Commissioner James Danly Statement
March 18, 2021
Docket Nos. CP17-40-000, CP17-40-001
Order: C-4
I dissent in part from the Commission’s order requiring Spire STL Pipeline LLC (Spire) to conduct additional mitigation to comply with its certificate. The order’s requirement that Spire perform additional soil decompaction, despite Spire having completed decompaction in 2019, is legally infirm because it is unsupported by substantial evidence and reasoned decision making. The order therefore runs afoul of the Administrative Procedure Act (APA).[1]
As an initial matter, it should be recognized that any obligation to mitigate the agricultural impacts of construction must flow from the terms of Spire’s certificate.[2] The Commission cannot order Spire to take actions beyond the requirements established in the conditions attached to its certificate and any orders purporting to compel Spire to take particular action must be supported by substantial evidence and reasoned decision making. The requirement that Spire conduct decompaction on agricultural lands originates in the Agricultural Impact Mitigation Agreement (Agreement)—an agreement negotiated between Spire and the Illinois Department of Agriculture (Department) and adopted by the certificate order.[3] The Agreement provides that it is “the complete instrument governing the mitigation of agricultural impacts that may result from the construction of the natural gas pipeline . . . .”[4] The Agreement requires that Spire rip all areas (when sufficiently dry) traversed by vehicles and construction equipment, the soil penetrometer readings are 300 psi or greater, and the soil strength in the right-of-way is greater than that of the non-trafficked area.[5] Thus, in order to require decompaction under the certificate, the Commission must make two findings: first, that there is compaction requiring mitigation, and second, that the pipeline is liable under the terms of its certificate for that compaction.
The Commission must support each finding with substantial evidence in the record and through reasoned decision making by “examin[ing] the relevant data and articulat[ing] a satisfactory explanation for its action.”[6] Substantial evidence means “more than a mere scintilla,” that is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”[7]
The Commission fails to support either finding necessary to require additional decompaction with substantial evidence. At most, the Commission marginally supports its finding that there is compaction requiring mitigation. The order requires Spire to conduct additional decompaction to comply with the Agreement based on a report filed on August 14, 2020, by the Department. The Department’s report states that “proper and successful decompaction has not occurred on the impacted soil” for each property based on a comparison of one soil penetrometer reading on the right-of-way with one reading off the right-of-way.[8] Read for all its worth, the Department’s report leads to no more than the conclusion that soil at one specific location on the right-of-way is more compacted than one specific location off the right-of-way for each property.
Even assuming that this is a sufficiently rigorous method to convincingly assess the need for decompaction, the record contains no evidence, substantial or otherwise, as to who bears the liability for that compaction. In fact, the record shows, and the order concedes, that the difference in compaction between the soil on the right-of-way versus off the right-of-way may not be directly attributable to the construction of the natural gas pipeline.[9] Spire performed decompaction in the fall of 2019 on all of the properties, except for certain properties at the landowner’s request and after having determined that soil compaction readings did not require decompaction prior to seeding.[10] Spire filed comments stating that an Agricultural Inspector monitored and documented decompaction efforts to ensure effective soil decompaction occurred to restore crop and soil productivity.[11] The order states that the Commission’s Compliance Monitors conducted multiple field inspections, reviewed Spire’s decompaction program,[12] and found Spire to be in compliance.[13] There is no evidence in the record—and certainly nothing cited by the Department or any party to the proceeding—that shows Spire later conducted activities that re-compacted the soil. In fact, the Agreement implicitly acknowledged the scenario that may well be before us, that the pipeline might discharge all of its obligations to perform decompaction, but that the soil, due to no fault of the pipeline, might become re-compacted: “[r]educed compaction created by the ripper pass will not remain over time without subsequent root penetration.”[14] For this reason, it “recommend[ed] to landowners to plant a cover crop (cereal rye, clover, alfalfa, tillage radish, turnips, etc.) following decompaction.”[15] As it turns out, some of the affected landowners elected to not to plant crops on the affected right-of-way.[16]
In addition to failing to support its decision with substantial evidence, the Commission’s order falls short of the requirement to engage in reasoned decision making rendering it arbitrary and capricious. The Commission “must examine the relevant data and articulate a satisfactory explanation . . . including a ‘rational connection between the facts found and the choice made.’”[17] The phrase—“[i]n any event”—used by the order to dismiss the countervailing evidence that Spire is not liable for the compaction can hardly qualify as examining the relevant data.[18] A bare recitation of the pleadings and facts is insufficient.[19] The Commission cannot “offer[] an explanation for its decision that runs counter to the evidence before [it].”[20] This, the Commission has clearly failed to do. The order is infirm under the APA.
Acceptance of a certificate of public convenience and necessity is not an assumption of liability in perpetuity for the ills suffered by affected landowners after mitigation has been completed. In order to compel action on the part of Spire, the Commission must support its action with substantial evidence and grapple with all of the evidence in the record. This order falls short by ignoring record evidence showing that Spire may not be responsible for further decompaction. No matter how sympathetic, well-pleaded or convincing one side of an argument is, the Commission must support its decisions with substantial evidence and reasoned decision making that analyzes all evidence from both sides. For these reasons, I respectfully dissent in part.
[1] See 5 U.S.C. § 706 (“The reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be—(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; . . . (E) unsupported by substantial evidence . . . .”); Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (“Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”). See also 15 U.S.C. § 717r(b) (“The finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.”).
[2] See 15 U.S.C. § 717f(e) (“The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions . . . .”).
[3] See Spire STL Pipeline LLC, 164 FERC ¶ 61,085, at P 241 (2018). The certificate also requires Spire to comply with the terms of the Commission’s Upland Erosion Control, Revegetation, and Maintenance Plan (Plan). See id. The Commission’s Plan requires soil compaction mitigation, specifically testing topsoil and subsoil for compaction and plowing severely compacted agricultural areas. See Upland Erosion Control, Revegetation, and Maintenance Plan, FERC, 14-15 (2013), https://www.ferc.gov/sites/default/files/2020-04/upland-erosion-control-revegetation-maintenance-plan.pdf.
[4] Agreement at 16.
[5] Id. at 10 and Appendix A.
[6] State Farm, 463 U.S. at 30. See also Elec. Consumers Res. Council v. FERC, 747 F.2d 1511, 1513-14 (D.C. Cir. 1984) (“We defer to the agency’s expertise . . . so long as its decision is supported by ‘substantial evidence’ in the record and reached by ‘reasoned decision-making,’ including an examination of the relevant data and a reasoned explanation supported by a stated connection between the facts found and the choice made.”) (citing Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962); Memphis Light, Gas & Water Div. v. FPC, 504 F.2d 225, 230 (D.C. Cir. 1974); 16 U.S.C. § 825l (1982)).
[7] Consol. Edison Co. of N.Y., Inc. v. NLRB, 305 U.S. 197, 229 (1938).
[8] Illinois Department of Agriculture August 14, 2020 Report at 2.
[9] See Spire STL Pipeline LLC, 174 FERC ¶ 61,219, at P 15 (2021) (“But, as Spire points out, landowners’ choice of practices for revegetating agricultural areas can affect the soil porosity following decompaction efforts. Here, the efforts by landowners to reestablish plant growth in previously disturbed agricultural areas along the Spire Project right-of-way were not uniform. Delaying or refraining from replanting crops, while the landowners’ prerogative, may have affected the porosity and degree of compaction of the soil within the impacted right-of-way.”) (emphasis added).
[10] Id. P 15, n.38; Commission staff November 12-14, 2019 Field Inspection Report at 4 (eLibrary Accession No. 20191202-3012).
[11] Spire June 9, 2020 Filing at 17.
[12] See Spire, 174 FERC ¶ 61,219 at PP 7, 15, n.38; see also Commission staff August 27-28, 2019 Field Inspection Report (eLibrary Accession No. 20190919-3054) (reviewed decompaction efforts); Commission staff September 25-26, 2019 Field Inspection Report (eLibrary Accession No. 20191016-3013) (same); Commission staff October 23-24, 2019 Field Inspection Report (eLibrary Accession No. 20191105-3011) (same); Commission staff November 12-14, 2019 Field Inspection Report (eLibrary Accession No. 20191202-3012) (same).
[13] Commission staff November 12-14, 2019 Inspection Report at 5 (“[N]o instances of noncompliance were identified. The entire ROW was restored to pre-construction contours, restoration was progressing acceptably with revegetation starting to establish along the Project route.”).
[14] Agreement at Appendix A; see also id. at 10 (“ripping across any agricultural land should only take one pass” and that “[a]dditional passes should only be conducted if the previous pass did not sufficiently shatter the soil.”) (emphasis in original).
[15] Agreement at Appendix A.
[16] See Spire Landowners September 14, 2020 Comments at 11.
[17] State Farm, 463 U.S. at 43 (citing Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)) (emphasis added); see also id. at 56 (“failed to offer the rational connection between facts and judgment required to pass muster under the arbitrary and capricious standard”).
[18] Spire STL Pipeline LLC, 174 FERC ¶ 61,219 at P 15.
[19] See Mo. Pub. Serv. Comm’n v. FERC, 234 F.3d 36, 41 (D.C. Cir. 2000) (“passing reference . . . is not sufficient to satisfy the Commission’s obligation to carry out ‘reasoned’ and ‘principled’ decisionmaking”).
[20] State Farm, 463 U.S. at 43.