{"id":5505,"date":"2018-01-29T11:47:27","date_gmt":"2018-01-29T16:47:27","guid":{"rendered":"http:\/\/blogs.law.columbia.edu\/climatechange\/?p=5505"},"modified":"2023-03-13T11:35:30","modified_gmt":"2023-03-13T16:35:30","slug":"pipelines-and-climate-change-new-cases-on-fercs-obligation-to-assess-indirect-greenhouse-gas-emissions-in-nepa-reviews","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2018\/01\/29\/pipelines-and-climate-change-new-cases-on-fercs-obligation-to-assess-indirect-greenhouse-gas-emissions-in-nepa-reviews\/","title":{"rendered":"Pipelines and Climate Change: New Cases on FERC\u2019s Obligation to Assess Indirect Greenhouse Gas Emissions in NEPA Reviews"},"content":{"rendered":"
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By Jessica Wentz and Michael Burger<\/em><\/p>\n

Last year, the D.C. Circuit Court of Appeals issued a key decision on the scope of greenhouse gas emission impacts that must be considered by the Federal Energy Regulatory Commission (FERC) in environmental reviews of pipeline projects. In Sierra Club v. FERC, No. 16-1329 (2017)<\/a>, the court held that FERC\u2019s NEPA analysis for a natural gas pipeline project was insufficient because FERC had failed to consider the greenhouse gases generated by the combustion of the natural gas that would be transported via the pipeline. This decision was significant insofar as it clarified that the evaluation of downstream combustion emissions \u2013 which courts had previously required for coal mines and coal railways \u2013 is also required for FERC reviews of at least some natural gas pipelines.<\/p>\n

There are now several pending cases and administrative challenges that raise additional questions about the nature of federal agency obligations to assess indirect greenhouse gas emissions from pipeline approvals. For example, are agencies required to evaluate upstream emissions from induced natural gas development, as well as downstream emissions? How exactly should an agency go about assessing the \u201ccumulative impact\u201d of those emissions when added to other past, present, and future actions? And are there other factors that an agency should consider when assessing the significance of these emissions, such as the social cost of those emissions? These questions are now being litigated in the D.C. Circuit and the Second Circuit. They are also relevant to assessing the adequacy of the supplemental EIS that FERC is currently preparing on remand from Sierra Club v. FERC<\/em>.<\/p>\n

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Sierra Club v. FERC, D.C. Cir. No. 16-1329 (2017)<\/strong><\/a><\/p>\n

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\u00a0 \u00a0 \u00a0Source: FERC Notice of Intent EIS for Southeast Market Pipelines\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Project<\/em><\/figcaption><\/figure>\n

This case involved FERC\u2019s review of the Southeast Market Pipelines Project<\/a>, which is comprised of three natural gas pipelines currently under construction in Alabama, Georgia, and Florida. The Sierra Club challenged the adequacy of the EIS prepared for this project, alleging, among other things, that FERC improperly failed to consider downstream emissions from the combustion of natural gas transported via the pipeline as \u201cindirect effects\u201d of this project \u2013 i.e., \u201ceffects which are caused by the action and are later in time or father removed in distance, but are still reasonably foreseeable\u201d (50 C.F.R. \u00a7 1508.8).<\/p>\n

The D.C. Circuit found that the combustion emissions were both foreseeable and causally linked to the approval of the pipeline project. With regards to foreseeability, the court noted that the project was intended to transport the gas to power plants in Florida, some of which already existed, others of which were in the planning stages. Thus, the court noted that the combustion of the gas \u201cis not just \u2018reasonably foreseeable,\u2019 it is the project\u2019s entire purpose<\/em>.\u201d With regards to causation, the court held that because FERC can act on information about greenhouse gas emissions and climate change impacts when deciding whether to issue a pipeline certificate, and because FERC can deny the certificate if it finds that the project would be too harmful to the environment, FERC\u2019s approval is a \u201clegally relevant cause\u201d of the downstream effects of combusting the gas. (We discussed these issues at length in our paper on Upstream and Downstream Greenhouse Emissions: The Proper Scope of NEPA Review (2017)<\/a>).<\/p>\n

The court held that quantification of the downstream greenhouse gas emissions was required. In reaching this decision, the court rejected FERC\u2019s argument that it is impossible to know exactly what quantity of greenhouse gases will be emitted due to the approval of the pipeline because it depends on uncertain variables such as the operating decisions of individual plants and demand for electricity in the region, noting that NEPA requires agencies to conduct \u201creasonable forecasting.\u201d FERC had already estimated how much gas the pipelines will transport and, the court found, had given no good reason as to why this number could not also be used to estimate greenhouse gas emissions from power plants. The court also rejected FERC\u2019s argument that it need not quantify combustion emissions because some of the natural gas would replace dirtier fossil fuels, thus offsetting the project\u2019s emissions estimates. The court found that a purely qualitative analysis of substitution was inadequate because \u201c[a]n agency decisionmaker reviewing this EIS would\u2026 have no way of knowing whether total emissions, on net, will be reduced or increased by this project, or what degree of reduction or increase will be.\u201d<\/p>\n

In light of all this, the court held that the downstream greenhouse gas emissions are an indirect effect of authorizing the project, and that those emissions should be quantified:<\/p>\n

[Quantification] would permit the agency to compare the emissions from the project to emissions from other projects, to total emissions from the state or region, or to regional or national emissions-control goals. Without such comparisons, it is difficult to see how FERC could engage in \u2018informed decision making\u2019 with respect to the greenhouse-gas effects of this project, or how \u2018informed public comment\u2019 could be possible.<\/p>\n

The court also directed FERC to discuss the significance of the emissions, as well as the cumulative effects of the emissions \u2013 that is, \u201cthe incremental impact of the action when added to other past, present, and reasonably foreseeable future actions.\u201d \u00a0This third aspect of the court\u2019s order raises questions about what would suffice for a cumulative impacts analysis in this context \u2013 a question which is front and central the Allegheny Defense<\/em> case, discussed below.<\/p>\n

Finally, the court addressed whether FERC must link the downstream emissions to particular climate impacts, such as sea level rise or an increased risk of severe storms. The Sierra Club recommended that the Social Cost of Carbon metric could be used as a proxy for those effects and a useful disclosure tool. The court declined to issue a ruling on this matter, and instead directed FERC to explain in the supplemental EIS whether it would utilize the SCC metric and if not, why.<\/p>\n

On remand, FERC prepared a draft supplemental EIS<\/a> in which it estimated that the combustion of natural gas from the pipeline would generate 8.36 million tons per year of carbon dioxide (CO2<\/sub>) emissions. This is a large emissions impact \u2013 according to EPA\u2019s Greenhouse Gas Equivalency Calculator<\/a>, it is roughly equal to the emissions from: (i) approximately 1.8 million passenger vehicles driven each year, or (ii) approximately 1.25 million homes\u2019 electricity use for one year. Nonetheless, FERC quickly dismissed the significance of the emissions and also declined to estimate the social cost of the emissions (which, according to estimates set forth in our comments on the DSEIS<\/a>, would be roughly $306 million during the first year of operation and would rise to approximately $492 million per year by 2040). The DSEIS is currently under FERC review.<\/p>\n

Allegheny Defense Project v. FERC, D.C. Cir No. 17-1098 (2017)\u00a0<\/strong><\/a><\/p>\n

This case involves FERC\u2019s environmental review and approvals for the Atlantic Sunrise Pipeline Project<\/a>.\u00a0 The facts of this case are somewhat different from the Southeast Market Pipelines case: FERC did quantify downstream emissions in the EIS, and found that the combustion of the natural gas transported via the pipeline would contribute 32.9 million metric tons of CO2 <\/sub>per year. At the same time, FERC stated that the gas would likely displace use of oil and coal, resulting in a potential reduction of regional greenhouse gas emissions. Apart from this qualitative statement, FERC did not attempt to assess whether total regional emissions would increase or decrease as a result of the pipeline project.<\/p>\n

Environmental groups filed suit in the D.C. Circuit, arguing that FERC failed to adequately analyze the climate change impacts of the end use of the gas to be transported by the project. Specifically, they alleged that FERC improperly overlooked: (i) the net emissions impact from combustion (taking into account potential energy substitutions), (ii) the significance of the emissions, (iii) the cumulative impact of the emissions (in terms of climate change effects or social costs), and (iv) the extent to which the emissions impact might be reduced through mitigation measures or alternatives to the proposal. They also challenged FERC\u2019s failure to evaluate upstream impacts from natural gas production \u2013 an issue which was not decided by the D.C. Circuit in Sierra Club v. FERC<\/em>. To support their argument, the plaintiffs cited the NEPA regulations on indirect effects, which require agencies to consider \u201cgrowth inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems\u201d (40 C.F.R. \u00a7 1508.8(b)), and presented evidence of specific drilling operation plans that were contingent on the approval of the pipeline.<\/p>\n

The court has denied plaintiffs\u2019 emergency motion to stay construction of the pipeline. It remains to be seen how the court will respond to the plaintiffs\u2019 arguments on the merits. With respect to downstream emissions, the court may require additional analysis to establish a quantitative net GHG emissions estimate. Or, the court might distinguish the Atlantic Sunrise Pipeline from the Southeast Market Pipelines based on the fact that FERC already quantified emissions from combustion. With respect to upstream emissions, the court\u2019s previous finding that FERC\u2019s approval is a \u201clegally relevant cause\u201d of induced natural gas consumption could apply to induced natural gas production as well, leading to the first decision requiring upstream analysis for pipelines.<\/p>\n

Other Cases and Administrative Adjudications<\/strong><\/p>\n

There are also one other pending case and several administrative adjudications involving FERC\u2019s obligation to address downstream and upstream emissions from pipelines:<\/p>\n