] And the Commission’s recent attempts to do so, absent the expertise to make such a determination and the statutory authority to impose it, have amounted to little more than picking arbitrary numbers.[9]
In now stating in certificate orders that “[t]he Commission is not herein characterizing these emissions as significant or insignificant because we are conducting a generic proceeding to determine whether and how the Commission will conduct significance determinations going forward,”[10] the Commission has effectively preserved its ability to expand its use of the flawed “eyeball” test, possibly with a new number picked as the threshold. Perhaps, the number picked will be 165,000 metric tons per year of GHG emissions.[11] Perhaps higher.[12] Or perhaps lower. There is no way of knowing. But we have learned that if a new number is to be picked to serve as a significance threshold for GHG emissions, that number will be based solely on the whim of a majority of commissioners. Regardless, such action is neither within our authority[13] nor can it be considered reasoned decision making.[14]
Second, regarding the inclusion of a calculation of the Social Cost of Carbon from the project’s emissions,[15] the Commission has provided extensive discussion on why the use of the Social Cost of Carbon is not appropriate in project-level NEPA review, and why it cannot meaningfully inform the Commission’s decisions on natural gas infrastructure projects under the NGA.[16] Nothing can be gleaned from the numbers calculated by Commission staff in today’s order.
Furthermore, as I previously stated,[17] in Vecinos para el Bienestar de la Comunidad Costera v. FERC,[18] the U.S. Court of Appeals for the District of Columbia Circuit admonished the Commission, not for failing to use the Social Cost of Carbon, but for failing to respond to an argument. The fact that this particular argument focused on the Social Cost of Carbon is merely incidental. As a final note, I should reiterate that the Social Cost of Carbon was not developed for project-level review and therefore its use is not mandated for evaluating impacts under section 1502.21 of the CEQ’s regulations.[19]
Third, although I agree that the Commission must act “in accordance with our . . . statutory duties,” [20] it is necessary to take a moment to explain the scope of the public convenience and necessity standard. The Supreme Court has found that NGA section “7(e) requires the Commission to evaluate all factors bearing on the public interest.”[21] This obligation, however, is not unlimited in scope and this requirement cannot be read in a vacuum. The Supreme Court has explained that the inclusion of the term “public interest” in our statute is not “a broad license to promote the general public welfare”—instead, it “take[s] meaning from the purposes of the regulatory legislation.”[22] We must then turn to the purpose of the NGA, which the Supreme Court has instructed us is “to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[23] To the extent to which any of the Commission’s recent or future certificate issuances attempt to expand the subjects considered in the Commission’s balancing under the public convenience and necessity standard, as contemplated in the now-draft Updated Certificate Policy Statement, I reiterate my view that any balancing regime the Commission employs must “take meaning” from the purpose of the NGA.
Finally, I wish to highlight the unnecessary delay of today’s issuance. It has been over 21 months since the Applicants filed their authorization requests;[24] over 16 months since the Commission issued an Environmental Assessment (EA) for the projects;[25] and nearly one year after the requested action date that ANR stated was necessary to allow for the safe and efficient construction of facilities occurring in areas prone to hurricane risks and other weather-related events.[26] ANR and one of its project shippers have filed requests for the Commission’s prompt action.[27] One cannot help but wonder about the purpose of the Commission’s delay.
No party protested the applications,[28] and, as today’s order acknowledges, only ANR filed comments on the EA.[29] One would have expected the Commission to act earlier given that when responding to Senator Barrasso, the Chairman stated
where the environmental documents presented relatively little legal risk—e.g., because they were unprotested and thus not subject to appeal—we have proceeded with issuing certificates supported by a majority of the Commission . . . I believe that an approach along these lines is the appropriate way to balance our responsibility to issue legally durable decisions with developers’ interest in receiving a prompt decision.[30]
Yet, despite this proceeding being “unprotested and thus not subject to appeal,” Commission staff, under the Chairman’s supervision, issued a notice announcing that it would issue a supplemental Environmental Impact Statement (EIS) for the project to “assist the Commission in its consideration of the Project’s contribution to climate change and its decision-making process.”[31] The Commission was not compelled to issue supplemental draft and final EISs.[32] The D.C. Circuit has not held that an EA is inadequate for the consideration of projects’ GHG emissions.[33] The Commission could have quantified direct and downstream emissions and placed those emissions into context in an order.
There is no doubt that the Commission delayed action on this and other certificates in order to issue the Updated Certificate Policy Statement and Interim GHG Policy Statement first.[34] My colleagues have claimed that those policy statements were necessary to provide a legally durable framework for certificate orders going forward.[35] And yet those policy statements are now in draft form,[36] they are no longer in effect, but here we are acting on certificate orders.
Of course, one cannot help but notice the Commission inserting elements of the now draft policy statements. The order notes whether the project shipper is an affiliate of ANR in the project need discussion.[37] How to consider affiliate precedent agreements is a subject of the draft Updated Certificate Policy Statement.[38] Also in the project need section, the Commission discusses the purported end use of the gas transported by the project.[39] The draft Updated Certificate Policy Statement proposes to deny a pipeline application if an applicant does not provide information on end use.[40]
In addition, the order describes ANR’s voluntary participation in emission reduction initiatives.[41] Why does the Commission offer such information? It does not say. Could it be that the Commission is balancing the mitigation in its public convenience and necessity test? Or could it simply be that the Commission intended to respond to comments by the U.S. Environmental Protection Agency. In any event, what is notably absent from the order? A discussion on the Commission’s authority to impose GHG mitigation measures.
Why bother with issuing policy statements that attract attention when you can just change the policy in serial adjudications with a limited number of parties and a now certificate holder that has no incentive to appeal?
For these reasons, I respectfully concur in the judgment.
[1] 15 U.S.C. § 717f.
[2] See ANR Pipeline Co., 179 FERC ¶ 61,040 (2022) (ANR).
[3] See, e.g., Columbia Gulf Transmission, LLC, 178 FERC ¶ 61,198 (2022) (Danly, Comm’r, concurring in the judgment at PP 2-4) (Columbia Gulf).
[4] See ANR, 179 FERC ¶ 61,040 at P 45 n.72 (citing N. Nat. Gas Co., 174 FERC ¶ 61,189 (2021) (Danly, Comm’r, concurring in part and dissenting in part) (Northern)). In Northern, a majority of my colleagues established what has been referred to (by some) as the “eyeball” test. See Catherine Morehouse, Glick, Danly spar over gas pipeline reviews as FERC considers project’s climate impacts for first time, Util. Dive (Mar. 19, 2021), https://www.utilitydive.com/news/glick-danly-spar-over-gas-pipeline-reviews-as-ferc-considers-projects-cli/597016/ (“‘We essentially used the eyeball test,’ [Chairman Glick] said, adding that based on that analysis, ‘it didn’t seem significant in terms of the impact of those emissions on climate change.’”).
[5] Dominion Transmission, Inc., 163 FERC ¶ 61,128, at P 67 (2018) (citation omitted).
[6] See, e.g., Nat’l Fuel Gas Supply Corp., 158 FERC ¶ 61,145, at P 188 (2017).
[7] See CEQ, Draft [National Environmental Policy Act (NEPA)] Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, at 3 (Feb. 18, 2010), https://obamawhitehouse.archives.gov/sites/default/files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf (“it is not currently useful for the NEPA analysis to attempt to link specific climatological changes, or the environmental impacts thereof, to the particular project or emissions, as such direct linkage is difficult to isolate and to understand.”).
[8] See, e.g., Mountain Valley Pipeline, LLC, 163 FERC ¶ 61,197, at P 292 (2018).
[9] See Interim GHG Policy Statement., 178 FERC ¶ 61,108 at PP 79-81 (establishing a significance threshold of 100,000 metric tons per year of CO2e); id. (Danly, Comm’r, dissenting at PP 32-36) (explaining why the majority’s presumptive significance threshold is illogical); see also Northern, 174 FERC ¶ 61,189 (Danly, Comm’r, concurring in part and dissenting in part at P 16) (comparing the Northern test to “posting a speed limit sign with a question mark instead of a number, leaving it to the police officer to decide arbitrarily whether you were speeding”).
[10] ANR, 179 FERC ¶ 61,040 at P 45.
[11] See Columbia Gulf, 178 FERC ¶ 61,198 (Glick, Chairman, concurring at P 5) (“I would have preferred to apply Northern Natural here and would have concluded based on evidence in the record that the relevant 165,000 metric tons per year of GHG emissions are not significant.”) (citation omitted); Tenn. Gas Pipeline Co., L.L.C., 178 FERC ¶ 61,199 (2022) (Glick, Chairman, concurring at P 5) (“I would have preferred to apply Northern Natural here and would have concluded based on evidence in the record that the relevant 145,000 metric tons per year of GHG emissions are not significant.”) (citation omitted) (Tennessee Gas).
[12] See Columbia Gulf, 178 FERC ¶ 61,198 (Glick, Chairman, concurring at P 5 n.14) (“I recognize the now-draft GHG policy statement proposes 100,000 metric tons as a threshold over which a project’s GHG emissions would be presumed significant. . . . In my view, that is a deliberately conservative number intended to ensure that the Commission did not lead projects developers down the path of an environmental assessment, only to subsequently change course and require an environmental impact statement in the event that the Commission were to establish a lower threshold in a final GHG policy statement than it did in the then-interim, now-draft policy statement. I remain open to reviewing the comments submitted in response to that draft statement, as well as guidance we may receive from other federal agencies, in considering what threshold would be appropriate in a final policy statement.”) (emphasis added) (citation omitted); Tennessee Gas, 178 FERC ¶ 61,199 (Glick, Chairman, concurring at P 5 n.13) (same).
[13] See Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (“As a federal agency, FERC is a ‘creature of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.’”) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)); see Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“It is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.”); see also Senate Energy & Nat. Res. Committee, Full Committee Hearing To Review FERC’s Recent Guidance On Natural Gas Pipelines, https://www.energy.senate.gov/hearings/2022/3/full-committee-hearing-to-review-ferc-s-recent-guidance-on-natural-gas-pipelines, at 00:58:30 (Mar. 3, 2022) (questioning by Chairman Manchin regarding the recent policy statements: “The Commission, you all acknowledge, that . . . no federal agency, including this Commission has established a threshold for determining what level of project-induced greenhouse gas emissions is significant. Why do you all think that FERC, whose primary purpose is to regulate efficient and reliable energy, should be the first agency, the first to set such a standard rather than the environmental agencies?”); see generally Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Danly, Comm’r, dissenting).
[14] The Commission is authorized to make a “‘rational legislative-type judgment’” but may not “pluck a number out of thin air when it promulgates rules.” WJG Tel. Co., Inc. v. FCC, 675 F.2d 386, 388-89 (D.C. Cir. 1982) (quoting FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775, 814 (1978)); see also LeMoyne-Owen Coll. v. NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004) (“In the absence of an explanation, the ‘totality of the circumstances’ can become simply a cloak for agency whim—or worse.”) (citation omitted).
[15] See ANR, 179 FERC ¶ 61,040 at P 53.
[16] See, e.g., Mountain Valley Pipeline, LLC, 161 FERC ¶ 61,043, at P 296 (2017), order on reh’g, 163 FERC ¶ 61,197, at PP 275-97 (2018), aff’d sub nom. Appalachian Voices v. FERC, No. 17-1271, 2019 WL 847199, at *2 (D.C. Cir. 2019) (“[The Commission] gave several reasons why it believed petitioners’ preferred metric, the Social Cost of Carbon tool, is not an appropriate measure of project-level climate change impacts and their significance under NEPA or the Natural Gas Act. That is all that is required for NEPA purposes.”).
[17] See, e.g., Columbia Gulf, 178 FERC ¶ 61,198 (Danly, Comm’r, concurring in the judgement P 6).
[18] 6 F. 4th 1321 (D.C. Cir. 2021).
[19] 40 C.F.R. § 1502.21(c). This reasoning is consistent with Florida Southeast Connection, LLC where the Commission stated, “[a]nd we do not dispute that [the Social Cost of Carbon] is generally accepted in the scientific community and can play an important role in different contexts, such as rulemaking proceedings.” 164 FERC ¶ 61,099, at P 35 (2018) (emphasis added).
[20] ANR, 179 FERC ¶ 61,040 at P 54 n.92 (“[w]hile the Commission is not one of the specified agencies in Executive Order 12898, the Commission nonetheless addresses environmental justice in its analysis, in accordance with our governing regulations and guidance, and statutory duties.”) (citing 15 U.S.C. § 717f; 18 C.F.R. § 380.12(g) (requiring applicants to submit information about the socioeconomic impact area of a project for the Commission’s consideration during NEPA review); FERC, Guidance Manual for Environmental Report Preparation at 4-76 to 4-80 (Feb. 2017), https://www.ferc.gov/sites/default/files/2020-04/guidance-manual-volume-1.pdf.).
[21] Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959).
[22] NAACP v. Fed. Power Comm’n, 425 U.S. 662, 669 (1976) (NAACP).
[23] Id. at 669-70; accord Myersville Citizens for a Rural Cmty., 783 F.3d 1301, 1307 (D.C. Cir. 2015) (quoting NAACP, 425 U.S. at 669-70). I note that the Supreme Court has also recognized the Commission has authority to consider “other subsidiary purposes,” such as “conservation, environmental, and antitrust questions.” NAACP, 425 U.S. at 670 & n.6 (citations omitted). But all subsidiary purposes are, necessarily, subordinate to the statute’s primary purpose.
[24] See ANR Pipeline Co., Abbreviated Application for a Certificate of Public Convenience and Necessity and for Related Authorizations, Docket No. CP20-484-000 (June 22, 2020) (ANR Application); Great Lakes Gas Transmission Limited Partnership, Abbreviated Application for Authorization to Abandon Firm Capacity by Lease, Docket No. CP20-485-000 (June 22, 2020) (Great Lakes Application).
[25] See Commission Staff, Environmental Assessment for ANR Pipeline Co., et al.’s Alberta Xpress and Lease Capacity Abandonment Projects, Docket Nos. CP20-484-000, et al. (Dec. 4, 2020).
[26] See ANR Application at 2, 5 (listing May 20, 2021 as the requested action by date).
[27] See ANR Pipeline Co. March 29, 2022 Follow-Up to Request for Prompt Action, Docket No. CP20-484-000; Tourmaline Oil Marketing Corp. February 2, 2022 Letter in Support of Prompt Action, Docket No. CP20-484-000; ANR Pipeline Co. January 31, 2022 Request for Prompt Action, Docket No. CP20-484-000.
[28] See ANR Pipeline Co, March 29, 2022 Follow-Up to Request for Prompt Action, Docket No. CP20-484-000, at 1.
[29] See ANR, 179 FERC ¶ 61,040 at P 39.
[30] Chairman Glick September 24, 2021 Letter in Response to Senator Barrasso’s Letter Dated September 15, Docket Nos. PL18-1-000, et al., at 2-3 (emphasis added).
[31] Commission Staff, Notice of Intent to Prepare an Environmental Impact Statement for the Proposed Alberta Xpress and Lease Capacity Abandonment Projects and Schedule for Environmental Review, Docket Nos. CP20-484-000, at 1 (July 7, 2021).
[32] See Commission Staff, Draft Environmental Impact Statement for the Proposed Alberta Xpress and Lease Capacity Abandonment Projects, Docket No. CP20-484-000 (July 30, 2021); Commission Staff, Final Environmental Impact Statement for the Proposed Alberta Xpress and Lease Capacity Abandonment Projects, Docket No. CP20-484-000 (Oct. 29, 2021).
[33] The D.C. Circuit recently upheld the Commission’s assessment of direct GHG emissions in an Environmental Assessment. See Food & Water Watch v. FERC, 28 F.4th 277, 289-90 (D.C. Cir. 2022) (Food & Water Watch). Notably, the D.C. Circuit in Food & Water Watch does not require the preparation of an Environmental Impact Statement, but instead, on remand requires that the Commission “perform a supplemental environmental assessment in which it must either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.” Id. at 289 (emphasis added).
[34] See Commissioner Danly March 2, 2022 Letter in Response to Senator Barrasso’s Letter Dated February 15, 2022, Docket Nos. PL18-1-000, et al., at 5-7, https://www.ferc.gov/news-events/news/commissioner-james-danly-letter-senator-barrasso.
[35] See, e.g., Written Testimony of Chairman Richard Glick for March 3, 2022 Senate Energy and Natural Resources Committee Hearing, at 9, https://www.energy. senate.gov/services/files/270F8F6E-C554-43CF-B683-EB60583873D8 (“The principal purpose of the Interim Greenhouse Gas Policy Statement is to provide a framework for considering reasonably foreseeable greenhouse gas emissions in our analysis under NGA sections 3 and 7 that is consistent with binding court precedent.”); Transcript of the 1087th Meeting, FERC, at 36-37 (Feb. 17, 2022), https://www.ferc.gov/news-events/events/february-17-2022-virtual-open-meeting-02172022 (Commissioner Clements stated, “I think [the Updated Certificate Policy Statement] is an important step towards establishing a framework for making wise and legally durable decisions that account for the complexities of an energy system undergoing profound transformation.”).
[36] See Order on Draft Policy Statements, 178 FERC ¶ 61,197 at P 2 (“Upon further consideration, we are making the Updated [Certificate] Policy Statement and the Interim GHG Policy Statement draft policy statements. . . . The Commission will not apply the Updated Draft Policy Statement or the Draft GHG Policy Statement to pending applications or applications filed before the Commission issues any final guidance in these dockets.”) (citations omitted).
[37] See ANR, 178 FERC ¶ 61,040 at P 13.
[38] See Updated Certificate Policy Statement, 178 FERC ¶ 61,107 P 60.
[39] See ANR, 178 FERC ¶ 61,040 at P 13.
[40] See Updated Certificate Policy Statement, 178 FERC ¶ 61,107 at P 55 (“To the extent applicants do not have information on the end use of the gas, they are encouraged to work with their prospective shippers to obtain it. The absence of this information may prevent an applicant from meeting its burden to demonstrate that a project is needed.”).
[41] See ANR, 179 FERC ¶ 61,040 at P 50.