McNamee Examines FERC’s NGA, NEPA Authority

Commissioner’s Concurring Statement Addresses Meaning of “Public Convenience and Necessity”
Mark Reishus
November 25, 2019 at 13:20:30 ET
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On Nov. 21, 2019, FERC Commissioner Bernard L. McNamee issued a 37-page separate, concurring statement defending the Commission’s approach to reviewing the environmental effects of proposed natural gas pipeline projects under the Natural Gas Act (NGA) and National Environmental Policy Act (NEPA). Specifically, McNamee wrote separately “to address what I perceive to be a misinterpretation of the Commission’s authority under the NGA and NEPA. There have been contentions that the NGA authorizes the Commission to deny a certificate application based on the environmental effects that result from the upstream production and downstream use of natural gas, that the NGA authorizes the Commission to establish measures to mitigate GHG emissions, and that the Commission violates the NGA and NEPA by not determining whether GHG emissions significantly affect the environment. I disagree.”

Authorization of El Paso's Project

In El Paso Natural Gas Co. L.L.C., Order Issuing Certificate, 169 FERC ¶61,133 (2019) [Docket No. CP18-332-000], the two-person majority of FERC’s three sitting commissioners voted to conditionally authorize El Paso Natural Gas Co. L.L.C. (El Paso) to construct and operate 17 miles of natural gas loop pipeline facilities in Hudspeth and El Paso Counties, Texas, and two new compressor stations in Luna County, New Mexico and Cochise County, Arizona.

FERC Chairman Neil Chatterjee and McNamee agreed that, consistent with the Commission’s Certificate Policy Statement and NGA section 7(c), “the public convenience and necessity requires approval of the South Mainline Expansion Project, as conditioned in this order.” They also concluded that, based on the analysis in the environmental assessment (EA) prepared for the proposed project, as supplemented in the Certificate Order, “if constructed and operated in accordance with El Paso’s application and supplements, including any commitments made therein, and in compliance with the environmental conditions in the appendix to this order, our approval of this proposal would not constitute a major federal action significantly affecting the quality of the human environment.”

As he often does in natural gas project certification proceedings, Commissioner Richard Glick dissented in part. In his separate statement, Glick argued that the majority’s determination that the proposed project is in the public interest is not the product of reasoned decisionmaking. “The Commission is saying out of one side of its mouth that it need not assess the significance of the Project’s impact on climate change while, out of the other side of its mouth, assuring us that all environmental impacts are insignificant. That is ludicrous, unreasoned, and an abdication of our responsibility to give climate change the ‘hard look’ that the law demands.” Glick also argued that the majority’s NEPA analysis of the project’s contribution to climate change is deficient.

In his concurring statement, McNamee asserted that “[a] close examination of the statutory text and foundation of the NGA demonstrates that the Commission does not have the authority under the NGA or NEPA to deny a pipeline certificate application based on the environmental effects of the upstream production or downstream use of natural gas nor does the Commission have the authority to unilaterally establish measures to mitigate [greenhouse gas (GHG)] emissions. Further, the Commission has no objective basis to determine whether GHG emissions will have a significant effect on climate change nor the authority to establish its own basis for making such a determination.” McNamee said the purpose of his review of FERC’s statutory authority is to “assist the Commission, the courts, and other parties in their arguments regarding the meaning of the ‘public convenience and necessity’ and the Commission’s consideration of a project’s effect on climate change.”

Framing the Current Debate

McNamee began his analysis by describing the current debate.

According to McNamee, FERC has two primary statutory obligations when acting on a natural gas pipeline certificate application: “(1) to determine whether the project is required by the ‘public convenience and necessity’ as required by the NGA; and (2) to take a ‘hard look’ at the direct, indirect, and cumulative effects of the proposed action as required by NEPA and the Council on Environmental Quality’s (CEQ) implementing regulations.” The recent debate concerns “what factors the Commission can consider in determining whether a proposed project is in the ‘public convenience and necessity,’ and whether the effects of upstream production and downstream use of natural gas are indirect effects of a certificate application that must be considered in the Commission’s NEPA analysis.”

McNamee characterized Glick’s argument as equating “public convenience and necessity” with a “public interest” standard requiring the Commission to weigh GHGs emitted from the proposed project’s facilities and related to the upstream and downstream use of natural gas. By not determining the significance of GHG emissions, so Glick’s argument goes, “the ‘public interest determination [] systematically excludes the most important environmental consideration of our time’ and ‘is contrary to law, arbitrary and capricious’ and is not ‘the product of reasoned decisionmaking.’ ”

In addition, Glick “also argues that the emissions from all downstream use of natural gas are indirect effects of the Project and must be considered in the Commission’s [EA]. In other proceedings, he argues that the Commission must also consider GHG emissions from upstream natural gas production. He asserts that the Commission must determine whether GHG emissions will have a significant effect on climate change and that the Commission could make that determination using the Social Cost of Carbon or its own expertise. Further, he contends that the Commission could mitigate any GHG emissions in the event that it made a finding that the GHG emissions had a significant impact on climate change.”

McNamee also identified recent holdings of the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) that discussed the Commission’s obligations under the NGA and NEPA. In Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (Sabal Trail), the court vacated and remanded a natural gas pipeline certificate order because the Commission inadequately assessed the GHGs emitted from downstream power plants in its environmental impact statement (EIS) for the proposed Southeast Market Pipelines Project (consisting of three pipelines, one of which is the Sabal Trail Pipeline Project). The court held in Sabal Trail that the downstream GHG emissions resulting from burning the transported natural gas were a reasonably foreseeable indirect effect of authorizing the project and FERC should have, at a minimum, estimated those emissions.

The D.C. Circuit also found in Sabal Trail that FERC’s authorization of the project was the legally relevant cause of the GHGs emitted from the downstream power plants “because FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment.” According to the court, FERC’s consideration of whether a proposed pipeline project is in the public convenience and necessity involves balancing the project’s public benefits against its adverse effects, including adverse environmental effects. McNamee asserted that the D.C. Circuit thus “distinguished Sabal Trail from the Supreme Court’s holding in [Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 770 (2004) (Public Citizen)], where the Court held ‘when the agency has no legal power to prevent a certain environmental effect, there is no decision to inform, and the agency need not analyze the effect in its NEPA review’ and the D.C. Circuit’s decision in Sierra Club v. FERC, [827 F.3d 36, 47 (D.C. Cir. 2016),] where it held ‘that FERC had no legal authority to prevent the adverse environmental effects of natural gas exports.’ ”

McNamee observed that, in Sabal Trail, the court explained that it did not hold that quantification of GHG emissions is required every time those emissions are an indirect effect of an agency action, and recognized that “in some cases quantification may not be feasible.”

McNamee also discussed Birckhead v. FERC, 925 F.3d 510 (D.C. Cir. 2019) (Birckhead). In that opinion, “the D.C. Circuit commented in dicta on the Commission’s authority to consider downstream emissions.” Quoting Sabal Trail, the court stated in Birckhead “that because the Commission could ‘ “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment, the agency is the legally relevant cause of the direct and indirect environmental effects of pipelines it approves” — even where it lacks jurisdiction over the producer or distributor of the gas transported by the pipeline.’ ”

Disagreement with D.C. Circuit

While McNamee said he recognizes that the Sabal Trail holding is binding on the Commission, he “disagree[s] with the court’s finding that the Commission can, pursuant to the NGA, deny a pipeline based on environmental effects stemming from the production and use of natural gas, and that the Commission is therefore required to consider such environmental effects under the NGA and NEPA.”

Disagreeing with Glick, who believes that Sabal Trail unambiguously gives FERC the authority to act on the direct and indirect effects of a proposed pipeline, McNamee suggested that the court’s Sabal Trail opinion was a narrow ruling on the facts presented in that case. Neither the narrow ruling in Sabal Trail nor the dicta in Birckhead “proclaim a new reading of the NGA and NEPA. … [FERC] is still bound by the NGA and NEPA as enacted by Congress, and interpreted by the U.S. Supreme Court and the D.C. Circuit. Our obligation is to read the statutes and case law in harmony. This concurrence articulates the legal reasoning by which to do so.”

(In his partial dissent, Glick acknowledged that it is McNamee’s prerogative to argue that Sabal Trail and Birckhead are wrongly decided. However, Glick asserted, “it is irrelevant to the task before us. As [McNamee] has explained, we are called on to apply the law and the facts, not our personal policy preferences. But surely, implicit in that statement, is a recognition that we must apply the law as it is, not as we wish it were. The D.C. Circuit has unambiguously interpreted the ‘public convenience and necessity’ standard in section 7 of the NGA to encompass the authority to consider and, if appropriate, act upon ‘the direct and indirect environmental effects’ of a proposed pipeline. As Commissioners, our job is to apply that law, not to attack binding judicial precedent in favor of an interpretation that was, in fact, expressly rejected by the court.”)

Citing Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766 (1983), McNamee asserted that the Supreme Court “has observed that NEPA requires an indirect effect to have ‘a reasonably close causal relationship’ with the alleged cause. Whether there is a reasonably close causal relationship depends on ‘the underlying policies or legislative intent’ of the agency’s organic statute ‘to draw a manageable line between those causal changes that may make an actor responsible for an effect and those that do not.’ ” McNamee believes the text of the NGA and subsequent acts by Congress demonstrate that the “public convenience and necessity” standard in the NGA “is not so broad as to include environmental effects of the upstream production or downstream use of natural gas, and that the Commission cannot be responsible for those effects.”

As discussed below, McNamee reviewed the Commission’s statutory authorities in an attempt to demonstrate the correctness of his beliefs. According to McNamee, the D.C. Circuit “may not have been presented with the arguments I make here.”

McNamee's Analysis of NGA

In McNamee’s view, the Commission may consider GHGs emitted from the pipeline facilities themselves in its public convenience and necessity determination, “and is required to consider them in its NEPA analysis.” However, “the Commission cannot unilaterally establish measures to mitigate GHG emissions, and there currently is no suitable method for the Commission to determine whether GHG emissions are significant.”

The purpose of enacting the NGA was “to counter activities that would limit the public’s access to natural gas and subject the public to abusive pricing,” McNamee asserted. “The text of NGA section 1(a) and its reference to [Federal Trade Commission (FTC) reports] make clear that ‘public interest’ is directly linked to ensuring the public’s access to natural gas through regulating its transport and sale. Moreover, the NGA is designed to promote the ‘public interest’ primarily through economic regulation. This is apparent in the text of the NGA and by its reference to the FTC Report that identified the concern with monopolistic activity that would limit access to natural gas.”

Therefore, McNamee argued, “there is no textual support in NGA section 1 for the claim that the Commission may deny a pipeline application due to potential upstream and downstream effects of GHG emissions on climate change. But, this is not the end of the analysis. We must also examine the Commission’s specific authority under … NGA section 7.”

Like NGA section 1, “the text of NGA section 7 makes clear that its purpose is to ensure that the public has access to natural gas,” McNamee said. Multiple provisions of section 7 “illuminate the ultimate purpose of the NGA: to ensure that the public has access to natural gas because Congress considered such access to be in the public interest. To now interpret ‘public convenience and necessity’ to mean that the Commission has the authority to deny a certificate for a pipeline due to upstream or downstream emissions because the pipeline may result in access to, and the use of, natural gas would radically rewrite the NGA and undermine its stated purpose.”

Authority of States

McNamee also asserted that NGA section 1(b) and Federal Power Act (FPA) section 201 confirm that control over the physical environmental effects related to the upstream production and downstream use of natural gas “are squarely reserved for the States.”

NGA section 1(b) provides that “[t]he provisions of this chapter ... shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities for such distribution or to the production or gathering of natural gas.” According to McNamee, the Ninth Circuit and the D.C. Circuit “have interpreted the reference to distribution as meaning that States have exclusive authority over the gas once the gas moves beyond high-pressure mainlines. Likewise, FPA section 201 specifically reserves the authority to make generation decisions to the States.”

McNamee argued that Supreme Court precedent and legislative history “confirm that the regulation of the physical upstream production and downstream use of gas is reserved for the States.” In contrast, “there is no legislative history to support that the Commission may consider environmental effects related to the upstream production or downstream use of gas and the field of environmental regulation of such activities is not one that has been left unregulated. … [S]tates can reasonably be expected to regulate air emissions from the upstream production or downstream use of natural gas.”

McNamee observed that the Clean Air Act vests States with authority to issue permits to regulate stationary sources related to upstream and downstream activities. “In addition, pursuant to their police powers, States have the ability to regulate environmental effects related to the upstream production and downstream use of natural gas within their jurisdictions. The FTC Report referenced in NGA section 1(a) recognized that States’ ability to regulate the use of natural gas. And, various States have exercised this ability. For example, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont participate in the Regional Greenhouse Gas Initiative (RGGI), which requires power plants with a capacity over 25 megawatts to hold allowances equal to their [carbon dioxide] emissions over a three-year control period.”

Were FERC to consider the environmental effects related to upstream production and downstream use, McNamee said that it “would be an attempt to exert influence over States’ regulation of physical upstream production or downstream use of natural gas, which the [Supreme] Court in [Federal Power Commission v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1 (1961)] suggested would be encroaching upon forbidden ground. If, for example, the Commission considered and denied a certificate based on the GHG emissions released from production activities, the Commission would be making a judgment that such production is too harmful for the environment and preempting a State’s authority to decide whether and how to regulate upstream production or downstream use of natural gas.” Similarly, “for the Commission to consider and deny a project based on emissions from end users, the Commission would be making a judgment that natural gas should not be used for certain activities.”

According to McNamee, the NGA reserves authority over the upstream production and downstream use of natural gas to the States, “and States can practicably regulate GHGs emitted by those activities.”

Even if there were a gap that federal regulation could fill, “it is nonsensical for the Commission to attempt to fill a gap that Congress has clearly meant for the U.S. Environmental Protection Agency (EPA) to occupy,” McNamee asserted. “Congress enacted the Clean Air Act to establish an all-encompassing regulatory program, supervised by the EPA to deal comprehensively with interstate air pollution. … Thus, the EPA has exclusive authority for determining whether emissions from pipeline facilities will have a significant effect on the environment.”

Other Acts of Congress

McNamee reviewed various acts enacted by Congress subsequent to the NGA and NEPA, including the Natural Gas Policy Act of 1978 (NGPA), the Fuel Use Act of 1978 (Fuel Use Act), and the Natural Gas Wellhead Decontrol Act of 1989 (Wellhead Decontrol Act). McNamee concluded that they further limit FERC’s authority over upstream production and downstream use of natural gas. “Arguments that the Commission can rely on the NGA’s public convenience and necessity standard and NEPA to deny a pipeline application so as to prevent the upstream production or downstream use of natural gas would undermine these acts of Congress.”

According to McNamee, “[t]he NGA, NGPA, the Wellhead Decontrol Act, and the repeal of the Fuel Use Act each reflect Congressional mandates to promote the production, transportation, and use of natural gas. None of these acts, and no other law, including NEPA, modifies the presumption in the NGA to facilitate access to natural gas. And, it is not for the Commission to substitute its judgment for that of Congress in determining energy policy.”

Ordinary Meaning

The ordinary meaning of the phrase “public convenience and necessity” does not support the Commission’s consideration of the environmental effects of upstream production or downstream use of natural gas, McNamee argued. That phrase “has always been understood to mean ‘need’ for the service. To the extent the environment is considered, such consideration is limited to the effects stemming from the construction and operation of the proposed facilities and is not as broad as some would believe.”

According to McNamee, the phrase “public convenience and necessity” was a term of art used when Congress enacted the NGA in 1938. One year later, FERC’s predecessor agency, the Federal Power Commission (FPC), defined the phrase as “a public need or benefit without which the public is inconvenienced to the extent of being handicapped in the pursuit of business or comfort or both, without which the public generally in the area involved is denied to its detriment that which is enjoyed by the public of other areas similarly situated.” To make such a showing, McNamee said, the FPC “required certificate applicants to demonstrate that the public needed its proposed project, the applicant could perform the proposed service, and the service would be provided at reasonable rates.”

Factors other than need were considered, but “they were limited and usually directly related to the proposed facilities, not upstream or downstream effects related to the natural gas commodity. Such considerations included the effects on pipeline competition, duplication of facilities, and social costs, such as misuse of eminent domain and environmental impacts resulting from the creation of the right-of-way or service.”

FERC adopted the FPC’s approach and employs an economic balancing test focused on whether there is a need for the facilities and adverse economic effects stemming from the construction and operation of the proposed facilities themselves. “The Commission designed its balancing test ‘to foster competitive markets, protect captive customers, and avoid unnecessary environmental and community impacts while serving increasing demands for natural gas.’ The Commission also stated that its balancing test ‘provide[s] appropriate incentives for the optimal level of construction and efficient customer choices.’ To accomplish these objectives, the Commission determines whether a project is in the public convenience and necessity by balancing the public benefits of the project against the adverse economic impacts on the applicant’s existing shippers, competitor pipelines and their captive customers, and landowners.”

Under FERC policy, McNamee insisted, the environmental impacts to be considered when determining the need for a project are related to the construction and operation of the pipeline itself and the creation of the right-of-way. McNamee emphasized that FERC’s objective is “to avoid unnecessary environmental impacts, meaning to route the pipeline to avoid environmental effects where possible and feasible, not to prevent or mitigate environmental effects from the upstream production or downstream use of natural gas. This is confirmed when one considers that if the project had unnecessary adverse environmental effects, the Commission would require the pipeline to reroute the pipeline.”

McNamee concluded that “the ordinary meaning of ‘public convenience and necessity’ does not support weighing the public need for the project against effects related to the upstream production or downstream use of natural gas.”

A Merely Procedural Statute

According to McNamee, the courts have made clear that NEPA does not expand a federal agency’s substantive or jurisdictional powers. “Nor does NEPA repeal by implication any other statute. Rather, NEPA is a merely procedural statute that requires federal agencies to take a ‘hard look’ at the environmental effects of a proposed action before acting on it. NEPA also does not require a particular result. In fact, the Supreme Court has stated [in Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989)], even if a NEPA analysis identifies an environmental harm, the agency can still approve the project.”

CEQ’s regulations concerning the consideration of indirect effects also “cannot make the GHG emissions from upstream production or downstream use part of the Commission’s public convenience and necessity determination under the NGA.”

FERC’s obligation under NEPA to consider indirect adverse environmental effects “is limited to those effects stemming from the construction and operation of the pipeline facility and the related right-of-way. For the Commission to deny a pipeline based on GHGs emitted from the upstream production or downstream use of natural gas would be contrary to the text of the NGA and subsequent acts by Congress. The NGA reserves such considerations for the States, and the Commission must respect the jurisdictional boundaries set by Congress. Suggesting that the Commission can consider such effects not only defies Congress, but risks duplicative regulation.”

Mitigation Measures

McNamee rejected Glick’s suggestion that FERC should require the mitigation of GHG emissions from the certificated pipeline facilities and the upstream production and downstream use of natural gas transported by the facilities.

While NGA section 7(e) gives FERC the power to attach to the issuance of a certificate such reasonable terms and conditions as the public convenience and necessity may require, McNamee argued that the Commission “cannot interpret NGA section 7(e) to allow the Commission to establish measures to mitigate GHG emissions because Congress, through the Clean Air Act, assigned the EPA and the States exclusive authority to establish such measures. Congress designated the EPA as the expert agency ‘best suited to serve as primary regulator of greenhouse gas emissions,’ not the Commission.”

The text of the Clean Air Act thus “demonstrates it is improbable that NGA section 7(e) allows the Commission to establish GHG emission standards on mitigation measures out of whole cloth. To argue otherwise would defeat the significant discretion and complex balancing that the Clean Air Act entrusts in the EPA Administrator, and would eliminate the role of the States.”

McNamee argued that FERC’s use of its NGA conditioning authority to establish GHG emission mitigation measures and address climate change “is an extraordinary leap.” The Commission has no expertise in this area, which “has been subject to profound debate across our nation for decades.”

According to McNamee, the Supreme Court views agency rules on issues that have vast economic and political significance with a measure of skepticism and requires Congress to provide clear authorization. “Courts would undoubtedly treat with skepticism any attempt by the Commission to mitigate GHG emissions. Congress has introduced climate change bills since at least 1977, over four decades ago. Over the last 15 years, Congress has introduced and failed to pass 70 legislative bills to reduce GHG emissions — 29 of those were carbon emission fees or taxes. For the Commission to suddenly declare such climate mitigation power resides in the long-extant NGA and that Congress’s efforts were superfluous strains credibility. Requiring pipelines to pay a carbon emissions fee or tax, or to invest in GHG mitigation would be a major rule, and Congress has made no indication that the Commission has such authority.”

In his dissents, Glick often points out that FERC routinely establishes mitigation measures in contexts other than GHG emissions, such as those designed to protect wetlands, promote soil conservation and reduce noise pollution. However, McNamee said, these examples are distinguishable. “Congress did not exclusively assign the authority to establish avoidance or restoration measures for mitigating effects on wetlands or soil to a specific agency. The [U.S. Army Corps of Engineers] and the EPA developed a wetlands mitigation bank program pursuant to section 404 of the Clean Water Act. Congress endorsed such mitigation. As for noise, the Clean Air Act assigns the EPA Administrator authority over determining the level of noise that amounts to a public nuisance and requires federal agencies to consult with the EPA when its actions exceed the public nuisance standard. The Commission complies with the Clean Air Act by requiring project noise levels in certain areas to not exceed 55 dBA Ldn, as required by EPA’s guidelines.”

McNamee concluded that “there is no support that the Commission can use its NGA section 7(e) authority to establish measures to mitigate GHG emissions from proposed pipeline facilities or from the upstream production or downstream use of natural gas. … In addition, requiring a pipeline to mitigate emissions from upstream production or downstream use of natural gas would not be ‘a reasonable term or condition as the public convenience and necessity may require.’ … It would be unreasonable to require a pipeline to mitigate an effect it has no control over. Further, as discussed above, emissions from the upstream production and downstream use of natural gas are not relevant to the NGA’s public convenience and necessity determination.”

No Standard of Significance

The majority of Commissioners have repeatedly asserted that the Commission cannot determine the significance of GHG emissions that are the effects of a proposed project because there is no standard for determining such significance, and Glick has repeatedly criticized this assertion in his dissents. Glick has urged the Commission to adopt the Social Cost of Carbon to determine whether GHG emissions are significant, or to use its own expertise as it does for other environmental resources. (The Social Cost of Carbon is a tool developed by an interagency working group that values in dollars the long-term harm done by each ton of carbon emitted.)

McNamee repeated his belief that the Social Cost of Carbon “is not a suitable method for determining whether GHG emissions that are caused by a proposed project will have a significant effect on climate change and the Commission has no authority or objective basis using its own expertise to make such determination.” He noted that the courts have repeatedly upheld the majority’s reasoning on this point.

McNamee added that the Social Cost of Carbon and its calculated outputs “are not so simple to interpret or evaluate. When the Social Cost of Carbon estimates that one metric ton of [carbon dioxide] costs $12 (the 2020 cost for a discount rate of 5 percent), agency decision-makers and the public have no objective basis or benchmark to determine whether that cost is significant. Bare numbers standing alone simply cannot ascribe significance.”

As for those who argue that FERC could and should make up its own framework or targets, as it does when determining return on equity (ROE), McNamee said they “overlook the fact that Congress designated the EPA, not the Commission, with exclusive authority to determine the amount of emissions that are harmful to the environment. In addition, there are no available resources or agency expertise upon which the Commission could reasonably base a framework or target. … [FERC] is not positioned to unilaterally establish a standard for determining whether GHG emissions will significantly affect the environment when there is neither federal guidance nor an accepted scientific consensus on these matters.”

McNamee also explained that establishing ROE “has been one of the core functions of the Commission since its inception under the FPA as the Federal Power Commission. And, setting ROE has been an activity of state public utility commissions, even before the creation of the Federal Power Commission. The Commission’s methodology is also founded in established economic theory. In contrast, assessing the significance of GHG emissions is not one of the Commission’s core missions and there is no suitable methodology for making such determination.”

The majority believes there is no objective basis for making a finding of significance of GHG emissions. “To assess a project’s effect on climate change, the Commission can only quantify the amount of project emissions. That calculated number cannot inform the Commission on climate change effects caused by the project, e.g., increase of sea level rise, effect on weather patterns, or effect on ocean acidification. Nor are there acceptable scientific models that the Commission may use to attribute every ton of GHG emissions to a physical climate change effect.”

Without adequate support or a reasoned target, McNamee concluded, “the Commission cannot ascribe significance to particular amounts of GHG emissions. To do so would not only exceed our agency’s authority, but would risk reversal upon judicial review. Courts require agencies to ‘consider[] the relevant factors and articulate[] a rational connection between the facts found and the choice made.’ Simply put, stating that an amount of GHG emissions appears significant without any objective support fails to meet the agency’s obligations under the Administrative Procedure Act (APA).”

FERC's Limited Authority

In closing his separate, concurring statement, McNamee reminded his readers that the Commission “cannot act ultra vires and claim more authority than the NGA provides it, regardless of the importance of the issue sought to be addressed. The NGA provides the Commission no authority to deny a certificate application based on the environmental effects from the upstream production or downstream use of natural gas. Congress enacted the NGA, and subsequent legislation, to ensure the Commission provided public access to natural gas. Further, Congress designed the NGA to preserve States’ authority to regulate the physical effects from the upstream production and downstream use of natural gas, and did not leave that field unregulated. Congress simply did not authorize the Commission to judge whether the upstream production or downstream use of gas will be too environmentally harmful.”

Moreover, the Commission does not have the ability to establish measures to mitigate GHG emissions. “Pursuant to the Clean Air Act, Congress exclusively assigned authority to regulate emissions to the EPA and the States. Finally, the Commission has no objective basis for determining whether GHG emissions are significant that would satisfy the Commission’s APA obligations and survive judicial review.”

Finally, in response to the assertion that FERC should do more to address climate change, McNamee explained that FERC, “an energy agency with a limited statutory authority, is not the appropriate authority to establish a new regulatory regime. For these reasons, I respectfully concur.”

For More Information

See ¶603: Environmental Compliance for more information on the Commission’s environmental review of proposed natural gas pipeline projects.

El Paso Natural Gas Co. L.L.C., Order Issuing Certificate, 169 FERC ¶61,133 (2019) [Docket No. CP18-332-000].

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