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Commissioner Richard Glick Statement
November 16, 2018

Item No. C-1
Docket No. CP18-26-000
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Partial Dissent on Texas Eastern Transmission, LP, Lambertville East Expansion Project

In today’s order, the Commission authorizes Texas Eastern Transmission, LP’s (Texas Eastern) proposed Lambertville East Expansion Project, which will allow Texas Eastern to provide an additional 60,000 dekatherms per day (Dth/d) of firm transportation service from interconnections in Lambertville, New Jersey, and Marietta, Pennsylvania, to existing city gates in New Jersey.1 In doing so, the Commission refuses to consider whether the Project’s contribution to climate change from these emissions would be significant, even though it quantified the increase in greenhouse gas (GHG) emissions from the Project’s construction and operation. Moreover, the Commission entirely fails to consider the Project’s contribution to climate change from upstream and downstream GHG emissions. The Commission’s failure to undertake any consideration of the Project’s contribution to climate change falls well short of our obligations under the Natural Gas Act (NGA)2 and the National Environmental Policy Act (NEPA).3 Because I believe the Commission cannot find that the Project is in the public interest without first considering the significance of this impact in its order, I respectfully dissent in part.4

Consistent with previous conclusions,5 the Commission once again maintains that it is not required to consider the Project’s contribution to climate change from increased GHG emissions because—the Commission claims—it simply cannot do so.6 Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane, which can be released in large quantities through the production and the consumption of natural gas. It is therefore critical that the Commission carefully consider the Project’s contribution to climate change, both in order to fulfill NEPA’s requirements and to determine whether the Project is in the public interest under the NGA.

In the Project’s Environmental Assessment (EA), the Commission quantified the Project’s direct GHG emissions7 and explained that GHG emissions due to human activity, which include the Project’s GHG emissions, “are the primary contributor to climate change.”8 But the Commission nevertheless refuses to consider whether the Project’s contribution to climate change from these emissions is significant. In addition, despite relying on the fact the Project is fully subscribed and designed to serve a growth in “high priority demand,” including from industrial, commercial, and residential end users,9 the Commission again ignores the Project’s reasonably foreseeable downstream GHG emissions. It also gives no consideration to whether the Project will lead to an increase in upstream GHG emissions from additional production. The Commission adopts an overly narrow and circular definition of indirect effects10 and disregards the Project’s central purpose—to facilitate additional natural gas consumption.11 The Commission cannot ignore the fact that adding firm transportation capacity is likely to “spur demand,”12 and, for that reason, it must at least examine the effects that an expansion of pipeline capacity might have on consumption and production.13 Indeed,if a proposed pipeline neither increases the supply of natural gas available to consumers nor decreases the price that those consumers would pay, it is hard to imagine why that pipeline would be “needed” in the first place.

Even where exact information regarding the source of the gas to be transported and its end use is not available, the Commission will often be able to produce comparably useful information based on reasonable forecasts of the GHG emissions associated with production and consumption.14 Forecasting environmental impacts is a regular component of NEPA reviews and a reasonable estimate may inform the federal decisionmaking process even where the agency is not completely confident in the results of its forecast.15 Similar forecasts can play a useful role in the Commission’s evaluation of the public interest, even in those instances when the Commission must make a number of assumptions in its forecasting process.16

Quantifying the Project’s GHG emissions is a necessary, but not sufficient, step in meeting the Commission’s obligations to consider the Project’s environmental effects associated with climate change. NEPA and the NGA’s public interest standard require the Commission to consider not the GHG emissions themselves but the resulting environmental impact.17 The Commission claims that it lacks the means to determine whether the Project’s contribution to climate change is significant, relying instead on a vague assertion that “there is no generally accepted significance criteria for GHG emissions.”18 Relying on these bald conclusions is no substitute for fulfilling the Commission’s responsibility to carefully—and meaningfully—consider the public interest in the Project.

Under NEPA, the Commission must consider the harm from the Project’s GHG emissions when the emissions are direct and indirect effects of the Project.19 Moreover, in Sabal Trail, the court left no room to question that GHG emissions from the downstream combustion of natural gas can be “an indirect effect of authorizing” a pipeline project, which the Commission can reasonably foresee, and which the agency has a legal authority to consider and mitigate.20 As the court explained, section 7 of the NGA requires the Commission to balance “‘the public benefits [of a proposed pipeline] against the adverse effects of the project,’ including adverse environmental effects.”21 If a pipeline’s adverse effects outweigh its public benefits, the project is not in the public interest and the Commission must deny the section 7 certificate.22 As relevant here, that means that the section 7 balancing test must incorporate an analysis of the environmental harms, including those caused by a proposed pipeline’s contribution to climate change. The Commission’s failure to consider the harm from the Project’s GHG emissions under NEPA and in its public interest determination reveals a stubborn adherence to the views that the Sabal Trail court rejected. It is also a feeble excuse for failing to use the Social Cost of Carbon to assess the Project’s contribution to climate change.

Contrary to the Commission’s conclusion today, the Commission has the tools to “determine the Project’s incremental physical impacts on the environment caused by GHG emissions.”23 This is precisely what the Social Cost of Carbon delivers. By measuring the long-term damage done by a ton of carbon dioxide, it provides a method for linking GHG emissions to particular climate impacts, thereby providing both the Commission and the public with the “hard look” required to assess the magnitude of a proposed project’s impact on the climate. Especially when it comes to a global problem like climate change, a measure for translating a discrete project’s climate impacts into concrete and comprehensible terms can play a useful role in the NEPA process by putting the harms caused by the project in terms that are readily accessible for both agency decisionmakers and the public at large.

As in almost every aspect of the Commission’s regulation—from reviewing environmental and safety impacts to calculating expected rates of return on investment dollars—the Commission can manage uncertainty through probability and statistical analyses. In this same vein, “NEPA does not demand that every federal decision be verified by the reduction to mathematical absolutes for insertion into a precise formula.”24 The fact that the Commission may not know the exact cost of the Project’s contribution to climate change is no excuse for assuming the impact is zero. Instead, the Commission must engage in a case-specific inquiry into the reasonably foreseeable effects and estimate the potential impact—making assumptions where necessary—and then give that estimate the weight it deserves.

The Commission itself has recognized that a variety of environmental impacts are best considered qualitatively and once again provides no answer for why the Commission—as the agency with both the mandate and technical expertise to consider the public interest in the Project—cannot use a quantitative measure as input to making a qualitative determination regarding the significance of the Project’s contribution to climate change.25 The Council on Environmental Quality regulations already outline the factors agencies should consider to determine whether a project’s impacts on the environment will be considered significant.26 The Commission can use these factors to develop a framework to consider the significance of the Project’s impact. Its failure to do so is no excuse for neglecting to consider the Project’s harm from its contribution to climate change.

* * *

Climate change poses an existential threat to our security, economy, environment, and, ultimately, the health of individual citizens. Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane—which can be released in large quantities through the production and the consumption of natural gas. Congress determined under the NGA that no entity may transport natural gas interstate, or construct or expand interstate natural gas facilities, without the Commission first determining the activity is in the public interest. This requires the Commission to find, on balance, that a project’s benefits outweigh the harms, including the environmental impacts from climate change that result from authorizing additional transportation. Accordingly, it is critical that, as an agency of the federal government, the Commission comply with its statutory responsibility to document and consider how its authorization of a natural gas pipeline facility will lead to the emission of GHGs, contributing to climate change.

For these reasons, I respectfully dissent in part.

                                               

    1 Texas Eastern Transmission, LP, 165 FERC ¶ 61,132 (2018) (Certificate Order).
    2 15 U.S.C. 717f (2012).
    3 National Environmental Policy Act of 1969, Pub. L. No. 91–190, 83 Stat. 852.
    4 Section 7 of the NGA requires that, before issuing a certificate for new pipeline construction, the Commission must find both a need for the pipeline and that, on balance, the pipeline’s benefits outweigh its harms. 15 U.S.C. § 717f (2012). Furthermore, NEPA requires the Commission to take a “hard look” at the environmental impacts of its decisions. See 42 U.S.C. § 4332(2)(C)(iii); Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). This means that the Commission must both consider and discuss the significance of the harm from a pipeline’s contribution to climate change by actually evaluating the magnitude of the pipeline’s environmental impact. Doing so enables the Commission to compare the environment before and after the proposed federal action and factor the changes into its decisionmaking process. See Sierra Club v. FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail) (“The [FEIS] needed to include a discussion of the ‘significance’ of this indirect effect.”); 40 C.F.R. § 1502.16 (a)–(b) (An agency’s environmental review must “include the environmental impacts of the alternatives including the proposed action,” as well as a discussion of direct and indirect effects and their significance.) (emphasis added)). Today’s decision and the record omit any meaningful discussion of the Project’s contribution to climate change. That omission renders the Commission’s order arbitrary and capricious and not the product of reasoned decisionmaking.
    5 See, e.g., Dominion Transmission, Inc., 163 FERC ¶ 61,128, at PP 67–70 (2018) (LaFleur, Comm’r, dissenting in part; Glick, Comm’r, dissenting in part).
    6 Certificate Order, 165 FERC ¶ 61,132 at P 45.
    7 EA at 46 and Tables 8–9 (estimating the Project’s proposed new emissions from construction and operation).
    8 Id. at 38.
    9 Texas Eastern Certificate Application at 2; Texas Eastern July 18, 2018 Response to Commission Staff’s July 16, 2018 Data Request at 1.
    10 See San Juan Citizens All. et al. v. U.S. Bureau of Land Mgmt., No. 16-CV-376-MCA-JHR, 2018 WL 2994406, at *10 (D.N.M. June 14, 2018) (holding that it was arbitrary for the Bureau of Land Management to conclude “that consumption is not ‘an indirect effect of oil and gas production because production is not a proximate cause of GHG emissions resulting from consumption’” as “this statement is circular and worded as though it is a legal conclusion”). The Commission must use its “best efforts” to identify and quantify the full scope of the environmental impacts and, as the U.S. Court of Appeals for the District of Columbia found in Sierra Club v. FERC, educated assumptions are inevitable in the process of emission quantification. See Sabal Trail, 867 F.3d at 1374.
    11 Texas Eastern Certificate Application at 3 (“Demand is growing not only in the traditional residential, commercial and industrial markets, but also for electric generation as that sector has become increasingly dependent on reliable, cost-competitive sources of natural gas that promote a cleaner environment. The Project meets these criteria by providing access to firm, reliable natural gas transportation to the Project Shippers.”); id. at 9 (“The Project is not designed to bypass an existing pipeline or to provide service that is already provided by an existing pipeline.”).
    12 Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1138 (9th Cir. 2011) (holding that it “is completely inadequate” for an agency to ignore a project’s “growth inducing effects” where the project has a unique potential to spur demand); id. at 1139 (distinguishing City of Carmel-by-the-Sea v. U.S. Dep’t of Transp., 123 F.3d 1142 (9th Cir. 1997), which the majority relies on in today’s order) (“[O]ur cases have consistently noted that a new runway has a unique potential to spur demand, which sets it apart from other airport improvements, like changing flight patterns, improving a terminal, or adding a taxiway, which increase demand only marginally, if at all.”); id. at 1139 (“[E]ven if the stated purpose of [a new airport runway project] is to increase safety and efficiency, the agencies must analyze the impacts of the increased demand attributable to the additional runway as growth-inducing effects.”).
    13 As the United States Court of Appeals for the Eighth Circuit explained in Mid States Coal. for Progress v. Surface Transp. Bd.—a case that also involved the downstream emissions from new infrastructure for transporting fossil fuels—when the “nature of the effect” (end-use emissions) is reasonably foreseeable, but “its extent is not” (specific consumption activity producing emissions), an agency may not simply ignore the effect. 345 F.3d 520, 549 (8th Cir. 2003).
    14 NEPA, after all, does not require exact certainty; instead, it requires that the Commission engage in reasonable forecasting and estimation of possible effects of a major federal action where doing so would further the statute’s two-fold purpose of ensuring that the relevant agency will “have available, and will carefully consider, detailed information concerning significant environmental impacts” and that this information will also be “available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.” Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 768 (2004) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989)); Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1310 (2014).
    15 In determining what constitutes reasonable forecasting, it is relevant to consider the “usefulness of any new potential information to the decisionmaking process.” Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189, at 198 (D.C. Cir. 2017) (citing Pub. Citizen, 541 U.S. at 767).
    16 In comments submitted in the Commission’s pending review of the natural gas certification process, the Environmental Protection Agency identified a number of tools the Commission can use to quantify the reasonably foreseeable “upstream and downstream GHG emissions associated with a proposed natural gas pipeline.” These include “economic modeling tools” that can aid in determining the “reasonably foreseeable energy market impacts of a proposed project.” U.S. Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 3–4 (filed June 21, 2018) (explaining that the “EPA has emission factors and methods” available to estimate GHG emissions—from activities upstream and downstream of a proposed natural gas pipeline—through the U.S. Greenhouse Gas Inventory and the Greenhouse Gas Reporting Program); see Certification of New Interstate Natural Gas Facilities, Notice of Inquiry, 163 FERC ¶ 61,042 (2018).
    17 NEPA requires the Commission to reach a determination regarding the significance of the Projects’ indirect effects from upstream and downstream GHG emissions. Further, under section 7 of the NGA, the Commission must consider those harms as part of its determination whether the Projects are in the public interest. See Florida Southeast Connection, LLC, 164 FERC ¶ 61,099, at 2–3, 5–8 (Glick, Comm’r, dissenting).
    18 Certificate Order, 165 FERC ¶ 61,132 at P 45.
    19 40 C.F.R. § 1508.8 (defining direct effects and indirect effects).
    20 Sabal Trail, 867 F.3d at 1374 (citing the Commission’s authority, pursuant to the NGA, to “attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require,” 15 U.S.C. 717f(e)).
    21 Sabal Trail, 867 F.3d at 1373 (quoting Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)).
    22 See id. (explaining that the Commission may “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment”).
    23 Certificate Order, 165 FERC ¶ 61,132 at P 45.
    24 Sierra Club v. Lynn, 502 F.2d 43, 61 (5th Cir. 1974).
    25 As the Environmental Protection Agency has explained, the Commission may use estimates of the Social Cost of Carbon “for project analysis when [the Commission] determines that a monetary assessment of the impacts associated with the estimated net change in GHG emissions provides useful information in its environmental review or public interest determination.” United States Environmental Protection Agency, Comments, Docket No. PL18-1-000, at 4–5 (filed June 21, 2018).
    26 Council on Environmental Quality regulations adopt a two-step framework for determining whether an environmental impact is significant. Agencies must consider both the “context” of the proposed action and the “intensity” of the environmental consequences. 40 C.F.R. § 1508.27. (“Significantly as used in NEPA requires considerations of both context and intensity.”); id. (“‘Context’ . . . means that the significance of an action must be analyzed in several contexts such as society as a whole (human, national), the affected region, the affected interests, and the locality.”); id. (“‘Intensity’ . . . refers to the severity of the impact, . . . [including t]he degree to which” it affects considerations including “public health or safety” and the environment).
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