Commissioner James Danly Statement
February 18, 2022
Docket No. PL18-1-000 | Errata
I dissent from the issuance of the Updated Policy Statement on Certification of New Interstate Natural Gas Facilities.[1] Before I explain my reasons for dissenting, I would like to state from the outset that I voted for the Commission’s most recent revised Notice of Inquiry[2] considering changes to its Original Policy Statement.[3]
I cannot, however, support today’s issuance because it will, in combination with the Interim Greenhouse Gas (GHG) Policy Statement,[4] have profound implications for the ability of natural gas companies to secure capital, on the timelines for Natural Gas Act (NGA) section 7[5] applications to be processed, and on the costs that a pipeline and its customers will bear as a result of the potentially unmeasurable mitigation that the majority expects each company to propose when filing its application[6] and the possibility of further mitigation measures added unilaterally by the Commission. As I explain in more detail below, this policy statement contravenes the purpose of the NGA which, as the Supreme Court has held, is to “encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[7]
The Commission’s Jurisdiction and the Public Convenience and Necessity Standard are Not as Broad as the Updated Policy Statement Suggests
As an initial matter, the Commission “is a ‘creature of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.’”[8] The applicable statute is the NGA, and the statutory standard applicable to NGA section 7(c) certificate applications[9] is whether a proposed project “is or will be required by the present or future public convenience and necessity.”[10]
Notably, public convenience and necessity is not anywhere defined in the language of the NGA.[11] That phrase is famously ambiguous, and the statute fails to provide factors to be weighed in arriving at a determination that a proposed project “is or will be required by the present or future public convenience and necessity.”[12] Accordingly, “the Natural Gas Act ‘vests the Commission with broad discretion to invoke its expertise in balancing competing interests and drawing administrative lines.’”[13] This does not, of course, mean that we are wholly without guideposts in construing the meaning of the public convenience and necessity standard. As recognized by my colleagues, the Supreme Court has found that NGA section “7(e) requires the Commission to evaluate all factors bearing on the public interest.”[14] This finding, however, cannot not be read in a vacuum. The Court has explained that the inclusion of the phrase “public interest” in a statute is not “a broad license to promote the general public welfare”—instead, it “take[s] meaning from the purposes of the regulatory legislation.”[15] Thus, we turn, as we must, to the purpose of the NGA: “to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[16] Any balancing under the public convenience and necessity standard should “take meaning” from that purpose.
We also know that “[n]othing contained in [NGA section 7] shall be construed as a limitation upon the power of the Commission to grant certificates of public convenience and necessity for service of an area already being served by another natural-gas company.”[17] Therefore, the Commission is not barred from finding a proposed project required by the public convenience and necessity when it is in an area that is already served by another company.[18]
Another consideration relevant to the Commission’s evaluation of the public interest is our jurisdiction and, specifically, which areas of regulation Congress identified as being reserved to states—and thus outside of our jurisdiction. NGA section 1(b) sets forth that division of jurisdiction, providing that,
[t]he provisions of [the NGA] shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.[19]
The Commission’s authority therefore extends to: (1) the “transportation of natural gas in interstate commerce,” (2) the “sale in interstate commerce of natural gas for resale,” and (3) “natural-gas companies engaged in such transportation or sale.”[20] Exempted from our jurisdiction are production, gathering and local distribution.[21] From these exemptions, it may be gleaned that the Commission does not have jurisdiction over the “gas once it moves beyond the high-pressure mains into the hands of an end user.”[22] Another exemption from federal regulation is contained in NGA section 1(c), which states:
The provisions of this chapter shall not apply to any person engaged in or legally authorized to engage in the transportation in interstate commerce or the sale in interstate commerce for resale, of natural gas received by such person from another person within or at the boundary of a State if all the natural gas so received is ultimately consumed within such State, or to any facilities used by such person for such transportation or sale, provided that the rates and service of such person and facilities be subject to regulation by a State commission.[23]
By declaring the foregoing exemptions from federal regulation, Congress has carefully delineated the limits of the Commission’s jurisdiction.[24]
These limits on the Commission’s jurisdiction are not extended by the National Environmental Policy Act (NEPA).[25] In fact, NEPA cannot extend our jurisdiction because NEPA is not a means of “mandating that agencies achieve particular substantive environmental results”;[26] rather, it serves to “impose[] only procedural requirements on federal agencies with a particular focus on requiring agencies to undertake analyses of the environmental impact of their proposals and actions.”[27] Indeed, “NEPA not only does not require agencies to discuss any particular mitigation plans that they might put in place, it does not require agencies—or third parties—to effect any.”[28] It is necessary to acknowledge the limited, procedural nature of NEPA’s requirements since it almost appears as though some of my colleagues have become convinced that it is necessary to ensure that environmental impacts are mitigated before one can make a finding that a proposed project is required by the public convenience and necessity.[29] Neither NEPA nor the NGA establishes such a requirement.
And, any attempt to justify such action through the Commission’s conditioning authority is unsupported.[30] Under its conditioning authority, “[t]he Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.”[31] But the Commission’s conditioning authority cannot be used to impose conditions beyond the Commission’s jurisdiction.[32] Nor can the Commission find support under NEPA for its expectation that applicants propose mitigation measures in order for a project to be deemed required by the public convenience and necessity.[33]
A Number of the Changes to the Certificate Policy Statement are Misguided
Changes in the Commission’s Need Determination
In the Original Policy Statement, the Commission stated that, in evaluating the need for a project, it would:
consider all relevant factors reflecting on the need for the project. These might include, but would not be limited to, precedent agreements, demand projections, potential cost savings to consumers, or a comparison of projected demand with the amount of capacity currently serving the market. The objective would be for the applicant to make a sufficient showing of the public benefits of its proposed project to outweigh any residual adverse effects discussed below.[34]
Although the Commission stated in its Original Policy Statement that it would consider other factors, the Commission has also “explained that the [Original] Policy Statement does not require a certain percentage of a proposed project’s capacity be subscribed, and that with respect to affiliate shippers, ‘it is . . . Commission policy to not look beyond precedent or service agreements to make judgments about the needs of individual shippers.’”[35]
In the Updated Policy Statement, the Commission now is revising how it determines need. The Updated Policy Statement explains that “[i]n determining whether to issue a certificate of public convenience and necessity, the Commission will weigh the public benefits of a proposal, the most important of which is the need that will be served by the project, against its adverse impacts.”[36] The Commission acknowledges that its prior reliance on precedent agreements to determine need has been upheld by courts,[37] but then proclaims that “we cannot adequately assess project need without also looking at evidence beyond precedent agreements.”[38] An expectation is then established that applicants continue to provide precedent agreements but “the existence of precedent agreements may not be sufficient in and of themselves to establish need for the project.”[39]
The Commission underscores what it views as necessary for the Commission to determine need for all categories of proposed projects: “specific information detailing how the gas to be transported by the proposed project will ultimately be used,” i.e., the end use and, “why the project is needed to serve that use.”[40] And if the applicant does not have information regarding the intended end use? Applicants are “encouraged” to turn to their shippers to obtain it.[41] In the absence of such information, the Commission suggests that the applicant may not satisfy its burden to demonstrate need for the proposed project.[42] The projected end use and an explanation of the reasons why the project is needed to serve that use are not the only information the Commission requests—“[f]or all categories of proposed projects,” the majority also “encourage[s] applicants to provide specific information detailing . . . the expected utilization rate of the proposed project.”[43] The majority also suggests types of “evidence” for various categories of projects.[44]
And when precedent agreements are with an affiliate of the applicant, the majority states that those precedent agreements, will generally not be sufficient to demonstrate need.[45]
I agree that, as a legal matter, the Commission may take into account considerations other than precedent agreements in its need determination. I also agree that there may be circumstances—such as when there is evidence of self-dealing in the execution of a precedent agreement with an affiliated shipper—where “the existence of precedent agreements may not be sufficient in and of themselves to establish need for the project.”[46]
To the extent, however, that today’s order suggests that the Commission must look beyond precedent agreements in every circumstance to determine need, I disagree. In my view, precedent agreements are strong evidence of need and the Commission need not look further in most circumstances. As my colleagues acknowledge, courts have upheld on numerous occasions the Commission’s application of its Original Policy Statement and the Commission’s reliance on precedent agreements to support multiple findings of market need.[47]
In terms of precedent agreements with affiliates, the Commission recently received guidance in the form of the narrow holding in Environmental Defense Fund v. FERC.[48] There, the court found the Commission’s public convenience and necessity determination to be arbitrary and capricious due to the Commission’s
rel[iance] solely on a precedent agreement to establish market need for a proposed pipeline when (1) there was a single precedent agreement for the pipeline; (2) that precedent agreement was with an affiliated shipper; (3) all parties agreed that projected demand for natural gas in the area to be served by the new pipeline was flat for the foreseeable future; and (4) the Commission neglected to make a finding as to whether the construction of the proposed pipeline would result in cost savings or otherwise represented a more economical alternative to existing pipelines.[49]
That case does not stand for the proposition that in every circumstance, the Commission must always look beyond the precedent agreements. Instead, that case should be read as a failure on the part of the Commission to engage in reasoned decision making based on the facts presented.
Next, I disagree with the majority’s position that the Commission should weigh end use in its determination of need. I agree with Enbridge Gas Pipeline that “[p]rioritizing certain end uses in determining project need would be inconsistent with the Commission’s policies of open access, open seasons and awarding capacity to those that value the capacity the most.”[50] More importantly, the Commission does not have jurisdiction over the end use of the gas and has been purposefully deprived of its upstream and downstream authorities by Congress. The breadth of the subject matters that inform our public interest determinations must be informed by the limits of our jurisdiction.
I recognize that in Transco the Supreme Court stated that “‘end-use’ . . . was properly of concern to the Commission.”[51] As commenters observe,[52] however, the Transco decision was made prior to Congress’ enactment of the Natural Gas Policy Act of 1978 (NGPA)[53] and the Natural Gas Wellhead Decontrol Act of 1989 (Wellhead Decontrol Act).[54] These later enactments are instructive as to whether the Commission should consider end use as part of its public convenience and necessity determination.
The NGPA “was designed to phase out regulation of wellhead prices charged by producers of natural gas, . . . to ‘promote gas transportation by interstate and intrastate pipelines’ for third parties”[55] and also “to provide investors with adequate incentives to develop new sources of supply.”[56] Later, the enactment of the Wellhead Decontrol Act resulted in deregulating upstream natural gas production, and the legislative history suggests the enactment would serve to encourage competition of natural gas at the wellhead.[57] In combination, these acts effectively deprived the Commission of authority upstream of the jurisdictional pipeline.
In 1987, Congress repealed sections of the Power Plant and Industrial Fuel Use Act of 1978 (Fuel Use Act), further deregulating downstream considerations. My former colleague, Commissioner McNamee previously explained that the Fuel Use Act had “restricted the use of natural gas in electric generation so as to conserve it for other uses” and “[w]ith the repeal of the Fuel Use Act, Congress made clear that natural gas could be used for electric generation and that the regulation of the use of natural gas by power plants unnecessary.”[58] A House report stated:
By amending [the Fuel Use Act], H.R. 1941 will remove artificial government restrictions on the use of oil and gas; allow energy consumers to make their own fuel choices in an increasingly deregulated energy marketplace; encourage multifuel competition among oil, gas, coal, and other fuels based on their price, availability, and environmental merits; preserve the ‘coal option’ for new baseload electric powerplants which are long-lived and use so much fuel; and provide potential new markets for financially distressed domestic oil and gas producers.[59]
These later, deregulatory enactments were not at play in Transco. And I agree that “the current framework requires equal access to a plentiful gas supply for all buyers and sellers.”[60] Taking the foregoing into account, I am not convinced that the Commission has authority to deny a certificate of public convenience and necessity on the basis of end use, and the Commission should not consider end use in its need determination.
Consideration of Adverse Effects
The Commission explains in its Updated Policy Statement that it will consider four categories of adverse impacts from the construction and operation of new projects: (1) the interests of the applicant’s existing customers; (2) the interests of existing pipelines and their captive customers; (3) environmental interests; and (4) the interests of landowners and surrounding communities, including environmental justice communities.[61] The Commission also states that it may deny an application based on any of the foregoing types of adverse impacts.[62] Further, the Commission will “consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA.”[63] And the Commission “expects applicants to structure their projects to avoid, or minimize, potential adverse environmental impacts.”[64]
First, regarding the interests of the applicant’s existing customers, the Commission announces that while our policy of no financial subsidies remains unchanged, the Commission will no longer treat this as a threshold requirement.[65] This reprioritization is fine; it is merely a policy choice with no obvious legal infirmity.
Next, the Commission turns to its considerations of existing pipelines and their customers with an emphasis on the prevention of overbuilding. In an order clarifying the Original Policy Statement, the Commission discussed the consideration of overbuilding and explained that “[s]ending the wrong price signals to the market can lead to inefficient investment and contracting decisions which can cause pipelines to build capacity for which there is not a demonstrated market need,” and that “[s]uch overbuilding, in turn, can exacerbate adverse environmental impacts, distort competition between pipelines for new customers, and financially penalize existing customers of expanding pipelines and customers of the pipelines affected by the expansion.”[66] I agree that the concern of overbuilding is worthy of consideration in the Commission’s balancing and consistent with the purpose of “encourag[ing] the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[67]
The Commission also states that “[t]o the extent that a proposed project is designed to substantially serve demand already being met on existing pipelines, that could be an indication of potential overbuilding.”[68] In my view, the Commission should weigh this consideration with NGA section 7(g) in mind, which provides that “[n]othing contained in [NGA section 7] shall be construed as a limitation upon the power of the Commission to grant certificates of public convenience and necessity for service of an area already being served by another natural-gas company.”[69] In considering whether a proposed project is designed to substantially serve demand that is already met, the Commission should also consider whether the proposed project would allow for further competition, send appropriate price signals and improve the efficiency or reliability of service to existing customers. This is worth noting because of the statement in today’s order that states that “[t]he Commission may deny an application based on any of these types of adverse impacts,”[70] including impacts to existing pipelines and their customers.
Third, the majority addresses environmental impacts, stating: “While the 1999 Policy Statement focused on economic impacts, the consideration of environmental impacts is an important part of the Commission’s responsibility under the NGA to evaluate all factors bearing on the public interest.”[71] As explained by the majority, the Original Policy Statement “included an analytical framework for how the Commission would evaluate the effects of certificating new projects on economic interests,” and it “did not describe how the Commission would consider environmental interests in its decision-making process and, more specifically, how it would balance these interests with the economic interests of a project.”[72] The Commission now adjusts that framework to include environmental impacts as a consideration in its Updated Policy Statement.
The Commission explains that it will consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA.[73] The majority “expect[s] applicants to propose measures for mitigating impacts,” for consideration in the Commission’s balancing of adverse impacts against the potential benefits of a proposal.[74] The Commission may condition the certificate with further mitigation.[75] Moreover, the Commission states that it may “deny an application based on . . . environmental impacts, if the adverse impacts as a whole outweigh the benefits of the project and cannot be mitigated or minimized.”[76] Finally, the majority indicates its intent when making its public convenience and necessity determination to fully consider climate impacts.[77]
I discuss the reasons why I disagree with the majority’s Interim GHG Policy Statement in my dissent to that order.[78] In terms of the change from an economic focus in the Original Policy Statement, my view is that the Commission should retain its economic framework as the basis of its policy statement. I am concerned that several of the changes made in today’s Updated Policy Statement include issues outside the scope of that which the Commission is able to consider under the NGA. Though time has passed since the NGA’s enactment, it is Congress’ role to amend the statute should it see fit to include in the Commission’s authority matters such as the conditioning of certificates to mitigate GHG emissions. Congress has done so before and could do so again.[79] To restate the approach that should be taken to determine the public convenience and necessity: any balancing under that standard must “take meaning” from the interests articulated in the NGA.
Although courts have recognized that the Commission’s NGA section 7(e) “conditioning authority is ‘extremely broad,’”[80] such authority is not without limit. “The Commission may not, however, when it lacks the power to promote the public interest directly, do so indirectly by attaching a condition to a certificate that is, in unconditional form, already in the public convenience and necessity.”[81] There have been circumstances where the courts have found the Commission exceeded its conditioning authority.[82] Its use must be consistent with the other provisions of the NGA and the Commission may not use conditions under the guise of acting in the public interest in order to do something it would otherwise not have authority to do.
There are also practical considerations in the Commission finding in today’s policy statement that “[s]hould [the Commission] deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation.”[83] The costs that attend the proposed mitigation of GHG emissions may be unmeasurable, may not be readily apparent, and may also be more than the natural gas companies and its shippers are willing or able to bear. There will perhaps be difficulty in measuring the costs of conditions, such as market-based mitigation,[84] when the costs are determined based on a changing market. For instance, the cost of purchasing renewable energy credits may be different at the time an application is filed in comparison to when the certificate is issued. And there is no guarantee that the potentially extraordinary costs incurred by a pipeline to comply with the Commission’s public interest determination will be recovered in the pipeline’s rates.[85] These practical considerations have not been taken into account by the Commission. Without these considerations, I am not convinced that the Commission has engaged in reasoned decision making.
Turning to the Commission’s consideration of impacts on landowners and surrounding communities, as the majority recognizes, the Original Policy Statement’s primary focus was on economic impacts associated with a permanent right-of-way on a landowner’s property.[86] Going forward, the consideration “of impacts to landowners will be more expansive.”[87] The majority clarifies that the “consideration of impacts to communities surrounding a proposed project will include an assessment of impacts to any environmental justice communities and of necessary mitigation to avoid or lessen those impacts.”[88] And “expectations” are established “for how pipeline applicants will engage with landowners.”[89]
The majority also commits itself to “robust early engagement with all interested landowners, as well as continued evaluation of input from such parties during the course of any given proceeding” and states that the Commission “will, to the extent possible, assess a wider range of landowner impacts.”[90] Further, the majority states that it “expect[s] pipeline applicants to take all appropriate steps to minimize the future need to use eminent domain,” including “engage[ment] with the public and interested stakeholders during the planning phase of projects to solicit input on route concerns and incorporate reroutes, where practicable, to address landowner concerns, as well as providing landowners with all necessary information.”[91]
The majority states that it “expect[s] pipelines to take seriously their obligation to attempt to negotiate easements respectfully and in good faith with impacted landowners” and indicates that “[t]he Commission will look unfavorably on applicants that do not work proactively with landowners to address concerns.”[92] Does this mean that the majority plans to weigh, in its balancing of interests, allegations concerning whether the applicant has engaged in good faith negotiation of easements and collaboration with landowners to address concerns? It appears so. The Commission later states that “[i]n assessing potential impacts to landowners, the Commission will consider the steps a pipeline applicant has already taken to acquire lands through respectful and good faith negotiation, as well as the applicant’s plans to minimize the use of eminent domain upon receiving a certificate.”[93]
It is worth reminding my colleagues that on the very same meeting that this order is issued, the Commission also issues an order[94] that reaffirms a decision to deny landowners’ request for the Commission to interpret the scope of NGA section 7(h) because, in my colleagues’ view, NGA section 7(h) is “a provision that gives courts a particular implementing role” and therefore “is better resolved by the courts than the Commission.”[95] And yet here, the Commission contemplates considering in its balancing whether applicants have engaged in good faith negotiations for easements pursuant to NGA section 7(h).
Finally, the Commission discusses how it will consider impacts to environmental justice communities. In explaining its objectives, the majority states that “[t]he consideration of cumulative impacts is particularly important when it comes to conducting an environmental justice analysis.”[96] In support, the Commission has the following footnote:
“‘Cumulative impact’ is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.” 40 CFR 1508.7 (1978).[97]
There is no problem with announcing the paradigm by which a particular type of analysis will be conducted, but this looks very much as though my colleagues have decided that they can disregard currently-effective regulations and adopt their own definition of the “effects” that should be considered in the Commission’s analysis.[98] The current NEPA regulations repealed the definition of “Cumulative impact” previously contained in 40 C.F.R. § 1508.7.[99] The Commission, in attempting to go farther than the CEQ’s regulations, reasons that “[t]o adequately capture the effects of cumulative impacts, it is essential that the Commission consider those pre-existing conditions and how the adverse impacts of a proposed project may interact with and potentially exacerbate them.”[100]
I disagree with the Commission’s decision to disregard CEQ’s regulations.[101] The Commission, in its own regulations, states that it “will comply with the regulations of the [CEQ] except where those regulations are inconsistent with the statutory requirements of the Commission.”[102] Regardless of the latitude the majority thinks we may enjoy when conducting our analyses, it is a matter of black letter law that we are constrained by our regulations which adopt CEQ’s regulations; we are also unable to conjure rubrics out of thin air without explanation.
The Commission’s Approach of “Expecting” Self-Imposed Mitigation Appears Calculated To Circumvent Statutory Limits on the Commission’s Authority
In the Updated Policy Statement, as well as in the Interim GHG Policy Statement, the Commission has asserted a dramatic expansion of its conditioning authority. As explained above, the Commission likely does not have the statutory authority to enter this new territory. It is not surprising, therefore, to see a consistent theme in the Updated Policy Statement that the Commission has expectations of applicants.[103] The Commission expects more of applicants going forward. Should those expectations not be met to the Commission’s satisfaction, the Commission suggests that it will weigh that against finding that the project is required by the public convenience and necessity.[104]
Instead of saying that it is imposing or requiring the legally dubious conditions itself, the Commission is expecting the natural gas companies to play a game of “sentence first—verdict afterwards,”[105] where the applicants choose their own sentence—their proposed mitigation measures—in an effort to guess at the Commission’s expectations. Only then will the Commission rule on whether the project is required by the public convenience and necessity and reveal whether the proposed mitigation is sufficient.
It works in the Commission’s favor for applicants to impose their own mitigation measures. If the applicant proposes the mitigation instead of having it imposed by the Commission, it is less likely that a court would deem such condition unreasonable or beyond the Commission’s authority should it come to be challenged at all.[106] How can a condition be unreasonable or beyond the Commission’s jurisdiction if it is imposed at the suggestion of the applicant—the party who needs to satisfy such conditions?
It is Unclear Whether the Updated Policy Statement is Actually Binding and Whether the Commission Should Have Proceeded Through Rulemaking
Whether the Commission can impose mitigation as contemplated here, or whether the Commission lacks authority to do so with its conditioning authority will ultimately be addressed by the courts. I recognize the Commission’s assertion that the Updated Policy Statement is not binding.[107] I question whether that is actually the case.[108]
Given the non-binding designation, there may indeed be well-founded concerns by parties seeking to challenge the Updated Policy Statement.[109] But as explained above, the Commission has established its expectations regarding what information it wants included in certificate applications and plans to apply the Updated Policy Statement to both currently-pending[110] and future applications for a certificate of public convenience and necessity. For parties hesitant to challenge a “non-binding” policy statement, I submit that a court may perhaps be receptive to arguments of aggrievement based on the interests of shippers who will now likely have to renegotiate their agreements for proposed projects with currently-pending certificate applications.
Moreover, natural gas companies[111] and their shippers likely have not contemplated the increased costs that will come with the Commission’s new policies. It is likely that companies with pending applications have not yet presented proposals for mitigation of the proposed project’s GHG emissions. But the need for developing such proposals will arise—the Commission has requested that companies with pending applications supplement their applications.[112] The resulting cost increases will, at a minimum, make these projects more expensive and thus increase pipeline rates that may ultimately be passed on to consumers. But it is entirely possible that, in at least some cases, applicants will not accept the certificate.
One final thought is that it may have been more appropriate for the Commission to have proceeded through rulemaking instead of through a policy statement. The Commission details the types of information that it expects to be included in applications. However, the Commission’s regulations already address what the “General content[s] of [an] application” should include in 18 C.F.R. § 157.6(b). Nothing in that section supports the Commission’s expectation for information regarding end use and proposals for mitigation measures.[113] Our regulations do state that “[a]pplications under section 7 of the Natural Gas Act shall set forth all information necessary to advise the Commission fully concerning the operation, sales, service, construction, extension, or acquisition for which a certificate is requested . . . .”[114] But nowhere do our regulations permit the Commission to add to the requirements set forth therein regarding the contents necessary for an NGA section 7(c) application. The Commission may, of course, request information from an applicant through a data request to assist with its determination of whether the project is required by the public convenience and necessity. But to expect (in other words require) information, such as that regarding end use and proposals for mitigation of impacts, is perhaps something that should have been done through a rulemaking. Can a party ignore the Commission’s requests for additional information? Yes, but the cost would be the potential further delay to the issuance of already stalled certificates and perhaps the ultimate rejection of a proposal that fails to meet the Commission’s expectations.
Today’s Decision will Have Profound Reliability Implications
I cannot overstate the implications of the Updated Policy Statement.[115] It will subvert the purpose of the NGA: to “encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”[116] Further, we leave the public and the regulated community—including investors upon whom we rely to provide billions of dollars for critical infrastructure—with profound uncertainty regarding how the Commission will determine whether a proposed project is required by the public convenience and necessity. With that uncertainty comes reliability concerns.
The North American Electric Reliability Corporation (NERC) recently highlighted just how important natural gas is to our electric system when it explained in its most recent Long Term Reliability Assessment that “[n]atural gas is the reliability ‘fuel that keeps the lights on,’ and natural gas policy must reflect this reality.”[117] Today’s issuance is unlikely to allay NERC’s reliability concerns. I began this statement with the consequences that could attend today’s issuance of the Updated Policy Statement. As a reminder those consequences include, but are not limited to, further delay in the issuance of certificates, the incurrence of unmeasurable and unrecoverable costs that may result from the Commission’s imposition of mitigation measures to address GHG and environmental justice impacts (which are now both considered in the Commission’s balancing), and difficulty in securing capital for proposed projects. It is foreseeable that the result will be to cause a reliability crisis in areas that need the gas the most. This arises because of the uncertain criteria to be applied by the Commission, the delays in obtaining the Commission’s approval, and the resulting increases in costs—including the cost of mitigation. Individually and collectively, these could be so severe that a natural gas company might be unable to accept the conditions of its certificate and proceed with a project that otherwise is needed to maintain reliability.
Conclusion
Many in the industry have asked for certainty. The majority says that they have provided it.[118] Regrettably, the majority is wrong on that point, as well. The only certainty to be found in the Updated Policy Statement is that confusion will reign hereafter, at the expense of those who depend on natural gas.
For these reasons, I respectfully dissent.
[1] Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,107 (2022) (Updated Policy Statement).
[2] Certification of New Interstate Nat. Gas Facilities, 174 FERC ¶ 61,125 (2021).
[3] Certification of New Interstate Nat. Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094
(2000) (Original Policy Statement).
[4] Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (Interim GHG Policy Statement). I note that today’s issuance in Docket No. PL21-3-000 “is subject to revision” and is described as an “interim” policy statement. Id. P 1.
[5] 15 U.S.C. § 717f.
[6] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 (“[W]e expect applicants to propose measures for mitigating impacts, and we will consider those measures—or the lack thereof—in balancing adverse impacts against the potential benefits of a proposal.”).
[7] NAACP v. FPC, 425 U.S. 662, 669-70 (1976) (citations omitted) (NAACP); accord Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1307 (D.C. Cir. 2015) (quoting NAACP, 425 U.S. at 669-70) (Myersville).
[8] Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in original).
[9] 15 U.S.C. § 717f(c).
[10] Id. § 717f(e) (“[A] certificate shall be issued to any qualified applicant therefor, . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied.”) (emphasis added); see Okla. Nat. Gas Co. v. FPC, 257 F.2d 634, 639 (D.C. Cir. 1958) (“The granting or denial of a certificate of public convenience and necessity is a matter peculiarly within the discretion of the Commission.”).
[11] Cf. ICC v. Parker, 326 U.S. 60, 65 (1945) (“Public convenience and necessity is not defined by the statute. The nouns in the phrase possess connotations which have evolved from the half-century experience of government in the regulation of transportation.”); see generally S. Rep. No. 75-1162 at 5 (1937) (recognizing similarities in the provisions requiring certificates for public convenience and necessity under the other statutes, e.g., the Interstate Commerce Act).
[12] 15 U.S.C. § 717f(e).
[13] Envtl. Def. Fund v. FERC, 2 F.4th 953, 975 (D.C. Cir. 2021) (internal quotation marks omitted).
[14] Updated Policy Statement, 178 FERC ¶ 61,107 at P 4 n.6 (quoting Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959)).
[15] NAACP, 425 U.S. at 669.
[16] Id. at 669-70; accord Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669-70). I note that the Supreme Court has also recognized the Commission has authority to consider “other subsidiary purposes,” such as “conservation, environmental, and antitrust questions.” NAACP, 425 U.S. at 670 & n.6 (citations omitted). But all subsidiary purposes are, necessarily, subordinate to the statute’s primary purpose.
[17] 15 U.S.C. § 717f(g).
[18] See Panhandle E. Pipe Line Co. v. FPC, 169 F.2d 881, 884 (D.C. Cir. 1948) (“[N]othing in the Natural Gas Act suggests that Congress thought monopoly better than competition or one source of supply better than two, or intended for any reason to give an existing supplier of natural gas for distribution in a particular community the privilege of furnishing an increased supply.”).
[19] 15 U.S.C. § 717(b) (emphasis added).
[20] Id.
[21] See id.
[22] Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 277 (D.C. Cir. 1990).
[23] 15 U.S.C. § 717(c).
[24] See FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 8 (1961) (Transco) (“Congress, in enacting the Natural Gas Act, did not give the Commission comprehensive powers over every incident of gas production, transportation, and sale. Rather, Congress was ‘meticulous’ only to invest the Commission with authority over certain aspects of this field leaving the residue for state regulation.”) (citation omitted); see also FPC v. Panhandle E. Pipe Line Co. 337 U.S. 498, 502-03 (1949) (“[S]uffice 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 the states were powerless to regulate because of the Commerce Clause of the Federal Constitution.”) (footnote omitted).
[25] 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.”) (citations omitted); Cape May Greene, Inc. v. Warren, 698 F.2d 179, 188 (3d Cir. 1983) (“The National Environmental Policy Act does not expand the jurisdiction of an agency beyond that set forth in its organic statute.”) (citations omitted); Gage v. U.S. Atomic Energy Comm’n, 479 F.2d 1214, 1220 n.19 (D.C. Cir. 1973) (“NEPA does not mandate action which goes beyond the agency’s organic jurisdiction.”) (citation omitted).
[26] Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 371 (1989); accord Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (Methow Valley) (“[I]t is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process.”); see also Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (“Congress in enacting NEPA . . . did not require agencies to elevate environmental concerns over other appropriate considerations.”).
[27] Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 756-57 (2004) (citation omitted); accord Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 23 (2008) (“NEPA imposes only procedural requirements to ‘ensur[e] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts.’”) (quoting Methow Valley, 490 U.S. at 349); see also Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 558 (1978) (“NEPA does set forth significant substantive goals for the Nation, but its mandate to the agencies is essentially procedural.”) (citations omitted).
[28] Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 206 (D.C. Cir. 1991) (citing Methow Valley, 490 U.S. at 353 & n.16).
[29] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 (“We will consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA. The Commission expects applicants to structure their projects to avoid, or minimize, potential adverse environmental impacts.”); id. (“Should we deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation.”); id. P 79 (“[W]e clarify that our consideration of impacts to communities surrounding a proposed project will include an assessment of impacts to any environmental justice communities and of necessary mitigation to avoid or lessen those impacts.”).
[30] But see id. P 74 (concluding the because the Commission’s conditioning authority is broad, if the Commission determines that the applicant’s proposed mitigation of impacts are inadequate, the Commission has the authority to condition the certificate to require additional mitigation).
[31] 15 U.S.C. § 717f(e).
[32] See Richmond Power & Light of City of Richmond, Ind. v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (“What the Commission is prohibited from doing directly it may not achieve by indirection.”) (footnote omitted).
[33] See Methow Valley, 490 U.S. at 352-53 (“There is a fundamental distinction, however, between a requirement that mitigation be discussed in sufficient detail to ensure that environmental consequences have been fairly evaluated, on the one hand, and a substantive requirement that a complete mitigation plan be actually formulated and adopted, on the other. . . . Even more significantly, it would be inconsistent with NEPA’s reliance on procedural mechanisms—as opposed to substantive, result-based standards—to demand the presence of a fully developed plan that will mitigate environmental harm before an agency can act.”) (citing Baltimore Gas & Elec. Co., 462 U.S.at 100 (“NEPA does not require agencies to adopt any particular internal decisionmaking structure”)).
[34] Original Policy Statement, 88 FERC ¶ 61,227 at 61,747.
[35] NEXUS Gas Transmission, LLC, 172 FERC ¶ 61,199, at P 5 (2020) (citation omitted).
[36] Updated Policy Statement, 178 FERC ¶ 61,107 at P 52 (emphasis added).
[37] See id. P 54 (citing Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014) (noting that the 1999 Policy Statement “permits” but does not “require[]” the Commission to “look[] beyond the market need reflected by the applicant’s existing contracts with shippers”)).
[38] Id.
[39] Id. P 54 (listing other considerations that it views as relevant to a need determination, including whether the agreements were entered into before or after an open season, the results of the open season, the number of bidders, whether the agreements were entered into in response to a local distribution company or generator request for proposals (RFP), the details of any such RFP process, demand projections underlying the capacity subscribed, estimated capacity utilization rates, potential cost savings to customers, regional assessments, and filings or statements from state regulatory commissions or local distribution companies regarding the proposed project).
[40] Id. P 55.
[41] Id.
[42] See id.
[43] Id.
[44] See id. PP 55-59.
[45] Id. P 60.
[46] Id. P 54. I am generally skeptical of affiliate transactions and think that in most circumstances, the Commission should scrutinize agreements with an affiliate. As I have previously explained, I agree with the U.S. Court of Appeals for District of Columbia Circuit’s decision to remand the Commission’s orders and the court’s explanation for doing so in Environmental Defense Fund v. FERC, 2 F.4th 953. See Spire STL Pipeline LLC, 176 FERC ¶ 61,160 (2021) (Danly, Comm’r, dissenting at P 9).
[47] See, e.g., City of Oberlin, Ohio v. FERC, 937 F.3d 599, 606 (D.C. Cir. 2019) (“[T]his Court has also recognized that ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.’”) (citation omitted); Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d at 111 (“Petitioners identify nothing in the policy statement or in any precedent construing it to suggest that it requires, rather than permits, the Commission to assess a project’s benefits by looking beyond the market need reflected by the applicant’s existing contracts with shippers. To the contrary, the policy statement specifically recognizes that such agreements ‘always will be important evidence of demand for a project.’”) (quoting Original Policy Statement, 88 FERC ¶ 61,227 at 61,748); see also Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1311 (D.C. Cir. 2015) (explaining that “[f]or a variety of reasons related to the nature of the market, ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.’ . . . In keeping with its policy, the Commission concluded that the evidence that the Project was fully subscribed was adequate to support the finding of market need.”) (citation omitted).
[48] Envtl. Def. Fund v. FERC, 2 F.4th 953.
[49] Id. at 976.
[50] Enbridge Gas Pipelines May 26, 2021 Comments at 42. “[U]nder the Commission’s open-access regulatory regime, pipelines must provide transportation service without ‘undue discrimination or preference of any kind.’” NEXUS Gas Transmission, LLC, 172 FERC ¶ 61,199, at P 17 (2020) (quoting 18 C.F.R. § 284.7(b)). The Commission’s new consideration of the intended end use of the gas and why the gas is needed to serve that use may also cause tension with NGA section 4. Updated Policy Statement, 178 FERC ¶ 61,107 at P 52. NGA section 4(b) states that “[n]o natural-gas company shall, with respect to any transportation or sale of natural gas subject to the jurisdiction of the Commission, (1) make or grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in any other respect, either as between localities or as between classes of service.” 15 U.S.C. § 717c(b).
[51] Transco, 365 U.S. at 22.
[52] See, e.g., TC Energy Corporation May 26, 2021 Comments at 12-13 (explaining that after the Supreme Court’s Transco decision “was issued in 1961, Congress passed the NGPA, the Wellhead Decontrol Act, EPAct 1992, and the Commission issued Orders Nos. 636 and 637. These statutes and regulatory orders fundamentally altered the natural gas markets by acting to facilitate the development of competitive natural gas markets served by competitive interstate natural gas transportation.”); id. (“Under the current regulatory framework, there is no basis for the Commission to deny a certificate application based on end use, because the current framework requires equal access to a plentiful gas supply for all buyers and sellers. The end use of natural gas is outside the objectives of the current statutory framework, and the Commission should not take end use into consideration when assessing the public need for a pipeline project under the NGA.”); Boardwalk Pipeline Partners, LP May 26, 2021 Comments at 34 (“FPC v. Transco was decided prior to the NGPA’s and Wellhead Decontrol Act’s creation of a competitive natural gas market that allows all consumers to benefit from the United States’ plentiful gas supplies . . . . [G]iven all of the changes that have occurred over the past 60 years” and “[u]nder the current open-access regime, there is no legal basis for the Commission to deny a certificate application based on end use.”) (emphasis omitted).
[53] 15 U.S.C. §§ 3301-3432.
[54] Natural Gas Wellhead Decontrol Act of 1989, Pub. L. No. 101-60, 103 Stat. 157 (1989).
[55] Gen. Motors Corp. v. Tracy, 519 U.S. 278, 283 (1997) (quoting 57 Fed. Reg. 13271 (1992)).
[56] Pub. Serv. Comm’n of State of N.Y. v. Mid-Louisiana Gas Co., 463 U.S. 319, 334 (1983).
[57] See S. Rep. No. 101-39, at 1 (1989) (“[T]he purpose . . . is to promote competition for natural gas at the wellhead in order to ensure consumers an adequate and reliable supply of natural gas at the lowest reasonable price.”); H.R. Rep. No. 101-29, at 6 (1989) (“All sellers must be able to reasonably reach the highest-bidding buyer in an increasingly national market. All buyers must be free to reach the lowest-selling producer, and obtain shipment of its gas to them on even terms with other supplies.”).
[58] Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019) (McNamee, Comm’r, concurring at P 36).
[59] H.R. Rep. 100-78, at 2 (1987).
[60] TC Energy Corporation May 26, 2021 Comments at 13.
[61] Updated Policy Statement, 178 FERC ¶ 61,107 at P 62.
[62] Id.
[63] Id. P 74 (emphasis added).
[64] Id.
[65] Id. P 63.
[66] Certification of New Interstate Nat. Gas Pipeline Facilities, 90 FERC ¶ 61,128, at 61,391.
[67] NAACP, 425 U.S. at 670 (emphasis added).
[68] Updated Policy Statement, 178 FERC ¶ 61,107 at P 69.
[69] 15 U.S.C. § 717f(g).
[70] Updated Policy Statement, 178 FERC ¶ 61,107 at P 62 (emphasis added); see also id. P 99 (“[T]here may be proposals denied solely on the magnitude of a particular adverse impact to any of the four interests described above if the adverse impacts, as a whole, outweigh the benefits of the project and cannot be mitigated or minimized.”).
[71] Id. P 72 (citation omitted).
[72] Id. P 71.
[73] Id. P 74.
[74] Id.
[75] Id.
[76] Id.
[77] Id. P 76.
[78] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Danly, Comm’r, dissenting).
[79] See Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001) (“Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.”) (citations omitted).
[80] ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (citation omitted).
[81] Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (citing Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137, 152 (1960) (“once want of power to do this directly were established, the existence of power to achieve the same end indirectly through the conditioning power might well be doubted”); Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (the Commission may not achieve indirectly through conditioning power of Federal Power Act what it is otherwise prohibited from achieving directly)); see also Am. Gas Ass’n v. FERC, 912 F.2d 1496, 1510 (D.C. Cir. 1990) (“[T]he Commission may not use its § 7 conditioning power to do indirectly . . . things that it cannot do at all.”).
[82] See, e.g., Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d at 1520, 1522 (D.C. Cir. 1990) (finding that the Commission exceeded the scope of its NGA section 7(e) authority in conditioning the approval of an off-system sales certificate upon certificate holder’s acceptance of a blanket transportation certificate because “the Commission squarely found that National’s proposed ‘sales are required by the public convenience and necessity,’ quite apart from conditioning their certification upon the pipeline’s filing for a blanket transportation certificate.”); N. Nat. Gas Co., Div. of InterNorth v. FERC, 827 F.2d 779, 792-93 (D.C. Cir. 1987) (granting rehearing en banc, reaffirming the holding in Panhandle E. Pipe Line Co. v. FERC, 613 F.2d 1120, 1133 (D.C. Cir. 1979), which provides “that ‘the Commission does not have authority under section 7 to compel flow-through of revenues to customers of services not under consideration in that proceeding for certification,’” and vacating a condition that violates that holding).
[83] Updated Policy Statement, 178 FERC ¶ 61,107 at P 74.
[84] See Interim GHG Policy Statement, 178 FERC ¶ 61,108 at PP 113-114 (encouraging project sponsors to propose mitigation measures, stating that project sponsors “are free to propose any type of mitigation mechanism,” and providing the following examples of market-based mitigation: “[the] purchase [of] renewable energy credits, participat[ion] in a mandatory compliance market (if located in a state that requires participation in such a market), or participat[ion] in a voluntary carbon market”).
[85] See id. P 128 (“Pipelines may seek to recover GHG emissions mitigation costs through their rates, similarly to how they seek to recover other costs associated with constructing and operating a project, such as the cost of other construction mitigation requirements or the cost of fuel. Additionally, the Commission’s process for section 7 and section 4 rate cases is designed to protect shippers from unjust or unreasonable rates and will continue to do so with respect to the recovery of costs for mitigation measures.”).
[86] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 78 (citing Original Policy Statement, 88 FERC ¶ 61,227 at 61,749 (“The balancing of interests and benefits that will precede the environmental analysis will largely focus on economic interests such as the property rights of landowners.”))
[87] Id.
[88] Id. P 79.
[89] Id. P 80.
[90] Id. P 81.
[91] Id. P 82.
[92] Id.
[93] Id. P 85.
[94] See Spire STL Pipeline LLC, 178 FERC ¶ 61,109 at P 10 (2022) (citation omitted).
[95] Spire STL Pipeline LLC, 177 FERC ¶ 61,147, at P 70 (2021) (citation omitted); see id. (Danly, Comm’r, concurring in part and dissenting in part) (disagreeing with the Commission’s decision to not interpret NGA section 7(h) in the first instance and to leave the interpretation to the courts).
[96] Updated Policy Statement, 178 FERC ¶ 61,107 P 90 (relying on a repealed definition for “cumulative impacts,” formerly 40 CFR 1508.7 (1978), in the Council on Environmental Quality’s (CEQ) regulations) (citations omitted).
[97] Id. P 90 n.213.
[98] Cf. Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 n.189 (“Recognizing that CEQ is in the process of revising its NEPA regulations, the Commission will consider the comments in this docket regarding NEPA in our future review of our regulations, procedures, and practices for implementing NEPA.)
[99] See 40 C.F.R. § 1508.1(g)(3) (“An agency’s analysis of effects shall be consistent with this paragraph (g). Cumulative impact, defined in 40 CFR [§] 1508.7 (1978), is repealed.”).
[100] Updated Policy Statement, 178 FERC ¶ 61,107 at P 90.
[101] See 40 C.F.R. § 1508.1(g) (defining “effects or impacts”).
[102] 18 C.F.R. § 380.1.
[103] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 53 (stating that “the Commission’s expectations and requirements for how applicants should demonstrate project need have evolved over time”).
[104] See, e.g., id. P 74 (“Should we deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation. We may also deny an application based on any of the types of adverse impacts described herein, including environmental impacts, if the adverse impacts as a whole outweigh the benefits of the project and cannot be mitigated or minimized.”); id. P 82 (“[W]e expect pipelines to take seriously their obligation to attempt to negotiate easements respectfully and in good faith with impacted landowners. The Commission will look unfavorably on applicants that do not work proactively with landowners to address concerns.”).
[105] Lewis Carroll, Alice’s Adventures in Wonderland and Through the Looking-Glass 107 (Hugh Haughton ed., Penguin Classics 1998).
[106] See 15 U.S.C. § 717f(e) (“The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.”) (emphasis added).
[107] Updated Policy Statement, 178 FERC ¶ 61,107 at P 3 (stating that the Updated Policy Statement does not establish binding rules, but rather it is intended to explain how the Commission will consider NGA section 7 certificate applications).
[108] See Interstate Nat. Gas Ass’n of Am. v. FERC, 285 F.3d 18, 59 (D.C. Cir. 2002) (“The distinction between substantive rule and policy statement is said to turn largely on whether the agency position is one of ‘present binding effect,’ i.e., whether it ‘constrains the agency’s discretion.’”) (citations omitted); Brown Express, Inc. v. United States, 607 F.2d 695, 701 (5th Cir. 1979) (“An announcement stating a change in the method by which an agency will grant substantive rights is not a ‘general statement of policy.’”).
[109] See Panhandle E. Pipe Line Co. v. FERC, 198 F.3d 266, 270 (D.C. Cir. 1999) (denying the petition for review because “[t]he challenged opinions [were] non-binding policy statements” and therefore, the court found that the party petitioning for review was “not aggrieved and has not suffered an injury-in-fact.”).
[110] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 100 (“[T]he 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.”).
[111] “‘Natural-gas company’ means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” 15 U.S.C. § 717a(6).
[112] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 100.
[113] See 18 C.F.R. § 157.6(b) (“Each application filed other than an application for permission and approval to abandon pursuant to section 7(b) shall set forth the following information . . . .”).
[114] Id. § 157.5(a).
[115] Cf. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 228 (1994) (“It might be good English to say that the French Revolution ‘modified’ the status of the French nobility—but only because there is a figure of speech called understatement and a literary device known as sarcasm.”).
[116] NAACP, 425 U.S. at 669-70 (citations omitted); accord Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669-70).
[117] NERC, Long Term Reliability Assessment, at 5 (Dec. 2021), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2021.pdf (emphasis added).
[118] See Updated Policy Statement, 178 FERC ¶ 61,107 at P 51 (asserting that the Commission is “providing more regulatory certainty in the Commission’s review process and public interest determinations”); id. P 73 (“To provide more clarity and regulatory certainty to all participants in certificate proceedings, we explain here how the Commission will consider environmental impacts.”); id. P 100 (“A major purpose of this Updated Policy Statement is to provide clarity and regulatory certainty regarding the Commission’s decision-making process.”).