The Federal Energy Regulatory Commission has made some changes to the
It applies to natural gas projects. Going
Forward, FERC will consider downstream in its approval framework
The environmental effects of UseNatural transport
gas (including potential climate change impacts)
Environment justice communities. There are legal options.
Questions regarding the expanded scope of authority at FERC.
The FERC released an updated policy statement on February 18, 2022.
New Interstate Natural Gas Facilities – Certification
“Updated Policy Statement” is available simultaneously with an
interim policy statement regarding the Consideration of Greenhouse Gases
Review of Emissions in Natural Gas Infrastructure Project
(“Greenhouse Gas Interim Policy Statement”) The following is the
Updated Policy Statement, FERC will weigh adverse effects on
There are four main interests that will determine whether the proposed project is approved.
in the public interest. The public convenience is now available for the first time.
The analysis will also include consideration of possible consequences
Climate change impacts and environmental justice
communities. The Updated Constitution was approved by 32 parties.
Criticism has been levelled at the Policy Statement. The minority commissioners
Separate dissents were issued concluding that the Updated Policy of FERC was valid.
Statement goes beyond its statutory authority.
A summary of the updated policy statement
Section 7 of the Natural Gast Act (NGA) provides that FERC is subject to
It is the responsibility of determining if a proposed interstate natural gaz deal is valid.
facility “is required or will be required in the present or in the future
Public convenience and necessity1Historic FERC documents
1999 Policy Statement: The approach was established2On the
Certification of interstate natural gas facilities. After
Requesting comments on whether or not the document should be revised.
1999 Policy Statement in April2018
February2021,3The Updated Policy Statement was issued by the FERC.
The Updated Policy Statement aims to provide a comprehensive overview.
Analytic framework for how FERC decides if a new interstate should be created
The public is required to fund natural gas transportation projects
convenience and necessity. The updated policy statement clarifies
It is possible that precedent agreements alone are not enough to establish
public convenience and necessity. Instead, applicants are
To show the value of the project, it is encouraged to provide details.
It is a necessity.
The updated policy statement states that FERC will evaluate All
relevant factorsBearing on the public
Interest, including a balance between economic and environmental aspects
interests. Any adverse effects must be balanced against the anticipated benefits.
FERC will now look at the potential adverse effects of project benefits.
Impact of the proposed project upon four major interests
(1) the interests of existing customers;
(2) the interests of existing pipelines as well as their captive
Customers; (3)environmental interest; and (4)the
Landowners’ interests and those of the surrounding communities include
Environment justice communities. Where a project will take you
A greater showing of public benefit is required for adverse impacts
obtain a certificate.4 The Updated Statement of Policy expands on each one.
Four key interests should be considered
- First, FERC will determine whether the proposed project is viable.
Service for existing customers is affected by increases in rates or degrading
customers. Customers with existing customers will not experience any cost impacts.
Threshold question as they were under 1999 Policy
Statement.5FERC will continue to operate as it is now
policy that an applicant can’t rely on existing subsidization
Customers to provide financial support for the project. FERC explains.
The goal is to keep existing customers away from paying for a project.
This is not what they need. - Second, FERC emphasizes the need to consider harm to captives
Customers, regardless of whether or not FERC identifies unfair evidence
competition. FERC points out that competition is one consideration.
Overbuilding (i.e. the approval of projects designed for demand)
already being met). - Third, FERC will take into account environmental impacts, which includes
Potential downstream impacts of the UseTransport
Gas on climate change and an applicant’s proposal
Mitigation of such impacts. FERC explains that the National
Environmental Policy Act (NEPA), and court precedents in the past
Executive orders issued by the executive also include certificate proceedings.
The Obama and Biden administrations obligate it to weight
The actual has both upstream and downstream effects of greenhouse gas emissions
As part of its decision to issue a certificate of authenticity, project
public convenience and necessity. This environmental assessment is
Now, concurrently with economic impact review. Below
The 1999 Policy Statement, FERC later considered environment
Impacts if a project is approved by the economic test
The 1999 Policy Statement. FERC states it expects
Application to reduce or eliminate adverse environmental effects. FERC
It did not specify what certificate conditions it might consider.
The only way to mitigate the impact is certificate denial. - In connection with the publication of the Updated Policy
Statement: FERC issued the Greenhouse Gas Interim Policy
Statement.6This interim policy declaration explains.
How FERC will evaluate the impact of natural-gas infrastructure
Climate change projects in its reviews under NEPA and in
Public-interest determinations under section3
Section 7 of the NGA. This is an interim statement.
FERC is asking for comments on the Greenhouse Gas Interim Policy.
Statement will be implemented immediately, and for evaluation
There are currently pending applications - Last, FERC is going to examine the impacts on surrounding communities.
Beyond the economic impact associated with a permanent right to vote,
Way on a landowners’ property, which were the historical area of
Focus, FERC explains this fact will be broader
forward. Specifically, FERC now will assess the impact of a
Proposed project on environmental justice communities As with
Environmental impacts will be considered by FERC. Applicants must present any relevant information.
Adapted measures to reduce or mitigate the negative impact
Environment justice communities. This stresses environmental justice.
Federal agencies are emphasizing justice as the latest example of federal agencies’ emphasizing
Environmental justice considerations in the wake President
Biden’s January2021 executive orders regarding advancing racial equality
Equity and tackling climate change7
FERC can reject an application based upon any of these types
Negative impacts8
Reactions to the New Policy Statement
Some, including Christie and minority commissioners Danly, have.
The Updated Polic Statement was criticized. The dissenters highlight
FERC does not have a NEPA procedural obligation to consider the issue, but it does have a duty to consider the
FERC does not consider the environmental impact of its decisions.
Legislative authority to regulate greenhouse gas emissions.
Indirectly or directly through interstate pipelines
Producers or downstream consumers.
Commissioner Danly stated in a dissident that the Updated Policy
Statement “contravenes NGA’s purpose which, as
Supreme Court ruled that the purpose of encouraging orderly behavior is to “encourage the orderly.”
Development of abundant supplies
Natural gas at reasonable prices
prices.’?”9Danly argues for the Updated Policy
Statement is beyond FERC’s authority under NGA to consider
Public convenience: Whether a project is required or not
necessity. Danly points out that the term “public convenience” is a synonym for necessity.
“Necessity” is not defined by the NGA. Danly said this
Instructions must be read in the context of and taken to mean
The NGA has a narrower purpose. However, the NGA has a wide supply of
Natural gas at affordable prices Danly also criticized the
Majority believes that FERC should balance end-use
It considers the environmental impact of its determination of public convenience
It is a necessity.10Danly finally questioned the
The Commission claimed that it used a procedural vehicle. Danly observed that
Although the majority of respondents claim that the Updated Policy Statement does not apply to them,
“It may have been more appropriate to forgo binding agency action.”
FERC to have gone through rulemaking rather than through a
Policy statement11
The Commissioner Christie also dissented. Christie also dissented in his dissent.
The Updated Policy Statement is considered a “radical departure”.
Years of practice and precedent in implementing the Commission’s policies
NGA.”12Commissioner Christie asserts that
These changes affect the “major Questions doctrine.”
The Supreme Court precedent is the basis of the major-questions doctrine
Reflecting that Congress will be assumed to reserve for itself
Congress cannot address matters of great economic and political importance unless Congress agrees
This authority was clearly granted to the agency by statute.
Christie insists that Congress has not done this here. On
February 28, 2022: The Supreme Court heard arguments about the
major-questions doctrine in West Virginia v. Environmental
Protection Agency. The Supreme Court is currently considering whether
Clean had given the Environmental Protection Agency authority under the Clean
Air Act to establish an interstate cap and trade scheme
Electric generating units produce greenhouse gas emissions.
The Key Takeaways
- According to the FERC’s updated policy statement, environmental
Impacts, including climate change impacts.
Concurrently, environmental justice communities will be weighed
Economic impacts are used to determine whether a project is going ahead.
Approved for public convenience and necessity. - The Updated Policy statement will be applied by FERC.
With the GHG Interim Policy statement, immediately. Applicants with
Applications that are still pending will be offered the chance to supplement.
They should file accordingly. - There are legal questions about whether the Updated Policy is legal.
Statement goes beyond FERC statutory authority.
Footnotes
1 15
U.S.C. 717f(e).
2
New Interstate Natural Gas Pipeline Facilities are Certified, 88
FERC 61.227 (1999), clarified 90FERC
61,128, further clarified in 92FERC
61,094 ((2000)) (1999 Policy Statement).
3
Certification of New Interstate Natural Gas Facilities, (83FR).
18020 (Apr.25, 2018), 163FERC 61,042
(2018). Certification of New Interstate Natural Gas Facilities
86FR 11268 (Feb.24, 2021), 174FERC
61,125 (2021).
4Updated
Policy Statement, 178FERC 61,107, at
65.
5 1999
Clarified Policy Statement, 88FERC, 61,74647
90FERC at 61.39196
6
Consideration of Greenhouse Gas Emissions from Natural Gas
Infrastructure Project Reviews, 178FERC 61.108
(2022).
7 E.O.
13985, Racial Equity and Support for the Underserved
Communities Through the Federal Government,
701011; E.O.14008 – Tackling Climate Crisis at Home
Abroad, 86FR7619, 7629 See alsoThe White
House, Fact sheet: President Biden Takes Executive Measures
Take on the Climate Crisis at home and abroad, and create jobs.
Federal Government Restores Scientific Integrity
(2021).
8Updated
Policy Statement, 178FERC 61,107, at
51.
9 Danly
Dissent at 2 (citations deleted).
10
Id.At 16.
11
Id.23.
12
Christie Dissent at 2.
The purpose of this article is to provide a general overview.
guide to the subject matter Expert advice should be sought
Discuss your particular circumstances.
