Commissioner Mark C. Christie Statement
February 17, 2022
Docket Nos. PL18-1-000, PL21-3-000
Orders: C-1 and C-2
Last year I voted to re-issue this Notice of Inquiry (NOI) for another round of comment[1] because I believed – and still do – that there are reasonable updates to the 1999 policy statement that would be worthwhile.[2] For example, I agree that precedent agreements between corporate affiliates, because of the obvious potential for self-dealing, should not, in and of themselves and without additional evidence, prove need.[3] I also believe that the Commission’s procedures for guaranteeing due process to affected property owners, which, as Justice Frankfurter taught, consists of the two core elements of notice and opportunity to be heard,[4] could be strengthened.
Unfortunately, the new certificate policy the majority approves today[5] does not represent a reasonable update to the 1999 statement. On the contrary, what the majority does today is arrogate to itself the power to rewrite both the Natural Gas Act (NGA)[6] and the National Environmental Policy Act (NEPA),[7] a power that only the elected legislators in Congress can exercise. Today’s action represents a truly radical departure from decades of Commission practice and precedent implementing the NGA.
The fundamental changes the majority imposes today to the Commission’s procedures governing certificate applications are wrong as both law and policy. They clearly exceed the Commission’s legal authority under the NGA and NEPA and, in so doing, violate the United States Supreme Court’s major questions doctrine.[8]
The new policy also threatens to do fundamental damage to the nation’s energy security by making it even more costly and difficult to build the infrastructure that will be critically needed to maintain reliable power service to consumers as the generation mix changes to incorporate lower carbon-emitting resources such as wind and solar. And as recent events in Europe and Ukraine graphically illustrate, America’s energy security is an inextricable part of our national security.[9] The majority’s proposal on GHG impacts is obviously motivated by a desire to address climate change, but will actually make it more difficult to expand the deployment of low or no-carbon resources, because it will make it more difficult to build or maintain the gas infrastructure essential to keep the lights on as more intermittent resources are deployed.[10] In addition to the essential need for natural gas to keep our power supply reliable, a dependable and adequate natural gas supply is critically needed for our manufacturing industries and the millions of jobs for American workers in those industries.[11]
And while I agree that reducing carbon emissions that impact the climate is a compelling policy goal,[12] this Commission – an administrative agency that only has the powers Congress has explicitly delegated to it – has no open-ended license under the U.S. Constitution or the NGA to address climate change or any other problem the majority may wish to address.
Legal Questions
The long-running controversy over the role and use of GHG analyses in natural-gas facility certificate cases raises two central questions of law and a third that flows from the first two:
First, whether the Commission can use a GHG analysis to reject a certificate – or attach conditions (including the use of coercive deficiency letters) amounting to a de facto rejection by rendering the project unfeasible – based on the NGA’s “public convenience and necessity”[13] provision, even when the evidence otherwise supports a finding under the NGA that the facility is both “convenient and necessary” to provide the public with essential gas supply? Today’s orders assume that the answer is yes.[14]
Second, whether the Commission can, or is required to, reject a certificate – or attach conditions (including the use of coercive deficiency letters) amounting to a de facto rejection by rendering the project unfeasible – based on a GHG analysis conducted as part of an environmental review under NEPA,[15] when the certificate application would otherwise be approved as both “convenient and necessary” under the NGA? Again, today’s orders assume the answer is yes.[16]
Third, which, if any, conditions related to a GHG analysis may be attached to a certificate under NGA § 7(e),[17] or demanded through the use of deficiency letters? Today’s orders seem to assume that there is essentially no limit to the conditions the Commission can impose.[18]
As discussed below, today’s orders get each of these questions wrong.
The “Public Interest” in the Natural Gas Act
The starting point for answering all of these questions must be what “public interest” analysis the NGA empowers the Commission to make. Can the Commission’s statutory responsibility to determine the “public convenience and necessity” be used to reject a project otherwise needed by the public based solely on adverse impacts to “environmental interests”[19] (a term today’s orders leave undefined but which could be reduced to an unspecified level of GHG emissions) as the Commission today asserts?[20] Or can the Commission reject a project solely due to “the interests of landowners and environmental justice communities” as the majority also asserts?[21] The short answer is no. There is nothing in the text or history of the NGA to support such a claim about, or application of, the Commission’s public interest responsibilities under the NGA.
As discussed herein, any claim that a “public interest” analysis under the NGA gives FERC the authority to reject a project based solely on GHG emissions is specious and ahistorical. The history of the NGA indicates that Congress intended the statute to promote the development of pipelines and other natural-gas facilities. As one federal judge has observed, “nothing in the text of [the NGA] . . . empowers the Commission to entirely deny the construction of an export terminal or the issuance of a certificate based solely on an adverse indirect environmental effect regulated by another agency.” [22]
I recognize that the Commission and the courts have construed “public convenience and necessity” to require the Commission to consider “all factors bearing on the public interest,”[23] but the Supreme Court has been very clear that any public interest analysis undertaken in the course of determining “public necessity and convenience” is constrained by the purposes and limitations of the statute.[24] It is not an open-ended license to use this Commission’s certificating authority to promote whatever a majority of Commissioners from time to time may happen to view as the “public interest.”
With regard to GHG emissions that may be associated with upstream production activities or downstream distribution to, or consumption by, retail consumers, the Commission simply has no authority over such activities. That authority was left to the states.[25] Congress intended for the NGA to fill “a regulatory gap” over the “interstate shipment and sale of gas.”[26]
Even if the Commission were to undertake some estimate of the indirect GHG impacts of third-party activities that it has no authority to regulate, it does not follow that the Commission can then reject a certificate based on those impacts.[27] To do so would be to ignore the undeniable purpose of the NGA, which was enacted to facilitate the development and bringing to market of natural gas resources. The Commission’s role under the NGA is to promote the development of the nation’s natural gas resources and to safeguard the interests of ratepayers.[28] Any consideration of environmental impacts, while important, is necessarily subsidiary to that role.[29]
It is a truism that FERC is an economic regulator, not an environmental regulator. This Commission was not given certification authority in order to advance environmental goals;[30] it was given certification authority to ensure the development of natural gas resources and their availability – this includes pipeline infrastructure – at just and reasonable rates. To construe the Commission’s analysis of the public convenience and necessity as a license to prohibit the development of needed natural gas resources using the public interest language in the NGA would be to negate the very legislative purpose of the statute.[31] Put another way, the premise of the NGA is that the production and transportation of natural gas for ultimate consumption by end users is socially valuable and should be promoted, not that the use of natural gas (which inevitably results in some discharge of GHGs) is inherently destructive and must be curbed, mitigated, or discouraged.
To those who say “well, times have changed and Congress was not thinking about climate change when it passed the NGA,” here’s an inconvenient truth: If Congress wants to change the Commission’s mission under the NGA it has that power; FERC does not.
Any authority to perform a public interest analysis under the NGA must be construed with reference to the animating purposes of the Act. It is not a free pass to pursue any policy objective – however important or compelling it may be – that is related in some way to jurisdictional facilities.[32] As the Court of Appeals for the D.C. Circuit has explained:
Any such authority to consider all factors bearing on “the public interest” must take into account what “the public interest” means in the context of the Natural Gas Act. FERC’s authority to consider all factors bearing on the public interest when issuing certificates means authority to look into those factors which reasonably relate to the purposes for which FERC was given certification authority. It does not imply authority to issue orders regarding any circumstance in which FERC’s regulatory tools might be useful.[33]
Whereas the Commission’s role in certificating facilities under the NGA is explicit,[34] any purported authority for the Commission to regulate GHGs is conspicuously absent. The claim that the Commission can reject a needed facility due to GHG emissions using the public interest component in the NGA seems to be based on the following logic: to ascertain whether a facility serves the public convenience and necessity, the Commission must first determine whether the facility is in “the public interest,” which in turn entails considering factors such as “environmental” impacts from construction and operation of the proposed facility, as well as estimating and quantifying greenhouse gas emissions from the proposed facility, including both upstream emissions associated with gathering the gas and downstream emissions associated with its use, which the Commission is somehow empowered to deem to be too excessive to grant the certificate.[35] Suffice it to say, this tortured logic breaks apart in multiple places.[36]
Surely if Congress had any intention that GHG analyses should (or could) be the basis for rejecting certification of natural-gas facilities, it would have given the Commission clear statutory guidance as to when to reject on that basis. Instead, those who want the Commission to conjure up a standard on GHG emissions for deciding how much is too much are advocating for a standard resembling Justice Stewart’s famous method for identifying obscenity, to wit, that he could not describe it, but “I know it when I see it.”[37] And the Supreme Court eventually had the good sense to abandon that ocular standard.[38]
Using GHG analysis to reject a certificate implicates an important judicial doctrine used in evaluating just how far an administrative agency can go in essentially creating public policy without clear textual support in statutory law. Now let’s turn to that doctrine in this context.
The Major Questions Doctrine and the NGA
The Commission’s actions today implicate the “major questions doctrine,” which Justice Gorsuch has recently explained as follows:
The federal government’s powers . . . are not general, but limited and divided. Not only must the federal government properly invoke a constitutionally enumerated source of authority to regulate in this area or any other, it must also act consistently with the Constitution’s separation of powers. And when it comes to that obligation, this Court has established at least one firm rule: “We expect Congress to speak clearly” if it wishes to assign to an executive agency decisions “of vast economic and political significance.” We sometimes call this the major questions doctrine.[39]
In short, the major questions doctrine presumes that Congress reserves major issues to itself, so unless a grant of authority to address a major issue is explicit in a statute administered by an agency, it cannot be inferred to have been granted.
Whether this Commission can reject a certificate based on a GHG analysis – a certificate that otherwise would be approved under the NGA – is undeniably a major question of public policy. It will have enormous implications for the lives of everyone in this country, given the inseparability of energy security from economic security. Yet the Supreme Court has made it clear that broad deference to administrative agencies on major questions of public policy is not in order when statutes are lacking in any explicit statutory grant of authority.[40] “When much is sought from a statute, much must be shown. . . . [B]road assertions of administrative power demand unmistakable legislative support.”[41]
There is no “unmistakable legislative support” for the powers the Commission asserts today. A broad power to regulate upstream and downstream GHG emissions and their global impacts has simply not been delegated to this Commission.[42] To the extent the federal government has such power, it has been delegated elsewhere. “Of necessity, Congress selects different regulatory regimes to address different problems.”[43] The U.S. Environmental Protection Agency (EPA) is charged with regulating greenhouse gas emissions under the Clean Air Act.[44] By contrast, Congress established in the NGA a regulatory regime to address entirely different problems, namely, the need to develop the nation’s natural gas resources and to protect ratepayers from unjust and unreasonable rates for gas shipped in the flow of interstate commerce. If it chose, Congress could enact legislation that would invest the Commission with authority to constrain the development and bringing to market of natural gas resources, but the fact is that Congress has chosen not to do so. On the contrary, every time Congress has enacted natural gas legislation, it has been to promote the development of natural gas resources, not throw up barriers to them.[45]
The fact that the NGA requires the Commission to make some form of public interest determination in the course of a certificate proceeding does not furnish a basis for the Commission to arrogate to itself the authority to constrain the development of natural gas resources on the grounds of their potential greenhouse gas emissions. As now-Justice Kavanaugh has explained: “If an agency wants to exercise expansive regulatory authority over some major social or economic activity . . . regulating greenhouse gas emitters, for example – an ambiguous grant of statutory authority is not enough. Congress must clearly authorize an agency to take such a major regulatory action.”[46] Congress has not “clearly authorize[d]” this Commission to regulate greenhouse gas emitters, nor to deny certificates to facilities whose construction and operation would be in the public convenience and necessity, simply because the construction and operation of such infrastructure may result in some amount of greenhouse gas emissions.[47] “Even if the text were ambiguous, the sheer scope of the . . . claimed authority . . . would counsel against” such an expansive interpretation.[48]
The fact that the Commission has absolutely no standard against which to measure the impact of natural gas production upstream or use downstream of the facilities it certificates is also important. In order for Congress to delegate any authority to an executive agency, it must legislatively set forth an intelligible principle for the agency to follow.[49] There is no such “intelligible principle” for the Commission to follow when it comes to greenhouse gas emissions.
Although the NGA requires the Commission to determine whether a proposed facility is in the “public convenience and necessity,” the term “has always been understood to mean ‘need’ for the service. To the extent the environment is considered, such consideration is limited to the effects stemming from the construction and operation of the proposed facilities.”[50] The term “public convenience and necessity” has long been understood to refer most essentially to the public’s need for service on terms that are just and reasonable, i.e., that are low enough for the public to pay the rates and high enough for the provider to maintain a profitable business.[51] That understanding was reflected in various statutes employing the term, including the Natural Gas Act.[52] And it was further reflected in the earliest “public convenience and necessity” analyses under the NGA.[53]
To summarize: whether and how to regulate GHG emissions is a major question of vast economic and political significance. Congress has not explicitly authorized the Commission to regulate in this area as required under the major questions doctrine, nor has it laid down an intelligible principle for the Commission to follow as required by the non-delegation doctrine. Moreover, EPA, in coordination with the states, already has authority to regulate in this area as specified in federal statutes, which is far removed from this Commission’s core expertise and traditional responsibilities.
Let’s now turn to the second major question.
GHG Analysis under NEPA
Is this Commission required or allowed by NEPA[54] to reject a certificate for a natural gas facility – one that would otherwise be approved under the NGA – based on a GHG analysis conducted as part of the NEPA environmental review? And rejection includes attaching mitigation conditions so onerous (or coercing through deficiency letters) that they render the project unfeasible.[55]
Again, the short answer is no. NEPA does not contain a shred of specific textual authority requiring or allowing the Commission to reject based on a NEPA review of estimated GHG impacts (indirect or direct) a certificate application for a facility that otherwise would be found necessary to serve the public under the NGA. Nor would it: as an information-forcing statute, NEPA imposes no substantive obligations.[56]
Even conducting an analysis of indirect GHG effects under NEPA goes too far. The Supreme Court has explicitly rejected the idea that an “an agency’s action is considered a cause of an environmental effect [under NEPA] even when the agency has no statutory authority to prevent that effect.”[57] Rather, NEPA “requires a reasonably close causal relationship between the environmental effect and the alleged cause,” that is analogous to “the familiar doctrine of proximate cause from tort law.”[58] While this might leave some difficult judgments at the margins, estimates of the potential global impacts of possible non-jurisdictional upstream or downstream activity – as today’s orders purport to require[59] – is not a close call.
First off, in determining how far an agency’s NEPA responsibilities run, one “must look to the underlying policies or legislative intent in order to draw a manageable line between those causal changes that may make an actor responsible for an effect and those that do not.”[60] As discussed at length above, there is no way of drawing a plausible line, much less a manageable one, from the Commission’s certificating responsibilities under the NGA and the possible consequences of global climate change – consequences which, however potentially grave, are remote from this agency’s limited statutory mission under the NGA.
Second, speculating about the possible future impact on global climate change of a facility’s potential GHG emissions does not assist the Commission in its decision-making and therefore violates the “rule of reason”: where an agency lacks the power to do anything about the possible environmental impacts, it is not obligated to analyze them under NEPA.[61] Again, the Supreme Court has explained, “inherent in NEPA and its implementing regulations is a ‘rule of reason,’ which ensures that agencies determine whether and to what extent to prepare an EIS based on the usefulness of any new potential information to the decision-making process. Where the preparation of an EIS would serve ‘no purpose’ in light of NEPA’s regulatory scheme as a whole, no rule of reason worthy of the title would require an agency to prepare an EIS.”[62]
This conclusion becomes even more obvious when considered alongside the undeniable fact that neither NEPA nor any other statute contains a scintilla of guidance as to which specific metrics are to be used to determine when the Commission can or must reject a project based on a GHG analysis. The Commission today establishes a threshold of 100,000 metric tons of CO2e of annual project emissions for purposes of its analysis of natural gas projects under NEPA[63] The rationale for establishing this threshold has literally nothing to do with the Commission’s NGA obligations, or even with its NEPA obligations. It consists of little more than piggybacking on EPA’s approach to regulating stationary sources.[64] Today’s order boasts that this new threshold will capture projects “transporting an average of 5,200 dekatherms per day and projects involving the operation of one or more compressor stations or LNG facilities”[65] and that this threshold “will capture over 99% of GHG emissions from Commission-regulated natural gas projects.”[66]
These are just arbitrarily chosen numbers. A proliferation of quantification does not constitute reasoned decision-making. All of the important questions about the creation and application of this threshold remain unanswered: is there anything in either the NGA or NEPA to indicate how much is too much and should be rejected? Or how little is low enough to get under the red line? No. If the Commission is attempting to quantify indirect global GHG impacts, as EPA now suggests we do,[67] how much global impact is too much and requires rejection of the certificate? How much impact is not too much? Should rejection only be based on impacts on the United States? North America? The Western Hemisphere? The planet? Where is the line? Again, there is absolutely no statutory provision that answers these questions as to the application of GHG metrics in a certificate proceeding brought under the NGA. The complete absence of any statutory guidance on the seminal question of “how much is too much?” would render any action by the Commission to reject a certificate based on any metric as “arbitrary and capricious” in the fullest sense.[68]
I recognize that the 100,000 metric tons marker adopted in today’s orders is not a threshold for rejecting a proposed project but only for subjecting it to further scrutiny in the form of an EIS. But this is no small matter – completion of an EIS is extremely cost-intensive and time-consuming and, in addition, creates a plethora of opportunities for opponents of the project who otherwise lack meritorious objections to it, to run up the costs, to cause delays, and to create new grounds for the inevitable appeals challenging the certificate even if the applicant does manage to obtain it.[69]
NEPA provides no statutory authority to reject a gas project that would otherwise be approved under the NGA. How could it? As is well-known, the duties NEPA imposes are essentially procedural and informational.[70] The Commission’s regulations implementing NEPA reflect its limits by noting that, “[t]he Commission will comply with the regulations of the Council on Environmental Quality except where those regulations are inconsistent with the statutory requirements of the Commission.”[71]
It’s not actually very difficult to see how the approach the majority adopts today is “inconsistent with the statutory requirements of the Commission.”[72] I will repeat that the purpose of the NGA is to promote the development, transportation, and sale at reasonable rates of natural gas. I will repeat that the NGA conveys only limited jurisdictional authority; that NEPA conveys no jurisdictional authority; that a different agency is responsible for regulating GHGs; and that such regulation is a major issue that Congress would have to speak to unambiguously, which it clearly has not done. And yet under the analysis embraced by the majority today, this Commission purports to impose onerous – possibly fatal – regulatory requirements on certificate applicants in order to generate reams of highly speculative data that have no meaningful role to play in the execution of this agency’s statutory duties.[73] In fact, it contravenes the purposes of the NGA in at least two obvious ways: First, by bringing extrinsic considerations to bear on the Commission’s decision-making, and second, by causing needless delay in the process.[74]
There is no meaningful way of evaluating any of the critical issues, and no statutory authority to actually do anything about upstream or downstream emissions,[75] but unlimited ways to find fault with any analysis. Even though they aren’t supposed to “flyspeck” an agency’s NEPA analysis, judges who wish to impose their own policy preferences will be tempted to do exactly that. And once the agency undertakes to address an issue in its NEPA analysis, it is subject to the APA’s “reasoned decision-making” standard of review.[76] Thus the effect is to ramp up dramatically the legal uncertainties and costs facing any certificate applicant.
The Policy Statements Rest on Inadequate Legal Authority
Today’s orders rely to a remarkable degree on a smattering of statements from a handful of recent orders. Simply put, these authorities are simply “too slender a reed”[77] to support the great weight today’s orders place on them.
Neither Sabal Trail[78] nor Birckhead,[79] nor the more recent Vecinos[80] opinion from the D.C. Circuit changes any of the analysis above. Indeed, to the extent language from those cases is interpreted as requiring the Commission to exercise authority not found in statutes – and these opinions are more confusing than clear, as well as inconsistent with the D. C. Circuit’s own precedent – then such an interpretation would be contrary to the Supreme Court’s major question doctrine. Be that as it may, while I recognize that Sabal Trail and Vecinos are presently applicable to this Commission, neither of those cases individually nor both of them together provide a lawful basis for rejecting a certificate for a facility that is otherwise found to be needed under the NGA solely because of its estimated potential impacts on global climate change.[81]
Virtually the entire structure of the majority’s fundamental policy changes rests on a single line from Sabal Trail.[82] That statement is itself predicated on an idiosyncratic reading of Public Citizen and the D. C. Circuit’s own precedents.[83] Sabal Trail rather facilely distinguished existing D.C. Circuit precedent on the grounds that, in contrast to those cases, the same agency that was performing the EIS was also authorized to approve or deny the certificate.[84] It reasoned that because the Commission could take “environmental” issues into account in its public interest analysis, and GHG emissions raise “environmental” issues, it must therefore follow that the Commission could deny a certificate based on projected GHG emissions estimates.
Sabal Trail acknowledged that “Freeport and its companion cases rested on the premise that FERC had no legal authority to prevent the adverse environmental effects of natural gas exports.”[85] Specifically, “FERC was forbidden to rely on the effects of gas exports as a justification for denying an upgrade license.”[86] In contrast with those cases – all of which addressed certification of LNG facilities under NGA § 3 as opposed to interstate transportation facilities under NGA § 7 – the court in Sabal Trail concluded that, under NGA § 7, by contrast, “FERC is not so limited. Congress broadly instructed the agency to consider ‘the public convenience and necessity’ when evaluating applications to construct and operate interstate pipelines.”[87] It thus concluded that, “[b]ecause FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful for the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines that it approves. See Freeport, 827 F.3d at 47. Public Citizen thus did not excuse FERC from considering these indirect effects.”[88]
But the Sabal Trail court never considered with reference to the Commission’s statutory authority the proper scope of that public interest analysis or the extent to which “environmental” issues could be considered in that context. It simply assumed the Commission’s authority to be unlimited. But as discussed above, Congress drafted the NGA for the purpose of filling a specific gap in regulatory authority. The only way Sabal Trail would be correct is if Congress had “clearly authorized” the Commission to evaluate geographically and temporally remote impacts of non-jurisdictional activity in its “public convenience and necessity” determinations. As discussed above, that conclusion is clearly, irredeemably, wrong.[89]
As for Vecinos, there, the court compounds that error both by relying uncritically on Sabal Trail and by finding fault with the Commission for failing to connect its decision not to use the Social Cost of Carbon to Petitioners’ argument that it was required to do so under 40 C.F.R. § 1502.21(c).[90] That regulation sets forth an agency’s obligations when “information relevant to reasonably foreseeable significant adverse impacts cannot be obtained.”[91] But global climate change is only a “foreseeable significant adverse impact” of the Commission’s action if the Commission’s authority extends as far as the Sabal Trail court said it does. For the reasons set out in this statement, I respectfully disagree. Nor am I alone in my disagreement.[92]
Finally, as to the contention that the Commission is bound to follow Sabal Trail notwithstanding its errors, I would simply point out that intervening Supreme Court precedents – such as NFIB[93] and Ala. Ass’n.[94] – have not just significantly weakened, but utterly eviscerated the conceptual underpinnings of Sabal Trail’s limitless construction of the Commission’s public interest inquiry under the NGA’s “public convenience and necessity” analysis.[95] It is folly for this Commission to proceed heedless of the Supreme Court’s recent rulings that agencies may not use ambiguous or limited grants of statutory authority in unprecedented ways to make policy on major questions that Congress has reserved for itself. But that’s exactly what the Commission does today.[96]
We are indeed bound to follow judicial precedent, but we don’t get to “cherry pick” one precedent such as Sabal Trail because we like that particular opinion, while ignoring the many other conflicting precedents, especially those more recent rulings from the Supreme Court itself applying the major question doctrine. These more recent opinions light up Sabal Trail as a clear outlier.
The Real Debate Is about Public Policy not Law.
Preventing the construction of each and every natural gas project is the overt public-policy goal of many well-funded interest groups working to reduce or eliminate natural gas usage.[97] Today’s orders, whatever the intent, will have the undeniable effect of advancing that policy goal, and we should not deny the obvious. Rather than bringing legal certainty to the Commission’s certificate orders,[98] today’s orders will greatly increase the costs and uncertainty associated with this Commission’s own handling of certificate applications. In fact, by purporting to apply today’s new policy retroactively on applications that have already been submitted (and in many instances pending for years), today’s action is deeply unfair: it judges by an entirely new set of standards applications that were prepared and submitted to meet the old standards and essentially opens all of them to be relitigated.[99] The undoubted effect of these orders will be to interpose additional months or years of delay on project applicants and to increase exponentially the vulnerability on appeal of any Commission orders that do approve a project.
Recently I said the Commission’s new rule on unlimited late interventions in certificate cases was “not a legal standard, but a legal weapon.”[100] The new certificate policy approved today is the mother of all legal weapons. There is no question that it will be wielded against each and every natural gas facility both at the Commission and in the inevitable appeals, making the costs of even pursuing a natural gas project insuperable.
Let me emphasize that every person or organization pursuing the policy goal of ending the use of natural gas by opposing every natural gas facility has an absolute right under the First Amendment to engage in such advocacy. However, whether to end the use of natural gas by banning the construction of all new natural gas projects is a public policy question of immense importance, one that affects the lives and livelihoods of tens of millions of Americans and their communities, as well as the country’s national security. In a democracy, such a huge policy question should only be decided by legislators elected by the people, not by unelected judges or administrative agencies.[101]
This public-policy context is absolutely relevant to these orders because it illustrates that the long-running controversy at this Commission over the use of GHG analyses in natural-gas certificate cases, whether it’s a demand to quantify indirect impacts from upstream production and downstream use,[102] or a demand to apply an administratively-constructed metric such as the Social Cost of Carbon[103] – and then use GHG analyses to reject (or mitigate to death, or impose costly delays on) a gas project – has far less to do with the law itself and far more to do with promoting preferred public policy goals.
EPA admits as much in a remarkably (perhaps unwittingly) revealing passage in a letter to this Commission:
EPA reaffirms the suggestion that the Commission avoid expressing project-level emissions as a percentage of national or state emissions. Conveying the information in this way inappropriately diminishes the significance of project-level GHG emissions. Instead, EPA continues to recommend disclosing the increasing conflict between GHG emissions and national, state, and local GHG reduction policies and goals . . .[104]
So according to EPA, this Commission – which is supposed to be independent of the current (or any) presidential administration, by the way – should literally manipulate how it presents GHG data in order to avoid “inappropriately” diminishing the impact. As EPA reveals, this is really not about data or any specific GHG metric at all, but is really about pursuing public policy goals, especially those of the current presidential administration that runs EPA.[105]
The EPA’s purported guidance to this Commission illustrates that the real debate here is not over the minutiae of one methodology versus another, or whether one methodology is “generally accepted in the scientific community” and another is not,[106] or whether one particular esoteric formula is purportedly required by a regulation issued by the CEQ[107] and another does not meet the CEQ’s directives.
The real debate over the use of GHG analyses in certificate proceedings is about public policy, not law, and ultimately comes down to these questions: Who makes major decisions of public policy in our constitutional system? Legislators elected by the people or unelected administrative agencies or judges? Who decides?[108]
Conclusions
Based on the analysis above the following legal conclusions can be drawn:
First, the Commission may not reject a certificate based solely on an estimate of the impacts of GHG emissions, indirect or direct. Nor, on the basis of such GHG estimates, may the Commission attach to a certificate (or coerce through deficiency letters) conditions that represent a de facto rejection by rendering the project financially or technically unfeasible.
Second, the Commission can consider the direct GHG impacts of the specific facility for which a certificate is sought, just as it analyzes other direct environmental impacts of a project, and can attach reasonable and feasible conditions to the certificate designed to reduce or minimize the direct GHG impacts caused by the facility, just as it does with other environmental impacts.
Third, the conditions the Commission can impose are, like its other powers, limited to the authorities granted to it by Congress and the purposes for which they are given. So, no, the Commission may not impose conditions on a certificate to mitigate upstream or downstream GHG emissions arising from non-jurisdictional activity.
These legal conclusions do not mean that responding to climate change is not a compelling policy necessity for the nation. In my view it is, as I stated above.[109]
However, neither my policy views – nor those of any other member of this Commission – can confer additional legal authority on FERC.[110] For in our democracy, it is the elected legislators who have the exclusive power to determine the major policies that respond to a global challenge such as climate change. Further, the argument that administrative agencies must enact policies to address major problems whenever Congress is too slow, too polarized, or too prone to unsatisfying compromises, must be utterly rejected.[111] That is not how it is supposed to work in a democracy.
For if democracy means anything at all, it means that the people have an inherent right to choose the legislators to whom the people grant the power to decide the major questions of public policy that impact how the people live their daily lives. Unelected federal judges and executive-branch administrators, no matter how enlightened they and other elites may regard themselves to be, do not have the power to decide such questions; they only have the power to carry out the duly-enacted laws of the United States, including the most important law of all, the Constitution. That is the basic constitutional framework of the United States and it is the same for any liberal democracy worth the name.
For these reasons, I respectfully dissent.[1] Certification of New Interstate Natural Gas Facilities, 174 FERC ¶ 61,125 (2021).
[2] I also voted for the 2021 changes to the procedures for imposing a stay on the certificate and use of eminent domain during periods when petitions for reconsideration and appeals were pending. Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, Order No. 871-B, 175 FERC ¶ 61,098 (2021). These changes were largely opposed by the pipeline industry, but in my opinion represented a reasonable approach to bring more certainty and fairness to our procedures for handling petitions for reconsideration and the use of eminent domain during the pending period.
[3] See Certification of New Interstate Natural Gas Facilities, 178 FERC ¶ 61,107 (2022) (Certificate Policy Statement) at PP 53-57. The need for enhanced scrutiny of contracts among corporate affiliates is recognized in state utility regulation. See, e.g., Va. Code § 56-76 et seq., known as the “Virginia Affiliates Act.”
[4] See Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123 (1951) (Frankfurter, J., concurring).
[5] Certificate Policy Statement; Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (GHG Policy Statement). Although styled as an “interim” policy statement, it goes into effect immediately and will inflict major new costs and uncertainties on certificate applications that have been pending with the Commission for months or years. Id. at PP 1, 130. I consider both policy statements to be indivisible parts of a new policy governing certificates. Thus, my statement applies to both, and I am entering this dissent in both dockets.
[6] 15 U.S.C. § 717 et seq. See, e.g., Certificate Policy Statement at P 62.
[7] 42 U.S.C. § 4321 et seq.
[8] Nat’l Fed’n of Indep. Bus. v. Dep’t of Labor, OSHA, 142 S. Ct. 661 (2022) (NFIB); Alabama Ass’n. of Realtors v. Dep’t of Health and Human Services, 141 S. Ct. 2485 (2021) (Ala. Ass’n.); Util. Air Regulatory Grp. v. EPA, 573 U.S. 302 (2014) (UARG); FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (Brown & Williamson). I discuss this doctrine in Section I.B., infra.
[9] See, e.g., Natasha Bertrand, US putting together 'global' strategy to increase gas production if Russia invades Ukraine, officials say, CNN (Jan. 24, 2022), available at https://www.cnn.com/2022/01/23/politics/us-gas-production-strategy-russia-ukraine-invasion/index.htmlhttps://www.cnn.com/2022/01/23/politics/us-gas-production-strategy-russia-ukraine-invasion/index.html; and, Stephen Stapczynski and Sergio Chapa, U.S. Became World’s Top LNG Exporter, Spurred by Europe Crisis, Bloomberg (Jan 4, 2022), available at https://www.bloomberg.com/news/articles/2022-01-04/u-s-lng-exports-top-rivals-for-first-time-on-shale-revolution.
[10] See NERC December 2021 Long-Term Reliability Assessment, at 5 (Dec. 2021) (“Natural gas is the reliability ‘fuel that keeps the lights on,’ and natural gas policy must reflect this reality.”) (emphasis added) (available at https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2021.pdf); id. at 6 (“Sufficient flexible [dispatchable] resources are needed to support increasing levels of variable [intermittent] generation uncertainty. Until storage technology is fully developed and deployed at scale, (which cannot be presumed to occur within the time horizon of this LTRA), natural gas-fired generation will remain a necessary balancing resource to provide increasing flexibility needs.”) (emphasis added); NERC 2020 Long-Term Reliability Assessment, December 2020, at 7 (Dec. 2020) (“As more solar and wind generation is added, additional flexible resources are needed to offset their resources’ variability. This is placing more operating pressure on those (typically natural gas) resources and makes them the key to securing [Bulk Power System] reliability.” (emphases added) (available at https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2020.pdf).
[11] Letter from Industrial Energy Consumers of America to Sen. Joe Manchin III, Sen. John Barrasso, Sen. Frank Pallone, Jr., Sen. Cathy McMorris Rodgers, Lack of Interstate Natural Gas Pipeline Capacity Threatens Manufacturing Operations, Investments, Jobs, and Supply Chain (Feb. 9, 2022).
[12] Since we are regulators with an advisory role, not Article III judges, my personal view is that the most politically realistic and sustainable way to reduce carbon emissions significantly without threatening the reliability of our grid and punishing tens of millions of American workers and consumers with lost jobs and skyrocketing energy prices (see, e.g., Europe) is by massive public investment in the research, development and deployment of the technologies that can achieve that goal economically and effectively. See, e.g., Press Release, Bipartisan Policy Center, New AEIC Report Recommends DOE Combine Loan and Demonstration Offices, Jumpstart American Clean Energy Deployment (Jan. 21, 2022), available at https://bipartisanpolicy.org/press-release/new-aeic-report-recommends-doe-combine-loan-and-demonstration-offices-jumpstart-american-clean-energy-deployment/ (citing to American Energy Innovation Council, Scaling Innovation: A Proposed Framework for Scaling Energy Demonstrations and Early Deployment (Jan. 2022)). Once developed to commercial scale, marketable technologies will roll out globally on their own, without the market-distorting mandates and subsidies that only enrich rent-seekers and impoverish consumers. More specifically with regard to natural gas facilities, there is also the potential with available technology to reduce direct methane emissions from the existing oil and gas system within existing legal authority. And such initiatives do not obviate the need for near-term mitigation measures, such as preparing the electric grid to maintain power during extreme weather events.
[13] 15 U.S.C. § 717f.
[15] See Certificate Policy Statement at P 6, GHG Policy Statement at P 27.
[16] Certificate Policy Statement at P 62; GHG Policy Statement at PP 27, 99.
[17] 15 U.S.C. § 717f(e).
[18] See Certificate Policy Statement at P 74; GHG Policy Statement at P 99.
[19] Certificate Policy Statement at P 62.
[20] Id.
[21] Id. The notion that a certificate could be rejected based solely on the interests of “landowners” or “environmental justice communities” (a term the majority leaves largely undefined) illustrates the radical divergence from both law and long Commission practice of what the Commission purports to do today. While a regulatory commission should always be mindful of and sensitive to the impacts on affected property owners and communities in every case involving the potential use of eminent domain – particularly on the question of the project’s route or siting – and should generally seek wherever possible to reduce or minimize such impacts, specific measures to reduce or minimize such impacts are governed by the statutes applicable to each proceeding. Under both the Constitution and the NGA, if a project is needed for a public purpose, then landowners are made whole through just compensation. U.S. Const. amend. V. Questions of compensation are adjudicated in state or federal court – not by this Commission. NGA § 7(h), 15 U.S.C. § 717f(h). Bringing such extra-jurisdictional considerations into the Commission’s public convenience and necessity analyses under NGA § 7 is just another expansion of Commission power far beyond anything justified in law.
[22] Sabal Trail, 867 F.3d 1357, 1382 (D.C. Cir. 2017) (Sabal Trail) (Brown, J., dissenting in part and concurring in part).
[23] Atl. Refining Co. v. Pub. Serv. Comm’n of State of N.Y., 360 U.S. 378, 391 (1959) (“This is not to say that rates are the only factor bearing on the public convenience and necessity, for § 7(e) requires the Commission to evaluate all factors bearing on the public interest.”); N.C. Gas Corp., 10 FPC 469, 476 (1950) (“Public convenience and necessity comprehends a question of the public interest. Or, stated another way: Is the proposal conducive to the public welfare? Is it reasonably required to promote the accommodation of the public? The public interest we referred to has many facets. To the limit of our authority under the law our responsibility encompasses them all”) (emphasis added) (quoting Commonwealth Nat. Gas Corp., 9 FPC 70 (1950)).
[24] NAACP v. FPC, 425 U.S. 662, 669 (1976) (“This Court’s cases have consistently held that the use of the words ‘public interest’ in a regulatory statute is not a broad license to promote the general public welfare. Rather, the words take meaning from the purposes of the regulatory legislation.”). Where the Supreme Court has permitted the Commission to consider end use, those considerations have related directly to its core statutory responsibilities under the NGA, namely, ensuring adequate supply at reasonable rates. See FPC v. Transcontinental Pipe Line Co., 365 U.S. 1 (1961) (permitting the Commission to consider whether the end use was “wasteful” of limited gas resources).
[25] NGA § 1(b), 15 U.S.C. § 717(b).
[26] ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378 (2015) (emphasis added); see also, FPC v. Panhandle E. Pipe Line Co., 337 U.S. 498, 502-503 (1949) (“suffice it to say that the Natural Gas Act did not envisage federal regulation of the entire natural-gas field to the limit of constitutional power. Rather it contemplated the exercise of federal power as specified in the Act, particularly in that interstate segment which states were powerless to regulate because of the Commerce Clause of the Federal Constitution. The jurisdiction of the Federal Power Commission was to complement that of the state regulatory bodies.”) (emphasis added) (footnotes omitted); Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1315 (D.C. Cir. 2015) (“the Commission’s power to preempt state and local law is circumscribed by the Natural Gas Act’s savings clause, which saves from preemption the ‘rights of States’ under the Clean Air Act and two other statutes.”) (citations omitted).
[27] Ofc. of Consumers’ Counsel v. FERC, 655 F.2d 1132, 1142 (D.C. Cir. 1980) (“We bear in mind the caveat that an agency may not bootstrap itself into an area in which it has no jurisdiction by violating its statutory mandate.”) (citations, quotation marks, ellipsis omitted).
[28] City of Clarksville, Tenn. v. FERC, 888 F.3d 477, 479 (D.C. Cir. 2018) (City of Clarksville) (“Congress enacted the Natural Gas Act with the principal aim of ‘encouraging the orderly development of plentiful supplies of natural gas at reasonable prices,’ and ‘protect[ing] consumers against exploitation at the hands of natural gas companies,”) (citations omitted); see also Alexandra B. Klass & Danielle Meinhardt, Transporting Oil and Gas: U.S. Infrastructure Challenges, 100 Iowa L. Rev. 947, 990-99 (Mar. 2015).
[29] City of Clarksville, 888 F.3d. at 479. (“Along with those main objectives, there are also several ‘subsidiary purposes including conservation, environmental, and antitrust issues.’”) (quoting Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 281 (D.C. Cir. 1990)) (cleaned up). This does not mean that the Commission cannot properly impose conditions or mitigation to address environmental impacts directly related to the jurisdictional project; it merely recognizes that the Commission’s main objective is to facilitate the expansion and preservation of natural gas service at just and reasonable rates and that doing so will inevitably entail some measure of environmental costs. These can sometimes be reduced or minimized, but never completely eliminated. Every project ever built has some degree of environmental impacts. The standard under the NGA cannot be zero impacts.
[30] Congress could easily have conferred that authority if it had wanted to. There is no indication that Congress intended or expected FERC to perform any environmental regulation when it created the agency. See generally, Clark Byse, The Department of Energy Organization Act: Structure and Procedure, 30 Admin. L. Rev. 193 (1978). This Commission’s predecessor, the Federal Power Commission, existed for decades before EPA was created in 1970. And Congress began enacting legislation bearing on emissions decades before then as well. See Christopher D. Ahlers, Origins of the Clean Air Act: A New Interpretation, 45 Envtl. L. 75 (2015). Nor were the effects of GHG emissions unknown at that time. See Danny Lewis, Scientists Have Been Talking About Greenhouse Gases for 191 Years, Smithsonian Magazine (Aug. 3, 2015) (citing to Nobel Laureate Svante Arrhenius’ 1896 paper “On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground”).
[31] See United States v. Pub. Utils. Comm’n of Cal., 345 U.S. 295, 315 (1953) (explaining that recourse to legislative history is appropriate where “the literal words would bring about an end completely at variance with the purpose of the statute.”) (citations omitted). The present circumstance is very nearly the opposite: we are urged to pursue “an end completely at variance with the purpose of the statute” and for which there is no support in the “literal words.” Id.; see also Ctr. for Biological Diversity v. U.S. Army Corps of Eng’rs, 941 F.3d 1288, 1299 (11th Cir. 2019) (Ctr. for Biological Diversity) (“Regulations cannot contradict their animating statutes or manufacture additional agency power.”) (citing Brown & Williamson, 529 U.S. at 125-26).
[32] NAACP v. FPC, 425 U.S. at 665-670 (noting that, although “the eradication of discrimination in our society is an important national goal,” the Supreme Court has “consistently held that the use of the words ‘public interest’ in a regulatory statute is not a broad license to promote the general welfare. Rather, the words take meaning from the purposes of the regulatory legislation” which, for the [Federal Power Act] and [Natural Gas Act], are “to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices.”); see also Brown & Williamson, 529 U.S. at 161 (“no matter how important, conspicuous, and controversial the issue, and regardless of how likely the public is to hold the Executive Branch politically accountable, . . . an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress.”) (quotation marks, citation omitted).
[33] Office of Consumers’ Counsel v. FERC, 655 F.2d at 1147 (emphases added).
[34] See, e.g., NGA §§ 7(e), 15 U.S.C. § 717f(e) (apart from statutory exceptions, “a certificate shall be issued to any qualified applicant . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed,” and, among other things, to comply with “the requirements, rules and regulations of the Commission . . .”) (emphasis added).
[35] Certificate Policy Statement at PP 4-6; GHG Policy Statement at P 39 (citing Sabal Trail, 867 F.3d at 1372-73).
[36] I won’t belabor the point, but just to reiterate: a “public convenience and necessity” analysis is not a generalized “public interest” analysis, as courts have recognized. See, supra, P 13 & n.24 and infra, P 27. The “environmental” impacts appropriately considered in a certification proceeding must surely be limited in some way to the proposed facility itself since both upstream gathering and downstream use are beyond the Commission’s statutory jurisdiction. See City of Clarksville, 888 F.3d at 479 (identifying “environmental” concerns as a “subsidiary” purpose of the NGA).
[37] Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring); see also Catherine Morehouse, Glick, Danly spar over gas pipeline reviews as FERC considers project’s climate impacts for first time, Utility Dive (Mar. 19, 2021) (quoting Chairman Glick regarding use of GHG emissions analysis in N. Natural Gas Co., 174 FERC ¶ 61,189 (2021): “We essentially used the eyeball test. . . .”). Shorn of its irrelevant disquisition on EPA’s stationary source regulations, today’s GHG policy statement enshrines an eyeball test as the trigger for subjecting virtually all certificate applicants to the time-consuming and costly EIS process. GHG Statement at PP 88-95.
[38] Miller v. California, 413 U.S. 15 (1973).
[39] NFIB, 142 S. Ct. at 667 (Gorsuch, J., concurring) (citations omitted).
[40] UARG, 573 U.S. 302, 324 (2014) (“When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy,’ Brown & Williamson, 529 U.S. at 159 . . ., we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’ Id. at 160.”); Gundy v. United States, 139 S. Ct. 2116, 2141-42 (2019) (Gundy) (Gorsuch, J., dissenting) (“Under our precedents, an agency can fill in statutory gaps where ‘statutory circumstances’ indicate that Congress meant to grant it such powers. But we don’t follow that rule when the ‘statutory gap’ concerns ‘a question of deep economic and political significance’ that is central to the statutory scheme. So we’ve rejected agency demands that we defer to their attempts to rewrite rules for billions of dollars in healthcare tax credits, to assume control over millions of small greenhouse gas sources, and to ban cigarettes.) (citations omitted).
[41] In re MCP No. 165, 20 F.4th 264, 267-268 (6th Cir. 2021) (Sutton, C.J., dissenting from denial of initial hearing en banc) (emphases added).
[42] Panhandle E. Pipe Line Co. v. Pub. Serv. Comm’n of Ind., 332 U.S. 507, 516 (1947) (“three things, and three things only Congress drew within its own regulatory power, delegated by the [Natural Gas] Act to its agent, the Federal Power Commission. These were: (1) the transportation of natural gas in interstate commerce; (2) its sale in interstate commerce for resale; and (3) natural gas companies engaged in such transportation or sale.”); cf. Ala. Assn., 141 S. Ct. at 2488 (invalidating the CDC’s eviction moratorium because the “downstream connection between eviction and the interstate spread of disease is markedly different from the direct targeting of disease that characterizes the measures identified in the statute”).
[43] Am. Elec. Power Co. v. Conn., 564 U.S. 410, 426 (2011).
[44] Id. (“Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from powerplants”) (emphasis added); Am. Lung Ass’n. v. EPA, 985 F.3d at 959-60 (D.C. Cir. 2021) (“there is no question that the regulation of greenhouse gas emissions by power plants across the Nation falls squarely within the EPA’s wheelhouse.”). Consider for a moment how strange it would be for Congress to delegate regulation of GHG emissions from electric power plants to EPA, while somehow delegating regulation of GHG emissions from natural gas fired power plants to FERC. Yet that is what today’s orders presuppose.
[45] See Mountain Valley Pipeline, LLC, 171 FERC ¶ 61,232 (2020) (McNamee, Comm’r, concurring at PP 32-40) (discussing decades’ worth of legislative enactments, all of which “indicates that the Commission’s authority over upstream production and downstream use of natural gas has been further limited by Congress.”).
[46] U.S. Telecom Ass’n v. FCC, 855 F.3d 381, 422 (Kavanaugh, J. dissenting) (emphases added); see also NFIB, 142 S. Ct. at 665 (“the question . . . is whether the Act plainly authorizes the Secretary’s mandate. It does not.”).
[47] We cannot assume a Congressional intent to regulate every incidence of greenhouse gas emissions. As Justice Ginsberg observed, “we each emit carbon dioxide merely by breathing.” Am. Elec. Power Co. v. Conn., 564 U.S. at 426.
[48] Ala. Ass’n., 141 S. Ct. at 2489.
[49] Congress may “delegate power under broad general directives” so long as it sets forth “an intelligible principle” to guide the delegee. Mistretta v. United States, 488 U.S. 361, 372 (1989). See Gundy, 139 S. Ct. at 2129 (“a delegation is constitutional so long as Congress has set out an ‘intelligible principle’ to guide the delegee’s exercise of authority. Or in a related formulation, the Court has stated that a delegation is permissible if Congress has made clear to the delegee the general policy he must pursue and the boundaries of his authority.”) (citations, internal quotations omitted).
[50] Mountain Valley, 171 FERC ¶ 61,232 (McNamee, Comm’r, concurring at P 41); see also id. PP 15-47.
[51] See generally, Ford P. Hall, Certificates of Public Convenience and Necessity, 28 Mich. L. Rev. 276 (1930) (analyzing the meaning of “public convenience and necessity” in state laws antedating passage of the NGA, and concluding that it is the need of the consuming public, without which it will be inconvenienced, that is the critical question to be answered).
[52] The first such statute appears to have been the Interstate Commerce Act (ICA). The Supreme Court explicitly held that the use of the term “public convenience and necessity” was chosen in the knowledge that it would be understood against the background of its historical usage. ICC v. Parker, 326 U.S. 60, 65 (1945) (construing “public convenience and necessity” under the ICA and recognizing that Congress’ decision to use a term with such a long history indicated Congress intended “a continuation of the administrative and judicial interpretation of the language.”) When it passed the NGA, Congress was similarly cognizant of having employed the same concept as in the ICA. See, Robert Christin et al., Considering the Public Convenience and Necessity in Pipeline Certificate Cases under the Natural Gas Act, 38 Energy L.J. 115, 120 (2017) (citing Comm. on Interstate Commerce, Interstate Transportation and Sale of Natural Gas, S. Rep. No. 75-1162, at 5 (Aug. 9, 1937) and noting that “the concept of a regulatory agency determining whether a private entity’s proposal was in the public convenience and necessity was an established practice when the NGA was enacted.”).
[53] See In re Kan. Pipe Line & Gas Co., 2 FPC 29, 56 (1939) (“We view the term [public convenience and necessity] as meaning a public need or benefit without which the public is inconvenienced to the extent of being handicapped in pursuit of business or comfort or both without which the public generally in the area involved is denied to its detriment that which is enjoyed by the public of other areas similarly situated.”)
[54] NEPA, 42 U.S.C. § 4321 et seq., requires all federal agencies to undertake an “environmental assessment” of their actions, typically including the preparation of an “environmental impact statement” of proposed “major federal actions.” As discussed below, the purpose of the EA and EIS is for the agency to be fully informed of the impact of its decisions. NEPA does not mandate any specific action by the agency in response to an EA or EIS, other than to make an informed decision. See, e.g., Steven M. Siros, et al., Pipeline Projects – The Evolving Role of Greenhouse Gas Emissions Analyses under NEPA, 41 Energy L.J. 47 (May 2020); see also Sabal Trail, 867 F.3d at 1367-68 (describing NEPA as “primarily information-forcing” and noting that courts “should not ‘“flyspeck” an agency’s environmental analysis, looking for any deficiency no matter how minor.’”) (quoting Nevada v. Dep’t of Energy, 457 F.3d 78, 93 (D.C. Cir. 2006)).
[55] NGA § 7(e), 15 U.S.C. § 717f(e), authorizes the Commission to attach to a certificate “such reasonable terms and conditions as the public convenience and necessity may require.” There is no analytical difference between the Commission’s authority to reject a certificate application and its authority to mitigate it. See Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (“The Commission may not, . . . when it lacks the power to promote the public interest directly, do so indirectly by attaching a condition to a certificate that is, in its unconditional form, already in the public convenience and necessity.”) (citations omitted). That the Commission may be tempted to abuse its conditioning authority has long been recognized. See Carl I. Wheat, Administration by the Federal Power Commission of the Certificate Provisions of the Natural Gas Act, 14 Geo. Wash. L. Rev. 194, 214-215 (1945) (“It is particularly important that the Commission . . . steel itself against the somewhat natural temptation to attempt to use such ‘conditions’ as substitutes or ‘shortcuts’ for other (and more appropriate) methods of regulation prescribed in the statute. . . . . [W]hatever may be said with respect to conditions concerning rates and other matters over which the Commission has specific authority under other provisions of the Act, it would appear clear that the power to prescribe ‘reasonable conditions’ in certificates cannot be greater in scope than the statutory authority of the Commission.”)
[56] “[I]t is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process. If the adverse environmental effects of the proposed action are adequately identified and evaluated, the agency is not constrained by NEPA from deciding that other values outweigh the environmental costs. . . . Other statutes may impose substantive environmental obligations on federal agencies, . . . but NEPA merely prohibits uninformed – rather than unwise – agency action.” Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350-51 (1989) (citations omitted; emphases added). See also, e.g., Minisink Residents for Envtl. Preserv. & Safety v. FERC, 762 F.3d 97, 112 (D.C. Cir. 2014) (same).
[57] Dep’t. of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Pub. Citizen). This principle has been incorporated into the implementing regulations of the Council of Environmental Quality (CEQ), an executive branch agency. See 40 C.F.R. § 1508.1(g)(2) (2021) (“Effects do not include those effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action”).
[58] Pub. Citizen, 541 U.S. at 767 (citations omitted).
[59] Certificate Policy Statement at PP 73-76; GHG Policy Statement at PP 28-31.
[60] Pub. Citizen, 541 U.S. at 767 (citations omitted).
[61] See, e.g., Sabal Trail, 867 F.3d at 1372 (citing Pub. Citizen, 541 U.S. at 770) (“when the agency has no legal power to prevent a certain environmental effect, there is no decision to inform, and the agency need not analyze the effect in its NEPA review.”) (emphasis in original); Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 195 (D.C. Cir. 1991) (“an agency need follow only a ‘rule of reason’ in preparing an EIS . . . and . . . this rule of reason governs both which alternatives the agency must discuss, and the extent to which it must discuss them.”) (internal citations and quotations omitted, emphasis in original). To state the obvious: we have absolutely no way of knowing how much an individual project may or may not contribute to global climate change for any number of reasons, including because there is no way for us to meaningfully evaluate the release of GHG emissions if the facility in question were not to be certificated. Notwithstanding, today, the majority boasts of forcing virtually every certificate applicant into the EIS process. GHG Policy Statement at PP 80, 88.
[62] Pub. Citizen, 541 U.S. at 767 (citations omitted).
[63] GHG Policy Statement at P 80, 88. For purposes of determining what emissions count toward the 100,000 metric tons per year threshold, the majority states that this number is measured based on “the construction, operational, downstream, and, where determined to be reasonably foreseeable, upstream GHG emissions that reoccur annually over the life of the project.” Id. P 80 & n.197.
[64] Id. PP 88 - 93 (acknowledging that the Supreme Court has partially invalidated EPA’s regulatory regime).
[65] Id. P 89 (emphasis added).
[66] Id. P 95. It appears that the majority’s intent is to force all applicants into the EIS process. This will undeniably cause each application to become far more costly and time-consuming, both obvious disincentives to even trying.
[67] EPA Comments, Iroquois Gas Transmission Sys., L.P., Docket No. CP20-48-000 at 1-2 (filed Dec. 20, 2021) (EPA Dec. 20, 2021 Letter).
[68] And yet, as a practical matter, applicants must spend years of work and possibly millions of dollars (or more) in preparatory tasks like lining up financing, securing local political support, obtaining permits, etc. All this extensive legwork is needed just to put an application in to the Commission. Today’s orders effectively tell applicants that their application could be rejected for any reason or no reason at all. Nor does the majority even do the courtesy of providing a target for the applicant to aim at.
[69] See Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. 333, 339 & n.31 (2004) (noting that “Department of Energy EISs produced prior to 1994 had a mean cost of $6.3 million and a median cost of $1.2 million; following an aggressive effort to reduce costs, after 1994 the mean cost fell to $5.1 million, but the median cost rose to $2.7 million.”)
[70] See, Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 129 (D.C. Cir. 1987) (“NEPA, as a procedural device, does not work a broadening of the agency’s substantive powers. Whatever action the agency chooses to take must, of course, be within its province in the first instance.”) (citations omitted, emphasis added); Balt. Gas & Elec. Co. v. Natural Res. Defense Council, Inc., 462 U.S. 87, 97 (1983) (acknowledging NEPA’s “twin aims” as obligating an agency “to consider every significant aspect of the environmental impact of a proposed action” and ensuring “that the agency will inform the public that it has indeed considered environmental concerns in its decision-making process,” but noting that “Congress in enacting NEPA, however, did not require agencies to elevate environmental concerns over other appropriate considerations.”) (citations, alterations omitted).
[71] 18 C.F.R. § 380.1 (2021) (emphasis added); see also 40 C.F.R. § 1500.3(a) (2021) (compliance with the CEQ regulations “is applicable to and binding on all Federal agencies . . . except where compliance would be inconsistent with other statutory requirements”).
[72] 18 C.F.R. § 380.1 (2021). See The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments, Technical Conference on Greenhouse Gas Mitigation: Natural Gas Act Sections 3 and 7 Authorizations, Docket No. PL21-3-000 at 2 (The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments) (“if imposing mitigation for direct and indirect emissions discourages or forestalls pipeline development, the mitigation policy is directly contrary to the principal purpose of the Natural Gas Act and must be set aside.”).
[73] Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 345-346 (noting that fear of NEPA challenges has led agencies to “‘kitchen sink’ EISs” to reduce the risk of reversal, but that almost nobody actually reads them “and those who attempt to do so may find it difficult to separate the good information from the junk. Contrary to conventional wisdom, more information is not always better.”); see also, Pub. Citizen, 541 U.S. at 768-769 (“NEPA’s purpose is not to generate paperwork – even excellent paperwork – but to foster excellent action.”) (quoting then-in effect 40 C.F.R. § 1500.1(c) (2003)).
[74] The delay is clearly part of the point. Why else funnel virtually every certificate applicant into the EIS process? See e.g., Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 339-40 (observing that NEPA has become “a highly effective tool that environmental NGOs and others can use to raise the financial and political costs of projects they oppose and stretch out decisions over an extended time frame, giving time to rally political opposition.”). See also P 47, infra.
[75] In fact, even if the Commission had the authority to impose upstream or downstream GHG emissions mitigation, or to deny certificates of public convenience and necessity on that basis, the majority admits that it is by no means obvious that doing so would actually prevent or even meaningfully reduce global climate change or the problems associated with it. See GHG Policy Statement at P 88 (noting that “[e]ven if deep reductions in GHG emissions are achieved, the planet is projected to warm by at least 1.5 degrees Celsius (°C) by 2050;” and that “even relatively minor GHG emissions pose a significant threat”).
[76] Vecinos Para El Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1329 (D.C. Cir. 2021) (Vecinos) (“Because the Commission failed to respond to significant opposing viewpoints concerning the adequacy of its analyses of the projects’ greenhouse gas emissions, we find its analyses deficient under NEPA and the APA.”).
[77] Cf. The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments at 3.
[78] Sabal Trail, 867 F.3d 1357. In support of its assertion of broad discretion in attaching conditions to a certificate, the majority also cites to ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (ANR Pipeline). Certificate Policy Statement at P 74 & n. 190. Since the Commission’s conditioning authority is limited in the same way as its certificating authority, there is little reason to discuss it separately. I will only note in passing that, although the court described the Commission’s conditioning authority as “extremely broad,” the only issue actually before the court in ANR Pipeline was the validity of certificate terms imposed in furtherance of the Commission’s core duty to ensure that rates are non-discriminatory. Id.
[79] Birckhead v. FERC, 925 F.3d 510 (D.C. Cir. 2019) (rejecting, for failure to raise the issue before the Commission, a claim that NEPA requires FERC to analyze downstream GHG emissions). Since Birckhead was decided on jurisdictional grounds, any substantive commentary in that order is mere dicta and I will not discuss it further.
[80] Vecinos, 6 F.4th 1321.
[81] Both orders suffer from a number of infirmities that don’t bear belaboring in this context. In brief, however, Sabal Trail reads the Commission’s duty to “balance ‘the public benefits against the adverse effects of the project, including adverse environmental effects,’” Sabal Trail, 867 F.3d at 1373 (quoting Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97 at 101-02 and citing Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d at 1309), far too expansively, and Vecinos compounds that error. Both orders are discussed below.
[82] Namely, “[b]ecause FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful for the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines that it approves.” Sabal Trail, 867 F.3d at 1373. The other orders the majority relies on depend vitally on this statement. See, e.g., Certificate Policy Statement at PP 75 & n. 192 (citing Birckhead); 86 & n. 207 (citing Vecinos); GHG Policy Statement at PP 13, 36-38 (citing Birckhead) and P 14 & n. 38 (citing Vecinos).
[83] See Ctr. for Biological Diversity, 941 F.3d at 1300 (“the legal analysis in Sabal Trail is questionable at best. It fails to take seriously the rule of reason announced in Public Citizen or to account for the untenable consequences of its decision. The Sabal Trail court narrowly focused on the reasonable foreseeability of the downstream effects, as understood colloquially, while breezing past other statutory limits and precedents – such as Metropolitan [Edison Co. v. People Against Nuclear Energy, 460 U.S. 776 (1983)] and Public Citizen – clarifying what effects are cognizable under NEPA.”).
[84] Sabal Trail, 867 F.3d at 1372-1373. In each of the D.C. Circuit orders Sabal Trail purported to distinguish, the court had found that FERC did not have to analyze, because it could not regulate, downstream emissions.
[85] Id. at 1373 (citing Sierra Club v. FERC (Freeport), 827 F.3d 36, 47 (D.C. Cir. 2016). The “companion cases” are Sierra Club v. FERC (Sabine Pass), 827 F.3d 59 (D.C. Cir. 2016) and EarthReports, Inc. v. FERC, 828 F.3d 949 (D.C. Cir. 2016).
[86] Sabal Trail, 867 F.3d at 1373 (emphasis in original).
[87] Id. (citations omitted).
[88] Id.
[89] Supra, Section I.B. Cf. ICC v. Parker, 326 U.S. 60, 65 (1945) (construing “public convenience and necessity” under the Interstate Commerce Act and recognizing that Congress’ decision to use a term with such a long history indicated Congress intended “a continuation of the administrative and judicial interpretation of the language.”). Far from being “a continuation of the administrative and judicial interpretation of the language,” construing it to extend to an analysis of global GHG emissions is novel and unprecedented.
[90] Vecinos, 6 F.4th at 1328-30.
[91] 40 C.F.R. § 1502.21(c).
[92] See supra, n. 83.
[93] NFIB, 142 S. Ct. 661.
[94] Ala. Ass’n., 141 S. Ct. 2485 at 2489.
[95] See generally, Allegheny Def. Project v. FERC, 964 F.3d 1, 18 (D.C. Cir. 2020) (noting that circuit court precedent may be departed from “when intervening developments in the law – such as Supreme Court decisions – have removed or weakened the conceptual underpinnings of the prior decision.”) (cleaned up, citation omitted).
[96] In his NFIB concurrence, Justice Gorsuch states: “Sometimes Congress passes broadly worded statutes seeking to resolve important policy questions in a field while leaving an agency to work out the details of implementation. Later, the agency may seek to exploit some gap, ambiguity, or doubtful expression in Congress’s statutes to assume responsibilities far beyond its initial assignment. The major questions doctrine guards against this possibility by recognizing that Congress does not usually hide elephants in mouseholes.” 142 S. Ct. at 669 (Gorsuch, J., concurring) (citations, alterations omitted). It would be hard to find a better description of the path the Commission has taken to arrive at today’s orders.
[97]See, e.g., Bloomberg Philanthropies, https://www.bloomberg.org/environment/moving-beyond-carbon/ (“Launched in 2019 with a $500 million investment from Mike Bloomberg and Bloomberg Philanthropies, Beyond Carbon . . . . works . . . to . . . stop the construction of proposed gas plants.”) (last visited Feb. 8, 2022) (emphasis added); Sierra Club, https://www.sierraclub.org/policy/energy/fracking, (“There are no ‘clean’ fossil fuels. The Sierra Club is committed to eliminating the use of fossil fuels, including coal, natural gas and oil, as soon as possible”) (emphases added) (last visited Feb. 8, 2022); Natural Resources Defense Council, https://www.nrdc.org/issues/reduce-fossil-fuels (“Oil, gas, and other fossil fuels come with grave consequences for our health and our future. . . . NRDC is pushing America to move beyond these dirty fuels. We fight dangerous energy development on all fronts”) (emphases added) (last visited Feb. 8, 2022); Press Release, NRDC Receives $100 million from Bezos Earth Fund to Accelerate Climate Action (Nov. 16, 2020), available at https://www.nrdc.org/media/2020/201116 (“The Bezos Earth Fund grant will be used to help NRDC advance climate solutions and legislation at the state level, move the needle on policies and programs focused on reducing oil and gas production”) (emphasis added) (last visited Feb. 8, 2022); Sebastian Herrera, Jeff Bezos Pledges $10 Billion to Tackle Climate Change, Wall Street Journal (Feb. 17, 2020) (“Mr. Bezos . . . said the Bezos Earth Fund would help back scientists, activists, [non-governmental organizations]”) (emphasis added); see also, Ellie Potter, Environmentalists launch campaign to ban gas from US clean energy program, S&P Global Platts (Sep. 2, 2021) (quoting Collin Rees, U.S. Campaign Manager for Oil Change International, “Clean energy means no gas and no other fossil fuels, period.”) (emphases added); Sean Sullivan, FERC sets sights on gas infrastructure policy in 2022, S&P Capital IQ (Dec. 31, 2021) (quoting Maya van Rossum, head of Delaware Riverkeeper Network, “we are not changing course at all: We continue to take on every pipeline, LNG, and fracked gas project as urgently as we did before, knowing we will have to invest heavily to stop it . . .”) (emphases added).
[98] See Letter of Chairman Richard Glick to Sen. John Barasso, M.D. (Feb. 1, 2022) (“Preparing an EIS to consider the reasonably foreseeable GHG emissions that may be attributed to a project proposed under section 7 of the NGA allows the Commission to issue more legally durable orders on which all stakeholders can depend, including project developers.”); Letter of Commissioner Allison Clements to Sen. John Barasso, M.D. (Feb. 1, 2022) (“I will do my part to assure that the updated policy will be a legally durable framework for fairly and efficiently considering certificate applications – one that serves the public interest and increases regulatory certainty for all stakeholders.”); see also, Corey Paul, FERC Dems argue legal benefits from climate reviews outweigh gas project delays, S&P Capital IQ Pro (Feb. 3, 2022).
[99] Certificate Policy Statement at P 100 (“the Commission will apply the Updated Policy Statement to any currently pending applications for new certificates. Applicants will be given the opportunity to supplement the record and explain how their proposals are consistent with this Updated Policy Statement, and stakeholders will have an opportunity to respond to any such filings.”)
[100] Adelphia Gateway, LLC, 178 FERC ¶ 61,030 (2022) (Christie, Comm’r concurring at P 4) (available at: https://www.ferc.gov/news-events/news/item-c-3-commissioner-christies-partial-concurrence-and-partial-dissent-adelphia).
[101] See Am. Lung Ass’n v. EPA, 985 F.3d at 1003 (Walker, J., concurring in part and dissenting in part) (“whatever multi-billion-dollar regulatory power the federal government might enjoy, it’s found on the open floor of an accountable Congress, not in the impenetrable halls of an administrative agency – even if that agency is an overflowing font of good sense.”) (citing U.S. Const. art I, § 1).
[102] GHG Policy Statement at PP 27-28, 31, & n.97. See also, EPA Dec. 20, 2021 Letter.
[103] GHG Policy Statement at P 96. See also, e.g., Vecinos, 6 F.4th at 1328-1329.
[104] EPA Dec. 20, 2021 Letter at 4 (emphases added).
[105] This Commission’s independence reflects a conscious choice on Congress’ part to insulate certain of its functions from the vicissitudes of political pressure. See generally, Sharon B. Jacobs, The Statutory Separation of Powers, 129 Yale L.J. 378 (2019) (explaining that some but not all of the Federal Power Commission’s authorities were transferred to FERC, which was intended at least in part to counterbalance presidential influence). Succumbing to the pressure of EPA and others would sacrifice that crucial independence in meaningful ways.
[106] Cf. Vecinos, 6 F.4th at 1329.
[107] It has been observed that the values associated with the imputed social costs of GHG emissions have fluctuated dramatically from one administration to the next. See, e.g., Garrett S. Kral, What’s In a Number: The Social Cost of Carbon, Geo. Envtl. L. Rev. Online 1 (Aug. 19, 2021) (comparing the social cost of GHG emissions under the Trump administration with the interim social cost under the Biden administration and noting “the value of SC-GHGs have fluctuated. A lot.”). This degree of abrupt fluctuation – e.g., the social cost of carbon increasing from $7 per ton to $51 per ton – can only be explained by politics, not science.
[108] NFIB, 142 S. Ct. at 667 (Gorsuch, J. Concurring). (“The central question we face today is: Who decides?”) (emphasis added).
[109] See P 5 and n.12, supra.
[110] Office of Consumers Counsel, 655 F.2d at 1142 (“an agency may not bootstrap itself into an area in which it has no jurisdiction by violating its statutory mandate”) (quoting FMC v. Seatrain Lines, Inc., 411 U.S. 726, 745 (1973)) (ellipsis omitted); see also In re MCP No. 165, 20 F.4th 264, 269 (6th Cir. 2021) (Sutton, C.J., dissenting) (“As the Supreme Court recently explained in invalidating an eviction moratorium promulgated by the Center for Disease Control, ‘our system does not permit agencies to act unlawfully even in pursuit of desirable ends.’ Ala. Ass’n of Realtors, 141 S. Ct. at 2490. Shortcuts in furthering preferred policies, even urgent policies, rarely end well, and they always undermine, sometimes permanently, American vertical and horizontal separation of powers, the true mettle of the U.S. Constitution, the true long-term guardian of liberty.”) (emphasis added).
[111] This argument is often put forth by the legal, academic, and corporate elites who assume that an administrative agency will enact the public policies they prefer when Congress will not. Such an expectation is perfectly rational since these elites disproportionately have the resources that are most effective in achieving desired outcomes in the administrative process, which is largely an insiders’ game. The body of work on the economic theory of regulatory capture over the past half-century is relevant to this topic. See generally, Susan E. Dudley, Let’s Not Forget George Stigler’s Lessons about Regulatory Capture, Regulatory Studies Center (May 20, 2021) (available at https://regulatorystudies.columbian.gwu.edu/let%E2%80%99s-not-forget-george-stigler%E2%80%99s-lessons-about-regulatory-capture). And it is not just for-profit corporate elites at work here, so are other special interests who seek desired policy outcomes from administrative action rather than from the often messy and hard democratic processes of seeking to persuade voters to elect members of Congress who agree with you. See, e.g., n. 97, supra.