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On June 12, 2018, the Federal Energy Regulatory Commission (FERC) issued an order that implicates the scope of environmental review in pipeline permitting decisions under section 7 of the Natural Gas Act. See Tennessee Gas Pipeline Co., LLC, Docket No. CP15-77-001, order denying reh’g and dismissing clarification. The June 12 Order applied a new policy announced in a May 2018 pipeline certificate proceeding, which limits FERC’s review and disclosure of upstream and downstream greenhouse gas emissions as part of FERC’s National Environmental Policy Act responsibility and public interest determination under the Natural Gas Act. See Dominion Transmission – New Market Project, Docket No. CP14-497. Specifically, a majority of Commissioners found that the environmental effects of natural gas production are neither caused by a proposed pipeline nor reasonably foreseeable consequences of FERC’s approval of a proposed pipeline. In the absence of record evidence showing that the project’s specific adverse consequences are against the public interest, FERC limited its environmental review to exclude consideration of greenhouse gas emissions. FERC distinguishes Sierra Club v FERC, where the D.C. Circuit ordered FERC to determine downstream usage, asserting that downstream use of the gas was foreseeable in that particular case due to the pipeline project delivering natural gas to identifiable gas-fired electric generating plants.

Commissioner Richard Glick dissented from the June 12 order, as he did in the May 2018 decision that announced the new policy, writing that “a project’s upstream and downstream natural gas production and consumption are indirect environmental impacts that should be considered when reviewing applications to address public interest.” Commissioner Glick found that the public interest cannot be met without adequate environmental reviews to address rapid climate change. Though she disagrees with FERC’s new policy, Commissioner LaFleur issued a concurring opinion in support of the proposed pipeline. Citing her independent analysis of the best available information, Commissioner LaFleur concluded that the downstream and upstream impacts do not outweigh the pipeline’s public interest benefits.

In April 2018, FERC issued a Notice of Inquiry, Docket No. PL18-1-000, that seeks comment on its review under section 7 of the Natural Gas Act. The Notice of Inquiry specifically addresses whether FERC should consider upstream production and downstream consumption greenhouse gas emissions impacts in its certification proceedings.

For more information on these proceedings, please contact: Pete Scanlon