FERC Continues to Hold Some Pipeline Projects in Limbo

FERC has pending before it a number of significant pipeline projects that for over a year have been in limbo as FERC has not approved any expansion projects. But just yesterday it listed four of those projects for a decision at next week’s open meeting. FERC’s chairman regularly states that all projects will be voted out as soon as they can be, yet for the projects not listed on next week’s agenda, they have lingered now for over a year without any action, months after FERC was restored to a full complement of five commissioners.

The suspension of approvals is even a worse fate than an outright denial because at least a denial can be challenged in court. There is simply no remedy for these limbo projects that the FERC chairman has not acted on.

Projects Caught in Limbo

There are seven projects currently stuck in limbo at FERC, with an average cost of over $200 million. All seven of these projects were determined by FERC staff to have no significant impact on the human environment following the issuance of an Environmental Assessment (EA) for each. Yet, long before FERC issued its interim policy on greenhouse gasses that we discussed in FERC Majority Blocks the Path Forward for Pipeline Projects, the chairman used his control over FERC staff, ordering staff to prepare an Environmental Impact Statement (EIS) to address his apparent perception that the downstream greenhouse gas emissions may have a significant impact on the environment.

FERC Staff Does Its Best without any Guidance from the Commission

Each EIS that FERC staff prepared contained a statement very similar to this one from the EIS for Iroquois’s ExC project, which simply reconfirmed the findings of the EA:

“With the exception of climate change impacts, FERC staff concludes that approval of the proposed Project, with the mitigation measures recommended in this EIS, would not result in significant environmental impacts. FERC staff continues to be unable to determine significance with regards to climate change impacts.”

The ExC project is one of the four listed on next week’s agenda. But these statements in all of the EISs make it clear that FERC staff was provided no guidance from the Commission or the chairman as to how it should go about making a significance finding with respect to climate change, even though that was the sole purpose of requiring the preparation of an EIS for each project. Thus, FERC staff was sent on an aimless mission, the only result of which was to delay any possibility of FERC taking action on the pending applications. These were not short delays either.

As seen above, the time period from when the EA was completed to when FERC staff issued the EIS was typically over one year. This is significant when one considers the expectation of these applicants when they filed for approval from FERC.

As seen above, based on the historic timelines for projects requiring an EA in the decade preceding the filing of these applications, the combined median time frame for the EA issuance and the order issuance for similar projects was only 303 days. So the rework ordered by the chairman delayed these projects by more than the entire expected time frame for approval when they were filed.

We Are Just Doing What the Courts Require

The chairman has regularly justified the need for ordering this so far interminable delay by claiming that he was simply doing what the courts have required. While it is true that the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) has expressed dissatisfaction with former Chairman Chatterjee’s reluctance to address downstream emissions, it has also never stated that the only way to address its concern was to prepare an EIS as Chairman Glick directed in these cases, and which the interim GHG policy now requires for all projects. In fact, in a decision issued just last week, the DC Circuit once again found FERC’s efforts for assessing downstream GHG emissions deficient, but simply sent the case back to FERC “to perform a supplemental environmental assessment in which it must either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.” Not only does the court not conclude that an EIS is required, it even chose to not void the certificate in that case, but simply required FERC to essentially do a better job.

Significance is in the Eye of the Beholder

While FERC staff found it had no basis for determining the significance of the climate change impacts from these projects, all of them greatly exceed the new threshold of presumed significance in FERC’s recently adopted interim GHG policy of 100,000 tons of CO2e emissions, or the amount generated by using 5,200 Dth/day of natural gas.

As seen above, some of these projects greatly exceed that very low threshold, with the two Evangeline Pass projects, which are also listed for decision at next week’s open meeting, each being over 200 times greater. Yet, FERC staff found that there is simply no established standard for determining the significance of even that amount of downstream emissions. The revised EIS simply calculates the downstream GHG emissions from the project by assuming that the 1,100,000 Dth/day of natural gas each project can deliver, “if combusted, would result in up to 21.24 million metric tpy of CO2e. We note that this CO2e estimate represents an upper bound amount of end-use combustion that could result from the gas transported by this Project. This estimate assumes that the maximum capacity is transported 365 days per year.” This back of the envelope calculation could have been done in minutes, not months, and yet that is essentially the only contribution to the record contained in the EIS because FERC staff notes that it cannot “find an established threshold for determining the Project’s significance when compared to established GHG reduction targets at the state or federal level.”

In fact, these back of the envelope calculations were regularly done by former Commissioner LaFleur during the period when former Chairman Chatterjee was refusing to even look at downstream GHGs.

As seen above, Commissioner LaFleur voted to approve a number of projects where FERC staff prepared only an EA and were apparently directed by Chairman Chatterjee to not calculate even an upper bound limit on the expected downstream GHG emissions from the project. Despite this fact, Commissioner LaFleur voted to approve such projects after calculating her own upper bound limit. Thus, she must have concluded that such amounts of GHG emissions were not significant or she would have insisted that FERC staff prepare an EIS. The amounts that she approved far exceed the threshold in FERC’s new GHG policy by as much as 40 times. Two of the cases listed for next week’s open meeting, the previously mentioned ExC project and Columbia Gulf’s East Lateral Xpress project, are both far below Commissioner LaFleur’s upper limits, which is further indication that there simply was no need to conduct an EIS for such low levels of downstream GHGs.

We suspect that the listing of the two policies on the formal agenda means that they are being withdrawn and will be put out for comment prior to being reinstated. As for why four of the seven pending projects have been listed but not the other three is somewhat of a mystery that may only be solved when the decisions are issued next week. The four projects listed are certainly not the oldest projects nor even the smallest ones. For those projects not voted on at next week’s open meeting, the limbo will likely continue for at least another month. The lack of a vote is in many ways worse than a denial because at least with a denial the applicant is able to file an appeal. Those that continue in limbo have no real way to force FERC to vote them up or down and simply have to wait.

If you would like further information about the pending projects, please contact us.