Good morning Mr. Chairman and Commissioners.
Item C-2 is an Interim Policy Statement on Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews. The draft Interim Policy statement details the framework that the Commission intends to use to evaluate a proposed natural gas infrastructure project’s greenhouse gas emissions and climate impacts under the National Environmental Policy Act and in its Natural Gas Act public interest determination. The Commission will apply this framework to both pending and new NGA section 3 and 7 applications. The interim policy statement lays out the types of information that the Commission would find helpful to have in the record for its evaluation of a proposed project’s potential impact on climate change as well as the Commission’s balancing of a project’s adverse impacts and benefits in determining if the project is in the public convenience and necessity.
For purposes of considering GHG emissions and climate impacts in the Commission’s NEPA document, the interim policy statement outlines the process for quantifying a proposed project’s GHG emissions and determining whether the project’s emissions are significant. In each NGA section 3 or 7 project proceeding, the NEPA document will quantify GHG emissions that are reasonably foreseeable and have a close causal relationship to the proposed project.
The interim policy statement describes how the Commission will quantify a project’s reasonably foreseeable GHG emissions based on a projection of the amount of capacity that will be actually used and any other factors impacting the quantification of project emissions. The type of information that would assist the Commission in developing the best estimate of a project’s GHG emissions includes the project’s utilization rate, offsets, whether the upstream or downstream GHG emissions are reasonably foreseeable project impacts, as well as proposed mitigation. The interim policy statement identifies supporting information for projected utilization including: expected utilization data from project shippers; historical usage data for expansion projects; demand projections; and an estimate of how much capacity will be used on an interruptible basis.
Next, the interim policy statement explains that the Commission will consider proposals by project sponsors to mitigate all or part of their projects’ climate change impacts. The Commission encourages project sponsors to propose measures to mitigate the project’s direct GHG emissions to the extent these emissions have a significant adverse environmental impact. Additionally, project sponsors may propose measures to mitigate the reasonably foreseeable upstream or downstream emissions associated with their projects. The Commission plans to evaluate proposed mitigation plans on a case-by-case basis and is not mandating a standard level of mitigation. However, the Commission may condition its approval of a project on further mitigation of those impacts.
The Commission will presume, unless refuted by record evidence, that projects with estimated greenhouse gas emissions of 100,000 metric tons per year of carbon dioxide equivalent will have a significant impact on the environment. The interim policy statement describes how the Commission, in its order on an individual project application, will consider the environmental analysis, any proposed mitigation measures, and record evidence to make its public interest determination. In addition, the 100,000 metric tons per year threshold will serve as the metric for triggering the development of an Environmental Impact Statement. For purposes of assessing the appropriate level of NEPA review, Commission staff will apply the 100% utilization rate or “full burn” for the proposed project’s emissions. A 100% utilization rate would reflect the project’s maximum potential amount of GHG emissions. Using the full burn as a screen to determine whether to proceed with an EA or an EIS is intended to avoid regulatory delays that could occur if an EA is initially prepared, and then, through further development of the record, an EIS proves to be necessary.
The Commission invites comments on the interim policy statement. Comments are due on April 4th. I would like to acknowledge and thank the team of attorneys and technical staff that was instrumental to the development of the interim GHG Policy Statement: Rachael Warden, Beth Bootz, Claire Moroney, Alex Zarraby, and Katherine Liberty from the Office of General Counsel, as well as Eric Tomasi and Kylee Ferrara from the Office of Energy Projects. This concludes the presentation for C-2. Thank you.