Commissioner James Danly Statement
April 22, 2022
Docket No. CP21-474-000
I concur in the issuance of a Natural Gas Act (NGA) section 7(c)[1] certificate of public convenience and necessity to Rover Pipeline LLC (Rover), authorizing the construction and operation of the North Coast Interconnect Project,[2] because the project is required by the public convenience and necessity. I write separately to express a handful of points.
First, as I have explained in recently-issued certificate orders,[3] while not fatal to the durability of the order, 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, one cannot help but notice the order’s statement that “Rover is taking steps to reduce its direct GHG emissions.”[15] Why does the Commission offer such information? It does not say. Could it be that the Commission is balancing voluntary mitigation in its public convenience and necessity test as it proposed in the Interim GHG Policy Statement?[16]
Third, in my view there is no value added by the Commission acting on this matter instead of allowing Rover to construct interconnections under a blanket certificate. I acknowledge that the Commission denied Rover a blanket certificate because of its “intentional demolition of the Stoneman House raises the question of whether Rover would fully comply with our environmental regulations in future construction activities under a blanket certificate.”[17] Had I been on the Commission at that time, I might not have supported such a denial. I recently expressed that while demolishing the Stoneman House may have been untoward, I am not certain that Rover violated any law or regulation.[18]
It is also not clear to me that it is in the public convenience and necessity to deny a blanket certificate indefinitely. This is particularly the case since the Commission has found that these types of activities are “so well understood as an established industry practice that little scrutiny is required to determine their compatibility with the public convenience and necessity.”[19] There are processes in place for Commission review of blanket certificate activities that require greater scrutiny.[20]
Finally, while I recognize that had there been a blanket certificate, the timeline may have been faster, I am pleased that this certificate order issued quickly: it came out a little less than three months following the issuance of Commission staff’s Environmental Assessment.[21] I am hopeful that the Commission will act with the same efficiency and diligence in the remaining certificate proceedings that are awaiting Commission action.
For these reasons, I respectfully concur in the judgment.
[1] 15 U.S.C. § 717f(c).
[2] See Rover Pipeline LLC, 179 FERC ¶ 61,042 (2022) (Rover).
[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 Rover, 179 FERC ¶ 61,042 at P 21 n.22 (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 Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Revs., 178 FERC ¶ 61,108, at PP 79-81 (2022)) (establishing a significance threshold of 100,000 metric tons per year of CO2e) (Interim GHG Policy Statement); 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 “like 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] Rover, 179 FERC ¶ 61,042 at P 21.
[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.3d1, 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] Rover, 179 FERC ¶ 61,042 at P 23.
[16] Interim GHG Policy Statement, 178 FERC ¶ 61,108 at P 4 (“When considering under the NGA whether a project is in the public interest, the Commission considers a project’s impacts on climate change, and, accordingly, will consider proposals by the project sponsor to mitigate all or a portion of the project’s climate change impacts, and the Commission may condition its authorization on the project sponsor further mitigating those impacts.”).
[17] Rover Pipeline LLC, 158 FERC ¶ 61,109, at P 254 (2017).
[18] See Rover Pipeline, LLC, 178 FERC ¶ 61,028 (2022) (Danly, Comm’r, concurring).
[19] Revisions to the Blanket Certificate Regs. & Clarification Regarding Rates, Order No. 686, 71 Fed. Reg. 63,680, 117 FERC ¶ 61,074, at P 7 (2006) (citation omitted).
[20] See, e.g., 18 C.F.R. § 157.205(e)(1) (providing that Commission staff may protest a prior notice application).
[21] The Environmental Assessment was issued on January 27, 2022 with a comment deadline of February 28, 2022. See Commission Staff, Environment Assessment for Rover Pipeline LLC’s North Coast Interconnect Project, Docket No. CP21-474-000 (Jan. 27, 2022).