By Rich Heidorn Jr.
Democratic FERC Commissioners Cheryl LaFleur and Richard Glick have split with the Republican majority over its refusal to consider greenhouse gas emissions in two pipeline orders, the first skirmishes in what may be an escalating debate before the commission and in the courts.
The split came first in Wednesday’s order on remand confirming as in the public interest the 685-mile Southeast Market Pipelines Project, which will supply four gas-fired generators in Florida (CP14-554, et al.).
In August, a split D.C. Circuit Court of Appeals panel remanded FERC’s February 2016 approval of the pipeline, ruling 2-1 that FERC must consider the impact of greenhouse gas emissions when licensing gas pipelines (16-1329). (See FERC Must Consider GHG Impact of Pipelines, DC Circuit Rules.)
The court ruled in favor of a petition by the Sierra Club, ordering FERC to quantify and consider the project’s downstream GHG emissions or explain why it could not do so. The court also directed the commission to explain whether it still adheres to its prior position that the social cost of carbon tool is not useful in performing its review under the National Energy Policy Act.
Glick opposed the pipeline in Wednesday’s vote. LaFleur — the only current commissioner who took part in the 2016 order — supported the approval along with the three Republican commissioners but issued a partial dissent.
The project involves three pipelines, including the nearly 500-mile Sabal Trail, which will connect the other two pipelines between Tallapoosa County, Ala., and Osceola County, Fla., south of Orlando. Scheduled for completion in 2021, the project has a capacity of more than 1 Bcfd. It will supply two new plants — Florida Power & Light’s Okeechobee Clean Energy Center and Duke Energy’s Citrus County Combined Cycle Plant — and FPL’s existing Martin County Power Plant and Riviera Beach Clean Energy Center.
LaFleur: ‘Causal Relationship’
LaFleur said she agreed with the court that the downstream GHG emissions that result from burning gas transported by the pipelines are an indirect impact of the project and that those emissions are “reasonably foreseeable.”
The final Supplemental Environmental Impact Statement (SEIS) estimates that the project will indirectly result in annual gross downstream GHG emissions of 14.5 million metric tons of carbon dioxide-equivalent units (CO2e). Reflecting the reductions in GHG emissions that will occur as the gas-fired generators replace coal-fired units and displace oil as an alternate fuel, the SEIS calculated annual net downstream GHG emissions of 8.36 million metric tons CO2e. (See table.)
The majority contended that the emissions data cannot “meaningfully inform” the commission’s public interest determination.
“We are required by NEPA to reach a determination regarding the significance of all environmental impacts, including downstream GHG emissions. It is our responsibility to use the best information we have to make that determination,” LaFleur said. “In this case, we can gauge significance by comparing the gross and net GHG emissions of the SMP Project to the total state and national emission inventories to calculate how the SMP Project increases those GHG inventories,” she continued. “Here, I believe that a net increase of 3.6% of the Florida inventory for a single pipeline project is significant. Due to the need of the project, I believe that increase is acceptable but should be disclosed and assessed.”
LaFleur also parted with the majority view that the social cost of carbon is not an appropriate tool for evaluating the impact of GHG emissions. “That is precisely the use for which the social cost of carbon was developed — it is a scientifically derived tool to translate tonnage of carbon dioxide or other GHGs to the cost of long-term climate harm.”
She said concerns over the lack of consensus on the appropriate discount rate could be addressed by calculating it using a range of rates.
LaFleur said the commission should conduct a detailed cost-benefit analysis of the project, “including more information on the need for a project, the likely end-uses of the transported gas and the alternatives.” She said she would press the issue in the “generic” pipeline review proceeding announced by Chairman Kevin McIntyre in December. (See FERC to Review Gas Pipeline Approval Process.)
Glick: ‘Willful Ignorance’
Glick said the order failed to properly address either of the two issues raised by the court “and, as such, does not adequately respond to the court’s mandate.”
“Climate change is the single most significant threat to humanity, fundamentally threatening our environment, economy, national security and human health. It is difficult to understand how NEPA’s demand that an agency take a ‘hard look’ at the environmental impacts of its actions can be satisfied if the impacts of GHG emissions are ignored,” he wrote.
Glick said the commission “is engaging in a collateral attack on the court’s decision by suggesting that it is not the commission’s ‘job’ to consider whether emissions from ‘the end use of the gas would be too harmful to the environment.’
“It is absurd to even contemplate NEPA not applying to the most significant environmental issue of our time,” Glick continued.
He said the commission’s “willful ignorance of readily available analytical tools” undermines public confidence in its consideration of pipeline applications. “I fear that today’s order, by limiting analysis of the environmental impacts of a proposed pipeline, will both increase the commission’s litigation risk and contribute further to the cynicism of the pipeline siting process.”
Previous D.C. Circuit rulings had found that FERC did not have to consider the climate-change effects of exporting natural gas in its licensing of LNG terminals. If the circuit court again rejects FERC’s Southeast Markets order, it could be up to the Supreme Court to settle the inconsistency.
Majority’s Comments
The majority said its staff “had no basis for determining the significance of impacts from these emissions” because “there is no widely accepted standard to ascribe significance to a given rate or volume of GHG emissions.”
“There are no conditions the commission can impose on the construction of jurisdictional facilities that will affect the end-use-related GHG emissions,” the majority continued. “The only way for the commission to reflect consideration of the downstream emissions in its decision-making would be, as the court observed, to deny the certificate. However, were we to deny a pipeline certificate on the basis of impacts stemming from the end use of the gas transported, that decision would rest on a finding not ‘that the pipeline would be too harmful to the environment,’ but rather that the end use of the gas would be too harmful to the environment. The commission believes that it is for Congress or the executive branch to decide national policy on the use of natural gas and that the commission’s job is to review applications before it on a case-by-case basis.”
The commission said the social cost of carbon tool is more appropriate for regulators whose responsibilities are tied more directly to fossil fuel production or consumption, such as the Bureau of Land Management and the Bureau of Ocean Energy Management.
It noted that the Council on Environmental Quality does not require agencies to conduct a monetary cost-benefit analysis for NEPA review.
The majority also rejected as outside the scope of the SEIS and the court’s mandate issues regarding GHG emissions from upstream production of natural gas, environmental justice and the project’s effect on the supply and demand for natural gas and substitute energy sources.
Second Pipeline Dissent
Glick and LaFleur also dissented in part Thursday on an order granting a certificate of public convenience and necessity to DTE Midstream’s proposed 14-mile Birdsboro Pipeline, which will supply up to 79,000 dekatherms per day of firm transportation service to the 450-MW Birdsboro Power Facility in Berks County, Pa. (CP17-409).
As in the Southeast Market order, LaFleur and Glick dissented over the commission’s refusal to use the social cost of carbon to consider the significance of the project’s environmental impacts.
They also cited concerns over the commission’s “‘new policy’ approach towards motions to intervene out of time,” articulated in a Feb. 27 order involving Tennessee Gas Pipeline (CP16-4-001).
“Today’s order suggests that good cause for late intervention does not exist where an entity seeking to participate as a party in the proceeding submits a motion on the same day it learned that the application had been submitted,” they wrote in their DTE Midstream dissent. “While we agree that late interventions should be limited to parties that demonstrate good cause, we are concerned by the potential consequences of the commission’s pronouncement, particularly as it would apply to landowners and community organizations that lack sufficient resources to keep up with every docket.”
Dissent in Hydro Case
LaFleur and Glick also joined in a partial dissent in a case involving two small U.S. Army Corps of Engineers hydropower projects in West Virginia: the 5-MW Morgantown Lock and Dam and 6-MW Opekiska Lock and Dam (P-13753-003, P-13762-003).
The majority denied rehearing requests of staff’s Sept. 29, 2017, orders authorizing the dams on the Monongahela River, upholding staff’s determination that the West Virginia Department of Environmental Protection waived its Clean Water Action Section 401 water quality certification authority by failing to act on the licensee’s applications within one year of receipt.
LaFleur and Glick said that although the state missed its deadline, they would have included the state’s “modest requests to enhance recreational use of the project lands” — including a permanent public restroom instead of a portable restroom, trash receptacles and fishing piers — which were not opposed by the Army Corps.
“It is commission practice to consider incorporating the late-filed conditions into the license as recommendations … as long as they do not interfere with the licensee’s safe and effective operation of the hydroelectric facility for electric generation,” they wrote.
