Instead of 'Hot Summer' for FERC, Commission Lands in Hot Water

• Author: Bethany A. Davis Noll
• Position: Executive director at NYU Law's State Energy & Environmental Impact Center
• Pages: 13-13

NOVEMBER/DECEMBER 2021 | 13

Reprinted by permission from The Environmental Forum®, November/December 2021.

Copyright © 2021, Environmental Law Institute®, Washington, D.C. www.eli.org.

In the Courts

ILLINOIS Democrat Sean Casten

rolled out his “Hot FERC Summer”

campaign in a speech on the House

oor intended to promote the Fed-

eral Energy Regulatory Commission’s

powers with respect to climate change,

some boosted through proposed legis-

lation. Meanwhile, the courts are pay-

ing attention to FERC and its analysis

of need, climate impacts, and environ-

mental justice (or lack thereof). A pair

of decisions highlights a new era for the

panel, even as the commission shifts

priorities under President Biden.

First up, in June, the Court of Ap-

peals for the D.C. Circuit vacated a

certicate allowing Spire STL Pipeline

to operate a natural gas pipeline outside

St. Louis, Missouri. Spire had admitted

that there was no new

demand for the pipe-

line. e commission

nonetheless relied on

a study prepared by a

Spire aliate claiming

it would use the new

pipeline to determine

that the company had shown adequate

need. e court found that FERC had

failed to assess the probative value of the

aliate’s study, ignored concerns that

Spire engaged in self-dealing with its af-

liate, and failed to balance the claimed

need against the adverse environmental

eects of the new pipeline.

Because the errors were signicant,

the court vacated the certicate. But the

pipeline is already operational. Spire re-

sponded with a urry of lings, includ-

ing seeking rehearing (but only on the

remedy) and petitioning FERC for

emergency relief. At press time, FERC

had granted the company a 90-day cer-

ticate while it considers Spire’s request

for a temporary certicate. FERC did

not seek rehearing of the court’s vacatur,

though Commissioner James Danly

(airing dirty laundry perhaps) claimed

in a dissent that a majority of commis-

sioners (at the time) thought the agency

should have sought rehearing.

In the second case, Vecinos para el

Bienestar de la Comunidad Costera, the

same court held that FERC’s environ-

mental justice and climate analyses

were lacking. Several companies had

applied for authorization to construct

new liquied natural gas terminals in

Cameron County, Texas, to export the

fuel. In approving the projects, FERC

calculated the additional emissions but

claimed it could not determine if the

impact was signicant because there

was no “universally accepted meth-

odology” for that. However, FERC’s

own regulations direct the commission

to evaluate these types of impacts, us-

ing “theoretical approaches or research

methods generally accepted in the sci-

entic community.” And FERC had

previously not dis-

puted that the social

cost of carbon — a

monetary estimate

of the damages for

each additional ton of

greenhouse gas emis-

sions — was a gener-

ally accepted method for evaluating the

impact of greenhouse gas emissions.

In addition, the commission dis-

missed petitioners’ environmental

justice concerns with the projects,

claiming that they would not have a

disproportionate impact on “minority

and low-income populations versus on

some other project-aected compari-

son group” because “all project-aected

populations are minority or low-in-

come populations.” But a project does

not lack a disproportionate impact just

because it only aects minority and/or

low-income residents. Instead, that is

likely proof of disproportionate impact.

In the case of the terminals at issue

in Vecinos, the court remanded the case

to FERC to improve its analysis and

did not vacate the orders authorizing

the projects. But even if both the pipe-

line at issue in the Spire case and the

natural gas terminals at issue in Vecinos

continue to operate, the impact of the

decisions is sure to be felt beyond these

cases. FERC is reexamining its overall

policy governing analysis of proposed

pipelines. It will want to ensure that

it more carefully weighs claimed need

against environmental impact as well as

the climate and environmental justice

eects of those new projects.

Meanwhile, these decisions are

also likely to have an impact on oth-

er cases pending in the D.C. Circuit.

In a Delaware Riverkeeper Network

case, argued in September, the court

will consider an argument that FERC

improperly ignored indirect impacts

of the upstream fracking as well as the

emissions that would increase due to

the use of the gas downstream — and

that it again failed to assess the signi-

cance of the greenhouse gas emissions.

In another case, FERC had grant-

ed a certicate to PennEast Pipeline

Company to build a natural gas pipe-

line through New Jersey and Pennsyl-

vania, but petitioners challenged the

certicate arguing that the company’s

reliance on aliate agreements (again)

to demonstrate need, and the failure to

address the signicance of the project’s

greenhouse gas emissions, was arbi-

trary and capricious. In September, the

company announced that the project

would not go forward due to the fail-

ure to obtain other necessary permits.

Even though Representative

Casten has ended his “Hot FERC

Summer” campaign (with a Dolly

Parton-inspired ourish), the court’s

analysis of the commission’s deci-

sions is likely to stay hot.

Instead of ‘Hot Summer’ for FERC,

Commission Lands in Hot Water

The D.C. Circuit

slaps the commission

for failing to assess

climate impacts

Bethany A. Davis Noll is

executive direc tor at NYU Law’s

State Energ y & Environmenta l Impact

Center: bethany.davisnoll@nyu.edu.