Certification of New Interstate Natural Gas Facilities, 11548-11580 [2022-04148]

Download as PDF 11548 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. PL18–1–000] Certification of New Interstate Natural Gas Facilities Federal Energy Regulatory Commission, Department of Energy (DOE). ACTION: Updated Policy Statement on Certification of New Interstate Natural Gas Facilities. AGENCY: This Updated Policy Statement describes how the Commission will evaluate all factors bearing on the public interest in determining whether a new interstate natural gas transportation project is required by the public convenience and necessity under the Natural Gas Act. DATES: Comments that pertain to the Paperwork Reduction Act are due May 2, 2022. FOR FURTHER INFORMATION CONTACT: Paige Espy (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502–6698, Paige.Espy@ferc.gov Brandon Cherry (Technical Information), Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502– 8328, Brandon.Cherry@ferc.gov SUPPLEMENTARY INFORMATION: 1. On April 19, 2018, and February 18, 2021, the Commission issued Notices of Inquiry (NOI) 1 to help the Commission explore whether, and if so how, it should revise the approach established by its currently effective policy statement on the certification of new interstate natural gas transportation facilities (1999 Policy Statement) 2 to determine whether a proposed natural gas project ‘‘is or will be required by the present or future public convenience and necessity,’’ as that standard is established in section 7 of the Natural Gas Act (NGA).3 2. Based on the comments received in this proceeding and the significant changes that have occurred since issuance of the 1999 Policy Statement, and in order to provide stakeholders jspears on DSK121TN23PROD with NOTICES2 SUMMARY: 1 Certification of New Interstate Natural Gas Facilities, 83 FR 18020 (Apr. 25, 2018), 163 FERC ¶ 61,042 (2018); Certification of New Interstate Natural Gas Facilities, 86 FR 11268 (Feb. 24, 2021), 174 FERC ¶ 61,125 (2021). 2 Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000) (1999 Policy Statement). 3 15 U.S.C. 717f(e). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 with more clarity on the Commission’s decision-making process, we are issuing this Updated Certificate Policy Statement (Updated Policy Statement). 3. This Updated Policy Statement does not establish binding rules and is intended to explain how the Commission will consider applications to construct new interstate natural gas transportation facilities. I. Background A. Statutory Authority and Obligations 4. Section 7 of the NGA authorizes the Commission to issue certificates of public convenience and necessity for the construction and operation of facilities transporting natural gas in interstate commerce.4 Under section 7(e), the Commission shall issue a certificate to any qualified applicant upon finding that the construction and operation of a proposed project ‘‘is or will be required by the present or future public convenience and necessity.’’ 5 The public convenience and necessity standard encompasses all factors bearing on the public interest.6 5. The NGA authorizes the Commission to attach to a certificate ‘‘such reasonable terms and conditions as the public convenience and necessity may require.’’ 7 The Commission can also deny an application for a certificate if a balancing of all public interest factors weighs against authorization of the proposed project.8 If an applicant receives a certificate from the Commission, section 7(h) of the NGA authorizes the certificate holder to acquire the property rights necessary to construct and operate its project by use of eminent domain if it cannot reach an agreement with a landowner.9 6. The Commission’s consideration of an application generally triggers environmental review under the National Environmental Policy Act of 1969 (NEPA).10 NEPA and its implementing regulations require that, before taking or authorizing a major Federal action that may significantly affect the quality of the human environment, Federal agencies take a 4 Id. 717f. 717f(e). 6 Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959) (‘‘This is not to say that rates are the only factor bearing on the public convenience and necessity, for [section] 7(e) requires the Commission to evaluate all factors bearing on the public interest.’’). 7 15 U.S.C. 717f(e). 8 See, e.g., FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 17 (1961) (the Commission ‘‘can only exercise a veto power over proposed transportation . . . when a balance of all the circumstances weighs against certification’’). 9 15 U.S.C. 717f(h). 10 42 U.S.C. 4321–4370j. 5 Id. PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 ‘‘hard look’’ at the environmental consequences of the proposed action and disclose their analyses to the public.11 NEPA also requires that agencies consider whether there are steps that could be taken to mitigate any adverse environmental consequences.12 While NEPA is a procedural statute and does not require an agency to reject a proposed project based on its adverse effects or to take action to mitigate those effects,13 an agency may require mitigation measures as a condition of its approval under the NGA,14 or withhold approval based on significant adverse effects.15 B. Historical Context and the 1999 Certificate Policy Statement 7. From the enactment of the NGA in 1938 to the 1990s, as a result of statutory and regulatory revisions, the natural gas industry evolved away from a system of limited competition among vertically integrated companies selling bundled commodity and transportation services at Commission-regulated prices to one where pipelines provide openaccess transportation of gas supplies purchased pursuant to non-Commission regulated agreements between producers and other parties. Consequently, consumers benefitted from competition among non-pipeline entities in an unregulated commodity market and from competition among pipeline companies providing openaccess, unbundled transportation services at Commission-regulated rates or, if authorized under certain circumstances, market-based rates. 11 Id. 4332(2)(C); 40 CFR 1500.1–1508.1; Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (discussing the twin aims of NEPA—to consider environmental impacts and to disclose the agency’s consideration to the public). 12 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 351 (1989) (‘‘To be sure, one important ingredient of an [environmental impact statement] is the discussion of steps that can be taken to mitigate adverse environmental consequences.’’). 13 Id. at 352 (‘‘There is a fundamental distinction, however, between a requirement that mitigation be discussed in sufficient detail to ensure that environmental consequences have been fairly evaluated, on the one hand, and a substantive requirement that a complete mitigation plan be actually formulated and adopted, on the other.’’); see also Baltimore Gas & Elec. Co., 462 U.S. at 97 (citing Stryckers’ Bay Neighborhood Council v. Karlen, 444 U.S. 223, 227 (1980)). 14 Final Guidance for Federal Departments and Agencies on the Appropriate Use of Mitigation and Monitoring and Clarifying the Appropriate use of Mitigated Findings of No Significant Impact, 76 FR 3843, 3848 (Jan. 21, 2011). 15 See, e.g., Sierra Club v. FERC, 867 F.3d 1357, 1373 (D.C. Cir. 2017) (Sabal Trail) (explaining that the Commission may ‘‘deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment’’). E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 8. At the same time that natural gas commodity and transportation markets were becoming more competitive, the 1990s saw significant growth in natural gas consumption in the industrial and electric generation sectors. The resultant expansion of the pipeline system to meet this demand raised issues as to who should bear the costs of new construction. Before the Commission adopted the 1999 Policy Statement, the Commission’s pricing policy for new construction generally allowed for the costs of expansion projects to be rolled into a pipeline company’s existing system costs to derive rolled-in rates in a future rate case under section 4 of the NGA.16 All shippers bore some burden of the expansion project’s cost, regardless of whether they would benefit from the project. Local distribution companies (LDC) and other parties believed that this pricing policy sent the wrong price signals by masking the real costs of an expansion project and could result in overbuilding and subsidization of expansion by a pipeline’s existing shippers. 9. In response to these and other concerns, in 1998, the Commission issued a Notice of Proposed Rulemaking 17 and an NOI 18 to explore issues related to its policies on the certification and pricing of new pipeline projects. Based on the information received from stakeholders in response to these notices, the Commission issued the 1999 Policy Statement ‘‘to foster competitive markets, protect captive customers, and avoid unnecessary environmental and community impacts while serving increasing demands for natural gas.’’ 19 These objectives were realized primarily by a shift from a presumption of rolled-in pricing to a presumption of incremental pricing.20 16 Pricing Policy for New and Existing Facilities Constructed by Interstate Natural Gas Pipelines, 71 FERC ¶ 61,241 (1995), order on reh’g, 75 FERC ¶ 61,105 (1996). Under this pricing policy, expansion projects received a determination for rolled-in pricing upon a showing that the new costs would not increase existing rates by more than five percent. 17 Regulation of Short-Term Natural Gas Transportation Services, Notice of Proposed Rulemaking, 63 FR 42,982 (July 29, 1998), FERC Stats. & Regs. ¶ 32,533 (1998) (cross-referenced at 84 FERC ¶ 61,085). 18 Regulation of Interstate Natural Gas Transportation Services, NOI, 63 FR 42974 (Aug. 9, 1998), FERC Stats. & Regs. ¶ 35,533 (1998) (crossreferenced at 84 FERC ¶ 61,087). 19 1999 Policy Statement, 88 FERC at 61,743. 20 Although incremental pricing was presumed, an applicant could demonstrate that a proposed project qualified for a pre-determination of rolledin rate treatment through showing that inexpensive expansibility was made possible because of earlier, costly construction or that the project was designed to improve existing service for existing customers. Id. at 61,746 and n.12. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 Under incremental pricing, existing customers using only existing facilities do not subsidize the cost of constructing and operating new projects.21 10. Pursuant to the 1999 Policy Statement, when reviewing applications to construct new interstate transportation facilities the Commission would first determine whether a threshold requirement of no financial subsidization from existing customers was met. If so, the Commission would next consider whether the applicant eliminated or minimized any residual adverse effects the project might have on: (1) The applicant’s existing customers; (2) existing pipelines in the market and their captive customers; and (3) landowners and communities affected by the proposed project.22 Any residual adverse effects would be balanced against the anticipated benefits from the project.23 The Commission allowed an applicant to rely on a variety of factors to demonstrate that its proposed project was needed,24 but, in practice, applicants generally elected to submit, and the Commission accepted, precedent agreements with prospective customers for long-term firm service as the principal factor in demonstrating project need. 11. The 1999 Policy Statement introduced a sliding scale approach to balance public benefits with adverse effects, where the ‘‘more interests adversely affected or the more adverse impact a project would have on a particular interest, the greater the showing of public benefits from the project required to balance the adverse impact.’’ 25 The 1999 Policy Statement provided that, if the Commission found that project benefits outweighed adverse impacts on economic interests, then the Commission would proceed to consider the environmental impacts of the project.26 C. Developments After Issuance of the 1999 Certificate Policy Statement 12. Much has changed since the Commission issued the 1999 Policy Statement. In the last decade, increases in both domestic and international 21 Id. at 61,746. at 61,745. 23 Id. at 61,748. 24 Id. at 61,747. 25 Id. at 61,749. 26 Id. at 61,745–46. While the Commission only moved to the stage of balancing environmental impacts and other considerations if a proposed project passed this economic test established by the 1999 Policy Statement, Commission staff would begin review of the environmental impacts following the filing of an application. If a project did not pass this economic test, it could be rejected without further consideration of environmental factors. 22 Id. PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 11549 demand for natural gas produced in the United States, combined with the available supply of competitively-priced gas from shale reserves, have reduced prices and price volatility and have resulted in more proposals for natural gas transportation and export projects.27 Much of the increased production is attributable to the development of the Marcellus and Utica shale formations in Pennsylvania, West Virginia, Ohio, and New York; shale formations in the Permian Basin in West Texas and Eastern New Mexico; Eagle Ford Shale in South Texas; and Bakken Shale Formation in North Dakota, among others; as well as associated new extraction technologies. 13. Contracting patterns are changing significantly as a result of this supply growth. In the past, LDCs contracted for a large percentage of interstate pipeline capacity, obtaining supplies from the production area for their customers. Increasingly, however, LDCs are purchasing gas supplies further downstream at market area pooling points or at their city gates as other parties increasingly contract for pipeline capacity. Natural gas producers are now contracting for a significant amount of firm pipeline capacity on expansion projects in an effort to provide a secured commercial outlet for their gas. 14. Over the past decade, there has been greater interest and participation by affected landowners and communities, Tribes, environmental organizations, and others in natural gas project proceedings. Part of this may be attributable to the increase in proposals for new natural gas infrastructure in more densely populated areas of the eastern half of the nation. These stakeholders have raised various concerns with, among other things, the use of eminent domain, the need for new projects, and the environmental impacts of project construction and operation, including impacts on climate change and environmental justice communities. 15. The Commission’s consideration of climate change and greenhouse gas emissions (GHG) has also evolved since issuance of the 1999 Policy Statement. In the last decade, the Commission began including estimates of GHG emissions from project construction (e.g., tailpipe emissions from construction equipment) and operation (e.g., fuel combustion at compressor stations and gas venting and leaks) in its 27 In the early 2000s, there were a number of proposals for natural gas import projects. However, as natural gas supplies increased and prices decreased, the Commission began to see more proposals for natural gas export projects. E:\FR\FM\01MRN2.SGM 01MRN2 11550 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 NEPA documents.28 Then, starting in late 2016, the Commission began to estimate GHG emissions from downstream combustion and upstream production.29 In 2018, however, the Commission reversed this practice,30 resulting in a number of judicial decisions finding fault with the Commission’s approach.31 Concurrent with this Updated Policy Statement, the Commission is issuing a new policy statement to explain how it will assess project impacts on climate change in its NEPA and NGA reviews going forward (GHG Policy Statement).32 16. Another development since issuance of the 1999 Policy Statement is an increasing recognition of the need for Federal agencies to focus on environmental justice and equity. In 1994, under Executive Order 12898, agencies were directed to identify and address ‘‘disproportionately high and adverse human health or environmental effects’’ of their actions on minority and low-income populations (i.e., environmental justice communities).33 In 2021, President Biden issued two executive orders to renew and expand upon this directive. Specifically, Executive Order 13985, issued on January 20, 2021, requires agencies to conduct Equity Assessments to identify and remove barriers to underserved communities and ‘‘to increase coordination, communication, and engagement with community-based organizations and civil rights organizations.’’ 34 And Executive Order 14008, issued on January 27, 2021, directs agencies to develop ‘‘programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climaterelated and other cumulative impacts on disadvantaged communities, as well as 28 See, e.g., Environmental Assessment for the Philadelphia Lateral Expansion Project, Docket No. CP11–508–000, at 24 (Jan. 18, 2012) (construction emissions); Environmental Assessment for the Minisink Compressor Project, Docket No. CP11– 515–000, at 29 (Feb. 29, 2012) (operation emissions). 29 See, e.g., Columbia Gas Transmission, LLC, 158 FERC ¶ 61,046, at PP 116–120 (2017); Tex. E. Transmission, LP, 157 FERC ¶ 61,223, at P 41 (2016), reh’g granted, 161 FERC ¶ 61,226 (2017). 30 Dominion Transmission, Inc., 163 FERC ¶ 61,128 (2018), pet. dismissed, Otsego 2000 v. FERC, 767 F.App’x 19 (D.C. Cir. 2019) (unpublished opinion). 31 See infra P 70. 32 Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (GHG Policy Statement). 33 E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, at 7629, 7632 (Feb. 11, 1994). 34 E.O. 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, 86 FR 7009, 7010–11. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 the accompanying economic challenges of such impacts.’’ 35 II. Notices of Inquiry and Comments 17. As noted above, on April 19, 2018, the Commission issued an NOI (2018 NOI) seeking information and stakeholder perspectives to help the Commission explore whether, and if so how, it should revise the approach established by the 1999 Policy Statement. The Commission identified four general areas for examination in the 2018 NOI: (1) The reliance on precedent agreements to demonstrate need for a proposed project; (2) the potential exercise of eminent domain and landowner interests; (3) the Commission’s evaluation of alternatives and environmental effects under NEPA and the NGA; and (4) the efficiency and effectiveness of the Commission’s certificate processes. In response to the 2018 NOI, the Commission received more than 3,000 comments from a diverse range of stakeholders. 18. On February 18, 2021, the Commission issued another NOI (2021 NOI) seeking to build upon the existing record established by the 2018 NOI. The 2021 NOI noted that a number of changes had occurred since the Commission issued the 2018 NOI, including regulatory changes, the issuance of new executive orders, and increased stakeholder interest in certain topics. Accordingly, the 2021 NOI provided stakeholders with an opportunity to refresh the record and provide updated information and additional viewpoints to help the Commission assess its policy. 19. The 2021 NOI included the four general areas of examination identified in the 2018 NOI, with modifications to the specific questions asked, including new questions on how the Commission should assess and consider the impacts of proposed projects on climate change. The 2021 NOI also identified a fifth area of examination—the Commission’s identification and consideration of disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on environmental justice communities and the mitigation of those adverse impacts and burdens, as well as the Commission’s identification of potentially affected environmental justice communities and measures for ensuring effective participation by these 35 E.O. 14008, Tackling the Climate Crisis at Home and Abroad, 86 FR 7619, 7629; see also The White House, Fact Sheet: President Biden Takes Executive Actions to Tackle the Climate Crisis at Home and Abroad, Create Jobs, and Restore Scientific Integrity Across Federal Government (2021). PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 communities in the certificate review process. In response to the 2021 NOI, the Commission received more than 35,000 comments, including more than 150 unique comment letters, from a diverse range of stakeholders. 20. The comments received in response to the 2018 and 2021 NOIs are summarized at a high level below. Comments related to GHG emissions are summarized in the aforementioned GHG Policy Statement.36 The considerable number of comments submitted in this proceeding indicates substantial public interest in the Commission’s policy for reviewing proposed interstate natural gas facilities. A. The Commission’s Determination of Need 21. A wide range of commenters request that the Commission change how it makes its public need determination. Many of these commenters argue that the Commission should rely less on precedent agreements.37 Additionally, commenters request that, in assessing need, there be greater consideration of climate change impacts,38 increased transparency,39 and an enlarged participatory role for stakeholders.40 Some commenters recommend that applicants be required to provide specific evidence that need exists, the proposed facilities serve that need, and the asserted need cannot be met by existing infrastructure.41 In contrast, regulated companies and industry trade organizations are nearly unanimous in their general support of the 1999 Policy Statement as it relates to the public need determination.42 22. Several commenters argue that the public benefits recognized in the 1999 Policy Statement are skewed, overly 36 GHG Policy Statement, 178 FERC ¶ 61,108. Public Interest Organizations (PIO) 2021 Comments at 12; Delaware Riverkeeper Network 2018 Comments at 67; Friends of the Central Shenandoah 2018 Comments at 36–38. The PIO 2021 Comments represent 54 entities from around the country that advocate for the protection of environmental resources, including Natural Resources Defense Council, Sierra Club, Public Citizen, Conservation Law Foundation, and Southern Environmental Law Center. 38 See, e.g., Environmental Protection Agency (EPA) 2021 Comments at 1–2. 39 E.g., New Jersey Conservation Foundation, Sabin Center for Climate Change Law, Watershed Institute, Clean Air Council, PennFuture, and New Jersey League of Conservation Voters (collectively, New Jersey Conservation Foundation et al.) 2021 Comments at 31–32. 40 E.g., Ann W. Woll 2021 Comments at 1; Jessica Greenwood 2021 Comments at 1; Rev. Betsy Sowers 2021 Comments at 1. 41 E.g., Environmental Defense Fund (EDF) 2021 Comments at 8–12. 42 See, e.g., American Gas Association (AGA) 2021 Comments at 10–11. 37 E.g., E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices narrow, and outdated.43 Additionally, some commenters recommend that the Commission create clear guidelines for benefits like reliability and resilience.44 Some commenters suggest that the Commission consider additional factors in its benefits analysis, such as infrastructure security and how an applicant’s proposal fits with, or advances, new Federal and State policies and goals.45 In contrast, industry trade organizations generally support the Commission’s existing benefits analysis under the 1999 Policy Statement, arguing that the Commission’s responsibilities under the NGA have not changed, and, thus, any changes to the Commission’s review of public benefits should not impede those responsibilities.46 However, some regulated companies recommend that the Commission more heavily weigh certain benefits, such as reliability and resilience, in light of recent extreme cold weather events and ransomware attacks.47 23. Regarding what evidence the Commission should examine to determine project need, many nongovernmental organizations (NGO), individual commenters, and other entities argue that the Commission should analyze factors beyond precedent agreements, such as future markets, opportunity costs, Federal and State public policies, and effects on competition.48 NGOs request that the Commission take a more ‘‘holistic’’ approach and assess proposed projects in conjunction with other projects that are designed to serve the same market, serve similar markets, or pass through the same region,49 and that there be increased coordination with State agencies, including allowing State regulators to review and approve precedent agreements prior to the Commission making a need jspears on DSK121TN23PROD with NOTICES2 43 See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 4. 44 E.g., EDF 2021 Comments at 18. 45 See, e.g., New Jersey Division of Rate Counsel 2021 Comments at 4–8. 46 See, e.g., Natural Gas Supply Association (NGSA) 2021 Comments at 23. 47 Iroquois Gas Transmission System, L.P. (Iroquois) 2021 Comments at 10–11. 48 See, e.g., Niskanen Center, Hopewell Township, Horizons Village Property Owners Association, Inc., and 28 affected landowners (collectively, Niskanen Center et al.) 2021 Comments at 18; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 9; New Jersey Division of Rate Counsel 2021 Comments at 8–9; Carolyn Elefant 2021 Comments at 2–3. 49 PIO 2018 Comments at 10. The PIO 2018 Comments represent 64 entities from around the country that advocate for the protection of environmental resources; many of these entities also signed on to the PIO 2021 Comments. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 determination.50 In contrast, regulated companies and industry trade organizations State that precedent agreements remain powerful indicators of need, as they represent long-term, binding contractual and financial commitments to a project and are more objective evidence than market studies.51 24. Several commenters recommend that when applicants provide precedent agreements with affiliates as evidence of need, the Commission look beyond those agreements, given that companies with common profit interests might have incentives to inflate costs which can then be passed on to captive ratepayers.52 Additionally, several commenters argue that the terms of precedent agreements should be subject to close scrutiny 53 and that the Commission should consider the potential for an asset to be rendered obsolete before the end of its useful life, as well as the length of time over which an asset’s costs are recovered.54 In contrast, regulated companies and industry trade organizations argue that the Commission should not distinguish between affiliate and non-affiliate agreements, as standards of conduct and nondiscrimination require pipeline companies to treat all customers equitably, regardless of whether the customer is an affiliate or a nonaffiliate.55 These entities allege that economic risk, financial obligation, and oversight by State and local regulators associated with precedent agreements demonstrate that they are clear evidence of need, regardless of whether the shipper is an affiliate.56 25. A wide range of commenters assert that the Commission must consider the end use of the natural gas 50 Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 18. 51 See, e.g., WBI Energy Transmission, Inc. (WBI Energy) 2021 Comments at 3; National Fuel Gas Supply Corporation (National Fuel) 2021 Comments at 9; Energy Transfer LP 2021 Comments at 4–5; Interstate Natural Gas Association of America (INGAA) 2021 Comments at 17–19; Boardwalk Pipeline Partners LP (Boardwalk) 2021 Comments at 28. 52 See, e.g., Natural Resources Defense Council, Sierra Club, Earthjustice, GreenFaith, Southern Environmental Law Center, Conservation Law Foundation, Public Citizen, Catskill Mountainkeeper, New Jersey Conservation Foundation, Riverkeeper, Inc., and Acadia Center (collectively, Joint NGOs) April 2018 Comments at 2; Jim Steitz 2018 Comments at 2. 53 See, e.g., Friends of the Central Shenandoah 2018 Comments at 47–49; Upstate Forever 2018 Comments at 2. 54 New Jersey Division of Rate Counsel 2021 Comments at 10. 55 See, e.g., WBI Energy 2021 Comments at 5; INGAA 2021 Comments at 19–20; DTE Energy Company 2018 Comments at 5; Iroquois 2018 Comments at 12–13. 56 E.g., WBI Energy 2021 Comments at 5. PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 11551 to be transported in its assessment of need, even if end use could change over time.57 Some commenters also note that climate change issues cannot be appropriately addressed without a firm understanding of end use.58 However, regulated companies and industry trade organizations argue against consideration of expected end use given the practical challenges of dynamic gas markets,59 the Commission’s regulations prohibiting pipelines from unduly discriminating among shippers based on end use,60 and the fact that regulating end use is outside the scope of the Commission’s statutory authority.61 26. Many commenters recommend that the Commission assess need in a regional planning context, including consideration of existing infrastructure, in order to avoid unnecessary environmental harm, ‘‘underutilized or stranded’’ assets, and needlessly higher rates for captive consumers.62 Regulated companies and industry trade organizations, however, generally oppose the Commission using a regional approach to review natural gas pipeline projects, asserting that this could needlessly delay construction,63 the proximity of pipeline projects does not necessarily indicate that projects serve the same need in a region,64 and the open season process already serves to ensure duplicative projects are not constructed.65 Also, these entities do not support the Commission further examining whether existing infrastructure could sufficiently meet demand.66 27. Additionally, several commenters assert that the Commission must consider future demand as facilities age, as well as national and State decarbonization policies and targets.67 In contrast, regulated companies and industry trade organizations contend that assessment of future demand is not 57 See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 29–32; Deb Evans and Rob Schaaf 2018 Comments at 3–5. 58 E.g., Fore River Residents Against the Compressor Station, Inc. (FRRACS) 2021 Comments at 2. 59 Enbridge Gas Pipelines (Enbridge) 2021 Comments at 46; WBI Energy 2021 Comments at 6. 60 INGAA 2021 Comments at 22 (citing 18 CFR 284.7(b)). 61 Cheniere Energy, Inc. (Cheniere) 2018 Comments at 6. 62 See, e.g., EPA 2021 Comments at 1–3; New Jersey Division of Rate Council 2018 Comments at 13–15; Friends of Central Shenandoah 2018 Comments at 57–59. 63 E.g., INGAA 2021 Comments at 23. 64 E.g., INGAA 2021 Comments at 24. 65 E.g., Cheniere 2018 Comments at 8. 66 See, e.g., Energy Transfer LP 2021 Comments at 6; Iroquois 2021 Comments at 12. 67 See, e.g., New Jersey Division of Rate Counsel 2021 Comments at 13–14. E:\FR\FM\01MRN2.SGM 01MRN2 11552 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 necessary or prudent, given that sophisticated market participants already make these calculations, and do not support the Commission performing a comparative or future-looking analysis of energy sources.68 These entities emphasize that demand for natural gas projects will be correlated with demand for, and deployment of, variable energy resources.69 28. Generally, commenters are split on whether, and if so how, the Commission should consider the economic, energy security, and social attributes of domestic production and use of natural gas in reviewing proposed projects. Some regulated companies State that consideration of these factors should be limited; 70 however, others argue that the Commission should consider attributes such as job creation and tax revenues.71 Several individuals and NGOs State that the Commission could consider these attributes for particular projects, but that the Commission should then also consider the costs of natural gas projects associated with increased noise, lowered property values, lowered air quality, a lowered tax base, and the loss of landowners’ potential use of their land.72 Commenters also recommend that any need analysis be focused on the specific benefits of a proposed project rather than hypothetical or general benefits 73 and that the Commission assess the magnitude or extent of both the benefits and burdens of a proposed project, including whether the jobs created are temporary or permanent, as well as the proportion of the jobs that will be filled by low- to middle-income local workers.74 68 See, e.g., Williams Companies, Inc. (Williams) 2021 Comments at 14; Enbridge 2021 Comments at 51; INGAA 2021 Comments at 25–26. 69 INGAA 2021 Comments at 25–26; Boardwalk 2021 Comments at 38. 70 E.g., Southern Company Services, Inc. 2021 Comments at 4. 71 See, e.g., Williams 2021 Comments at 11–12; Boardwalk 2021 Comments at 39–40; see also American Forest & Paper Association, Industrial Energy Consumers of America, Process Gas Consumers Group, and the Fertilizer Institute (collectively, American Forest & Paper Association et al.) 2021 Comments at 17; INGAA 2021 Comments at 26–28; AGA 2021 Comments at 32; United Association of Journeymen and Apprentices of the Plumbing, Pipe Fitting and Sprinkler Fitting Industry of the United States and Canada, AFL–CIO (United Association) 2021 Comments at 26–28; NGSA 2021 Comments at 16. 72 See, e.g., PIO 2021 Comments at 12–13; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 42; Edward Woll 2021 Comments at 2; William F. Limpert 2021 Comments at 7–8; Massachusetts PipeLine Awareness Network (PLAN) 2021 Comments at 2; Rev. Betsy Sowers 2021 Comments at 2. 73 EDF 2021 Comments at 50. 74 EPA 2021 Comments at 4. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 B. The Exercise of Eminent Domain and Landowner Interests 29. Many commenters suggest that the Commission adjust its approach to considering the possible use of eminent domain. For example, some commenters assert that eminent domain should only be an option for projects that can guarantee domestic use or local benefit, or that the Commission should deny certificates that would rely on eminent domain for more than twenty percent of the proposed route.75 In contrast, regulated companies and industry trade organizations State that the Commission should maintain its current approach, as it adequately protects landowners from the unnecessary use of eminent domain by ensuring that only projects that are needed and that do not require subsidization from existing customers are approved.76 These entities also note that it is not possible for the Commission to reliably estimate the amount of eminent domain that will ultimately be used prior to issuance of a certificate.77 30. Some commenters assert that additional measures should be taken to minimize the use of eminent domain for projects, including routing pipelines in existing utility corridors when possible, requiring proof that an applicant’s efforts to negotiate with landowners have failed, or reporting to the Commission each easement as it is agreed upon.78 However, many regulated companies state that additional measures to minimize the use of eminent domain are unnecessary, as companies have already taken steps to ensure it is used infrequently.79 31. Several commenters recommend that the Commission give greater weight to the concerns of impacted landowners and communities.80 Some assert that landowners have unequal bargaining power with applicants and that the Commission should consider whether an applicant’s pre-certificate actions 75 See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 43; Upstate Forever 2018 Comments at 3; Jane Twitmyer 2018 Comments at 2; Franklin Regional Council of Gov’ts 2018 Comments at 2. 76 See, e.g., Boardwalk 2021 Comments at 61–63; TC Energy Corporation 2021 Comments at 16; INGAA 2018 Comments at 56. 77 See, e.g., TC Energy Corporation 2021 Comments at 19; Spectra Energy Partners LP (Spectra) 2018 Comments at 54; American Petroleum Institute (API) 2018 Comments at 13. 78 See, e.g., William F. Limpert 2021 Comments at 9; Tom Russo 2021 Comments at 12; Friends of the Central Shenandoah 2018 Comments at 67. 79 See, e.g., Cheniere 2021 Comments at 9–10; Kinder Morgan Entities (Kinder Morgan) 2021 Comments at 18–20; API 2021 Comments at 11–13; INGAA 2021 Comments at 29. 80 EDF 2021 Comments at 5; Dr. Susan F. Tierney 2018 Comments at 8, 46–48. PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 related to landowners demonstrate that the applicant acted in good faith.81 Additionally, some commenters argue that the Commission should expand the regulatory definition of ‘‘affected landowners’’ to ensure all impacted landowners and residents are included in the Commission’s consideration.82 32. Multiple commenters state that it is the Commission’s responsibility to explain the certificate process to landowners and to ensure that they have the necessary tools to fully participate.83 Regulated companies and industry trade organizations support the creation of the Commission’s Office of Public Participation (OPP) to guide landowners’ understanding of, and participation in, the pipeline development and review process.84 Several commenters recommend that the Commission designate certain staff as non-decisional to act as official procedural case managers.85 33. Numerous commenters also recommend changes to the Commission’s process and resources to assist landowners, including incorporating non-traditional outreach methods to notify and engage stakeholders early and throughout the process, improving the Commission’s website and eLibrary system, conducting public meetings and site visits focused on landowner issues, and providing longer public comment periods.86 Some commenters propose that the Commission automatically grant all affected landowners party status to project proceedings, or, at a minimum, provide an updated step-by-step guide for landowners on how to intervene.87 Industry trade organizations support longer intervention periods for landowners,88 while some regulated companies argue that the Commission 81 See, e.g., New Jersey Conservation Foundation, Watershed Institute, and Sierra Club 2018 Comments at 35–36; Jody McCaffree 2018 Comments at 7. 82 See, e.g., Sari DeCesare 2021 Comments at 1; Gary Salata 2021 Comments at 1. 83 See, e.g., Duke Energy Corporation 2018 Comments at 45; Upstate Forever 2018 Comments at 3. 84 See, e.g., Kinder Morgan 2021 Comments at 20– 21; BHE Pipeline Group 2021 Comments at 6–8; INGAA 2021 Comments at 31–32. 85 Tom Russo 2021 Comments at 13; American Midstream Partners LP, Canyon Midstream Partners LLC, and Cureton Midstream LLC 2018 Comments at 7–8; Giles County and Roanoke County, Virginia 2018 Comments at 13–14. 86 See, e.g., Carolyn Elefant 2021 Comments at 5– 6; Niskanen Center et al. 2021 Comments at 36–38; Kinder Morgan 2021 Comments at 22–26; Friends of Central Shenandoah 2018 Comments at 69; Spectra 2018 Comments at 5. 87 See Niskanen Center et al. 2021 Comments at 28; Deb Evans and Ron Schaaf 2021 Comments at 13; Carolyn Elefant 2018 Comments at 2–3. 88 See INGAA 2021 Comments at 32. E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices should limit interventions to entities that have a direct interest in a specific project.89 34. A wide range of commenters argue that, in order to prevent needless condemnations while routes are still subject to change and it is uncertain if a project will be authorized, the Commission could defer issuing a certificate or condition a certificate holder’s exercise of eminent domain until an applicant obtains all final Federal and State permits and issuance of such permits is sustained if appeal is filed.90 In contrast, many regulated companies and industry trade organizations assert that the Commission has no authority under the NGA to condition a certificate holder’s exercise of eminent domain because eminent domain is a right that arises directly from the NGA.91 These commenters express concern that if the Commission defers issuing a certificate until an applicant has all authorizations needed to commence construction, it would create practical challenges and could result in unintended consequences (e.g., a pipeline may need survey access in order to obtain information necessary for another permit).92 C. The Commission’s Consideration of Environmental Impacts 35. Many commenters suggest that the Commission revise its approach to analyzing alternatives under NEPA. Some commenters recommend that the Commission consider a broader scope of alternatives (e.g., modifications to existing infrastructure, co-location with existing infrastructure, and alternative sources of energy generation) 93 or a broader range of factors to compare alternatives (e.g., the quantified and monetized impact of GHG emissions; impact of natural gas exports on domestic energy prices; and costeffectiveness when accounting for all significant health, productivity, and opportunity costs).94 Additionally, jspears on DSK121TN23PROD with NOTICES2 89 See Adelphia Gateway LLC 2018 Comments at 13–14. 90 See, e.g., Land Trust Alliance 2021 Comments at 9; Jackie Freedman 2021 Comments at 1; Pipeline Safety Trust 2021 Comments at 2; Terese and Joseph Buchanan May 18, 2021 Comments at 1; Gary Salata 2021 Comments at 1. 91 See, e.g., INGAA 2021 Comments at 36–38; API 2021 Comments at 15–16; Enbridge 2021 Comments at 70; Cheniere 2021 Comments at 9. 92 See, e.g., API 2021 Comments at 17–18; Boardwalk 2021 Comments at 63–65. 93 See Friends of the Central Shenandoah 2018 Comments at 75; EPA June 21, 2018 Comments at 1; Leslie Sauer 2018 Comments at 2. 94 See New Jersey Conservation Foundation et al. 2021 Comments at 21–22; Institute for Policy Integrity at New York University School of Law (Policy Integrity) 2018 Comments at 16, 23–24; VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 commenters assert that the Commission should not blindly adopt a project sponsor’s project purpose and, consistent with Citizens Against Burlington, Inc. v. Busey,95 must evaluate alternatives to achieve the Commission’s goals, shaped by the application before it and the Commission’s function in the decisional process.96 In contrast, regulated companies and industry trade organizations state that the current scope of the Commission’s alternatives analysis is appropriate and consistent with NEPA, and has been upheld by the courts.97 These entities also assert that Busey prohibits the Commission from considering alternatives that would not meet the purpose and need of the proposed Federal action.98 36. Many commenters request that the Commission change how it conducts its cumulative effects analysis under NEPA. For example, NGOs and other commenters recommend that the Commission conduct regional evaluations 99 and prepare programmatic environmental impact statement (EIS) 100 to address cumulative effects. To determine the geographic scope for regional evaluations, commenters recommend that the Commission use a radius around the proposed project (e.g., 100 miles) 101 or consider the project scale, gas source, and end-use location.102 In contrast, industry trade organizations and regulated companies recommend that the Commission continue to use a project-specific geographic scope for its cumulative effects analysis.103 These entities assert that the Commission does not have the authority under section 7 of the NGA to conduct regional evaluations, as the Commission only reviews individual pipeline applications, not broader Federal Pennsylvania Departments of Environmental Protection, Conservation and Natural Resources, and Community and Economic Development 2018 Comments at 6; Carolyn Sellars 2018 Comments at 6. 95 938 F.2d 190, 199 (D.C. Cir. 1991). 96 See, e.g., PIO 2021 Comments at 21–22. 97 E.g., INGAA 2021 Comments at 39–41. 98 INGAA 2021 Comments at 41; Iroquois 2021 Comments at 13–14; API 2021 Comments at 19–20; Competitive Enterprise Institute 2021 Comments at 2–3; see also Kinder Morgan 2021 Comments at 26– 28. 99 See, e.g., Joint NGOs April 2018 Comments at 2. 100 E.g., Nature Conservancy 2018 Comments at 2–3; Appalachian Trail Conservancy 2018 Comments at 3. 101 Kirk Frost May 26, 2021 Comments at 8. 102 Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 57. 103 See, e.g., INGAA 2018 Comments at 75; Duke Energy Corporation 2018 Comments at 51–53; Edison Electric Institute 2018 Comments at 16. PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 11553 programs or regional actions where a programmatic review might be appropriate.104 37. NGOs and individual commenters state that how the Commission balances environmental impacts against favorable economic impacts is unclear, lacks transparency, and requires updating.105 Several commenters request that the Commission give environmental impacts greater weight.106 Other commenters criticize the Commission’s phased approach to addressing project impacts under the 1999 Policy Statement, and recommend that the Commission balance economic and environmental impacts together.107 In contrast, industry trade organizations state that the Commission’s approach under the 1999 Policy Statement properly balances economic and environmental impacts, giving proportionate consideration to all impacted stakeholders.108 These entities contend that broadening the balancing would exceed the Commission’s discretion under the NGA 109 and that the NEPA requirement to take a ‘‘hard look’’ at environmental consequences should remain separate from consideration of economic impacts.110 38. Regulated companies and industry trade organizations support the adoption of other agencies’ categorical exclusions under NEPA, including those referenced in Commission staff’s presentation at the January 19, 2021 Commission meeting (Docket No. RM21–10–000).111 Additionally, these entities state that a categorial exclusion should apply to certain actions that do not currently qualify for the Commission’s blanket certificate authority (e.g., project amendments that would result in no, or minimal, changes to the environment).112 In contrast, NGOs suggest that there is no need for the Commission to expand its existing categorical exclusions, and they request that the Commission provide a public notice and comment period for all 104 E.g., Williams 2021 Comments at 34; INGAA 2021 Comments at 44–45; Boardwalk 2021 Comments at 73. 105 See, e.g., Delaware Riverkeeper Network 2018 Comments at 92–93; Friends of the Central Shenandoah 2018 Comments at 92–94; Deb Evans and Rob Schaaf 2018 Comments at 12. 106 E.g., PIO 2021 Comments at 56; Elaine Mroz 2018 Comments at 4. 107 See, e.g., New Jersey Conservation Foundation et al. 2021 Comments at 18–22; Policy Integrity 2021 Comments at 4; Chesapeake Bay Foundation 2018 Comments at 4. 108 E.g., API 2021 Comments at 23. 109 Williams 2021 Comments at 39. 110 INGAA 2018 Comments at 85–89. 111 INGAA 2021 Comments at 83–85; Enbridge 2021 Comments at 149–150. 112 E.g., INGAA 2021 Comments at 84; Enbridge 2021 Comments at 150. E:\FR\FM\01MRN2.SGM 01MRN2 11554 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices projects in which an applicant proposes to use a categorical exclusion.113 D. The Efficiency and Effectiveness of the Commission’s Review Process 39. Many commenters recommend changes to the Commission’s application review process. For example, some commenters recommend that all affected stakeholders be brought into the process as early as possible,114 that decisions regarding information requirements be summarized in a comprehensive application completeness checklist, and that the Commission’s regulations be amended to encourage applicants to submit complete applications at the outset.115 Additionally, several commenters recommend changes to the Commission’s environmental review process, including that the Commission not prepare a NEPA document absent substantive environmental data for the entirety of the proposed route,116 that the Commission consider issuing final EISs and certificates at the same time,117 or, alternatively, that the Commission issue certificates within 90 days of issuance of a final NEPA document.118 Some commenters also state that the Commission should not inject additional regulatory uncertainty into its review process by requiring openended or unduly expansive environmental reviews.119 40. Commenters also make a variety of recommendations to increase transparency in the Commission’s review process and schedules. For example, some commenters propose that the Commission issue a public notice when a draft order has been circulated by Commission staff to the Commissioners,120 establish ‘‘permitting timetables’’ for NGA section 7(c) projects,121 and clarify deadlines for parties to intervene or submit studies.122 Some commenters also recommend that there be a ‘‘cooling off’’ period after the issuance of a draft EIS to resolve disputes between an applicant and 113 PIO 2021 Comments at 72–76. 2021 Comments at 78; see also Dr. Susan F. Tierney 2021 Comments at 41–42. 115 New Jersey Conservation Foundation et al. 2021 Comments at 30–31. 116 New Jersey Conservation Foundation et al. 2021 Comments at 31. 117 Energy Infrastructure Council (EIC) 2021 Comments at 33; Spectra 2018 Comments at 95. 118 WBI Energy 2021 Comments at 11; INGAA 2018 Comments at 94. 119 See, e.g., GPA Midstream Association 2021 Comments at 1; Laborers’ International Union of North America 2021 Comments at 2. 120 Kinder Morgan 2021 Comments at 46. 121 WBI Energy 2021 Comments at 11. 122 Carolyn Elefant 2021 Comments at 7; Spectra 2018 Comments at 94–95; INGAA 2018 Comments at 96. jspears on DSK121TN23PROD with NOTICES2 114 PIO VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 stakeholders with assistance from the Commission’s Dispute Resolution Service.123 41. Several commenters recommend changes to the duration of the pre-filing process. Recommendations include shortening the pre-filing process and extending the application review process,124 collapsing pre-filing into the post-filing process to eliminate lengthy processing times,125 and condensing the application review process by consolidating as much activity as possible in the pre-filing process and requiring all interested parties planning to object to a project to do so during prefiling.126 42. Many commenters also propose ways to make stakeholder participation more effective. For example, some commenters propose that applicants provide transportation or access to public transportation to public meetings, adequate parking at venues, and options for remote participation.127 Several commenters also recommend that the Commission provide notices and related materials in multiple languages 128 and issue guidance to ensure that pipeline project developers provide sufficient and timely information.129 Additionally, some commenters recommend that the Commission’s new OPP be a neutral resource to landowners and other stakeholders seeking more information on the Commission’s review process.130 Other commenters recommend that staff prioritize input provided by stakeholders that will be directly impacted by a project,131 and that all comments submitted to a docket receive a response or some other indication that a member of Commission staff has read the comments.132 43. Several commenters note the importance of transparency and coordination in the interagency review 123 Tom Russo 2021 Comments at 23. Elefant 2021 Comments at 6. 125 American Forest & Paper Association et al. 2021 Comments at 26–27; Spectra 2018 Comments at 98–99. 126 United Association 2021 Comments at 35–36; INGAA 2018 Comments at 102. 127 E.g., PLAN 2021 Comments at 3; Edward Woll 2021 Comments at 4; Rev. Betsy Sowers 2021 Comments at 3; Kim Robinson 2021 Comments at 2; Surfrider Foundation 2018 Comments at 2; Delaware Riverkeeper Network 2018 Comments at 57. 128 Egan Millard 2021 Comments at 3; Robert Kearns 2021 Comments at 3; Inbal Goldstein 2021 Comments at 4. 129 Dr. Susan F. Tierney 2021 Comments at 42. 130 WBI Energy 2021 Comments at 10. 131 Kinder Morgan 2021 Comments at 47–48. 132 See, e.g., Kim Robinson 2021 Comments at 2; Leslie Sauer Jones and Stephanie Jones June 2021 Comments at 1; James and Kathy Chandler 2018 Comments at 1. 124 Carolyn PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 process. Some regulated companies recommend that the Commission strengthen its role as the lead agency under NEPA by focusing on educating and training cooperating agencies to be better prepared to meet their own statutory deadlines.133 Other commenters suggest that the Commission consider standardized schedules for its review processes, such as publishing timelines that include prefiling, preparation of the NEPA document, and issuance of final orders and authorizations by other agencies,134 and that the Commission create a dedicated task force for coordinating with other agencies.135 44. Many commenters support the separate treatment of different classes of projects, recommending that the Commission provide more timely review of projects with minimal impacts and certain qualifying benefits,136 or expedite approvals for projects where only an environmental assessment is required and there is no opposition.137 However, other commenters oppose the separate treatment of different classes of projects, expressing concern that separate treatment would be arbitrary or discriminatory 138 and that some projects would be left in limbo while the Commission takes action on what it perceives as priority projects.139 Some commenters also suggest changes to the Commission’s blanket certificate program, including changing the filing requirements to reduce the number of required resource reports, eliminating the need for weekly reports,140 increasing both the automatic and prior notice cost limits,141 and adding consideration of other factors such as a project’s acreage to determine eligibility for blanket certificate authority.142 E. The Commission’s Consideration of Effects on Environmental Justice Communities 45. Many commenters suggest that the Commission revise its approach for identifying environmental justice communities in certificate proceedings. For example, some commenters recommend that the Commission use 133 E.g., Kinder Morgan 2021 Comments at 42–43. 2021 Comments at 157. 135 Kirk Frost May 26, 2021 Comments at 13. 136 Iroquois 2021 Comments at 18–19. 137 Kinder Morgan 2021 Comments at 44. 138 Americans for Prosperity 2021 Comments at 2. 139 AGA 2021 Comments at 39. 140 EIC 2021 Comments at 34; TransCanada Corporation 2018 Comments at 32. 141 API 2021 Comments at 36. 142 WEC Energy Group, Inc. 2018 Comment at 6– 7. 134 Enbridge E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 census block-level data; 143 on-theground surveys; 144 social, environmental, and health indicators; 145 and other data and tools to identify such communities.146 Additionally, several commenters recommend that the Commission consult with other Federal and State agencies for assistance with identifying environmental justice communities 147 or allow communities to identify themselves as environmental justice communities.148 46. Many commenters also recommend changes to how the Commission evaluates project impacts on environmental justice communities. For example, NGOs assert that the Commission should always use a reference or comparison group when evaluating disproportionately high and adverse impacts on such communities 149 and ensure that such a group is neither too geographically narrow nor too demographically similar to avoid masking disproportionate impacts.150 NGOs and individual commenters recommend that the Commission consider the existing burden from specific environmental and health indicators when it evaluates cumulative and historic exposures, including the presence of other infrastructure and existing pollution levels in the project area.151 Additionally, these commenters recommend changes to how the Commission evaluates the impacts of direct and indirect air pollution on environmental justice communities.152 In contrast, regulated companies and industry trade organizations state that the Commission should not make 143 See, e.g., PIO 2021 Comments at 86–87; New Jersey Conservation Foundation et al. 2021 Comments at 38–40. 144 See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 69; Tom Russo 2021 Comments at 24–25; William F. Limpert 2021 Comments at 19. 145 New Jersey Conservation Foundation et al. 2021 Comments at 35–38; North Carolina Department of Environmental Quality 2021 Comments at 2; EDF 2021 Comments at 57. 146 Quincy Democratic City Committee 2021 Comments at 1–2; Natural Resources Defense Council May 2021 Comments at 14–15. 147 EPA 2021 Comments at 7; Jeannie Ambrose 2021 Comments at 2. 148 See Save Our Illinois Land (SOIL) 2021 Comments at 1; William F. Limpert 2021 Comments at 19; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 69. 149 New Jersey Conservation Foundation et al. 2021 Comments at 39–40. 150 Policy Integrity 2021 Comments at 49–52. 151 See, e.g., New Jersey Conservation Foundation et al. 2021 Comments at 36–37; Ann W. Woll 2021 Comments at 5; SOIL 2021 Comments at 3. 152 Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 77–82; EDF 2021 Comments at 58. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 substantive changes to how it evaluates impacts on environmental justice communities at this time, and recommend that the Commission wait for further guidance from the White House, EPA, and the Council on Environmental Quality (CEQ) to ensure consistency across the Federal Government.153 47. Many commenters state that there are barriers to the participation of environmental justice communities in Commission proceedings, including inadequate translation services and the Commission’s reliance on electronic media.154 Other commenters state that Commission proceedings can be highly technical in nature, rendering them inaccessible to the general public unless a participant can invest significant time and resources.155 A wide range of commenters recommend changes to the Commission’s public notice and outreach processes to ensure meaningful engagement with environmental justice communities,156 including the Commission’s process for consulting with Tribes.157 Many commenters also support the Commission’s formation of OPP 158 and recommend that the Commission coordinate with community-based organizations and institutions to further encourage the participation of environmental justice communities in Commission proceedings.159 48. Several commenters assert that section 7(e) of the NGA provides the Commission with broad conditioning authority to address project impacts on environmental justice communities in its certificates.160 Some commenters state that the Commission should use its NEPA alternatives analysis to identify 153 API 2021 Comments at 37–39; Enbridge 2021 Comments at 167–168. 154 Terese and Joseph Buchanan May 18, 2021 Comments at 1; PIO 2021 Comments at 87–89; Robert Kearns 2021 Comments at 4; Jackie Freedman 2021 Comments at 1; Deborah Brown 2021 Comments at 1. 155 New Jersey Conservation Foundation et al. 2021 Comments at 34. 156 See, e.g., Kinder Morgan 2021 Comments at 58–59; Ohio Environmental Council 2021 Comments at 3. 157 Coharie Intra-Tribal Council, Haliwa-Saponi Indian Tribe, Lumbee Tribe of North Carolina, Meherrin Indian Nation of North Carolina, Nottoway Indian Tribe of Virginia, and Occaneechi Band of Saponi Nation 2021 Comments at 2; Haliwa-Saponi Indian Tribe 2021 Comments at 2; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 71. 158 See, e.g., API 2021 Comments at 41; EPA 2021 Comments at 8; National Fuel 2021 Comments at 22. 159 New Jersey Conservation Foundation et al. 2021 Comments at 33–35; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 73– 74. 160 New Jersey Division of Rate Counsel 2021 Comments at 23; PIO 2021 Comments at 105. PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 11555 and evaluate ways to mitigate impacts on environmental justice communities.161 If mitigating adverse impacts on environmental justice communities is not possible, other commenters assert that the Commission should deny a certificate.162 49. In contrast, many regulated companies and industry trade organizations state that no Federal statute requires the Commission to implement specific remedial measures to address project impacts on environmental justice communities, but they assert that NEPA provides an appropriate framework in which to analyze such impacts.163 These entities also contend that that the Commission’s conditioning authority under section 7(e) of the NGA is limited to direct project impacts and the Commission could not require measures to redress prior industrial impacts on environmental justice communities or impacts outside of the Commission’s jurisdiction.164 III. Goals and Objectives of the Updated Certificate Policy Statement 50. While significant changes have occurred in the past 23 years, the Commission’s goals and objectives with this Updated Policy Statement remain consistent with those of the 1999 Policy Statement, including to: (1) ‘‘appropriately consider the enhancement of competitive transportation alternatives, the possibility of over building, the avoidance of unnecessary disruption of the environment, and the unneeded exercise of eminent domain;’’ 165 (2) ‘‘provide appropriate incentives for the optimal level of construction and efficient customer choices;’’ 166 and (3) ‘‘provide an incentive for applicants to structure their projects to avoid, or minimize, the potential adverse impacts that could result from construction of the project.’’ 167 161 INGAA 2021 Comments at 98–99; EPA 2021 Comments at 8–9. 162 See, e.g., Attorneys General of Massachusetts, Connecticut, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, and the District of Columbia 2021 Comments at 32–33 (Attorneys General of Massachusetts et al.); see also PLAN 2021 Comments at 5; Katherine Manuel 2021 Comments at 5; Elizabeth Moulds 2021 Comments at 4; Jessica Greenwood 2021 Comments at 4; Shayna Gleason 2021 Comments at 3; Rick Mattila 2021 Comments at 3. 163 See, e.g., Williams 2021 Comments at 60–62, 65; Enbridge 2021 Comments at 178–180, 186; Kinder Morgan 2021 Comments at 48, 57; INGAA 2021 Comments at 88–90. 164 See, e.g., Enbridge 2021 Comments at 181; API 2021 Comment at 44–45. 165 1999 Policy Statement, 88 FERC at 61,737. 166 Id. at 61,743. 167 Id. E:\FR\FM\01MRN2.SGM 01MRN2 11556 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices 51. As discussed above, the 1999 Policy Statement included an analytical framework for how the Commission would evaluate the effects of certificating new projects on economic interests. With this Updated Policy Statement, the Commission intends to provide a more comprehensive analytical framework for its decisionmaking process. Specifically, we provide clarity on how the Commission will evaluate all factors bearing on the public interest, including the balancing of economic and environmental interests in determining whether a project is required by the public convenience and necessity, thus providing more regulatory certainty in the Commission’s review process and public interest determinations. IV. Updated Certificate Policy Statement A. Factors To Be Balanced in Assessing the Public Convenience and Necessity 52. In determining whether to issue a certificate of public convenience and necessity, the Commission will weigh the public benefits of a proposal, the most important of which is the need that will be served by the project, against its adverse impacts. 1. Consideration of Project Need jspears on DSK121TN23PROD with NOTICES2 53. To demonstrate that a project is required by the public convenience and necessity, an applicant must first establish that the proposed project is needed. As indicated above, the Commission’s expectations and requirements for how applicants should demonstrate project need have evolved over time. In the 1999 Policy Statement, the Commission noted concerns associated with relying ‘‘primar[ily]’’ 168 or ‘‘almost exclusively’’ 169 on contracts to establish need for a new project. Those concerns included the ‘‘additional issues [that arise] when the contracts are held by pipeline affiliates’’ 170 and the difficulty such a policy creates for ‘‘articulat[ing] to landowners and community interests why their land must be used for a new pipeline project.’’ 171 Thus, the 1999 Policy Statement provided that: [r]ather than relying only on one test for need, the Commission will consider all relevant factors reflecting on the need for the project. These might include, but would not be limited to, precedent agreements, demand projections, potential cost savings to consumers, or a comparison of projected 168 Id. at 61,744. 169 Id. 170 Id. 171 Id. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 demand with the amount of capacity currently serving the market.172 54. However, in practice, the Commission has relied almost exclusively on precedent agreements to establish project need. Although courts have upheld the Commission’s practice in certain contexts,173 we find that we cannot adequately assess project need without also looking at evidence beyond precedent agreements. After all, as the Commission’s 1999 Policy Statement noted, many different factors may indicate the need—or lack thereof—for a new interstate pipeline. While precedent agreements may indicate one or more shipper’s willingness to contract for new capacity, such willingness may not in all circumstances be sufficient to sustain a finding of need—e.g., in the face of contrary evidence or where there is reason to discount the probative value of those precedent agreements. Accordingly, we find that looking only to precedent agreements, and ignoring other, potentially contrary, evidence may cause the Commission to reach a determination on need that is inconsistent with the weight of the evidence in any particular proceeding, in violation of both the NGA and the Commission’s responsibilities under the Administrative Procedure Act.174 We reaffirm the Commission’s commitment to consider all relevant factors bearing on the need for a project. Although precedent agreements remain important evidence of need, and we expect that applicants will continue to provide precedent agreements, the existence of precedent agreements may not be sufficient in and of themselves to establish need for the project. The Commission will also consider, as relevant, the circumstances surrounding the precedent agreements (e.g., whether the agreements were entered into before 172 Id. at 61,747 (emphasis added). e.g., Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014) (noting that the 1999 Policy Statement ‘‘permits’’ but does not ‘‘require[ ]’’ the Commission to ’’ look[ ] beyond the market need reflected by the applicant’s existing contracts with shippers’’). But see Environmental Defense Fund v. FERC, 2 F.4th 953, 973 (D.C. Cir. 2021) (finding that is was arbitrary and capricious for the Commission to rely solely on a single precedent agreement with an affiliate shipper to establish need when demand for natural gas in the area was flat and the Commission neglected to make a finding as to whether the proposed pipeline would result in a more economical alternative to existing pipelines). 174 Under the Administrative Procedure Act, an agency cannot ignore substantial evidence bearing on the agency decision. See 5 U.S.C. 706; see also, e.g., Motor Vehicles Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (holding that an agency decision is arbitrary and capricious if it ‘‘entirely fail[s] to consider an important aspect of the problem’’). 173 See, PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 or after an open season and the results of the open season, including the number of bidders, whether the agreements were entered into in response to LDC or generator requests for proposals (RFP) and, if so, the details around that RFP process, including the length of time from RFP to execution of the agreement), as well as other evidence of need, as discussed below. 55. For all categories of proposed projects, we encourage applicants to provide specific information detailing how the gas to be transported by the proposed project will ultimately be used, why the project is needed to serve that use, and the expected utilization rate of the proposed project. To the extent applicants do not have information on the end use of the gas, they are encouraged to work with their prospective shippers to obtain it. The absence of this information may prevent an applicant from meeting its burden to demonstrate that a project is needed. 56. For a market-driven project that is responding to increased natural gas demand, the evidence relating to the need for the project could include a market study that projects volumetric or peak day load growth. An applicant may rely on publicly available analyses by the Energy Information Administration or other third parties showing projections of market growth. The applicant could also provide its best assessment, based on publicly available information or data, of whether other transportation suppliers may be able to meet the incremental demand with existing capacity to demonstrate why new pipeline construction is necessary. For individual shippers, load growth profiles, gas supply portfolios, and any advanced approval of contracts by State public service commissions would also be helpful in showing evidence of project need. 57. Some projects may not directly serve a customer but rather are being undertaken to add supplies of natural gas to the market. Such projects may be driven by natural gas producers or natural gas utilities attempting to provide supply at lower cost or support reliability by increasing the volumes of natural gas available to customers. For these projects, evidence to demonstrate consumer benefits may include projections of the net benefits, for example projected lower natural gas prices for consumers due to increased supply competition, compared to the incremental costs of transportation on the new pipeline. The Commission will consider record evidence of regional projections for both gas supply and market growth, as well as pipelinespecific studies in these areas. E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 58. Other pipeline projects may be intended to support more efficient system operations by replacing older and inefficient facilities (e.g., compressors and leak-prone pipes) and performing other infrastructure improvements, or to respond to changing State and Federal Government pipeline safety or environmental requirements. For these projects, applicants may document how proposed facilities, for example pipeline or compressor replacements, provide expected system benefits, such as reduced operating costs, improved pipeline integrity, or reduced natural gas leaks. In addition, an applicant may document how a project avoids adverse impacts or satisfies any changing State or Federal Government regulations. 59. The Commission will consider both current and projected future demand for a project based on the evidence in the record. Applicants are encouraged to submit analyses showing how market trends as well as current and expected policy and regulatory developments would affect future need for the project. Applicants are also encouraged to provide a thorough assessment of alternatives, including supporting data, to facilitate the Commission’s review. In assessing the strength of the applicant’s need showing, the Commission will consider record evidence of alternatives to the proposed project. The Commission’s evaluation will include information indicating that other suppliers would be able to meet some or all of the needs to be served by the proposed project on a timely, competitive basis or whether other factors may eliminate or curtail such needs. 60. As the Commission noted in the 1999 Policy Statement, projects supported by precedent agreements with affiliates raise unique concerns regarding need for the project.175 And, as the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) recently held in Environmental Defense Fund v. FERC, ‘‘evidence of ‘market need’ is too easy to manipulate when there is a corporate affiliation between the proponent of a new pipeline and a single shipper who have entered into a precedent agreement.’’ 176 175 1999 Policy Statement, 88 FERC at 61,739–40 (noting that the ‘‘use of contracts with affiliates to demonstrate market support for projects has generated opposition from affected landowners and competitor pipelines who question whether the contracts represent real market demand’’) and 61,744 (stating that ‘‘[u]sing contracts as the primary indicator of market support for the proposed pipeline project also raises additional issues when the contracts are held by pipeline affiliates.’’). 176 2 F.4th at 973. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 Given those concerns, affiliate precedent agreements will generally be insufficient to demonstrate need. Instead, where projects are backed primarily by precedent agreements with affiliates, the Commission will consider additional information, such as the evidence outlined above.177 We will determine how much additional evidence is required on a case-by-case determination. 61. To the extent the Commission receives information in the record from third parties addressing the need for a project, that too will be considered in our analysis. Where an applicant fails to carry its burden of demonstrating the proposed project is needed, the Commission will not undertake any further consideration of the project’s benefits or adverse effects. 2. Consideration of Adverse Effects 62. In determining whether to issue a certificate of public convenience and necessity, the Commission will consider four major interests that may be adversely affected by the construction and operation of new projects: (1) The interests of the applicant’s existing customers; (2) the interests of existing pipelines and their captive customers; (3) environmental interests; and (4) the interests of landowners and surrounding communities, including environmental justice communities. The Commission may deny an application based on any of these types of adverse impacts. a. Impacts on Existing Customers of the Pipeline Applicant 63. Existing customers of the pipeline applicant may be adversely affected if a proposed project causes an increase in rates or a degradation in service. Regarding potential rate increases, although we are no longer characterizing this issue as a ‘‘threshold question’’ in this Updated Policy Statement, our policy of no financial subsidies remains unchanged.178 That is, the pipeline applicant must be prepared to financially support its proposed project without relying on subsidization by its existing customers. As to other potential impacts to existing customers, like a degradation in service, we will consider the applicant’s efforts to eliminate or minimize any such impacts. 64. As the Commission stated in the 1999 Policy Statement, the policy of no financial subsidies does not mean that a project sponsor has to bear all the financial risk of the project; the risk can 177 See supra P 55. Policy Statement, 88 FERC at 61,746–47, clarified, 90 FERC at 61,391–96. 178 1999 PO 00000 Frm 00011 Fmt 4701 Sfmt 4703 11557 be shared with new customers, but it generally cannot be shifted to existing customers.179 One of the Commission’s regulatory goals is to protect captive customers from rate increases during the terms of their contracts that are unrelated to the costs associated with their service. And existing customers of the expanding pipeline should not have to subsidize a project that does not serve them. 65. The 1999 Policy Statement also stated that the requirement that a new project must be financially viable without subsidies does not eliminate the possibility that, in some instances, project costs should be rolled into the rates of existing customers.180 In most instances, incremental pricing will avoid subsidies for the new project, but the situation may be different in cases of inexpensive expansibility that is made possible because of earlier, costly construction.181 In that instance, because the existing customers bear the cost of the earlier, more costly construction in their rates, incremental pricing could result in the new customers receiving a subsidy from the existing customers because the new customers would not face the full cost of the construction that makes their new service possible. 66. Additionally, expansion costs could still be included in existing shippers’ rates when proposed projects are designed to improve service for existing customers.182 Increasing the rates of existing customers to pay for projects designed to benefit those customers (i.e., by replacing existing capacity, improving reliability, or providing flexibility) is not a subsidy.183 b. Impacts on Existing Pipelines and Their Customers 67. As the Commission stated in the 1999 Policy Statement, existing pipelines that already serve the market to be served by the proposed new capacity may be affected by the potential loss of market share and the possibility that they may be left with unsubscribed capacity investment.184 Additionally, captive customers of existing pipelines may be affected if they must pay for the resulting unsubscribed capacity in their rates. These remain important concerns. 179 1999 Policy Statement, 88 FERC at 61,746. For new pipeline companies, without existing customers, this requirement has no application. 180 Id. 181 Id. 182 Order Clarifying Statement of Policy, 90 FERC at 61,391. 183 Id. at 61,393. 184 1999 Policy Statement, 88 FERC at 61,748. E:\FR\FM\01MRN2.SGM 01MRN2 11558 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 68. It has been the Commission’s longstanding position that it has an obligation to ensure fair competition, but that it is not the role of the Commission to protect existing pipelines from the effects of competition.185 While we continue to maintain this position, we also emphasize that it is not just unfair competition that can harm captive customers. The Commission must consider the possible harm to captive customers that can result from a new pipeline, regardless of whether there is evidence of unfair competition. 69. Congress enacted the NGA ‘‘with the principal aim of encouraging the orderly development of plentiful supplies of . . . natural gas at reasonable prices, and protecting consumers against exploitation at the hands of natural gas companies.’’ 186 Ensuring the orderly development of natural gas supplies includes preventing overbuilding. One way that the Commission can prevent overbuilding is through careful consideration of a proposed project’s impacts on existing pipelines. To the extent that a proposed project is designed to substantially serve demand already being met on existing pipelines, that could be an indication of potential overbuilding. Nevertheless, in such instances, the Commission will also consider whether the proposed project would offer certain advantages (e.g., providing lower costs to consumers or enhancing system reliability). 70. Comments from existing pipelines and their captive customers about the potential impacts from a proposed project will be an important piece of our review. Additionally, comments from State utility or public service commissions as to how a proposed project may impact existing pipelines will be particularly useful. c. Environmental Impacts 71. As noted above, the 1999 Policy Statement included an analytical framework for how the Commission would evaluate the effects of certificating new projects on economic interests. However, the 1999 Policy Statement did not describe how the Commission would consider environmental interests in its decisionmaking process and, more specifically, how it would balance these interests with the economic interests of a project. 185 See Ruby Pipeline, L.L.C., 128 FERC ¶ 61,224, at PP 37–39 (2009); see also 1999 Policy Statement, 88 FERC at 61,748. 186 City of Clarksville, Tennessee v. FERC, 888 F.3d at 479 (quoting NAACP v. FPC, 425 U.S. at 669–70 and FPC v. Hope Nat. Gas Co., 320 U.S. at 610). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 Instead, it stated that environmental interests would be ‘‘separately considered’’ in a certificate proceeding after the balancing of public benefits against the residual adverse effects on economic interests.187 72. While the 1999 Policy Statement focused on economic impacts, the consideration of environmental impacts is an important part of the Commission’s responsibility under the NGA to evaluate all factors bearing on the public interest.188 In the years immediately following issuance of the 1999 Policy Statement, the Commission would sometimes issue a preliminary determination on the nonenvironmental issues associated with a proposed project, and then issue a subsequent decision on the certificate application following the environmental review process; however, in practice, Commission staff would begin review of both the economic and environmental impacts following the filing of an application. Today, the Commission no longer issues preliminary determinations on non-environmental issues, and the Commission and staff continue to review the economic and environmental impacts of projects concurrently. Thus, the sequential framing of these analyses in the 1999 Policy Statement has created some confusion and incorrectly conveyed how the Commission considers environmental impacts. In addition to questions about sequencing, we have seen a significant increase in comments from a range of stakeholders expressing concerns about how the Commission considers environmental impacts, including impacts on climate change and environmental justice communities, in its public interest determinations. 73. To provide more clarity and regulatory certainty to all participants in certificate proceedings, we explain here how the Commission will consider environmental impacts.189 The Commission will balance all impacts, including economic and environmental impacts, together in its public interest determinations under the NGA. As discussed further below, the potential 187 1999 Policy Statement, 88 FERC at 61,747. Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. at 391 (holding that the NGA requires the Commission to consider ‘‘all factors being on the public interest’’); see also Sabal Trail, 867 F.3d at 1373 (explaining that the Commission must consider a pipeline’s direct and indirect GHG emissions because the Commission may ‘‘deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment’’). 189 Recognizing that CEQ is in the process of revising its NEPA regulations, the Commission will consider the comments in this docket regarding NEPA in our future review of our regulations, procedures, and practices for implementing NEPA. 188 See PO 00000 Frm 00012 Fmt 4701 Sfmt 4703 adverse impacts will be weighed against the evidence of need and other potential benefits of a proposal in determining whether to issue a certificate of public convenience and necessity. 74. We will consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA. The Commission expects applicants to structure their projects to avoid, or minimize, potential adverse environmental impacts. Additionally, we expect applicants to propose measures for mitigating impacts, and we will consider those measures—or the lack thereof—in balancing adverse impacts against the potential benefits of a proposal. Further, the NGA grants the Commission broad authority to attach reasonable terms and conditions to certificates of public convenience and necessity.190 Should we deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation. We may also deny an application based on any of the types of adverse impacts described herein, including environmental impacts, if the adverse impacts as a whole outweigh the benefits of the project and cannot be mitigated or minimized. 75. As noted above, since issuance of the 1999 Policy Statement, the Commission’s policy for considering climate impacts has evolved.191 In addition to the significant increase in comments from stakeholders, the courts have issued several decisions addressing the Commission’s evaluation of GHG emissions in certificate proceedings. The D.C. Circuit recently held that reasonably foreseeable downstream GHG emissions are an indirect effect of the Commission authorizing proposed projects 192 and are relevant to the Commission’s determination of whether proposed projects are required by the public convenience and necessity.193 190 15 U.S.C. 717f(e); see also, e.g., ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (noting the Commission’s ‘‘extremely broad’’ conditioning authority). 191 Supra P 15. 192 Sabal Trail, 867 F.3d at 1374. 193 Id. at 1373. In Birckhead v. FERC, 925 F.3d 510, 518 (D.C. Cir. 2019), the D.C. Circuit rejected the Commission’s position that Sabal Trail is limited to the narrow facts of that case. While the court in Birckhead acknowledged that downstream emissions may not always be a foreseeable effect of natural gas projects, it rejected the notion that downstream GHG emissions are a reasonably foreseeable indirect effect of a natural gas project only if a specific end destination is identified. The court further noted that the Commission should attempt to obtain information on downstream uses E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices 76. Concurrently with this Updated Policy Statement, we are issuing a separate policy statement to explain how the Commission will assess project impacts on climate change in certificate proceedings going forward.194 This separate policy statement describes Commission procedures for evaluating climate impacts under NEPA and explains how the Commission will integrate climate considerations into its public convenience and necessity findings under the NGA, including how the Commission will consider measures to mitigate climate impacts. When making public interest determinations, we intend to fully consider climate impacts, in addition to other environmental impacts. d. Impacts on Landowners and Surrounding Communities 77. The construction and operation of new natural gas infrastructure has the potential to result in adverse impacts on the landowners and communities surrounding a project. As the Commission stated in the 1999 Policy Statement: [l]andowners whose land would be condemned for the new pipeline right-ofway, under eminent domain rights conveyed by the Commission’s certificate, have an interest as does the community surrounding the right-of-way. The interest of these groups is to avoid unnecessary construction, and any adverse effects on their property associated with a permanent right-of-way.195 jspears on DSK121TN23PROD with NOTICES2 In the over 20 years that have passed since issuance of the 1999 Policy Statement, the Commission has seen an increase in proposals for projects in more densely populated areas, as well as a significant increase in comments from landowners raising a multitude of economic, environmental, and others concerns with proposed projects. 78. While the 1999 Policy Statement focused primarily on the economic impact associated with a permanent right-of-way on a landowner’s property,196 going forward, and as discussed below, our analysis of impacts to landowners will be more expansive. This fuller consideration of landowner impacts is consistent with the Commission’s approach in recent years of more fully engaging with landowners to ensure that their concerns are properly considered in our to determine whether downstream GHG emissions are a reasonably foreseeable effect of the project. Birckhead, 925 F.3d at 518–19. 194 GHG Policy Statement, 178 FERC ¶ 61,108. 195 1999 Policy Statement, 88 FERC at 61,748. 196 Id. at 61,749 (‘‘The balancing of interests and benefits that will precede the environmental analysis will largely focus on economic interests such as the property rights of landowners.’’). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 proceedings. For example, in June 2021, the Commission established OPP, in part, to facilitate public participation in Commission proceedings. 79. In addition to the increase in comments from landowners since issuance of the 1999 Policy Statement, the Commission has also seen a significant increase in comments raising environmental justice concerns. In recent years, issues surrounding environmental justice and equity have received increased focus and attention at both the State and Federal levels, as demonstrated by the recent issuance of Executive Orders 13985 and 14008, referenced above.197 The Commission is committed to ensuring that environmental justice and equity concerns are better incorporated into our decision-making processes. Accordingly, we clarify that our consideration of impacts to communities surrounding a proposed project will include an assessment of impacts to any environmental justice communities and of necessary mitigation to avoid or lessen those impacts. 80. The Commission and applicants have a shared responsibility to engage communities that may be impacted by a proposed project. This responsibility includes ensuring effective communication with landowners and environmental justice communities about potential impacts and giving careful consideration to the input of such parties during the agency proceeding. Below, we further discuss our expectations for how pipeline applicants will engage with landowners, steps the Commission has taken to protect landowner interests, and how the Commission will consider potential impacts to landowners and environmental justice communities. i. Impacts on Landowners 81. As noted above, once the Commission grants a certificate of public convenience and necessity, section 7(h) of the NGA authorizes a certificate holder to acquire the necessary land or property to construct the approved facilities by exercising the right of eminent domain for those lands for which it could not negotiate an easement with landowners.198 As the Commission has previously recognized: [t]here is no question that eminent domain is among the most significant actions that a government may take with regard to an individual’s private property. And the harm to an individual from having their land condemned is one that may never be fully 197 Supra 198 15 PO 00000 P 16. U.S.C. 717f(h). Frm 00013 Fmt 4701 11559 remedied, even in the event they receive their constitutionally-required compensation.199 Thus, looking only at the economic impacts associated with eminent domain does not sufficiently account for the full scope of impact on landowners. Landowners whose property is subject to eminent domain often experience intangible impacts, which cannot always be monetized. Our consideration of landowner impacts will be based upon robust early engagement with all interested landowners, as well as continued evaluation of input from such parties during the course of any given proceeding. And we will, to the extent possible, assess a wider range of landowner impacts. 82. Given the serious impacts associated with the use of eminent domain, we expect pipeline applicants to take all appropriate steps to minimize the future need to use eminent domain. This includes engaging with the public and interested stakeholders during the planning phase of projects to solicit input on route concerns and incorporate reroutes, where practicable, to address landowner concerns, as well as providing landowners with all necessary information. Additionally, we expect pipelines to take seriously their obligation to attempt to negotiate easements respectfully and in good faith with impacted landowners. The Commission will look unfavorably on applicants that do not work proactively with landowners to address concerns. 83. Additionally, we note that that, while a certificate provides the holder with significant rights and privileges, it also imposes concomitant responsibilities, including complying with all certificate conditions. Specifically, certificate holders must comply with requirements regarding restoration of the pipeline right-of-way. Failure to comply with such requirements could mean that a pipeline is out of compliance with its certificate, and could lead to compliance action by the Commission, including referral to the Commission’s Office of Enforcement for further investigation and potential civil penalties.200 84. Although the Commission does not have the authority to deny or restrict the power of eminent domain in a section 7 certificate,201 or to oversee the 199 Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, Order 871–B, 86 FR 26150 (May 13, 2021), 175 FERC ¶ 61,098, at P 47 (2021). 200 See, e.g., Midship Pipeline Co., LLC, 177 FERC ¶ 61,187 (2021). 201 See Midcoast Interstate Transmission, Inc. v. FERC, 198 F.3d 960, 973 (D.C. Cir. 2000) (‘‘The Continued Sfmt 4703 E:\FR\FM\01MRN2.SGM 01MRN2 11560 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices acquisition of property rights through eminent domain, including issues regarding the timing of and just compensation for the acquisition of property rights,202 the Commission has recently taken steps within its authority to protect landowner interests. Specifically, the Commission issued Order No. 871–B, which precludes authorization of construction during the rehearing period for certificate orders and pending resolution of rehearing requests reflecting opposition to project construction, operation, or need (subject to a time limitation), and which establishes a general policy, subject to a case-by-case determination, of staying certificate orders during the rehearing period and pending Commission resolution of any timely requests for rehearing filed by landowners (also subject to a time limitation).203 85. We acknowledge that in many cases pipeline applicants will not be able to acquire all the necessary rightof-way by negotiation and in such instances may need to use eminent domain. In assessing potential impacts to landowners, the Commission will consider the steps a pipeline applicant has already taken to acquire lands through respectful and good faith negotiation, as well as the applicant’s plans to minimize the use of eminent domain upon receiving a certificate. And, as discussed further below, the potential adverse impacts to landowners, along with other adverse impacts, will be weighed against the evidence of need and potential benefits of a proposal in determining whether to issue a certificate of public convenience and necessity. jspears on DSK121TN23PROD with NOTICES2 ii. Impacts on Environmental Justice Communities 86. Our evaluation of the impacts of a proposed interstate natural gas pipeline will include a robust consideration of its impacts on environmental justice communities.204 Commission does not have the discretion to deny a certificate holder the power of eminent domain.’’). 202 PennEast Pipeline Co., LLC, 174 FERC ¶ 61,056, at P 10 (2021) (citing Atl. Coast Pipeline, LLC, 164 FERC ¶ 61,100, at P 88 (2018); Mountain Valley Pipeline, LLC, 163 FERC ¶ 61,197, at P 76 (2018); PennEast Pipeline Co., LLC, 164 FERC ¶ 61,098, at P 33 n.82 (2018)). 203 Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, Order 871–B, 86 FR 26150 (May 13, 2021), 175 FERC ¶ 61,098, order on reh’g, Order 871–C, 86 FR 43077 (Aug. 6, 2021), 176 FERC ¶ 61,062 (2021). 204 We recognize that the Commission’s environmental justice analysis will also apply to the Commission’s authorization of liquefied natural gas facilities, pursuant to section 3 of the NGA. While those authorizations are not the subject of this Updated Policy Statement, this commitment is worth noting in this discussion of impacts on environmental justice communities. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 We recognize that environmental justice communities have long borne a disproportionate share of the impacts associated with industrial development near their residences, workplaces, religious institutions, and schools. That history often comes with significant, deleterious consequences. For example, environmental justice communities frequently experience health disparities, such as higher rates of asthma and certain cancers relative to society at large, which can render individuals in those communities particularly susceptible to incremental pollution and other adverse impacts that may be caused by a new project.205 The Commission’s public interest responsibility demands that we seriously evaluate these considerations and incorporate them into the balancing test outlined below.206 87. For the Commission to adequately evaluate the impacts of a proposed project on environmental justice communities, it is essential to promptly and properly identify such communities. Commenters noted the insufficiency of relying only on initial screening tools to identify environmental justice communities.207 While data from screening tools such as the EPA’s EJSCREEN may be useful, additional data collection methods may be necessary to properly identify environmental justice communities. We encourage applicants to consult with guidance provided by EPA, CEQ, and other authoritative sources,208 to ensure that the Commission has before it all the data needed to adequately identify environmental justice communities potentially affected by a proposed project. We will evaluate and incorporate, as appropriate, any subsequently issued guidance when considering how to identify environmental justice communities affected by a proposed project. We encourage project developers to do the same. 88. Many commenters encourage the Commission to factor in demographic considerations—such as disability, age, 205 Policy Integrity 2021 Comments at 46–47, 55– 56. 206 Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321 (D.C. Cir. 2021) (Vecinos) (remanding a Commission order based in part on a ‘‘deficient’’ environmental justice analysis). 207 For example, screening tool data ‘‘may need to be supplemented with additional or more localized information and/or ground truthing.’’ EPA 2021 Comments at 7, 9. 208 This may include, for example, relevant State or local agencies. We also note that Federal agencies, including EPA and CEQ, are in the process of updating their guidance regarding environmental justice. PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 household income, pre-existing health conditions, and level of education.209 We recognize that such demographic considerations may be appropriate to consider on a project-by-project basis or as Federal guidance evolves. 89. Additionally, we recognize that proper selection of both the geographic unit of analysis (e.g., census block group) within the affected environment and the reference community (e.g., county/parish, or State) is necessary to ensure that affected environmental justice communities are properly identified for consideration in the Commission’s analysis.210 The affected environment for environmental justice analysis purposes may vary according to the characteristics of the particular project and the surrounding communities.211 Accordingly, the Commission will ensure that the delineation of the affected area, selected geographic unit of analysis, and reference community are consistent with best practices and Federal guidance and will not be limited to a one-size-fits-all approach.212 90. The consideration of cumulative impacts 213 is particularly important when it comes to conducting an environmental justice analysis.214 An environmental analysis that, for example, considers incremental impacts of a project in isolation will, almost by definition, fail to adequately consider the project’s impact on a community that already experiences elevated levels of pollution or other adverse impacts. To adequately capture the effects of 209 North Carolina DEQ 2018 Comments at 8. See also Niskanen Center 2018 Comments at 17–19. 210 An overly broad geographic unit of analysis, for example, could dilute the presence of environmental justice communities. See Policy Integrity 2021 Comments at 46–48; see also Federal Interagency Working Group on Environmental Justice & NEPA Committee, Promising Practices for EJ Methodologies in NEPA Reviews at 21, 26 (March 2016), https://www.epa.gov/sites/production/files/ 2016-08/documents/nepa_promising_practices_ document_2016.pdf (EJ IWG & NEPA Committee). 211 See Vecinos, 6 F.4th at 1330 (‘‘When conducting an environmental justice analysis, an agency’s delineation of the area potentially affected by the project must be ‘reasonable and adequately explained,’ . . . and include ‘a rational connection between the facts found and the decision made.’ ’’ (citations omitted)). 212 See EJ IWG & NEPA Committee at 21–28. 213 ‘‘ ‘Cumulative impact’ is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.’’ 40 CFR 1508.7 (1978). 214 See EDF 2021 Comments at 58; Attorneys General of Massachusetts et al. 2021 Comments at 31; Delaware Riverkeeper & Berks Gas Truth 2021 Comments at 78 and 83; and SOIL 2021 Comments at 3. E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 cumulative impacts, it is essential that the Commission consider those preexisting conditions and how the adverse impacts of a proposed project may interact with and potentially exacerbate them. To that end, several commenters provide recommendations for specific health and environmental indicators that the Commission should consider when it evaluates cumulative exposures. These include factors such as air pollution, heat vulnerability, as well as the effects of pre-existing infrastructure (e.g., bus depots, highways, and waste facilities).215 That analysis can be informed by a wide range of data, including, for example, health statistics such as cancer clusters, asthma rates, social vulnerability data, and community resilience data.216 We will carefully examine cumulative impacts on environmental justice communities and encourage applicants to identify and submit any such data that may be relevant for the particular environmental justice communities affected by their proposed project. 91. The Commission will also consider measures to eliminate or mitigate a project’s adverse impacts on environmental justice communities. We recognize that mitigation must be tailored to the needs of different environmental justice communities. This will require close consultation between the project developer, the communities in question, and the Commission, consistent with our ex parte regulations.217 We will look with disfavor on mitigation proposals that are proposed without sufficient community input. In addition, we note that effective mitigation will require the Commission to consider, among other things, the feasibility of proposed mitigation and methods for ensuring compliance, the timing of proposed mitigation, and, where useful, a range of potential mitigation options. 92. As described above, in June 2021, the Commission established OPP to help facilitate public participation in Commission proceedings. We anticipate that OPP will similarly play an important role in ensuring that environmental justice communities are able to participate meaningfully in section 7 certificate proceedings that affect their interests. We also recognize the adverse impacts that natural gas 215 New Jersey Conservation Foundation et al. 2021 Comments 2021 at 36–37. 216 EPA, EnviroAtlas Interactive Map, https:// www.epa.gov/enviroatlas/enviroatlas-interactivemap (last visited Feb. 1, 2022); Centers for Disease Control and Prevention, Social Vulnerability Index Interactive Map, https://svi.cdc.gov/map.html (last visited Feb. 1, 2022). 217 18 CFR 385.2201. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 infrastructure can have on Native American Tribes and Tribal resources, and we will continue to review our existing processes to ensure that the Commission is engaging in effective government-to-government consultation with Tribes and receiving and considering Tribal input on proposals. 93. In sum, we recognize that ‘‘environmental justice is not merely a box to be checked’’ 218 and we commit to ensuring that such concerns are fully considered in our public interest analysis under NGA section 7. We expect the principles and concerns outlined above will guide that consideration as the Commission continues to develop its environmental justice precedent. Finally, as noted above, we recognize that Federal agencies, including EPA and CEQ, are in the process of updating their guidance regarding environmental justice and we will review and incorporate, as appropriate, any future guidance in our case-by-case decision-making process. B. Assessing Public Benefits and Adverse Effects 94. In deciding whether to issue a certificate of public convenience and necessity, the Commission must decide whether, on balance, the project will serve the public interest. In order to make such a determination, the Commission must consider all of the benefits of a proposal together with all of the adverse impacts, including the economic and environmental impacts. 95. As discussed above, under the 1999 Policy Statement, the Commission would first determine whether, given an applicant’s efforts to mitigate or minimize impacts, there would be any residual adverse effects on the economic interests of the existing customers of the pipeline applicant, existing pipelines in the market and their captive customers, or landowners and communities affected by the proposal. If so, the Commission would balance the evidence of public benefits to be achieved by the project against those residual adverse effects on economic interests. If the benefits outweighed the adverse economic effects, the Commission would then consider the environmental impacts associated with the proposal.219 96. As noted above, today, the Commission and staff review the economic and environmental impacts of projects concurrently. Thus, the sequential framing of these analyses in the 1999 Policy Statement has created 218 Friends of Buckingham v. State Air Pollution Control Bd., 947 F.3d 68, 92 (4th Cir. 2020). 219 1999 Policy Statement, 88 FERC at 61,745–46. PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 11561 some confusion and incorrectly conveyed how the Commission considers economic and environmental impacts. Accordingly, to provide clarity regarding our decision-making process, we explain that, in order to determine whether a proposed project is in the public interest, we must look at the entirety of a proposal and balance all its benefits against all of its adverse impacts. 97. In assessing the public benefits of a project, the Commission intends to consider all benefits that will be provided by the project. The most important consideration in assessing benefits will be the evidence demonstrating that a project is needed, as discussed in more detail above. The Commission will also consider any benefits beyond demand that are alleged by the applicant and supported in the record, which may include evidence that the project will displace more pollution-heavy generation sources, facilitate the integration of renewable energy sources, and/or result in a significant source of jobs or tax revenues (we note that temporary impacts associated with a proposal will generally be given less weight). 98. In assessing the adverse impacts of a proposal, we will consider the range of impacts to: (1) Existing customers of the pipeline applicant; (2) existing pipelines in the market and their captive customers; (3) environmental resources; and (4) landowners and surrounding communities, including environmental justice communities. In reviewing those adverse impacts, the Commission will carefully consider the extent to which an applicant will be able to mitigate any adverse impacts through applicant-proposed measures or additional measures that the Commission could require. 99. Consistent with the 1999 Policy Statement, we believe that ‘‘[t]he more interests adversely affected or the more adverse impact a project would have on a particular interest, the greater the showing of public benefits from the project required to balance the adverse impact.’’ 220 And, as the Commission did in the 1999 Policy Statement, we decline to adopt any bright-line standards for how we will carry out this balancing; 221 rather, the approach must remain flexible enough for the Commission to resolve specific cases and take into account the different interests that must be considered. We do make clear, however, that there may be proposals denied solely on the magnitude of a particular adverse 220 Id. at 61,749. 221 Id. E:\FR\FM\01MRN2.SGM 01MRN2 11562 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices impact to any of the four interests described above if the adverse impacts, as a whole, outweigh the benefits of the project and cannot be mitigated or minimized. On the other hand, there may be proposals that have significant impacts but are still found to be in the public interest if the public benefits outweigh those impacts. V. Applicability of the Updated Certificate Policy Statement 100. A major purpose of this Updated Policy Statement is to provide clarity and regulatory certainty regarding the Commission’s decision-making process. Therefore, the Updated Policy Statement will not be applied retroactively to cases where a certificate has already been issued and investment decisions have been made. However, the Commission will apply the Updated Policy Statement to any currently pending applications for new certificates. Applicants will be given the opportunity to supplement the record and explain how their proposals are consistent with this Updated Policy Statement, and stakeholders will have an opportunity to respond to any such filings. VI. Information Collection Statement 101. The collection of information discussed in the Updated Policy Statement is being submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the Paperwork Reduction Act of 1995 222 and OMB’s implementing regulations.223 OMB must approve information collection requirements imposed by agency rules.224 Respondents will not be subject to any penalty for failing to comply with a collection of information if the collection does not display a valid OMB control number. 102. The Commission solicits comments from the public on the Commission’s need for this information, whether the information will have practical utility, the accuracy of the burden estimates, recommendations to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing respondents’ burden, including the use of automated information techniques. Public comments are due May 2, 2022. The burden estimates are focused on implementing the voluntary information collection pursuant to this Updated Policy Statement. The Commission asks that any revised burden estimates submitted by commenters include the details and assumptions used to generate the estimates. 103. The following estimate of reporting burden is related only to this Updated Policy Statement. 104. Public Reporting Burden: The collection of information related to this Updated Policy Statement falls under FERC–537 and impacts the burden estimates associated with the ‘‘Interstate Certificate and Abandonment Applications’’ component of FERC–537. The Updated Policy Statement will not impact the burden estimates related to any other component of FERC–537.225 The estimated annual burden 226 and cost 227 follow. MODIFICATIONS TO FERC–537 (GAS PIPELINE CERTIFICATES: CONSTRUCTION, ACQUISITION, AND ABANDONMENT) AS A RESULT OF PL18–1–000 Number of respondents Annual number of responses per respondent Total number of responses Average burden & cost per response Total annual burden hours & total annual cost Cost per respondent ($) (1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) ÷ (1) Interstate Certificate and Abandonment Applications. 40 1 105. Title: FERC–537, Gas Pipeline Certificates: Construction, Acquisition and Abandonment. 106. Action: Proposed revisions to an existing information collection. 107. OMB Control No.: 1902–0060. 108. Respondents: Entities proposing natural gas projects under section 7 of the NGA. 109. Frequency of Information Collection: On occasion. 110. Necessity of Voluntary Information Collection: The Commission’s existing FERC–537 information collection pertains to regulations implementing section 7 of the NGA, which authorizes the Commission to issue certificates of jspears on DSK121TN23PROD with NOTICES2 222 44 U.S.C. 3507(d). CFR 1320. 224 This Updated Policy Statement does not require the collection of any information, but rather discusses information that entities may elect to provide. The Commission is following Paperwork Reduction Act procedures to ensure compliance with that act. 225 The Updated Policy Statement will not impact burden estimates to the following components of 223 5 VerDate Sep<11>2014 20:59 Feb 28, 2022 Jkt 256001 40 880 hours; $76,560 Increase. 35,200 hours; $3,062,400 Increase. $76,560 Increase. public convenience and necessity for the construction and operation of facilities transporting natural gas in interstate commerce. The information collected pursuant to this Updated Policy Statement should help the Commission in making its public interest determinations. 111. Internal Review: The opportunity to file the information conforms to the Commission’s plan for efficient information collection, communication, and management within the natural gas pipeline industry. The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the opportunity to file the information. 112. Interested persons may provide comments on this information collection by one of the following methods: • Electronic Filing (preferred): Documents must be filed in acceptable native applications and print-to-PDF, but not in scanned or picture format. • USPS: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street NE, Washington, DC 20426. • Hard copy other than USPS: Federal Energy Regulatory Commission, Office of the Secretary, 12225 Wilkins Avenue, Rockville, Maryland 20852. FERC–537: Pipeline Purging/Testing Exemptions, Blanket Certificates Prior Notice Filings, Blanket Certificates-Annual Reports, Section 311 Construction-Annual Reports, Request for Waiver of Capacity Release Regulations, Interstate and Intrastate Bypass Notice, Blanket Certificates, or Hinshaw Blanket Certificates. 226 Burden is defined as the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. See 5 CFR 1320 for additional information on the definition of information collection burden. 227 Commission staff estimates that the industry’s average hourly cost for this information collection is approximated by the Commission’s average hourly cost (for wages and benefits) for 2021, or $87.00/hour. PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices VII. Document Availability 113. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the internet through the Commission’s Home Page (https:// www.ferc.gov). At this time, the Commission has suspended access to the Commission’s Public Reference Room due to the President’s March 13, 2020 proclamation declaring a National Emergency concerning the Novel Coronavirus Disease (COVID–19). 114. From the Commission’s Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field. 115. User assistance is available for eLibrary and the Commission’s website during normal business hours from the Commission’s Online Support at (202) 502–6652 (toll free at 1–866–208–3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502–8371, TTY (202) 502–8659. Email the Public Reference Room at public.referenceroom@ferc.gov. By the Commission. Commissioner Danly is dissenting with a separate statement attached. Commissioner Christie is dissenting with a separate statement attached. Issued: February 18, 2022. Kimberly D. Bose, Secretary. DEPARTMENT OF ENERGY FEDERAL ENERGY REGULATORY COMMISSION jspears on DSK121TN23PROD with NOTICES2 Certification of New Interstate Natural Gas Facilities Docket No. PL18–1–000 DANLY, Commissioner, dissenting: 1. I dissent from the issuance of the Updated Policy Statement on Certification of New Interstate Natural Gas Facilities.1 Before I explain my reasons for dissenting, I would like to state from the outset that I voted for the Commission’s most recent revised Notice of Inquiry 2 considering changes to its Original Policy Statement.3 1 Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,107 (2022) (Updated Policy Statement). 2 Certification of New Interstate Nat. Gas Facilities, 174 FERC ¶ 61,125 (2021). 3 Certification of New Interstate Nat. Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 2. I cannot, however, support today’s issuance because it will, in combination with the Interim Greenhouse Gas (GHG) Policy Statement,4 have profound implications for the ability of natural gas companies to secure capital, on the timelines for Natural Gas Act (NGA) section 7 5 applications to be processed, and on the costs that a pipeline and its customers will bear as a result of the potentially unmeasurable mitigation that the majority expects each company to propose when filing its application 6 and the possibility of further mitigation measures added unilaterally by the Commission. As I explain in more detail below, this policy statement contravenes the purpose of the NGA which, as the Supreme Court has held, is to ‘‘encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.’’ 7 I. The Commission’s Jurisdiction and the Public Convenience and Necessity Standard Are Not as Broad as the Updated Policy Statement Suggests 3. As an initial matter, the Commission ‘‘is a ‘creature of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.’ ’’ 8 The applicable statute is the NGA, and the statutory standard applicable to NGA section 7(c) certificate applications 9 is whether a proposed project ‘‘is or will be required by the present or future public convenience and necessity.’’ 10 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000) (Original Policy Statement). 4 Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (Interim GHG Policy Statement). I note that today’s issuance in Docket No. PL21–3– 000 ‘‘is subject to revision’’ and is described as an ‘‘interim’’ policy statement. Id. P 1. 5 15 U.S.C. 717f. 6 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 (‘‘[W]e expect applicants to propose measures for mitigating impacts, and we will consider those measures—or the lack thereof—in balancing adverse impacts against the potential benefits of a proposal.’’). 7 NAACP v. FPC, 425 U.S. 662, 669–70 (1976) (citations omitted) (NAACP); accord Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1307 (D.C. Cir. 2015) (quoting NAACP, 425 U.S. at 669–70) (Myersville). 8 Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in original). 9 15 U.S.C. 717f(c). 10 Id. § 717f(e) (‘‘[A] certificate shall be issued to any qualified applicant therefor, . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 11563 4. Notably, public convenience and necessity is not anywhere defined in the language of the NGA.11 That phrase is famously ambiguous, and the statute fails to provide factors to be weighed in arriving at a determination that a proposed project ‘‘is or will be required by the present or future public convenience and necessity.’’ 12 Accordingly, ‘‘the Natural Gas Act ‘vests the Commission with broad discretion to invoke its expertise in balancing competing interests and drawing administrative lines.’ ’’ 13 This does not, of course, mean that we are wholly without guideposts in construing the meaning of the public convenience and necessity standard. As recognized by my colleagues, the Supreme Court has found that NGA section ‘‘7(e) requires the Commission to evaluate all factors bearing on the public interest.’’ 14 This finding, however, cannot not be read in a vacuum. The Court has explained that the inclusion of the phrase ‘‘public interest’’ in a statute is not ‘‘a broad license to promote the general public welfare’’—instead, it ‘‘take[s] meaning from the purposes of the regulatory legislation.’’ 15 Thus, we turn, as we must, to the purpose of the NGA: ‘‘to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.’’ 16 Any balancing under the public convenience and necessity standard should ‘‘take meaning’’ from that purpose. 5. We also know that ‘‘[n]othing contained in [NGA section 7] shall be construed as a limitation upon the power of the Commission to grant such application shall be denied.’’) (emphasis added); see Okla. Nat. Gas Co. v. FPC, 257 F.2d 634, 639 (D.C. Cir. 1958) (‘‘The granting or denial of a certificate of public convenience and necessity is a matter peculiarly within the discretion of the Commission.’’). 11 Cf. ICC v. Parker, 326 U.S. 60, 65 (1945) (‘‘Public convenience and necessity is not defined by the statute. The nouns in the phrase possess connotations which have evolved from the halfcentury experience of government in the regulation of transportation.’’); see generally S. Rep. No. 75– 1162 at 5 (1937) (recognizing similarities in the provisions requiring certificates for public convenience and necessity under the other statutes, e.g., the Interstate Commerce Act). 12 15 U.S.C. 717f(e). 13 Envtl. Def. Fund v. FERC, 2 F.4th 953, 975 (D.C. Cir. 2021) (internal quotation marks omitted). 14 Updated Policy Statement, 178 FERC ¶ 61,107 at P 4 n.6 (quoting Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959)). 15 NAACP, 425 U.S. at 669. 16 Id. at 669–70; accord Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669–70). I note that the Supreme Court has also recognized the Commission has authority to consider ‘‘other subsidiary purposes,’’ such as ‘‘conservation, environmental, and antitrust questions.’’ NAACP, 425 U.S. at 670 & n.6 (citations omitted). But all subsidiary purposes are, necessarily, subordinate to the statute’s primary purpose. E:\FR\FM\01MRN2.SGM 01MRN2 11564 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices certificates of public convenience and necessity for service of an area already being served by another natural-gas company.’’ 17 Therefore, the Commission is not barred from finding a proposed project required by the public convenience and necessity when it is in an area that is already served by another company.18 6. Another consideration relevant to the Commission’s evaluation of the public interest is our jurisdiction and, specifically, which areas of regulation Congress identified as being reserved to states—and thus outside of our jurisdiction. NGA section 1(b) sets forth that division of jurisdiction, providing that, [t]he provisions of [the NGA] shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to naturalgas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.19 The Commission’s authority therefore extends to: (1) The ‘‘transportation of natural gas in interstate commerce,’’ (2) the ‘‘sale in interstate commerce of natural gas for resale,’’ and (3) ‘‘naturalgas companies engaged in such transportation or sale.’’ 20 Exempted from our jurisdiction are production, gathering and local distribution.21 From these exemptions, it may be gleaned that the Commission does not have jurisdiction over the ‘‘gas once it moves beyond the high-pressure mains into the hands of an end user.’’ 22 Another exemption from federal regulation is contained in NGA section 1(c), which states: The provisions of this chapter shall not apply to any person engaged in or legally authorized to engage in the transportation in interstate commerce or the sale in interstate commerce for resale, of natural gas received by such person from another person within 17 15 U.S.C. 717f(g). Panhandle E. Pipe Line Co. v. FPC, 169 F.2d 881, 884 (D.C. Cir. 1948) (‘‘[N]othing in the Natural Gas Act suggests that Congress thought monopoly better than competition or one source of supply better than two, or intended for any reason to give an existing supplier of natural gas for distribution in a particular community the privilege of furnishing an increased supply.’’). 19 15 U.S.C. 717(b) (emphasis added). 20 Id. 21 See id. 22 Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 277 (D.C. Cir. 1990). jspears on DSK121TN23PROD with NOTICES2 18 See VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 or at the boundary of a State if all the natural gas so received is ultimately consumed within such State, or to any facilities used by such person for such transportation or sale, provided that the rates and service of such person and facilities be subject to regulation by a State commission.23 By declaring the foregoing exemptions from federal regulation, Congress has carefully delineated the limits of the Commission’s jurisdiction.24 7. These limits on the Commission’s jurisdiction are not extended by the National Environmental Policy Act (NEPA).25 In fact, NEPA cannot extend our jurisdiction because NEPA is not a means of ‘‘mandating that agencies achieve particular substantive environmental results’’; 26 rather, it serves to ‘‘impose[ ] only procedural requirements on federal agencies with a particular focus on requiring agencies to undertake analyses of the environmental impact of their proposals and actions.’’ 27 Indeed, ‘‘NEPA not only 23 15 U.S.C. 717(c). FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 8 (1961) (Transco) (‘‘Congress, in enacting the Natural Gas Act, did not give the Commission comprehensive powers over every incident of gas production, transportation, and sale. Rather, Congress was ‘meticulous’ only to invest the Commission with authority over certain aspects of this field leaving the residue for State regulation.’’) (citation omitted); see also FPC v. Panhandle E. Pipe Line Co. 337 U.S. 498, 502–03 (1949) (‘‘[S]uffice it to say that the Natural Gas Act did not envisage federal regulation of the entire natural-gas field to the limit of constitutional power. Rather it contemplated the exercise of federal power as specified in the Act, particularly in that interstate segment which the states were powerless to regulate because of the Commerce Clause of the Federal Constitution.’’) (footnote omitted). 25 See Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 129 (D.C. Cir. 1987) (‘‘NEPA, as a procedural device, does not work a broadening of the agency’s substantive powers.’’) (citations omitted); Cape May Greene, Inc. v. Warren, 698 F.2d 179, 188 (3d Cir. 1983) (‘‘The National Environmental Policy Act does not expand the jurisdiction of an agency beyond that set forth in its organic statute.’’) (citations omitted); Gage v. U.S. Atomic Energy Comm’n, 479 F.2d 1214, 1220 n.19 (D.C. Cir. 1973) (‘‘NEPA does not mandate action which goes beyond the agency’s organic jurisdiction.’’) (citation omitted). 26 Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 371 (1989); accord Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (Methow Valley) (‘‘[I]t is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process.’’); see also Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (‘‘Congress in enacting NEPA . . . did not require agencies to elevate environmental concerns over other appropriate considerations.’’). 27 Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 756–57 (2004) (citation omitted); accord Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 23 (2008) (‘‘NEPA imposes only procedural requirements to ‘ensur[e] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts.’ ’’) (quoting Methow Valley, 490 U.S. at 349); see also Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 24 See PO 00000 Frm 00018 Fmt 4701 Sfmt 4703 does not require agencies to discuss any particular mitigation plans that they might put in place, it does not require agencies—or third parties—to effect any.’’ 28 It is necessary to acknowledge the limited, procedural nature of NEPA’s requirements since it almost appears as though some of my colleagues have become convinced that it is necessary to ensure that environmental impacts are mitigated before one can make a finding that a proposed project is required by the public convenience and necessity.29 Neither NEPA nor the NGA establishes such a requirement. 8. And, any attempt to justify such action through the Commission’s conditioning authority is unsupported.30 Under its conditioning authority, ‘‘[t]he Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.’’ 31 But the Commission’s conditioning authority cannot be used to impose conditions beyond the Commission’s jurisdiction.32 Nor can the Commission find support under NEPA for its expectation that applicants propose mitigation measures in order for a project to be deemed required by the public convenience and necessity.33 558 (1978) (‘‘NEPA does set forth significant substantive goals for the Nation, but its mandate to the agencies is essentially procedural.’’) (citations omitted). 28 Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 206 (D.C. Cir. 1991) (citing Methow Valley, 490 U.S. at 353 & n.16). 29 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 (‘‘We will consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA. The Commission expects applicants to structure their projects to avoid, or minimize, potential adverse environmental impacts.’’); id. (‘‘Should we deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation.’’); id. P 79 (‘‘[W]e clarify that our consideration of impacts to communities surrounding a proposed project will include an assessment of impacts to any environmental justice communities and of necessary mitigation to avoid or lessen those impacts.’’). 30 But see id. P 74 (concluding because the Commission’s conditioning authority is broad, if the Commission determines that the applicant’s proposed mitigation of impacts are inadequate, the Commission has the authority to condition the certificate to require additional mitigation). 31 15 U.S.C. 717f(e). 32 See Richmond Power & Light of City of Richmond, Ind. v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (‘‘What the Commission is prohibited from doing directly it may not achieve by indirection.’’) (footnote omitted). 33 See Methow Valley, 490 U.S. at 352–53 (‘‘There is a fundamental distinction, however, between a requirement that mitigation be discussed in E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices II. A Number of the Changes to the Certificate Policy Statement Are Misguided jspears on DSK121TN23PROD with NOTICES2 proclaims that ‘‘we cannot adequately assess project need without also looking at evidence beyond precedent agreements.’’ 38 An expectation is then • Changes in the Commission’s Need established that applicants continue to Determination provide precedent agreements but ‘‘the 9. In the Original Policy Statement, existence of precedent agreements may the Commission stated that, in not be sufficient in and of themselves to evaluating the need for a project, it establish need for the project.’’ 39 would: 11. The Commission underscores what it views as necessary for the consider all relevant factors reflecting on the need for the project. These might include, but Commission to determine need for all would not be limited to, precedent categories of proposed projects: agreements, demand projections, potential ‘‘specific information detailing how the cost savings to consumers, or a comparison gas to be transported by the proposed of projected demand with the amount of project will ultimately be used,’’ i.e., the capacity currently serving the market. The end use and, ‘‘why the project is needed objective would be for the applicant to make to serve that use.’’ 40 And if the a sufficient showing of the public benefits of its proposed project to outweigh any residual applicant does not have information regarding the intended end use? adverse effects discussed below.34 to turn to Although the Commission stated in its Applicants are ‘‘encouraged’’ their shippers to obtain it.41 In the Original Policy Statement that it would absence of such information, the consider other factors, the Commission Commission suggests that the applicant has also ‘‘explained that the [Original] may not satisfy its burden to Policy Statement does not require a demonstrate need for the proposed certain percentage of a proposed project.42 The projected end use and an project’s capacity be subscribed, and that with respect to affiliate shippers, ‘it explanation of the reasons why the project is needed to serve that use are is . . . Commission policy to not look beyond precedent or service agreements not the only information the Commission requests—‘‘[f]or all to make judgments about the needs of categories of proposed projects,’’ the individual shippers.’ ’’ 35 majority also ‘‘encourage[s] applicants 10. In the Updated Policy Statement, to provide specific information detailing the Commission now is revising how it . . . the expected utilization rate of the determines need. The Updated Policy proposed project.’’ 43 The majority also Statement explains that ‘‘[i]n suggests types of ‘‘evidence’’ for various determining whether to issue a categories of projects.44 certificate of public convenience and 12. And when precedent agreements necessity, the Commission will weigh are with an affiliate of the applicant, the the public benefits of a proposal, the most important of which is the need that majority states that those precedent agreements, will generally not be will be served by the project, against its sufficient to demonstrate need.45 adverse impacts.’’ 36 The Commission 13. I agree that, as a legal matter, the acknowledges that its prior reliance on precedent agreements to determine need Commission may take into account considerations other than precedent has been upheld by courts,37 but then agreements in its need determination. I also agree that there may be sufficient detail to ensure that environmental circumstances—such as when there is consequences have been fairly evaluated, on the one hand, and a substantive requirement that a evidence of self-dealing in the execution complete mitigation plan be actually formulated and adopted, on the other. . . . Even more significantly, it would be inconsistent with NEPA’s reliance on procedural mechanisms—as opposed to substantive, result-based standards—to demand the presence of a fully developed plan that will mitigate environmental harm before an agency can act.’’) (citing Baltimore Gas & Elec. Co., 462 U.S. at 100 (‘‘NEPA does not require agencies to adopt any particular internal decisionmaking structure’’)). 34 Original Policy Statement, 88 FERC ¶ 61,227 at 61,747. 35 NEXUS Gas Transmission, LLC, 172 FERC ¶ 61,199, at P 5 (2020) (citation omitted). 36 Updated Policy Statement, 178 FERC ¶ 61,107 at P 52 (emphasis added). 37 See id. P 54 (citing Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014) (noting that the 1999 Policy Statement ‘‘permits’’ but does not ‘‘require[ ]’’ the Commission to ‘‘look[ ] beyond the market need reflected by the applicant’s existing contracts with shippers’’)). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 38 Id. 39 Id. P 54 (listing other considerations that it views as relevant to a need determination, including whether the agreements were entered into before or after an open season, the results of the open season, the number of bidders, whether the agreements were entered into in response to a local distribution company or generator request for proposals (RFP), the details of any such RFP process, demand projections underlying the capacity subscribed, estimated capacity utilization rates, potential cost savings to customers, regional assessments, and filings or statements from State regulatory commissions or local distribution companies regarding the proposed project). 40 Id. P 55. 41 Id. 42 See id. 43 Id. 44 See id. PP 55–59. 45 Id. P 60. PO 00000 Frm 00019 Fmt 4701 Sfmt 4703 11565 of a precedent agreement with an affiliated shipper—where ‘‘the existence of precedent agreements may not be sufficient in and of themselves to establish need for the project.’’ 46 14. To the extent, however, that today’s order suggests that the Commission must look beyond precedent agreements in every circumstance to determine need, I disagree. In my view, precedent agreements are strong evidence of need and the Commission need not look further in most circumstances. As my colleagues acknowledge, courts have upheld on numerous occasions the Commission’s application of its Original Policy Statement and the Commission’s reliance on precedent agreements to support multiple findings of market need.47 15. In terms of precedent agreements with affiliates, the Commission recently received guidance in the form of the narrow holding in Environmental Defense Fund v. FERC.48 There, the court found the Commission’s public convenience and necessity determination to be arbitrary and capricious due to the Commission’s rel[iance] solely on a precedent agreement to establish market need for a proposed pipeline when (1) there was a single precedent agreement for the pipeline; (2) that precedent agreement was with an affiliated shipper; (3) all parties agreed that projected demand for natural gas in the area to be served by the 46 Id. P 54. I am generally skeptical of affiliate transactions and think that in most circumstances, the Commission should scrutinize agreements with an affiliate. As I have previously explained, I agree with the U.S. Court of Appeals for District of Columbia Circuit’s decision to remand the Commission’s orders and the court’s explanation for doing so in Environmental Defense Fund v. FERC, 2 F.4th 953. See Spire STL Pipeline LLC, 176 FERC ¶ 61,160 (2021) (Danly, Comm’r, dissenting at P 9). 47 See, e.g., City of Oberlin, Ohio v. FERC, 937 F.3d 599, 606 (D.C. Cir. 2019) (‘‘[T]his Court has also recognized that ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.’ ’’) (citation omitted); Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d at 111 (‘‘Petitioners identify nothing in the policy statement or in any precedent construing it to suggest that it requires, rather than permits, the Commission to assess a project’s benefits by looking beyond the market need reflected by the applicant’s existing contracts with shippers. To the contrary, the policy statement specifically recognizes that such agreements ‘always will be important evidence of demand for a project.’ ’’) (quoting Original Policy Statement, 88 FERC ¶ 61,227 at 61,748); see also Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1311 (D.C. Cir. 2015) (explaining that ‘‘[f]or a variety of reasons related to the nature of the market, ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.’ . . . In keeping with its policy, the Commission concluded that the evidence that the Project was fully subscribed was adequate to support the finding of market need.’’) (citation omitted). 48 Envtl. Def. Fund v. FERC, 2 F.4th 953. E:\FR\FM\01MRN2.SGM 01MRN2 11566 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices new pipeline was flat for the foreseeable future; and (4) the Commission neglected to make a finding as to whether the construction of the proposed pipeline would result in cost savings or otherwise represented a more economical alternative to existing pipelines.49 That case does not stand for the proposition that in every circumstance, the Commission must always look beyond the precedent agreements. Instead, that case should be read as a failure on the part of the Commission to engage in reasoned decision making based on the facts presented. 16. Next, I disagree with the majority’s position that the Commission should weigh end use in its determination of need. I agree with Enbridge Gas Pipeline that ‘‘[p]rioritizing certain end uses in determining project need would be inconsistent with the Commission’s policies of open access, open seasons and awarding capacity to those that value the capacity the most.’’ 50 More importantly, the Commission does not have jurisdiction over the end use of the gas and has been purposefully deprived of its upstream and downstream authorities by Congress. The breadth of the subject matters that inform our public interest determinations must be informed by the limits of our jurisdiction. 17. I recognize that in Transco the Supreme Court stated that ‘‘ ‘end-use’ . . . was properly of concern to the Commission.’’ 51 As commenters observe,52 however, the Transco 49 Id. at 976. Gas Pipelines May 26, 2021 Comments at 42. ‘‘[U]nder the Commission’s openaccess regulatory regime, pipelines must provide transportation service without ‘undue discrimination or preference of any kind.’ ’’ NEXUS Gas Transmission, LLC, 172 FERC ¶ 61,199, at P 17 (2020) (quoting 18 CFR 284.7(b)). The Commission’s new consideration of the intended end use of the gas and why the gas is needed to serve that use may also cause tension with NGA section 4. Updated Policy Statement, 178 FERC ¶ 61,107 at P 52. NGA section 4(b) states that ‘‘[n]o natural-gas company shall, with respect to any transportation or sale of natural gas subject to the jurisdiction of the Commission, (1) make or grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in any other respect, either as between localities or as between classes of service.’’ 15 U.S.C. 717c(b). 51 Transco, 365 U.S. at 22. 52 See, e.g., TC Energy Corporation May 26, 2021 Comments at 12–13 (explaining that after the Supreme Court’s Transco decision ‘‘was issued in 1961, Congress passed the NGPA, the Wellhead Decontrol Act, EPAct 1992, and the Commission issued Orders Nos. 636 and 637. These statutes and regulatory orders fundamentally altered the natural gas markets by acting to facilitate the development of competitive natural gas markets served by competitive interstate natural gas transportation.’’); id. (‘‘Under the current regulatory framework, there jspears on DSK121TN23PROD with NOTICES2 50 Enbridge VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 decision was made prior to Congress’ enactment of the Natural Gas Policy Act of 1978 (NGPA) 53 and the Natural Gas Wellhead Decontrol Act of 1989 (Wellhead Decontrol Act).54 These later enactments are instructive as to whether the Commission should consider end use as part of its public convenience and necessity determination. 18. The NGPA ‘‘was designed to phase out regulation of wellhead prices charged by producers of natural gas, . . . to ‘promote gas transportation by interstate and intrastate pipelines’ for third parties’’ 55 and also ‘‘to provide investors with adequate incentives to develop new sources of supply.’’ 56 Later, the enactment of the Wellhead Decontrol Act resulted in deregulating upstream natural gas production, and the legislative history suggests the enactment would serve to encourage competition of natural gas at the wellhead.57 In combination, these acts effectively deprived the Commission of authority upstream of the jurisdictional pipeline. 19. In 1987, Congress repealed sections of the Power Plant and Industrial Fuel Use Act of 1978 (Fuel Use Act), further deregulating downstream considerations. My former colleague, Commissioner McNamee previously explained that the Fuel Use Act had ‘‘restricted the use of natural gas in electric generation so as to conserve it for other uses’’ and ‘‘[w]ith the repeal of the Fuel Use Act, Congress is no basis for the Commission to deny a certificate application based on end use, because the current framework requires equal access to a plentiful gas supply for all buyers and sellers. The end use of natural gas is outside the objectives of the current statutory framework, and the Commission should not take end use into consideration when assessing the public need for a pipeline project under the NGA.’’); Boardwalk Pipeline Partners, LP May 26, 2021 Comments at 34 (‘‘FPC v. Transco was decided prior to the NGPA’s and Wellhead Decontrol Act’s creation of a competitive natural gas market that allows all consumers to benefit from the United States’ plentiful gas supplies . . . . [G]iven all of the changes that have occurred over the past 60 years’’ and ‘‘[u]nder the current openaccess regime, there is no legal basis for the Commission to deny a certificate application based on end use.’’) (emphasis omitted). 53 15 U.S.C. 3301–3432. 54 Natural Gas Wellhead Decontrol Act of 1989, Public Law 101–60, 103 Stat. 157 (1989). 55 Gen. Motors Corp. v. Tracy, 519 U.S. 278, 283 (1997) (quoting 57 FR 13271 (1992)). 56 Pub. Serv. Comm’n of State of N.Y. v. MidLouisiana Gas Co., 463 U.S. 319, 334 (1983). 57 See S. Rep. No. 101–39, at 1 (1989) (‘‘[T]he purpose . . . is to promote competition for natural gas at the wellhead in order to ensure consumers an adequate and reliable supply of natural gas at the lowest reasonable price.’’); H.R. Rep. No. 101–29, at 6 (1989) (‘‘All sellers must be able to reasonably reach the highest-bidding buyer in an increasingly national market. All buyers must be free to reach the lowest-selling producer, and obtain shipment of its gas to them on even terms with other supplies.’’). PO 00000 Frm 00020 Fmt 4701 Sfmt 4703 made clear that natural gas could be used for electric generation and that the regulation of the use of natural gas by power plants unnecessary.’’ 58 A House report stated: By amending [the Fuel Use Act], H.R. 1941 will remove artificial government restrictions on the use of oil and gas; allow energy consumers to make their own fuel choices in an increasingly deregulated energy marketplace; encourage multifuel competition among oil, gas, coal, and other fuels based on their price, availability, and environmental merits; preserve the ‘coal option’ for new baseload electric powerplants which are long-lived and use so much fuel; and provide potential new markets for financially distressed domestic oil and gas producers.59 These later, deregulatory enactments were not at play in Transco. And I agree that ‘‘the current framework requires equal access to a plentiful gas supply for all buyers and sellers.’’ 60 Taking the foregoing into account, I am not convinced that the Commission has authority to deny a certificate of public convenience and necessity on the basis of end use, and the Commission should not consider end use in its need determination. b. Consideration of Adverse Effects 20. The Commission explains in its Updated Policy Statement that it will consider four categories of adverse impacts from the construction and operation of new projects: (1) The interests of the applicant’s existing customers; (2) the interests of existing pipelines and their captive customers; (3) environmental interests; and (4) the interests of landowners and surrounding communities, including environmental justice communities.61 The Commission also states that it may deny an application based on any of the foregoing types of adverse impacts.62 Further, the Commission will ‘‘consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA.’’ 63 And the Commission ‘‘expects applicants to structure their projects to avoid, or minimize, potential adverse environmental impacts.’’ 64 21. First, regarding the interests of the applicant’s existing customers, the Commission announces that while our 58 Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019) (McNamee, Comm’r, concurring at P 36). 59 H.R. Rep. 100–78, at 2 (1987). 60 TC Energy Corporation May 26, 2021 Comments at 13. 61 Updated Policy Statement, 178 FERC ¶ 61,107 at P 62. 62 Id. 63 Id. P 74 (emphasis added). 64 Id. E:\FR\FM\01MRN2.SGM 01MRN2 jspears on DSK121TN23PROD with NOTICES2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices policy of no financial subsidies remains unchanged, the Commission will no longer treat this as a threshold requirement.65 This reprioritization is fine; it is merely a policy choice with no obvious legal infirmity. 22. Next, the Commission turns to its considerations of existing pipelines and their customers with an emphasis on the prevention of overbuilding. In an order clarifying the Original Policy Statement, the Commission discussed the consideration of overbuilding and explained that ‘‘[s]ending the wrong price signals to the market can lead to inefficient investment and contracting decisions which can cause pipelines to build capacity for which there is not a demonstrated market need,’’ and that ‘‘[s]uch overbuilding, in turn, can exacerbate adverse environmental impacts, distort competition between pipelines for new customers, and financially penalize existing customers of expanding pipelines and customers of the pipelines affected by the expansion.’’ 66 I agree that the concern of overbuilding is worthy of consideration in the Commission’s balancing and consistent with the purpose of ‘‘encourag[ing] the orderly development of plentiful supplies of . . . natural gas at reasonable prices.’’ 67 23. The Commission also states that ‘‘[t]o the extent that a proposed project is designed to substantially serve demand already being met on existing pipelines, that could be an indication of potential overbuilding.’’ 68 In my view, the Commission should weigh this consideration with NGA section 7(g) in mind, which provides that ‘‘[n]othing contained in [NGA section 7] shall be construed as a limitation upon the power of the Commission to grant certificates of public convenience and necessity for service of an area already being served by another natural-gas company.’’ 69 In considering whether a proposed project is designed to substantially serve demand that is already met, the Commission should also consider whether the proposed project would allow for further competition, send appropriate price signals and improve the efficiency or reliability of service to existing customers. This is worth noting because of the statement in today’s order that states that ‘‘[t]he Commission may deny an application based on any of these 65 Id. P 63. 66 Certification of New Interstate Nat. Gas Pipeline Facilities, 90 FERC ¶ 61,128, at 61,391. 67 NAACP, 425 U.S. at 670 (emphasis added). 68 Updated Policy Statement, 178 FERC ¶ 61,107 at P 69. 69 15 U.S.C. 717f(g). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 types of adverse impacts,’’ 70 including impacts to existing pipelines and their customers. 24. Third, the majority addresses environmental impacts, stating: ‘‘While the 1999 Policy Statement focused on economic impacts, the consideration of environmental impacts is an important part of the Commission’s responsibility under the NGA to evaluate all factors bearing on the public interest.’’ 71 As explained by the majority, the Original Policy Statement ‘‘included an analytical framework for how the Commission would evaluate the effects of certificating new projects on economic interests,’’ and it ‘‘did not describe how the Commission would consider environmental interests in its decision-making process and, more specifically, how it would balance these interests with the economic interests of a project.’’ 72 The Commission now adjusts that framework to include environmental impacts as a consideration in its Updated Policy Statement. 25. The Commission explains that it will consider environmental impacts and potential mitigation in both our environmental reviews under NEPA and our public interest determinations under the NGA.73 The majority ‘‘expect[s] applicants to propose measures for mitigating impacts,’’ for consideration in the Commission’s balancing of adverse impacts against the potential benefits of a proposal.74 The Commission may condition the certificate with further mitigation.75 Moreover, the Commission states that it may ‘‘deny an application based on . . . environmental impacts, if the adverse impacts as a whole outweigh the benefits of the project and cannot be mitigated or minimized.’’ 76 Finally, the majority indicates its intent when making its public convenience and necessity determination to fully consider climate impacts.77 26. I discuss the reasons why I disagree with the majority’s Interim GHG Policy Statement in my dissent to that order.78 In terms of the change from 70 Updated Policy Statement, 178 FERC ¶ 61,107 at P 62 (emphasis added); see also id. P 99 (‘‘[T]here may be proposals denied solely on the magnitude of a particular adverse impact to any of the four interests described above if the adverse impacts, as a whole, outweigh the benefits of the project and cannot be mitigated or minimized.’’). 71 Id. P 72 (citation omitted). 72 Id. P 71. 73 Id. P 74. 74 Id. 75 Id. 76 Id. 77 Id. P 76. 78 See Interim GHG Policy Statement, 178 FERC ¶ 61,108 (Danly, Comm’r, dissenting). PO 00000 Frm 00021 Fmt 4701 Sfmt 4703 11567 an economic focus in the Original Policy Statement, my view is that the Commission should retain its economic framework as the basis of its policy statement. I am concerned that several of the changes made in today’s Updated Policy Statement include issues outside the scope of that which the Commission is able to consider under the NGA. Though time has passed since the NGA’s enactment, it is Congress’ role to amend the statute should it see fit to include in the Commission’s authority matters such as the conditioning of certificates to mitigate GHG emissions. Congress has done so before and could do so again.79 To restate the approach that should be taken to determine the public convenience and necessity: Any balancing under that standard must ‘‘take meaning’’ from the interests articulated in the NGA. 27. Although courts have recognized that the Commission’s NGA section 7(e) ‘‘conditioning authority is ‘extremely broad,’ ’’ 80 such authority is not without limit. ‘‘The Commission may not, however, when it lacks the power to promote the public interest directly, do so indirectly by attaching a condition to a certificate that is, in unconditional form, already in the public convenience and necessity.’’ 81 There have been circumstances where the courts have found the Commission exceeded its conditioning authority.82 Its use must be 79 See Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001) (‘‘Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.’’) (citations omitted). 80 ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (citation omitted). 81 Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (citing Sunray MidContinent Oil Co. v. FPC, 364 U.S. 137, 152 (1960) (‘‘once want of power to do this directly were established, the existence of power to achieve the same end indirectly through the conditioning power might well be doubted’’); Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (the Commission may not achieve indirectly through conditioning power of Federal Power Act what it is otherwise prohibited from achieving directly)); see also Am. Gas Ass’n v. FERC, 912 F.2d 1496, 1510 (D.C. Cir. 1990) (‘‘[T]he Commission may not use its section 7 conditioning power to do indirectly . . . things that it cannot do at all.’’). 82 See, e.g., Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d at 1520, 1522 (D.C. Cir. 1990) (finding that the Commission exceeded the scope of its NGA section 7(e) authority in conditioning the approval of an off-system sales certificate upon certificate holder’s acceptance of a blanket transportation certificate because ‘‘the Commission squarely found that National’s proposed ‘sales are required by the public convenience and necessity,’ quite apart from conditioning their certification upon the pipeline’s filing for a blanket transportation certificate.’’); N. Nat. Gas Co., Div. of InterNorth v. FERC, 827 F.2d 779, 792–93 (D.C. Cir. 1987) (granting rehearing en banc, reaffirming the holding in Panhandle E. Pipe Line Co. v. FERC, 613 F.2d 1120, 1133 (D.C. Cir. E:\FR\FM\01MRN2.SGM Continued 01MRN2 11568 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 consistent with the other provisions of the NGA and the Commission may not use conditions under the guise of acting in the public interest in order to do something it would otherwise not have authority to do. 28. There are also practical considerations in the Commission finding in today’s policy statement that ‘‘[s]hould [the Commission] deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation.’’ 83 The costs that attend the proposed mitigation of GHG emissions may be unmeasurable, may not be readily apparent, and may also be more than the natural gas companies and its shippers are willing or able to bear. There will perhaps be difficulty in measuring the costs of conditions, such as market-based mitigation,84 when the costs are determined based on a changing market. For instance, the cost of purchasing renewable energy credits may be different at the time an application is filed in comparison to when the certificate is issued. And there is no guarantee that the potentially extraordinary costs incurred by a pipeline to comply with the Commission’s public interest determination will be recovered in the pipeline’s rates.85 These practical considerations have not been taken into account by the Commission. Without these considerations, I am not convinced that the Commission has engaged in reasoned decision making. 29. Turning to the Commission’s consideration of impacts on landowners and surrounding communities, as the 1979), which provides ‘‘that ‘the Commission does not have authority under section 7 to compel flowthrough of revenues to customers of services not under consideration in that proceeding for certification,’ ’’ and vacating a condition that violates that holding). 83 Updated Policy Statement, 178 FERC ¶ 61,107 at P 74. 84 See Interim GHG Policy Statement, 178 FERC ¶ 61,108 at PP 114–115 (encouraging project sponsors to propose mitigation measures, stating that project sponsors ‘‘are free to propose any type of mitigation mechanism,’’ and providing the following examples of market-based mitigation: ‘‘[the] purchase [of] renewable energy credits, participat[ion] in a mandatory compliance market (if located in a State that requires participation in such a market), or participat[ion] in a voluntary carbon market’’). 85 See id. P 129 (‘‘Pipelines may seek to recover GHG emissions mitigation costs through their rates, similarly to how they seek to recover other costs associated with constructing and operating a project, such as the cost of other construction mitigation requirements or the cost of fuel. Additionally, the Commission’s process for section 7 and section 4 rate cases is designed to protect shippers from unjust or unreasonable rates and will continue to do so with respect to the recovery of costs for mitigation measures.’’). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 majority recognizes, the Original Policy Statement’s primary focus was on economic impacts associated with a permanent right-of-way on a landowner’s property.86 Going forward, the consideration ‘‘of impacts to landowners will be more expansive.’’ 87 The majority clarifies that the ‘‘consideration of impacts to communities surrounding a proposed project will include an assessment of impacts to any environmental justice communities and of necessary mitigation to avoid or lessen those impacts.’’ 88 And ‘‘expectations’’ are established ‘‘for how pipeline applicants will engage with landowners.’’ 89 30. The majority also commits itself to ‘‘robust early engagement with all interested landowners, as well as continued evaluation of input from such parties during the course of any given proceeding’’ and states that the Commission ‘‘will, to the extent possible, assess a wider range of landowner impacts.’’ 90 Further, the majority states that it ‘‘expect[s] pipeline applicants to take all appropriate steps to minimize the future need to use eminent domain,’’ including ‘‘engage[ment] with the public and interested stakeholders during the planning phase of projects to solicit input on route concerns and incorporate reroutes, where practicable, to address landowner concerns, as well as providing landowners with all necessary information.’’ 91 31. The majority states that it ‘‘expect[s] pipelines to take seriously their obligation to attempt to negotiate easements respectfully and in good faith with impacted landowners’’ and indicates that ‘‘[t]he Commission will look unfavorably on applicants that do not work proactively with landowners to address concerns.’’ 92 Does this mean that the majority plans to weigh, in its balancing of interests, allegations concerning whether the applicant has engaged in good faith negotiation of easements and collaboration with landowners to address concerns? It appears so. The Commission later states that ‘‘[i]n assessing potential impacts to landowners, the Commission will consider the steps a pipeline applicant has already taken to acquire lands through respectful and good faith negotiation, as well as the applicant’s plans to minimize the use of eminent domain upon receiving a certificate.’’ 93 32. It is worth reminding my colleagues that on the very same meeting that this order is issued, the Commission also issues an order 94 that reaffirms a decision to deny landowners’ request for the Commission to interpret the scope of NGA section 7(h) because, in my colleagues’ view, NGA section 7(h) is ‘‘a provision that gives courts a particular implementing role’’ and therefore ‘‘is better resolved by the courts than the Commission.’’ 95 And yet here, the Commission contemplates considering in its balancing whether applicants have engaged in good faith negotiations for easements pursuant to NGA section 7(h). 33. Finally, the Commission discusses how it will consider impacts to environmental justice communities. In explaining its objectives, the majority states that ‘‘[t]he consideration of cumulative impacts is particularly important when it comes to conducting an environmental justice analysis.’’ 96 In support, the Commission has the following footnote: ‘‘ ‘Cumulative impact’ is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.’’ 40 CFR 1508.7 (1978).97 34. There is no problem with announcing the paradigm by which a particular type of analysis will be conducted, but this looks very much as though my colleagues have decided that they can disregard currently-effective regulations and adopt their own definition of the ‘‘effects’’ that should be considered in the Commission’s 93 Id. P 85. Spire STL Pipeline LLC, 178 FERC ¶ 61,109 at P 10 (2022) (citation omitted). 95 Spire STL Pipeline LLC, 177 FERC ¶ 61,147, at P 70 (2021) (citation omitted); see id. (Danly, Comm’r, concurring in part and dissenting in part) (disagreeing with the Commission’s decision to not interpret NGA section 7(h) in the first instance and to leave the interpretation to the courts). 96 Updated Policy Statement, 178 FERC ¶ 61,107 P 90 (relying on a repealed definition for ‘‘cumulative impacts,’’ formerly 40 CFR 1508.7 (1978), in the Council on Environmental Quality’s (CEQ) regulations) (citations omitted). 97 Id. P 90 n.213. 94 See 86 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 78 (citing Original Policy Statement, 88 FERC ¶ 61,227 at 61,749 (‘‘The balancing of interests and benefits that will precede the environmental analysis will largely focus on economic interests such as the property rights of landowners.’’)) 87 Id. 88 Id. P 79. 89 Id. P 80. 90 Id. P 81. 91 Id. P 82. 92 Id. PO 00000 Frm 00022 Fmt 4701 Sfmt 4703 E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices analysis.98 The current NEPA regulations repealed the definition of ‘‘Cumulative impact’’ previously contained in 40 CFR 1508.7.99 The Commission, in attempting to go farther than the CEQ’s regulations, reasons that ‘‘[t]o adequately capture the effects of cumulative impacts, it is essential that the Commission consider those preexisting conditions and how the adverse impacts of a proposed project may interact with and potentially exacerbate them.’’ 100 35. I disagree with the Commission’s decision to disregard CEQ’s regulations.101 The Commission, in its own regulations, states that it ‘‘will comply with the regulations of the [CEQ] except where those regulations are inconsistent with the statutory requirements of the Commission.’’ 102 Regardless of the latitude the majority thinks we may enjoy when conducting our analyses, it is a matter of black letter law that we are constrained by our regulations which adopt CEQ’s regulations; we are also unable to conjure rubrics out of thin air without explanation. jspears on DSK121TN23PROD with NOTICES2 III. The Commission’s Approach of ‘‘Expecting’’ Self-Imposed Mitigation Appears Calculated To Circumvent Statutory Limits on the Commission’s Authority 36. In the Updated Policy Statement, as well as in the Interim GHG Policy Statement, the Commission has asserted a dramatic expansion of its conditioning authority. As explained above, the Commission likely does not have the statutory authority to enter this new territory. It is not surprising, therefore, to see a consistent theme in the Updated Policy Statement that the Commission has expectations of applicants.103 The Commission expects more of applicants going forward. Should those expectations not be met to the Commission’s satisfaction, the 98 Cf. Updated Policy Statement, 178 FERC ¶ 61,107 at P 74 n.189 (‘‘Recognizing that CEQ is in the process of revising its NEPA regulations, the Commission will consider the comments in this docket regarding NEPA in our future review of our regulations, procedures, and practices for implementing NEPA.) 99 See 40 CFR 1508.1(g)(3) (‘‘An agency’s analysis of effects shall be consistent with this paragraph (g). Cumulative impact, defined in 40 CFR [§ ] 1508.7 (1978), is repealed.’’). 100 Updated Policy Statement, 178 FERC ¶ 61,107 at P 90. 101 See 40 CFR 1508.1(g) (defining ‘‘effects or impacts’’). 102 18 CFR 380.1. 103 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 53 (stating that ‘‘the Commission’s expectations and requirements for how applicants should demonstrate project need have evolved over time’’). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 Commission suggests that it will weigh that against finding that the project is required by the public convenience and necessity.104 37. Instead of saying that it is imposing or requiring the legally dubious conditions itself, the Commission is expecting the natural gas companies to play a game of ‘‘sentence first—verdict afterwards,’’ 105 where the applicants choose their own sentence— their proposed mitigation measures—in an effort to guess at the Commission’s expectations. Only then will the Commission rule on whether the project is required by the public convenience and necessity and reveal whether the proposed mitigation is sufficient. 38. It works in the Commission’s favor for applicants to impose their own mitigation measures. If the applicant proposes the mitigation instead of having it imposed by the Commission, it is less likely that a court would deem such condition unreasonable or beyond the Commission’s authority should it come to be challenged at all.106 How can a condition be unreasonable or beyond the Commission’s jurisdiction if it is imposed at the suggestion of the applicant—the party who needs to satisfy such conditions? IV. It Is Unclear Whether the Updated Policy Statement Is Actually Binding and Whether the Commission Should Have Proceeded Through Rulemaking 39. Whether the Commission can impose mitigation as contemplated here, or whether the Commission lacks authority to do so with its conditioning authority will ultimately be addressed by the courts. I recognize the Commission’s assertion that the Updated Policy Statement is not 104 See, e.g., id. P 74 (‘‘Should we deem an applicant’s proposed mitigation of impacts inadequate to enable us to reach a public interest determination, we may condition the certificate to require additional mitigation. We may also deny an application based on any of the types of adverse impacts described herein, including environmental impacts, if the adverse impacts as a whole outweigh the benefits of the project and cannot be mitigated or minimized.’’); id. P 82 (‘‘[W]e expect pipelines to take seriously their obligation to attempt to negotiate easements respectfully and in good faith with impacted landowners. The Commission will look unfavorably on applicants that do not work proactively with landowners to address concerns.’’). 105 Lewis Carroll, Alice’s Adventures in Wonderland and Through the Looking-Glass 107 (Hugh Haughton ed., Penguin Classics 1998). 106 See 15 U.S.C. 717f(e) (‘‘The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.’’) (emphasis added). PO 00000 Frm 00023 Fmt 4701 Sfmt 4703 11569 binding.107 I question whether that is actually the case.108 40. Given the non-binding designation, there may indeed be wellfounded concerns by parties seeking to challenge the Updated Policy Statement.109 But as explained above, the Commission has established its expectations regarding what information it wants included in certificate applications and plans to apply the Updated Policy Statement to both currently-pending 110 and future applications for a certificate of public convenience and necessity. For parties hesitant to challenge a ‘‘non-binding’’ policy statement, I submit that a court may perhaps be receptive to arguments of aggrievement based on the interests of shippers who will now likely have to renegotiate their agreements for proposed projects with currentlypending certificate applications. 41. Moreover, natural gas companies 111 and their shippers likely have not contemplated the increased costs that will come with the Commission’s new policies. It is likely that companies with pending applications have not yet presented proposals for mitigation of the proposed project’s GHG emissions. But the need for developing such proposals will arise—the Commission has requested that companies with pending applications supplement their 107 Updated Policy Statement, 178 FERC ¶ 61,107 at P 3 (stating that the Updated Policy Statement does not establish binding rules, but rather it is intended to explain how the Commission will consider NGA section 7 certificate applications). 108 See Interstate Nat. Gas Ass’n of Am. v. FERC, 285 F.3d 18, 59 (D.C. Cir. 2002) (‘‘The distinction between substantive rule and policy statement is said to turn largely on whether the agency position is one of ‘present binding effect,’ i.e., whether it ‘constrains the agency’s discretion.’ ’’) (citations omitted); Brown Express, Inc. v. United States, 607 F.2d 695, 701 (5th Cir. 1979) (‘‘An announcement stating a change in the method by which an agency will grant substantive rights is not a ‘general statement of policy.’ ’’). 109 See Panhandle E. Pipe Line Co. v. FERC, 198 F.3d 266, 270 (D.C. Cir. 1999) (denying the petition for review because ‘‘[t]he challenged opinions [were] non-binding policy statements’’ and therefore, the court found that the party petitioning for review was ‘‘not aggrieved and has not suffered an injury-in-fact.’’). 110 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 100 (‘‘[T]he Commission will apply the Updated Policy Statement to any currently pending applications for new certificates. Applicants will be given the opportunity to supplement the record and explain how their proposals are consistent with this Updated Policy Statement, and stakeholders will have an opportunity to respond to any such filings.’’). 111 ‘‘ ‘Natural-gas company’ means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.’’ 15 U.S.C. 717a(6). E:\FR\FM\01MRN2.SGM 01MRN2 11570 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices applications.112 The resulting cost increases will, at a minimum, make these projects more expensive and thus increase pipeline rates that may ultimately be passed on to consumers. But it is entirely possible that, in at least some cases, applicants will not accept the certificate. 42. One final thought is that it may have been more appropriate for the Commission to have proceeded through rulemaking instead of through a policy statement. The Commission details the types of information that it expects to be included in applications. However, the Commission’s regulations already address what the ‘‘General content[s] of [an] application’’ should include in 18 CFR 157.6(b). Nothing in that section supports the Commission’s expectation for information regarding end use and proposals for mitigation measures.113 Our regulations do state that ‘‘[a]pplications under section 7 of the Natural Gas Act shall set forth all information necessary to advise the Commission fully concerning the operation, sales, service, construction, extension, or acquisition for which a certificate is requested . . . .’’ 114 But nowhere do our regulations permit the Commission to add to the requirements set forth therein regarding the contents necessary for an NGA section 7(c) application. The Commission may, of course, request information from an applicant through a data request to assist with its determination of whether the project is required by the public convenience and necessity. But to expect (in other words require) information, such as that regarding end use and proposals for mitigation of impacts, is perhaps something that should have been done through a rulemaking. Can a party ignore the Commission’s requests for additional information? Yes, but the cost would be the potential further delay to the issuance of already stalled certificates and perhaps the ultimate rejection of a proposal that fails to meet the Commission’s expectations. V. Today’s Decision Will Have Profound Reliability Implications jspears on DSK121TN23PROD with NOTICES2 43. I cannot overstate the implications of the Updated Policy Statement.115 It 112 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 100. 113 See 18 CFR 157.6(b) (‘‘Each application filed other than an application for permission and approval to abandon pursuant to section 7(b) shall set forth the following information . . . .’’). 114 Id. § 157.5(a). 115 Cf. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 228 (1994) (‘‘It might be good English to say that the French Revolution ‘modified’ the status of the French nobility—but only because VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 will subvert the purpose of the NGA: To ‘‘encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.’’ 116 Further, we leave the public and the regulated community—including investors upon whom we rely to provide billions of dollars for critical infrastructure—with profound uncertainty regarding how the Commission will determine whether a proposed project is required by the public convenience and necessity. With that uncertainty comes reliability concerns. 44. The North American Electric Reliability Corporation (NERC) recently highlighted just how important natural gas is to our electric system when it explained in its most recent Long Term Reliability Assessment that ‘‘[n]atural gas is the reliability ‘fuel that keeps the lights on,’ and natural gas policy must reflect this reality.’’ 117 Today’s issuance is unlikely to allay NERC’s reliability concerns. I began this statement with the consequences that could attend today’s issuance of the Updated Policy Statement. As a reminder those consequences include, but are not limited to, further delay in the issuance of certificates, the incurrence of unmeasurable and unrecoverable costs that may result from the Commission’s imposition of mitigation measures to address GHG and environmental justice impacts (which are now both considered in the Commission’s balancing), and difficulty in securing capital for proposed projects. It is foreseeable that the result will be to cause a reliability crisis in areas that need the gas the most. This arises because of the uncertain criteria to be applied by the Commission, the delays in obtaining the Commission’s approval, and the resulting increases in costs— including the cost of mitigation. Individually and collectively, these could be so severe that a natural gas company might be unable to accept the conditions of its certificate and proceed with a project that otherwise is needed to maintain reliability. VI. Conclusion 45. Many in the industry have asked for certainty. The majority says that they have provided it.118 Regrettably, the there is a figure of speech called understatement and a literary device known as sarcasm.’’). 116 NAACP, 425 U.S. at 669–70 (citations omitted); accord Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669–70). 117 NERC, Long Term Reliability Assessment, at 5 (Dec. 2021), https://www.nerc.com/pa/RAPA/ra/ Reliability%20Assessments%20DL/NERC_LTRA_ 2021.pdf (emphasis added). 118 See Updated Policy Statement, 178 FERC ¶ 61,107 at P 51 (asserting that the Commission is ‘‘providing more regulatory certainty in the PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 majority is wrong on that point, as well. The only certainty to be found in the Updated Policy Statement is that confusion will reign hereafter, at the expense of those who depend on natural gas. For these reasons, I respectfully dissent. James P. Danly, Commissioner DEPARTMENT OF ENERGY FEDERAL ENERGY REGULATORY COMMISSION Certification of New Interstate Natural Gas Facilities Docket No. PL18–1–000 CHRISTIE, Commissioner, dissenting: 1. Last year I voted to re-issue this Notice of Inquiry (NOI) for another round of comment 1 because I believed—and still do—that there are reasonable updates to the 1999 policy statement that would be worthwhile.2 For example, I agree that precedent agreements between corporate affiliates, because of the obvious potential for selfdealing, should not, in and of themselves and without additional evidence, prove need.3 I also believe that the Commission’s procedures for guaranteeing due process to affected property owners, which, as Justice Frankfurter taught, consists of the two core elements of notice and opportunity to be heard,4 could be strengthened. 2. Unfortunately, the new certificate policy the majority approves today 5 Commission’s review process and public interest determinations’’); id. P 73 (‘‘To provide more clarity and regulatory certainty to all participants in certificate proceedings, we explain here how the Commission will consider environmental impacts.’’); id. P 100 (‘‘A major purpose of this Updated Policy Statement is to provide clarity and regulatory certainty regarding the Commission’s decision-making process.’’). 1 Certification of New Interstate Natural Gas Facilities, 174 FERC ¶ 61,125 (2021). 2 I also voted for the 2021 changes to the procedures for imposing a stay on the certificate and use of eminent domain during periods when petitions for reconsideration and appeals were pending. Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, Order No. 871–B, 175 FERC ¶ 61,098 (2021). These changes were largely opposed by the pipeline industry, but in my opinion represented a reasonable approach to bring more certainty and fairness to our procedures for handling petitions for reconsideration and the use of eminent domain during the pending period. 3 See Certification of New Interstate Natural Gas Facilities, 178 FERC ¶ 61,107 (2022) (Certificate Policy Statement) at PP 53–57. The need for enhanced scrutiny of contracts among corporate affiliates is recognized in State utility regulation. See, e.g., Va. Code § 56–76 et seq., known as the ‘‘Virginia Affiliates Act.’’ 4 See Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123 (1951) (Frankfurter, J., concurring). 5 Certificate Policy Statement; Consideration of Greenhouse Gas Emissions in Natural Gas E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 does not represent a reasonable update to the 1999 statement. On the contrary, what the majority does today is arrogate to itself the power to rewrite both the Natural Gas Act (NGA) 6 and the National Environmental Policy Act (NEPA),7 a power that only the elected legislators in Congress can exercise. Today’s action represents a truly radical departure from decades of Commission practice and precedent implementing the NGA. 3. The fundamental changes the majority imposes today to the Commission’s procedures governing certificate applications are wrong as both law and policy. They clearly exceed the Commission’s legal authority under the NGA and NEPA and, in so doing, violate the United States Supreme Court’s major questions doctrine.8 4. The new policy also threatens to do fundamental damage to the nation’s energy security by making it even more costly and difficult to build the infrastructure that will be critically needed to maintain reliable power service to consumers as the generation mix changes to incorporate lower carbon-emitting resources such as wind and solar. And as recent events in Europe and Ukraine graphically illustrate, America’s energy security is an inextricable part of our national security.9 The majority’s proposal on GHG impacts is obviously motivated by a desire to address climate change, but Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (GHG Policy Statement). Although styled as an ‘‘interim’’ policy statement, it goes into effect immediately and will inflict major new costs and uncertainties on certificate applications that have been pending with the Commission for months or years. Id. at PP 1, 130. I consider both policy statements to be indivisible parts of a new policy governing certificates. Thus, my statement applies to both, and I am entering this dissent in both dockets. 6 15 U.S.C. 717 et seq. See, e.g., Certificate Policy Statement at P 62. 7 42 U.S.C. 4321 et seq. 8 Nat’l Fed’n of Indep. Bus. v. Dep’t of Labor, OSHA, 142 S. Ct. 661 (2022) (NFIB); Alabama Ass’n. of Realtors v. Dep’t of Health and Human Services, 141 S. Ct. 2485 (2021) (Ala. Ass’n.); Util. Air Regulatory Grp. v. EPA, 573 U.S. 302 (2014) (UARG); FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (Brown & Williamson). I discuss this doctrine in Section I.B., infra. 9 See, e.g., Natasha Bertrand, US putting together ’global’ strategy to increase gas production if Russia invades Ukraine, officials say, CNN (Jan. 24, 2022), available at https://www.cnn.com/2022/01/23/ politics/us-gas-production-strategy-russia-ukraineinvasion/ https://www.cnn.com/2022/01/ 23/politics/us-gas-production-strategy-russiaukraine-invasion/; and, Stephen Stapczynski and Sergio Chapa, U.S. Became World’s Top LNG Exporter, Spurred by Europe Crisis, Bloomberg (Jan 4, 2022), available at https:// www.bloomberg.com/news/articles/2022-01-04/u-slng-exports-top-rivals-for-first-time-on-shalerevolution. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 will actually make it more difficult to expand the deployment of low or nocarbon resources, because it will make it more difficult to build or maintain the gas infrastructure essential to keep the lights on as more intermittent resources are deployed.10 In addition to the essential need for natural gas to keep our power supply reliable, a dependable and adequate natural gas supply is critically needed for our manufacturing industries and the millions of jobs for American workers in those industries.11 5. And while I agree that reducing carbon emissions that impact the climate is a compelling policy goal,12 10 See NERC December 2021 Long-Term Reliability Assessment, at 5 (Dec. 2021) (‘‘Natural gas is the reliability ‘fuel that keeps the lights on,’ and natural gas policy must reflect this reality.’’) (emphasis added) (available at https:// www.nerc.com/pa/RAPA/ra/ Reliability%20Assessments%20DL/NERC_LTRA_ 2021.pdf); id. at 6 (‘‘Sufficient flexible [dispatchable] resources are needed to support increasing levels of variable [intermittent] generation uncertainty. Until storage technology is fully developed and deployed at scale, (which cannot be presumed to occur within the time horizon of this LTRA), natural gas-fired generation will remain a necessary balancing resource to provide increasing flexibility needs.’’) (emphasis added); NERC 2020 Long-Term Reliability Assessment, December 2020, at 7 (Dec. 2020) (‘‘As more solar and wind generation is added, additional flexible resources are needed to offset their resources’ variability. This is placing more operating pressure on those (typically natural gas) resources and makes them the key to securing [Bulk Power System] reliability.’’ (emphases added) (available at https://www.nerc.com/pa/RAPA/ra/ Reliability%20Assessments%20DL/NERC_LTRA_ 2020.pdf). 11 Letter from Industrial Energy Consumers of America to Sen. Joe Manchin III, Sen. John Barrasso, Sen. Frank Pallone, Jr., Sen. Cathy McMorris Rodgers, Lack of Interstate Natural Gas Pipeline Capacity Threatens Manufacturing Operations, Investments, Jobs, and Supply Chain (Feb. 9, 2022). 12 Since we are regulators with an advisory role, not Article III judges, my personal view is that the most politically realistic and sustainable way to reduce carbon emissions significantly without threatening the reliability of our grid and punishing tens of millions of American workers and consumers with lost jobs and skyrocketing energy prices (see, e.g., Europe) is by massive public investment in the research, development and deployment of the technologies that can achieve that goal economically and effectively. See, e.g., Press Release, Bipartisan Policy Center, New AEIC Report Recommends DOE Combine Loan and Demonstration Offices, Jumpstart American Clean Energy Deployment (Jan. 21, 2022), available at https://bipartisanpolicy.org/press-release/new-aeicreport-recommends-doe-combine-loan-anddemonstration-offices-jumpstart-american-cleanenergy-deployment/ (citing to American Energy Innovation Council, Scaling Innovation: A Proposed Framework for Scaling Energy Demonstrations and Early Deployment (Jan. 2022)). Once developed to commercial scale, marketable technologies will roll out globally on their own, without the marketdistorting mandates and subsidies that only enrich rent-seekers and impoverish consumers. More specifically with regard to natural gas facilities, there is also the potential with available technology to reduce direct methane emissions from the existing oil and gas system within existing legal PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 11571 this Commission—an administrative agency that only has the powers Congress has explicitly delegated to it— has no open-ended license under the U.S. Constitution or the NGA to address climate change or any other problem the majority may wish to address. I. Legal Questions 6. The long-running controversy over the role and use of GHG analyses in natural-gas facility certificate cases raises two central questions of law and a third that flows from the first two: 7. First, whether the Commission can use a GHG analysis to reject a certificate—or attach conditions (including the use of coercive deficiency letters) amounting to a de facto rejection by rendering the project unfeasible— based on the NGA’s ‘‘public convenience and necessity’’ 13 provision, even when the evidence otherwise supports a finding under the NGA that the facility is both ‘‘convenient and necessary’’ to provide the public with essential gas supply? Today’s orders assume that the answer is yes.14 8. Second, whether the Commission can, or is required to, reject a certificate—or attach conditions (including the use of coercive deficiency letters) amounting to a de facto rejection by rendering the project unfeasible— based on a GHG analysis conducted as part of an environmental review under NEPA,15 when the certificate application would otherwise be approved as both ‘‘convenient and necessary’’ under the NGA? Again, today’s orders assume the answer is yes.16 9. Third, which, if any, conditions related to a GHG analysis may be attached to a certificate under NGA section 7(e),17 or demanded through the use of deficiency letters? Today’s orders seem to assume that there is essentially no limit to the conditions the Commission can impose.18 10. As discussed below, today’s orders get each of these questions wrong. authority. And such initiatives do not obviate the need for near-term mitigation measures, such as preparing the electric grid to maintain power during extreme weather events. 13 15 U.S.C. 717f. 14 Certificate Policy Statement at P 62; GHG Policy Statement at PP 4, 99. 15 See Certificate Policy Statement at P 6, GHG Policy Statement at P 27. 16 Certificate Policy Statement at P 62; GHG Policy Statement at PP 27, 99. 17 15 U.S.C. 717f(e). 18 See Certificate Policy Statement at P 74; GHG Policy Statement at P 99. E:\FR\FM\01MRN2.SGM 01MRN2 11572 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices A. The ‘‘Public Interest’’ in the Natural Gas Act 11. The starting point for answering all of these questions must be what ‘‘public interest’’ analysis the NGA empowers the Commission to make. Can the Commission’s statutory responsibility to determine the ‘‘public convenience and necessity’’ be used to reject a project otherwise needed by the public based solely on adverse impacts to ‘‘environmental interests’’ 19 (a term today’s orders leave undefined but which could be reduced to an unspecified level of GHG emissions) as the Commission today asserts? 20 Or can the Commission reject a project solely due to ‘‘the interests of landowners and environmental justice communities’’ as the majority also asserts? 21 The short answer is no. There is nothing in the text or history of the NGA to support such a claim about, or application of, the Commission’s public interest responsibilities under the NGA. 12. As discussed herein, any claim that a ‘‘public interest’’ analysis under the NGA gives FERC the authority to reject a project based solely on GHG emissions is specious and ahistorical. The history of the NGA indicates that Congress intended the statute to promote the development of pipelines and other natural-gas facilities. As one Federal judge has observed, ‘‘nothing in the text of [the NGA] . . . empowers the Commission to entirely deny the construction of an export terminal or the issuance of a certificate based solely on an adverse indirect environmental effect regulated by another agency.’’ 22 19 Certificate Policy Statement at P 62. jspears on DSK121TN23PROD with NOTICES2 20 Id. 21 Id. The notion that a certificate could be rejected based solely on the interests of ‘‘landowners’’ or ‘‘environmental justice communities’’ (a term the majority leaves largely undefined) illustrates the radical divergence from both law and long Commission practice of what the Commission purports to do today. While a regulatory commission should always be mindful of and sensitive to the impacts on affected property owners and communities in every case involving the potential use of eminent domain—particularly on the question of the project’s route or siting—and should generally seek wherever possible to reduce or minimize such impacts, specific measures to reduce or minimize such impacts are governed by the statutes applicable to each proceeding. Under both the Constitution and the NGA, if a project is needed for a public purpose, then landowners are made whole through just compensation. U.S. Const. amend. V. Questions of compensation are adjudicated in State or Federal court—not by this Commission. NGA section 7(h), 15 U.S.C. 717f(h). Bringing such extra-jurisdictional considerations into the Commission’s public convenience and necessity analyses under NGA section 7 is just another expansion of Commission power far beyond anything justified in law. 22 Sabal Trail, 867 F.3d 1357, 1382 (D.C. Cir. 2017) (Sabal Trail) (Brown, J., dissenting in part and concurring in part). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 13. I recognize that the Commission and the courts have construed ‘‘public convenience and necessity’’ to require the Commission to consider ‘‘all factors bearing on the public interest,’’ 23 but the Supreme Court has been very clear that any public interest analysis undertaken in the course of determining ‘‘public necessity and convenience’’ is constrained by the purposes and limitations of the statute.24 It is not an open-ended license to use this Commission’s certificating authority to promote whatever a majority of Commissioners from time to time may happen to view as the ‘‘public interest.’’ 14. With regard to GHG emissions that may be associated with upstream production activities or downstream distribution to, or consumption by, retail consumers, the Commission simply has no authority over such activities. That authority was left to the states.25 Congress intended for the NGA to fill ‘‘a regulatory gap’’ over the ‘‘interstate shipment and sale of gas.’’ 26 23 Atl. Refining Co. v. Pub. Serv. Comm’n of State of N.Y., 360 U.S. 378, 391 (1959) (‘‘This is not to say that rates are the only factor bearing on the public convenience and necessity, for § 7(e) requires the Commission to evaluate all factors bearing on the public interest.’’); N.C. Gas Corp., 10 FPC 469, 476 (1950) (‘‘Public convenience and necessity comprehends a question of the public interest. Or, stated another way: Is the proposal conducive to the public welfare? Is it reasonably required to promote the accommodation of the public? The public interest we referred to has many facets. To the limit of our authority under the law our responsibility encompasses them all’’) (emphasis added) (quoting Commonwealth Nat. Gas Corp., 9 FPC 70 (1950)). 24 NAACP v. FPC, 425 U.S. 662, 669 (1976) (‘‘This Court’s cases have consistently held that the use of the words ‘public interest’ in a regulatory statute is not a broad license to promote the general public welfare. Rather, the words take meaning from the purposes of the regulatory legislation.’’). Where the Supreme Court has permitted the Commission to consider end use, those considerations have related directly to its core statutory responsibilities under the NGA, namely, ensuring adequate supply at reasonable rates. See FPC v. Transcontinental Pipe Line Co., 365 U.S. 1 (1961) (permitting the Commission to consider whether the end use was ‘‘wasteful’’ of limited gas resources). 25 NGA section 1(b), 15 U.S.C. 717(b). 26 ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378 (2015) (emphasis added); see also, FPC v. Panhandle E. Pipe Line Co., 337 U.S. 498, 502–503 (1949) (‘‘suffice it to say that the Natural Gas Act did not envisage federal regulation of the entire natural-gas field to the limit of constitutional power. Rather it contemplated the exercise of federal power as specified in the Act, particularly in that interstate segment which states were powerless to regulate because of the Commerce Clause of the Federal Constitution. The jurisdiction of the Federal Power Commission was to complement that of the state regulatory bodies.’’) (emphasis added) (footnotes omitted); Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1315 (D.C. Cir. 2015) (‘‘the Commission’s power to preempt state and local law is circumscribed by the Natural Gas Act’s savings clause, which saves from preemption the ‘rights of States’ under the Clean Air Act and two other statutes.’’) (citations omitted). PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 15. Even if the Commission were to undertake some estimate of the indirect GHG impacts of third-party activities that it has no authority to regulate, it does not follow that the Commission can then reject a certificate based on those impacts.27 To do so would be to ignore the undeniable purpose of the NGA, which was enacted to facilitate the development and bringing to market of natural gas resources. The Commission’s role under the NGA is to promote the development of the nation’s natural gas resources and to safeguard the interests of ratepayers.28 Any consideration of environmental impacts, while important, is necessarily subsidiary to that role.29 16. It is a truism that FERC is an economic regulator, not an environmental regulator. This Commission was not given certification authority in order to advance environmental goals; 30 it was given 27 Ofc. of Consumers’ Counsel v. FERC, 655 F.2d 1132, 1142 (D.C. Cir. 1980) (‘‘We bear in mind the caveat that an agency may not bootstrap itself into an area in which it has no jurisdiction by violating its statutory mandate.’’) (citations, quotation marks, ellipsis omitted). 28 City of Clarksville, Tenn. v. FERC, 888 F.3d 477, 479 (D.C. Cir. 2018) (City of Clarksville) (‘‘Congress enacted the Natural Gas Act with the principal aim of ‘encouraging the orderly development of plentiful supplies of natural gas at reasonable prices,’ and ‘protect[ing] consumers against exploitation at the hands of natural gas companies,’’) (citations omitted); see also Alexandra B. Klass & Danielle Meinhardt, Transporting Oil and Gas: U.S. Infrastructure Challenges, 100 Iowa L. Rev. 947, 990–99 (Mar. 2015). 29 City of Clarksville, 888 F.3d. at 479. (‘‘Along with those main objectives, there are also several ‘subsidiary purposes including conservation, environmental, and antitrust issues.’’’) (quoting Pub. Utils. Comm’n of Cal. v. FERC, 900 F.2d 269, 281 (D.C. Cir. 1990)) (cleaned up). This does not mean that the Commission cannot properly impose conditions or mitigation to address environmental impacts directly related to the jurisdictional project; it merely recognizes that the Commission’s main objective is to facilitate the expansion and preservation of natural gas service at just and reasonable rates and that doing so will inevitably entail some measure of environmental costs. These can sometimes be reduced or minimized, but never completely eliminated. Every project ever built has some degree of environmental impacts. The standard under the NGA cannot be zero impacts. 30 Congress could easily have conferred that authority if it had wanted to. There is no indication that Congress intended or expected FERC to perform any environmental regulation when it created the agency. See generally, Clark Byse, The Department of Energy Organization Act: Structure and Procedure, 30 Admin. L. Rev. 193 (1978). This Commission’s predecessor, the Federal Power Commission, existed for decades before EPA was created in 1970. And Congress began enacting legislation bearing on emissions decades before then as well. See Christopher D. Ahlers, Origins of the Clean Air Act: A New Interpretation, 45 Envtl. L. 75 (2015). Nor were the effects of GHG emissions unknown at that time. See Danny Lewis, Scientists Have Been Talking About Greenhouse Gases for 191 Years, Smithsonian Magazine (Aug. 3, 2015) (citing to Nobel Laureate Svante Arrhenius’ 1896 paper E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 certification authority to ensure the development of natural gas resources and their availability—this includes pipeline infrastructure—at just and reasonable rates. To construe the Commission’s analysis of the public convenience and necessity as a license to prohibit the development of needed natural gas resources using the public interest language in the NGA would be to negate the very legislative purpose of the statute.31 Put another way, the premise of the NGA is that the production and transportation of natural gas for ultimate consumption by end users is socially valuable and should be promoted, not that the use of natural gas (which inevitably results in some discharge of GHGs) is inherently destructive and must be curbed, mitigated, or discouraged. 17. To those who say ‘‘well, times have changed and Congress was not thinking about climate change when it passed the NGA,’’ here’s an inconvenient truth: If Congress wants to change the Commission’s mission under the NGA it has that power; FERC does not. 18. Any authority to perform a public interest analysis under the NGA must be construed with reference to the animating purposes of the Act. It is not a free pass to pursue any policy objective—however important or compelling it may be—that is related in some way to jurisdictional facilities.32 ‘‘On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground’’). 31 See United States v. Pub. Utils. Comm’n of Cal., 345 U.S. 295, 315 (1953) (explaining that recourse to legislative history is appropriate where ‘‘the literal words would bring about an end completely at variance with the purpose of the statute.’’) (citations omitted). The present circumstance is very nearly the opposite: We are urged to pursue ‘‘an end completely at variance with the purpose of the statute’’ and for which there is no support in the ‘‘literal words.’’ Id.; see also Ctr. for Biological Diversity v. U.S. Army Corps of Eng’rs, 941 F.3d 1288, 1299 (11th Cir. 2019) (Ctr. for Biological Diversity) (‘‘Regulations cannot contradict their animating statutes or manufacture additional agency power.’’) (citing Brown & Williamson, 529 U.S. at 125–26). 32 NAACP v. FPC, 425 U.S. at 665–670 (noting that, although ‘‘the eradication of discrimination in our society is an important national goal,’’ the Supreme Court has ‘‘consistently held that the use of the words ‘public interest’ in a regulatory statute is not a broad license to promote the general welfare. Rather, the words take meaning from the purposes of the regulatory legislation’’ which, for the [Federal Power Act] and [Natural Gas Act], are ‘‘to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices.’’); see also Brown & Williamson, 529 U.S. at 161 (‘‘no matter how important, conspicuous, and controversial the issue, and regardless of how likely the public is to hold the Executive Branch politically accountable, . . . an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress.’’) (quotation marks, citation omitted). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 As the Court of Appeals for the D.C. Circuit has explained: Any such authority to consider all factors bearing on ‘‘the public interest’’ must take into account what ‘‘the public interest’’ means in the context of the Natural Gas Act. FERC’s authority to consider all factors bearing on the public interest when issuing certificates means authority to look into those factors which reasonably relate to the purposes for which FERC was given certification authority. It does not imply authority to issue orders regarding any circumstance in which FERC’s regulatory tools might be useful.33 19. Whereas the Commission’s role in certificating facilities under the NGA is explicit,34 any purported authority for the Commission to regulate GHGs is conspicuously absent. The claim that the Commission can reject a needed facility due to GHG emissions using the public interest component in the NGA seems to be based on the following logic: To ascertain whether a facility serves the public convenience and necessity, the Commission must first determine whether the facility is in ‘‘the public interest,’’ which in turn entails considering factors such as ‘‘environmental’’ impacts from construction and operation of the proposed facility, as well as estimating and quantifying greenhouse gas emissions from the proposed facility, including both upstream emissions associated with gathering the gas and downstream emissions associated with its use, which the Commission is somehow empowered to deem to be too excessive to grant the certificate.35 Suffice it to say, this tortured logic breaks apart in multiple places.36 20. Surely if Congress had any intention that GHG analyses should (or could) be the basis for rejecting certification of natural-gas facilities, it 33 Office of Consumers’ Counsel v. FERC, 655 F.2d at 1147 (emphases added). 34 See, e.g., NGA section 7(e), 15 U.S.C. 717f(e) (apart from statutory exceptions, ‘‘a certificate shall be issued to any qualified applicant . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed,’’ and, among other things, to comply with ‘‘the requirements, rules and regulations of the Commission . . .’’) (emphasis added). 35 Certificate Policy Statement at PP 4–6; GHG Policy Statement at P 39 (citing Sabal Trail, 867 F.3d at 1372–73). 36 I won’t belabor the point, but just to reiterate: A ‘‘public convenience and necessity’’ analysis is not a generalized ‘‘public interest’’ analysis, as courts have recognized. See, supra, P 13 & n.24 and infra, P 27. The ‘‘environmental’’ impacts appropriately considered in a certification proceeding must surely be limited in some way to the proposed facility itself since both upstream gathering and downstream use are beyond the Commission’s statutory jurisdiction. See City of Clarksville, 888 F.3d at 479 (identifying ‘‘environmental’’ concerns as a ‘‘subsidiary’’ purpose of the NGA). PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 11573 would have given the Commission clear statutory guidance as to when to reject on that basis. Instead, those who want the Commission to conjure up a standard on GHG emissions for deciding how much is too much are advocating for a standard resembling Justice Stewart’s famous method for identifying obscenity, to wit, that he could not describe it, but ‘‘I know it when I see it.’’ 37 And the Supreme Court eventually had the good sense to abandon that ocular standard.38 21. Using GHG analysis to reject a certificate implicates an important judicial doctrine used in evaluating just how far an administrative agency can go in essentially creating public policy without clear textual support in statutory law. Now let’s turn to that doctrine in this context. B. The Major Questions Doctrine and the NGA 22. The Commission’s actions today implicate the ‘‘major questions doctrine,’’ which Justice Gorsuch has recently explained as follows: The federal government’s powers . . . are not general, but limited and divided. Not only must the federal government properly invoke a constitutionally enumerated source of authority to regulate in this area or any other, it must also act consistently with the Constitution’s separation of powers. And when it comes to that obligation, this Court has established at least one firm rule: ‘‘We expect Congress to speak clearly’’ if it wishes to assign to an executive agency decisions ‘‘of vast economic and political significance.’’ We sometimes call this the major questions doctrine.39 In short, the major questions doctrine presumes that Congress reserves major issues to itself, so unless a grant of authority to address a major issue is explicit in a statute administered by an agency, it cannot be inferred to have been granted. 23. Whether this Commission can reject a certificate based on a GHG analysis—a certificate that otherwise would be approved under the NGA—is undeniably a major question of public 37 Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring); see also Catherine Morehouse, Glick, Danly spar over gas pipeline reviews as FERC considers project’s climate impacts for first time, Utility Dive (Mar. 19, 2021) (quoting Chairman Glick regarding use of GHG emissions analysis in N. Natural Gas Co., 174 FERC ¶ 61,189 (2021): ‘‘We essentially used the eyeball test. . . .’’). Shorn of its irrelevant disquisition on EPA’s stationary source regulations, today’s GHG policy statement enshrines an eyeball test as the trigger for subjecting virtually all certificate applicants to the time-consuming and costly EIS process. GHG Statement at PP 88–95. 38 Miller v. California, 413 U.S. 15 (1973). 39 NFIB, 142 S. Ct. at 667 (Gorsuch, J., concurring) (citations omitted). E:\FR\FM\01MRN2.SGM 01MRN2 11574 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 policy. It will have enormous implications for the lives of everyone in this country, given the inseparability of energy security from economic security. Yet the Supreme Court has made it clear that broad deference to administrative agencies on major questions of public policy is not in order when statutes are lacking in any explicit statutory grant of authority.40 ‘‘When much is sought from a statute, much must be shown. . . . [B]road assertions of administrative power demand unmistakable legislative support.’’ 41 24. There is no ‘‘unmistakable legislative support’’ for the powers the Commission asserts today. A broad power to regulate upstream and downstream GHG emissions and their global impacts has simply not been delegated to this Commission.42 To the extent the federal government has such power, it has been delegated elsewhere. ‘‘Of necessity, Congress selects different regulatory regimes to address different problems.’’ 43 The U.S. Environmental Protection Agency (EPA) is charged with regulating greenhouse gas emissions under the Clean Air Act.44 By 40 UARG, 573 U.S. 302, 324 (2014) (‘‘When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy,’ Brown & Williamson, 529 U.S. at 159 . . . , we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’ Id. at 160.’’); Gundy v. United States, 139 S. Ct. 2116, 2141–42 (2019) (Gundy) (Gorsuch, J., dissenting) (‘‘Under our precedents, an agency can fill in statutory gaps where ‘statutory circumstances’ indicate that Congress meant to grant it such powers. But we don’t follow that rule when the ‘statutory gap’ concerns ‘a question of deep economic and political significance’ that is central to the statutory scheme. So we’ve rejected agency demands that we defer to their attempts to rewrite rules for billions of dollars in healthcare tax credits, to assume control over millions of small greenhouse gas sources, and to ban cigarettes.) (citations omitted). 41 In re MCP No. 165, 20 F.4th 264, 267–268 (6th Cir. 2021) (Sutton, C.J., dissenting from denial of initial hearing en banc) (emphases added). 42 Panhandle E. Pipe Line Co. v. Pub. Serv. Comm’n of Ind., 332 U.S. 507, 516 (1947) (‘‘three things, and three things only Congress drew within its own regulatory power, delegated by the [Natural Gas] Act to its agent, the Federal Power Commission. These were: (1) The transportation of natural gas in interstate commerce; (2) its sale in interstate commerce for resale; and (3) natural gas companies engaged in such transportation or sale.’’); cf. Ala. Assn., 141 S. Ct. at 2488 (invalidating the CDC’s eviction moratorium because the ‘‘downstream connection between eviction and the interstate spread of disease is markedly different from the direct targeting of disease that characterizes the measures identified in the statute’’). 43 Am. Elec. Power Co. v. Conn., 564 U.S. 410, 426 (2011). 44 Id. (‘‘Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from powerplants’’) (emphasis added); Am. Lung Ass’n. v. EPA, 985 F.3d at 959–60 (D.C. Cir. 2021) (‘‘there is no question that the regulation VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 contrast, Congress established in the NGA a regulatory regime to address entirely different problems, namely, the need to develop the nation’s natural gas resources and to protect ratepayers from unjust and unreasonable rates for gas shipped in the flow of interstate commerce. If it chose, Congress could enact legislation that would invest the Commission with authority to constrain the development and bringing to market of natural gas resources, but the fact is that Congress has chosen not to do so. On the contrary, every time Congress has enacted natural gas legislation, it has been to promote the development of natural gas resources, not throw up barriers to them.45 25. The fact that the NGA requires the Commission to make some form of public interest determination in the course of a certificate proceeding does not furnish a basis for the Commission to arrogate to itself the authority to constrain the development of natural gas resources on the grounds of their potential greenhouse gas emissions. As now-Justice Kavanaugh has explained: ‘‘If an agency wants to exercise expansive regulatory authority over some major social or economic activity . . . regulating greenhouse gas emitters, for example—an ambiguous grant of statutory authority is not enough. Congress must clearly authorize an agency to take such a major regulatory action.’’ 46 Congress has not ‘‘clearly authorize[d]’’ this Commission to regulate greenhouse gas emitters, nor to deny certificates to facilities whose construction and operation would be in the public convenience and necessity, simply because the construction and operation of such infrastructure may result in some amount of greenhouse gas emissions.47 ‘‘Even if the text were ambiguous, the sheer scope of the . . . of greenhouse gas emissions by power plants across the Nation falls squarely within the EPA’s wheelhouse.’’). Consider for a moment how strange it would be for Congress to delegate regulation of GHG emissions from electric power plants to EPA, while somehow delegating regulation of GHG emissions from natural gas fired power plants to FERC. Yet that is what today’s orders presuppose. 45 See Mountain Valley Pipeline, LLC, 171 FERC ¶ 61,232 (2020) (McNamee, Comm’r, concurring at PP 32–40) (discussing decades’ worth of legislative enactments, all of which ‘‘indicates that the Commission’s authority over upstream production and downstream use of natural gas has been further limited by Congress.’’). 46 U.S. Telecom Ass’n v. FCC, 855 F.3d 381, 422 (Kavanaugh, J. dissenting) (emphases added); see also NFIB, 142 S. Ct. at 665 (‘‘the question . . . is whether the Act plainly authorizes the Secretary’s mandate. It does not.’’). 47 We cannot assume a Congressional intent to regulate every incidence of greenhouse gas emissions. As Justice Ginsberg observed, ‘‘we each emit carbon dioxide merely by breathing.’’ Am. Elec. Power Co. v. Conn., 564 U.S. at 426. PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 claimed authority . . . would counsel against’’ such an expansive interpretation.48 26. The fact that the Commission has absolutely no standard against which to measure the impact of natural gas production upstream or use downstream of the facilities it certificates is also important. In order for Congress to delegate any authority to an executive agency, it must legislatively set forth an intelligible principle for the agency to follow.49 There is no such ‘‘intelligible principle’’ for the Commission to follow when it comes to greenhouse gas emissions. 27. Although the NGA requires the Commission to determine whether a proposed facility is in the ‘‘public convenience and necessity,’’ the term ‘‘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.’’ 50 The term ‘‘public convenience and necessity’’ has long been understood to refer most essentially to the public’s need for service on terms that are just and reasonable, i.e., that are low enough for the public to pay the rates and high enough for the provider to maintain a profitable business.51 That understanding was reflected in various statutes employing the term, including the Natural Gas Act.52 And it was 48 Ala. Ass’n., 141 S. Ct. at 2489. may ‘‘delegate power under broad general directives’’ so long as it sets forth ‘‘an intelligible principle’’ to guide the delegee. Mistretta v. United States, 488 U.S. 361, 372 (1989). See Gundy, 139 S. Ct. at 2129 (‘‘a delegation is constitutional so long as Congress has set out an ‘intelligible principle’ to guide the delegee’s exercise of authority. Or in a related formulation, the Court has stated that a delegation is permissible if Congress has made clear to the delegee the general policy he must pursue and the boundaries of his authority.’’) (citations, internal quotations omitted). 50 Mountain Valley, 171 FERC ¶ 61,232 (McNamee, Comm’r, concurring at P 41); see also id. PP 15–47. 51 See generally, Ford P. Hall, Certificates of Public Convenience and Necessity, 28 Mich. L. Rev. 276 (1930) (analyzing the meaning of ‘‘public convenience and necessity’’ in State laws antedating passage of the NGA, and concluding that it is the need of the consuming public, without which it will be inconvenienced, that is the critical question to be answered). 52 The first such statute appears to have been the Interstate Commerce Act (ICA). The Supreme Court explicitly held that the use of the term ‘‘public convenience and necessity’’ was chosen in the knowledge that it would be understood against the background of its historical usage. ICC v. Parker, 326 U.S. 60, 65 (1945) (construing ‘‘public convenience and necessity’’ under the ICA and recognizing that Congress’ decision to use a term with such a long history indicated Congress intended ‘‘a continuation of the administrative and judicial interpretation of the language.’’) When it passed the NGA, Congress was similarly cognizant 49 Congress E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices further reflected in the earliest ‘‘public convenience and necessity’’ analyses under the NGA.53 28. To summarize: Whether and how to regulate GHG emissions is a major question of vast economic and political significance. Congress has not explicitly authorized the Commission to regulate in this area as required under the major questions doctrine, nor has it laid down an intelligible principle for the Commission to follow as required by the non-delegation doctrine. Moreover, EPA, in coordination with the states, already has authority to regulate in this area as specified in Federal statutes, which is far removed from this Commission’s core expertise and traditional responsibilities. 29. Let’s now turn to the second major question. C. GHG Analysis Under NEPA jspears on DSK121TN23PROD with NOTICES2 30. Is this Commission required or allowed by NEPA 54 to reject a certificate for a natural gas facility—one that would otherwise be approved under the NGA—based on a GHG analysis conducted as part of the NEPA environmental review? And rejection includes attaching mitigation conditions so onerous (or coercing through of having employed the same concept as in the ICA. See, Robert Christin et al., Considering the Public Convenience and Necessity in Pipeline Certificate Cases under the Natural Gas Act, 38 Energy L.J. 115, 120 (2017) (citing Comm. on Interstate Commerce, Interstate Transportation and Sale of Natural Gas, S. Rep. No. 75–1162, at 5 (Aug. 9, 1937) and noting that ‘‘the concept of a regulatory agency determining whether a private entity’s proposal was in the public convenience and necessity was an established practice when the NGA was enacted.’’). 53 See In re Kan. Pipe Line & Gas Co., 2 FPC 29, 56 (1939) (‘‘We view the term [public convenience and necessity] as meaning a public need or benefit without which the public is inconvenienced to the extent of being handicapped in 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.’’) 54 NEPA, 42 U.S.C. 4321 et seq., requires all federal agencies to undertake an ‘‘environmental assessment’’ of their actions, typically including the preparation of an ‘‘environmental impact statement’’ of proposed ‘‘major federal actions.’’ As discussed below, the purpose of the EA and EIS is for the agency to be fully informed of the impact of its decisions. NEPA does not mandate any specific action by the agency in response to an EA or EIS, other than to make an informed decision. See, e.g., Steven M. Siros, et al., Pipeline Projects— The Evolving Role of Greenhouse Gas Emissions Analyses under NEPA, 41 Energy L.J. 47 (May 2020); see also Sabal Trail, 867 F.3d at 1367–68 (describing NEPA as ‘‘primarily informationforcing’’ and noting that courts ‘‘should not ‘‘‘flyspeck’’ an agency’s environmental analysis, looking for any deficiency no matter how minor.’’’) (quoting Nevada v. Dep’t of Energy, 457 F.3d 78, 93 (D.C. Cir. 2006)). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 deficiency letters) that they render the project unfeasible.55 31. Again, the short answer is no. NEPA does not contain a shred of specific textual authority requiring or allowing the Commission to reject based on a NEPA review of estimated GHG impacts (indirect or direct) a certificate application for a facility that otherwise would be found necessary to serve the public under the NGA. Nor would it: As an information-forcing statute, NEPA imposes no substantive obligations.56 32. Even conducting an analysis of indirect GHG effects under NEPA goes too far. The Supreme Court has explicitly rejected the idea that an ‘‘an agency’s action is considered a cause of an environmental effect [under NEPA] even when the agency has no statutory authority to prevent that effect.’’ 57 Rather, NEPA ‘‘requires a reasonably close causal relationship between the 55 NGA section 7(e), 15 U.S.C. 717f(e), authorizes the Commission to attach to a certificate ‘‘such reasonable terms and conditions as the public convenience and necessity may require.’’ There is no analytical difference between the Commission’s authority to reject a certificate application and its authority to mitigate it. See Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (‘‘The Commission may not, . . . when it lacks the power to promote the public interest directly, do so indirectly by attaching a condition to a certificate that is, in its unconditional form, already in the public convenience and necessity.’’) (citations omitted). That the Commission may be tempted to abuse its conditioning authority has long been recognized. See Carl I. Wheat, Administration by the Federal Power Commission of the Certificate Provisions of the Natural Gas Act, 14 Geo. Wash. L. Rev. 194, 214–215 (1945) (‘‘It is particularly important that the Commission . . . steel itself against the somewhat natural temptation to attempt to use such ‘conditions’ as substitutes or ‘shortcuts’ for other (and more appropriate) methods of regulation prescribed in the statute. . . . . [W]hatever may be said with respect to conditions concerning rates and other matters over which the Commission has specific authority under other provisions of the Act, it would appear clear that the power to prescribe ‘reasonable conditions’ in certificates cannot be greater in scope than the statutory authority of the Commission.’’) 56 ‘‘[I]t is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process. If the adverse environmental effects of the proposed action are adequately identified and evaluated, the agency is not constrained by NEPA from deciding that other values outweigh the environmental costs. . . . Other statutes may impose substantive environmental obligations on federal agencies, . . . but NEPA merely prohibits uninformed—rather than unwise—agency action.’’ Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350–51 (1989) (citations omitted; emphases added). See also, e.g., Minisink Residents for Envtl. Preserv. & Safety v. FERC, 762 F.3d 97, 112 (D.C. Cir. 2014) (same). 57 Dep’t. of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Pub. Citizen). This principle has been incorporated into the implementing regulations of the Council of Environmental Quality (CEQ), an executive branch agency. See 40 CFR 1508.1(g)(2) (2021) (‘‘Effects do not include those effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action’’). PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 11575 environmental effect and the alleged cause,’’ that is analogous to ‘‘the familiar doctrine of proximate cause from tort law.’’ 58 While this might leave some difficult judgments at the margins, estimates of the potential global impacts of possible non-jurisdictional upstream or downstream activity—as today’s orders purport to require 59—is not a close call. 33. First off, in determining how far an agency’s NEPA responsibilities run, one ‘‘must look to the underlying policies or legislative intent in order to draw a manageable line between those causal changes that may make an actor responsible for an effect and those that do not.’’ 60 As discussed at length above, there is no way of drawing a plausible line, much less a manageable one, from the Commission’s certificating responsibilities under the NGA and the possible consequences of global climate change—consequences which, however potentially grave, are remote from this agency’s limited statutory mission under the NGA. 34. Second, speculating about the possible future impact on global climate change of a facility’s potential GHG emissions does not assist the Commission in its decision-making and therefore violates the ‘‘rule of reason’’: Where an agency lacks the power to do anything about the possible environmental impacts, it is not obligated to analyze them under NEPA.61 Again, the Supreme Court has explained, ‘‘inherent in NEPA and its implementing regulations is a ‘rule of reason,’ which ensures that agencies determine whether and to what extent to prepare an EIS based on the usefulness of any new potential 58 Pub. Citizen, 541 U.S. at 767 (citations omitted). 59 Certificate Policy Statement at PP 73–76; GHG Policy Statement at PP 28–31. 60 Pub. Citizen, 541 U.S. at 767 (citations omitted). 61 See, e.g., Sabal Trail, 867 F.3d at 1372 (citing Pub. Citizen, 541 U.S. at 770) (‘‘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.’’) (emphasis in original); Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 195 (D.C. Cir. 1991) (‘‘an agency need follow only a ‘rule of reason’ in preparing an EIS . . . and . . . this rule of reason governs both which alternatives the agency must discuss, and the extent to which it must discuss them.’’) (internal citations and quotations omitted, emphasis in original). To state the obvious: We have absolutely no way of knowing how much an individual project may or may not contribute to global climate change for any number of reasons, including because there is no way for us to meaningfully evaluate the release of GHG emissions if the facility in question were not to be certificated. Notwithstanding, today, the majority boasts of forcing virtually every certificate applicant into the EIS process. GHG Policy Statement at PP 80, 88. E:\FR\FM\01MRN2.SGM 01MRN2 11576 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 information to the decision-making process. Where the preparation of an EIS would serve ‘no purpose’ in light of NEPA’s regulatory scheme as a whole, no rule of reason worthy of the title would require an agency to prepare an EIS.’’ 62 35. This conclusion becomes even more obvious when considered alongside the undeniable fact that neither NEPA nor any other statute contains a scintilla of guidance as to which specific metrics are to be used to determine when the Commission can or must reject a project based on a GHG analysis. The Commission today establishes a threshold of 100,000 metric tons of CO2e of annual project emissions for purposes of its analysis of natural gas projects under NEPA 63 The rationale for establishing this threshold has literally nothing to do with the Commission’s NGA obligations, or even with its NEPA obligations. It consists of little more than piggybacking on EPA’s approach to regulating stationary sources.64 Today’s order boasts that this new threshold will capture projects ‘‘transporting an average of 5,200 dekatherms per day and projects involving the operation of one or more compressor stations or LNG facilities’’ 65 and that this threshold ‘‘will capture over 99% of GHG emissions from Commission-regulated natural gas projects.’’ 66 36. These are just arbitrarily chosen numbers. A proliferation of quantification does not constitute reasoned decision-making. All of the important questions about the creation and application of this threshold remain unanswered: Is there anything in either the NGA or NEPA to indicate how much is too much and should be rejected? Or how little is low enough to get under the red line? No. If the Commission is attempting to quantify indirect global GHG impacts, as EPA now suggests we do,67 how much global impact is too 62 Pub. Citizen, 541 U.S. at 767 (citations omitted). 63 GHG Policy Statement at P 80, 88. For purposes of determining what emissions count toward the 100,000 metric tons per year threshold, the majority states that this number is measured based on ‘‘the construction, operational, downstream, and, where determined to be reasonably foreseeable, upstream GHG emissions that reoccur annually over the life of the project.’’ Id. P 80 & n.197. 64 Id. PP 88–93 (acknowledging that the Supreme Court has partially invalidated EPA’s regulatory regime). 65 Id. P 89 (emphasis added). 66 Id. P 95. It appears that the majority’s intent is to force all applicants into the EIS process. This will undeniably cause each application to become far more costly and time-consuming, both obvious disincentives to even trying. 67 EPA Comments, Iroquois Gas Transmission Sys., L.P., Docket No. CP20–48–000 at 1–2 (filed Dec. 20, 2021) (EPA Dec. 20, 2021 Letter). VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 much and requires rejection of the certificate? How much impact is not too much? Should rejection only be based on impacts on the United States? North America? The Western Hemisphere? The planet? Where is the line? Again, there is absolutely no statutory provision that answers these questions as to the application of GHG metrics in a certificate proceeding brought under the NGA. The complete absence of any statutory guidance on the seminal question of ‘‘how much is too much?’’ would render any action by the Commission to reject a certificate based on any metric as ‘‘arbitrary and capricious’’ in the fullest sense.68 37. I recognize that the 100,000 metric tons marker adopted in today’s orders is not a threshold for rejecting a proposed project but only for subjecting it to further scrutiny in the form of an EIS. But this is no small matter—completion of an EIS is extremely cost-intensive and time-consuming and, in addition, creates a plethora of opportunities for opponents of the project who otherwise lack meritorious objections to it, to run up the costs, to cause delays, and to create new grounds for the inevitable appeals challenging the certificate even if the applicant does manage to obtain it.69 38. NEPA provides no statutory authority to reject a gas project that would otherwise be approved under the NGA. How could it? As is well-known, the duties NEPA imposes are essentially procedural and informational.70 The Commission’s regulations implementing NEPA reflect its limits by noting that, ‘‘[t]he Commission will comply with the regulations of the Council on Environmental Quality except where those regulations are inconsistent with the statutory requirements of the Commission.’’ 71 39. It’s not actually very difficult to see how the approach the majority adopts today is ‘‘inconsistent with the statutory requirements of the Commission.’’ 72 I will repeat that the purpose of the NGA is to promote the development, transportation, and sale at reasonable rates of natural gas. I will repeat that the NGA conveys only limited jurisdictional authority; that NEPA conveys no jurisdictional authority; that a different agency is responsible for regulating GHGs; and that such regulation is a major issue that Congress would have to speak to unambiguously, which it clearly has not done. And yet under the analysis embraced by the majority today, this Commission purports to impose onerous—possibly fatal—regulatory requirements on certificate applicants in order to generate reams of highly speculative data that have no meaningful role to play in the execution of this agency’s statutory duties.73 In fact, it contravenes the purposes of the NGA in at least two obvious ways: First, by bringing extrinsic considerations to bear on the Commission’s decisionmaking, and second, by causing needless delay in the process.74 68 And yet, as a practical matter, applicants must spend years of work and possibly millions of dollars (or more) in preparatory tasks like lining up financing, securing local political support, obtaining permits, etc. All this extensive legwork is needed just to put an application in to the Commission. Today’s orders effectively tell applicants that their application could be rejected for any reason or no reason at all. Nor does the majority even do the courtesy of providing a target for the applicant to aim at. 69 See Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J . 333, 339 & n.31 (2004) (noting that ‘‘Department of Energy EISs produced prior to 1994 had a mean cost of $6.3 million and a median cost of $1.2 million; following an aggressive effort to reduce costs, after 1994 the mean cost fell to $5.1 million, but the median cost rose to $2.7 million.’’) 70 See, Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 129 (D.C. Cir. 1987) (‘‘NEPA, as a procedural device, does not work a broadening of the agency’s substantive powers. Whatever action the agency chooses to take must, of course, be within its province in the first instance.’’) (citations omitted, emphasis added); Balt. Gas & Elec. Co. v. Natural Res. Defense Council, Inc., 462 U.S. 87, 97 (1983) (acknowledging NEPA’s ‘‘twin aims’’ as obligating an agency ‘‘to consider every significant aspect of the environmental impact of a proposed action’’ and ensuring ‘‘that the agency will inform the public that it has indeed considered environmental concerns in its decision-making process,’’ but noting that ‘‘Congress in enacting NEPA, however, did not require agencies to elevate environmental concerns over other appropriate considerations.’’) (citations, alterations omitted). 71 18 CFR 380.1 (2021) (emphasis added); see also 40 CFR 1500.3(a) (2021) (compliance with the CEQ regulations ‘‘is applicable to and binding on all Federal agencies . . . except where compliance would be inconsistent with other statutory requirements’’). 72 18 CFR 380.1 (2021). See The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments, Technical Conference on Greenhouse Gas Mitigation: Natural Gas Act Sections 3 and 7 Authorizations, Docket No. PL21–3–000 at 2 (The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments) (‘‘if imposing mitigation for direct and indirect emissions discourages or forestalls pipeline development, the mitigation policy is directly contrary to the principal purpose of the Natural Gas Act and must be set aside.’’). 73 Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 345–346 (noting that fear of NEPA challenges has led agencies to ‘‘‘kitchen sink’ EISs’’ to reduce the risk of reversal, but that almost nobody actually reads them ‘‘and those who attempt to do so may find it difficult to separate the good information from the junk. Contrary to conventional wisdom, more information is not always better.’’); see also, Pub. Citizen, 541 U.S. at 768–769 (‘‘NEPA’s purpose is not to generate paperwork—even excellent paperwork—but to foster excellent action.’’) (quoting then-in effect 40 CFR 1500.1(c) (2003)). 74 The delay is clearly part of the point. Why else funnel virtually every certificate applicant into the EIS process? See e.g., Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 339–40 (observing that NEPA has become ‘‘a highly effective tool that environmental NGOs and others PO 00000 Frm 00030 Fmt 4701 Sfmt 4703 E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices 40. There is no meaningful way of evaluating any of the critical issues, and no statutory authority to actually do anything about upstream or downstream emissions,75 but unlimited ways to find fault with any analysis. Even though they aren’t supposed to ‘‘flyspeck’’ an agency’s NEPA analysis, judges who wish to impose their own policy preferences will be tempted to do exactly that. And once the agency undertakes to address an issue in its NEPA analysis, it is subject to the APA’s ‘‘reasoned decision-making’’ standard of review.76 Thus the effect is to ramp up dramatically the legal uncertainties and costs facing any certificate applicant. jspears on DSK121TN23PROD with NOTICES2 D. The Policy Statements Rest on Inadequate Legal Authority 41. Today’s orders rely to a remarkable degree on a smattering of statements from a handful of recent orders. Simply put, these authorities are simply ‘‘too slender a reed’’ 77 to support the great weight today’s orders place on them. 42. Neither Sabal Trail 78 nor Birckhead,79 nor the more recent can use to raise the financial and political costs of projects they oppose and stretch out decisions over an extended time frame, giving time to rally political opposition.’’). See also P 47, infra. 75 In fact, even if the Commission had the authority to impose upstream or downstream GHG emissions mitigation, or to deny certificates of public convenience and necessity on that basis, the majority admits that it is by no means obvious that doing so would actually prevent or even meaningfully reduce global climate change or the problems associated with it. See GHG Policy Statement at P 88 (noting that ‘‘[e]ven if deep reductions in GHG emissions are achieved, the planet is projected to warm by at least 1.5 degrees Celsius (°C) by 2050;’’ and that ‘‘even relatively minor GHG emissions pose a significant threat’’). 76 Vecinos Para El Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1329 (D.C. Cir. 2021) (Vecinos) (‘‘Because the Commission failed to respond to significant opposing viewpoints concerning the adequacy of its analyses of the projects’ greenhouse gas emissions, we find its analyses deficient under NEPA and the APA.’’). 77 Cf. The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments at 3. 78 Sabal Trail, 867 F.3d 1357. In support of its assertion of broad discretion in attaching conditions to a certificate, the majority also cites to ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (ANR Pipeline). Certificate Policy Statement at P 74 & n. 190. Since the Commission’s conditioning authority is limited in the same way as its certificating authority, there is little reason to discuss it separately. I will only note in passing that, although the court described the Commission’s conditioning authority as ‘‘extremely broad,’’ the only issue actually before the court in ANR Pipeline was the validity of certificate terms imposed in furtherance of the Commission’s core duty to ensure that rates are non-discriminatory. Id. 79 Birckhead v. FERC, 925 F.3d 510 (D.C. Cir. 2019) (rejecting, for failure to raise the issue before the Commission, a claim that NEPA requires FERC to analyze downstream GHG emissions). Since Birckhead was decided on jurisdictional grounds, any substantive commentary in that order is mere dicta and I will not discuss it further. VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 Vecinos 80 opinion from the D.C. Circuit changes any of the analysis above. Indeed, to the extent language from those cases is interpreted as requiring the Commission to exercise authority not found in statutes—and these opinions are more confusing than clear, as well as inconsistent with the D. C. Circuit’s own precedent—then such an interpretation would be contrary to the Supreme Court’s major question doctrine. Be that as it may, while I recognize that Sabal Trail and Vecinos are presently applicable to this Commission, neither of those cases individually nor both of them together provide a lawful basis for rejecting a certificate for a facility that is otherwise found to be needed under the NGA solely because of its estimated potential impacts on global climate change.81 43. Virtually the entire structure of the majority’s fundamental policy changes rests on a single line from Sabal Trail.82 That statement is itself predicated on an idiosyncratic reading of Public Citizen and the D.C. Circuit’s own precedents.83 Sabal Trail rather facilely distinguished existing D.C. Circuit precedent on the grounds that, in contrast to those cases, the same agency that was performing the EIS was also authorized to approve or deny the certificate.84 It reasoned that because the 80 Vecinos, 6 F.4th 1321. orders suffer from a number of infirmities that don’t bear belaboring in this context. In brief, however, Sabal Trail reads the Commission’s duty to ‘‘balance ‘the public benefits against the adverse effects of the project, including adverse environmental effects,’’’ Sabal Trail, 867 F.3d at 1373 (quoting Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97 at 101–02 and citing Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d at 1309), far too expansively, and Vecinos compounds that error. Both orders are discussed below. 82 Namely, ‘‘[b]ecause FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful for the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines that it approves.’’ Sabal Trail, 867 F.3d at 1373. The other orders the majority relies on depend vitally on this statement. See, e.g., Certificate Policy Statement at PP 75 & n. 192 (citing Birckhead); 86 & n. 207 (citing Vecinos); GHG Policy Statement at PP 13, 36–38 (citing Birckhead) and P 14 & n. 38 (citing Vecinos). 83 See Ctr. for Biological Diversity, 941 F.3d at 1300 (‘‘the legal analysis in Sabal Trail is questionable at best. It fails to take seriously the rule of reason announced in Public Citizen or to account for the untenable consequences of its decision. The Sabal Trail court narrowly focused on the reasonable foreseeability of the downstream effects, as understood colloquially, while breezing past other statutory limits and precedents—such as Metropolitan [Edison Co. v. People Against Nuclear Energy, 460 U.S. 776 (1983)] and Public Citizen— clarifying what effects are cognizable under NEPA.’’). 84 Sabal Trail, 867 F.3d at 1372–1373. In each of the D.C. Circuit orders Sabal Trail purported to distinguish, the court had found that FERC did not 81 Both PO 00000 Frm 00031 Fmt 4701 Sfmt 4703 11577 Commission could take ‘‘environmental’’ issues into account in its public interest analysis, and GHG emissions raise ‘‘environmental’’ issues, it must therefore follow that the Commission could deny a certificate based on projected GHG emissions estimates. 44. Sabal Trail acknowledged that ‘‘Freeport and its companion cases rested on the premise that FERC had no legal authority to prevent the adverse environmental effects of natural gas exports.’’ 85 Specifically, ‘‘FERC was forbidden to rely on the effects of gas exports as a justification for denying an upgrade license.’’ 86 In contrast with those cases—all of which addressed certification of LNG facilities under NGA section 3 as opposed to interstate transportation facilities under NGA section 7—the court in Sabal Trail concluded that, under NGA section 7, by contrast, ‘‘FERC is not so limited. Congress broadly instructed the agency to consider ‘the public convenience and necessity’ when evaluating applications to construct and operate interstate pipelines.’’ 87 It thus concluded that, ‘‘[b]ecause FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful for the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines that it approves. See Freeport, 827 F.3d at 47. Public Citizen thus did not excuse FERC from considering these indirect effects.’’ 88 45. But the Sabal Trail court never considered with reference to the Commission’s statutory authority the proper scope of that public interest analysis or the extent to which ‘‘environmental’’ issues could be considered in that context. It simply assumed the Commission’s authority to be unlimited. But as discussed above, Congress drafted the NGA for the purpose of filling a specific gap in regulatory authority. The only way Sabal Trail would be correct is if Congress had ‘‘clearly authorized’’ the Commission to evaluate geographically and temporally remote impacts of nonjurisdictional activity in its ‘‘public convenience and necessity’’ determinations. As discussed above, have to analyze, because it could not regulate, downstream emissions. 85 Id. at 1373 (citing Sierra Club v. FERC (Freeport), 827 F.3d 36, 47 (D.C. Cir. 2016). The ‘‘companion cases’’ are Sierra Club v. FERC (Sabine Pass), 827 F.3d 59 (D.C. Cir. 2016) and EarthReports, Inc. v. FERC, 828 F.3d 949 (D.C. Cir. 2016). 86 Sabal Trail, 867 F.3d at 1373 (emphasis in original). 87 Id. (citations omitted). 88 Id. E:\FR\FM\01MRN2.SGM 01MRN2 11578 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices that conclusion is clearly, irredeemably, wrong.89 46. As for Vecinos, there, the court compounds that error both by relying uncritically on Sabal Trail and by finding fault with the Commission for failing to connect its decision not to use the Social Cost of Carbon to Petitioners’ argument that it was required to do so under 40 CFR 1502.21(c).90 That regulation sets forth an agency’s obligations when ‘‘information relevant to reasonably foreseeable significant adverse impacts cannot be obtained.’’ 91 But global climate change is only a ‘‘foreseeable significant adverse impact’’ of the Commission’s action if the Commission’s authority extends as far as the Sabal Trail court said it does. For the reasons set out in this statement, I respectfully disagree. Nor am I alone in my disagreement.92 47. Finally, as to the contention that the Commission is bound to follow Sabal Trail notwithstanding its errors, I would simply point out that intervening Supreme Court precedents—such as NFIB 93 and Ala. Ass’n.94—have not just significantly weakened, but utterly eviscerated the conceptual underpinnings of Sabal Trail’s limitless construction of the Commission’s public interest inquiry under the NGA’s ‘‘public convenience and necessity’’ analysis.95 It is folly for this Commission to proceed heedless of the Supreme Court’s recent rulings that agencies may not use ambiguous or limited grants of statutory authority in unprecedented ways to make policy on major questions that Congress has reserved for itself. But that’s exactly what the Commission does today.96 jspears on DSK121TN23PROD with NOTICES2 89 Supra, Section I.B. Cf. ICC v. Parker, 326 U.S. 60, 65 (1945) (construing ‘‘public convenience and necessity’’ under the Interstate Commerce Act and recognizing that Congress’ decision to use a term with such a long history indicated Congress intended ‘‘a continuation of the administrative and judicial interpretation of the language.’’). Far from being ‘‘a continuation of the administrative and judicial interpretation of the language,’’ construing it to extend to an analysis of global GHG emissions is novel and unprecedented. 90 Vecinos, 6 F.4th at 1328–30. 91 40 CFR 1502.21(c). 92 See supra, n. 83. 93 NFIB, 142 S. Ct. 661. 94 Ala. Ass’n., 141 S. Ct. 2485 at 2489. 95 See generally, Allegheny Def. Project v. FERC, 964 F.3d 1, 18 (D.C. Cir. 2020) (noting that circuit court precedent may be departed from ‘‘when intervening developments in the law—such as Supreme Court decisions—have removed or weakened the conceptual underpinnings of the prior decision.’’) (cleaned up, citation omitted). 96 In his NFIB concurrence, Justice Gorsuch states: ‘‘Sometimes Congress passes broadly worded statutes seeking to resolve important policy questions in a field while leaving an agency to work out the details of implementation. Later, the agency may seek to exploit some gap, ambiguity, or doubtful expression in Congress’s statutes to VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 orders,98 today’s orders will greatly increase the costs and uncertainty associated with this Commission’s own handling of certificate applications. In fact, by purporting to apply today’s new policy retroactively on applications that have already been submitted (and in many instances pending for years), today’s action is deeply unfair: It judges by an entirely new set of standards applications that were prepared and submitted to meet the old standards and II. The Real Debate Is About Public essentially opens all of them to be Policy Not Law relitigated.99 The undoubted effect of 49. Preventing the construction of these orders will be to interpose each and every natural gas project is the additional months or years of delay on overt public-policy goal of many wellproject applicants and to increase funded interest groups working to exponentially the vulnerability on reduce or eliminate natural gas usage.97 appeal of any Commission orders that Today’s orders, whatever the intent, will do approve a project. have the undeniable effect of advancing 50. Recently I said the Commission’s that policy goal, and we should not deny new rule on unlimited late interventions the obvious. Rather than bringing legal in certificate cases was ‘‘not a legal certainty to the Commission’s certificate standard, but a legal weapon.’’ 100 The new certificate policy approved today is assume responsibilities far beyond its initial the mother of all legal weapons. There assignment. The major questions doctrine guards is no question that it will be wielded against this possibility by recognizing that Congress against each and every natural gas does not usually hide elephants in mouseholes.’’ facility both at the Commission and in 142 S. Ct. at 669 (Gorsuch, J., concurring) (citations, alterations omitted). It would be hard to find a the inevitable appeals, making the costs better description of the path the Commission has of even pursuing a natural gas project taken to arrive at today’s orders. insuperable. 97 See, e.g., Bloomberg Philanthropies, https:// 51. Let me emphasize that every www.bloomberg.org/environment/moving-beyondcarbon/ (‘‘Launched in 2019 with a $500 million person or organization pursuing the investment from Mike Bloomberg and Bloomberg policy goal of ending the use of natural Philanthropies, Beyond Carbon . . . . works . . . to gas by opposing every natural gas . . . stop the construction of proposed gas plants.’’) facility has an absolute right under the (last visited Feb. 8, 2022) (emphasis added); Sierra Club, https://www.sierraclub.org/policy/energy/ First Amendment to engage in such fracking, (‘‘There are no ‘clean’ fossil fuels. The advocacy. However, whether to end the Sierra Club is committed to eliminating the use of use of natural gas by banning the fossil fuels, including coal, natural gas and oil, as construction of all new natural gas soon as possible’’) (emphases added) (last visited Feb. 8, 2022); Natural Resources Defense Council, projects is a public policy question of 48. We are indeed bound to follow judicial precedent, but we don’t get to ‘‘cherry pick’’ one precedent such as Sabal Trail because we like that particular opinion, while ignoring the many other conflicting precedents, especially those more recent rulings from the Supreme Court itself applying the major question doctrine. These more recent opinions light up Sabal Trail as a clear outlier. https://www.nrdc.org/issues/reduce-fossil-fuels (‘‘Oil, gas, and other fossil fuels come with grave consequences for our health and our future. . . . NRDC is pushing America to move beyond these dirty fuels. We fight dangerous energy development on all fronts’’) (emphases added) (last visited Feb. 8, 2022); Press Release, NRDC Receives $100 million from Bezos Earth Fund to Accelerate Climate Action (Nov. 16, 2020), available at https:// www.nrdc.org/media/2020/201116 (‘‘The Bezos Earth Fund grant will be used to help NRDC advance climate solutions and legislation at the State level, move the needle on policies and programs focused on reducing oil and gas production’’) (emphasis added) (last visited Feb. 8, 2022); Sebastian Herrera, Jeff Bezos Pledges $10 Billion to Tackle Climate Change, Wall Street Journal (Feb. 17, 2020) (‘‘Mr. Bezos . . . said the Bezos Earth Fund would help back scientists, activists, [non-governmental organizations]’’) (emphasis added); see also, Ellie Potter, Environmentalists launch campaign to ban gas from US clean energy program, S&P Global Platts (Sep. 2, 2021) (quoting Collin Rees, U.S. Campaign Manager for Oil Change International, ‘‘Clean energy means no gas and no other fossil fuels, period.’’) (emphases added); Sean Sullivan, FERC sets sights on gas infrastructure policy in 2022, S&P Capital IQ (Dec. 31, 2021) (quoting Maya van Rossum, head of Delaware Riverkeeper Network, ‘‘we are not changing course at all: We continue to take on every pipeline, LNG, and fracked gas project as urgently as we did before, knowing we will have to invest heavily to stop it . . .’’) (emphases added). PO 00000 Frm 00032 Fmt 4701 Sfmt 4703 98 See Letter of Chairman Richard Glick to Sen. John Barasso, M.D. (Feb. 1, 2022) (‘‘Preparing an EIS to consider the reasonably foreseeable GHG emissions that may be attributed to a project proposed under section 7 of the NGA allows the Commission to issue more legally durable orders on which all stakeholders can depend, including project developers.’’); Letter of Commissioner Allison Clements to Sen. John Barasso, M.D. (Feb. 1, 2022) (‘‘I will do my part to assure that the updated policy will be a legally durable framework for fairly and efficiently considering certificate applications—one that serves the public interest and increases regulatory certainty for all stakeholders.’’); see also, Corey Paul, FERC Dems argue legal benefits from climate reviews outweigh gas project delays, S&P Capital IQ Pro (Feb. 3, 2022). 99 Certificate Policy Statement at P 100 (‘‘the Commission will apply the Updated Policy Statement to any currently pending applications for new certificates. Applicants will be given the opportunity to supplement the record and explain how their proposals are consistent with this Updated Policy Statement, and stakeholders will have an opportunity to respond to any such filings.’’) 100 Adelphia Gateway, LLC, 178 FERC ¶ 61,030 (2022) (Christie, Comm’r concurring at P 4) (available at: https://www.ferc.gov/news-events/ news/item-c-3-commissioner-christies-partialconcurrence-and-partial-dissent-adelphia). E:\FR\FM\01MRN2.SGM 01MRN2 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices immense importance, one that affects the lives and livelihoods of tens of millions of Americans and their communities, as well as the country’s national security. In a democracy, such a huge policy question should only be decided by legislators elected by the people, not by unelected judges or administrative agencies.101 52. This public-policy context is absolutely relevant to these orders because it illustrates that the longrunning controversy at this Commission over the use of GHG analyses in naturalgas certificate cases, whether it’s a demand to quantify indirect impacts from upstream production and downstream use,102 or a demand to apply an administratively-constructed metric such as the Social Cost of Carbon 103—and then use GHG analyses to reject (or mitigate to death, or impose costly delays on) a gas project—has far less to do with the law itself and far more to do with promoting preferred public policy goals. 53. EPA admits as much in a remarkably (perhaps unwittingly) revealing passage in a letter to this Commission: EPA reaffirms the suggestion that the Commission avoid expressing project-level emissions as a percentage of national or State emissions. Conveying the information in this way inappropriately diminishes the significance of project-level GHG emissions. Instead, EPA continues to recommend disclosing the increasing conflict between GHG emissions and national, State, and local GHG reduction policies and goals . . .104 jspears on DSK121TN23PROD with NOTICES2 54. So according to EPA, this Commission—which is supposed to be independent of the current (or any) presidential administration, by the way—should literally manipulate how it presents GHG data in order to avoid ‘‘inappropriately’’ diminishing the impact. As EPA reveals, this is really not about data or any specific GHG metric at all, but is really about pursuing public policy goals, especially those of the current presidential administration that runs EPA.105 101 See Am. Lung Ass’n v. EPA, 985 F.3d at 1003 (Walker, J., concurring in part and dissenting in part) (‘‘whatever multi-billion-dollar regulatory power the federal government might enjoy, it’s found on the open floor of an accountable Congress, not in the impenetrable halls of an administrative agency—even if that agency is an overflowing font of good sense.’’) (citing U.S. Const. art I, section 1). 102 GHG Policy Statement at PP 27–28, 31, & n.97. See also, EPA Dec. 20, 2021 Letter. 103 GHG Policy Statement at P 96. See also, e.g., Vecinos, 6 F.4th at 1328–1329. 104 EPA Dec. 20, 2021 Letter at 4 (emphases added). 105 This Commission’s independence reflects a conscious choice on Congress’ part to insulate certain of its functions from the vicissitudes of political pressure. See generally, Sharon B. Jacobs, VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 55. The EPA’s purported guidance to this Commission illustrates that the real debate here is not over the minutiae of one methodology versus another, or whether one methodology is ‘‘generally accepted in the scientific community’’ and another is not,106 or whether one particular esoteric formula is purportedly required by a regulation issued by the CEQ 107 and another does not meet the CEQ’s directives. 56. The real debate over the use of GHG analyses in certificate proceedings is about public policy, not law, and ultimately comes down to these questions: Who makes major decisions of public policy in our constitutional system? Legislators elected by the people or unelected administrative agencies or judges? Who decides? 108 III. Conclusions 57. Based on the analysis above the following legal conclusions can be drawn: 58. First, the Commission may not reject a certificate based solely on an estimate of the impacts of GHG emissions, indirect or direct. Nor, on the basis of such GHG estimates, may the Commission attach to a certificate (or coerce through deficiency letters) conditions that represent a de facto rejection by rendering the project financially or technically unfeasible. 59. Second, the Commission can consider the direct GHG impacts of the specific facility for which a certificate is sought, just as it analyzes other direct environmental impacts of a project, and can attach reasonable and feasible conditions to the certificate designed to reduce or minimize the direct GHG impacts caused by the facility, just as it does with other environmental impacts. 60. Third, the conditions the Commission can impose are, like its The Statutory Separation of Powers, 129 Yale L.J. 378 (2019) (explaining that some but not all of the Federal Power Commission’s authorities were transferred to FERC, which was intended at least in part to counterbalance presidential influence). Succumbing to the pressure of EPA and others would sacrifice that crucial independence in meaningful ways. 106 Cf. Vecinos, 6 F.4th at 1329. 107 It has been observed that the values associated with the imputed social costs of GHG emissions have fluctuated dramatically from one administration to the next. See, e.g., Garrett S. Kral, What’s In a Number: The Social Cost of Carbon, Geo. Envtl. L. Rev. Online 1 (Aug. 19, 2021) (comparing the social cost of GHG emissions under the Trump administration with the interim social cost under the Biden administration and noting ‘‘the value of SC–GHGs have fluctuated. A lot.’’). This degree of abrupt fluctuation—e.g., the social cost of carbon increasing from $7 per ton to $51 per ton—can only be explained by politics, not science. 108 NFIB, 142 S. Ct. at 667 (Gorsuch, J. Concurring). (‘‘The central question we face today is: Who decides?’’) (emphasis added). PO 00000 Frm 00033 Fmt 4701 Sfmt 4703 11579 other powers, limited to the authorities granted to it by Congress and the purposes for which they are given. So, no, the Commission may not impose conditions on a certificate to mitigate upstream or downstream GHG emissions arising from nonjurisdictional activity. 61. These legal conclusions do not mean that responding to climate change is not a compelling policy necessity for the nation. In my view it is, as I stated above.109 62. However, neither my policy views—nor those of any other member of this Commission—can confer additional legal authority on FERC.110 For in our democracy, it is the elected legislators who have the exclusive power to determine the major policies that respond to a global challenge such as climate change. Further, the argument that administrative agencies must enact policies to address major problems whenever Congress is too slow, too polarized, or too prone to unsatisfying compromises, must be utterly rejected.111 That is not how it is supposed to work in a democracy. 63. For if democracy means anything at all, it means that the people have an inherent right to choose the legislators to whom the people grant the power to 109 See P 5 and n.12, supra. of Consumers Counsel, 655 F.2d at 1142 (‘‘an agency may not bootstrap itself into an area in which it has no jurisdiction by violating its statutory mandate’’) (quoting FMC v. Seatrain Lines, Inc., 411 U.S. 726, 745 (1973)) (ellipsis omitted); see also In re MCP No. 165, 20 F.4th 264, 269 (6th Cir. 2021) (Sutton, C.J., dissenting) (‘‘As the Supreme Court recently explained in invalidating an eviction moratorium promulgated by the Center for Disease Control, ‘our system does not permit agencies to act unlawfully even in pursuit of desirable ends.’ Ala. Ass’n of Realtors, 141 S. Ct. at 2490. Shortcuts in furthering preferred policies, even urgent policies, rarely end well, and they always undermine, sometimes permanently, American vertical and horizontal separation of powers, the true mettle of the U.S. Constitution, the true long-term guardian of liberty.’’) (emphasis added). 111 This argument is often put forth by the legal, academic, and corporate elites who assume that an administrative agency will enact the public policies they prefer when Congress will not. Such an expectation is perfectly rational since these elites disproportionately have the resources that are most effective in achieving desired outcomes in the administrative process, which is largely an insiders’ game. The body of work on the economic theory of regulatory capture over the past half-century is relevant to this topic. See generally, Susan E. Dudley, Let’s Not Forget George Stigler’s Lessons about Regulatory Capture, Regulatory Studies Center (May 20, 2021) (available at https:// regulatorystudies.columbian.gwu.edu/ let%E2%80%99s-not-forget-georgestigler%E2%80%99s-lessons-about-regulatorycapture). And it is not just for-profit corporate elites at work here, so are other special interests who seek desired policy outcomes from administrative action rather than from the often messy and hard democratic processes of seeking to persuade voters to elect members of Congress who agree with you. See, e.g., n. 97, supra. 110 Office E:\FR\FM\01MRN2.SGM 01MRN2 11580 Federal Register / Vol. 87, No. 40 / Tuesday, March 1, 2022 / Notices jspears on DSK121TN23PROD with NOTICES2 decide the major questions of public policy that impact how the people live their daily lives. Unelected Federal judges and executive-branch administrators, no matter how enlightened they and other elites may regard themselves to be, do not have the VerDate Sep<11>2014 20:38 Feb 28, 2022 Jkt 256001 power to decide such questions; they only have the power to carry out the duly-enacted laws of the United States, including the most important law of all, the Constitution. That is the basic constitutional framework of the United PO 00000 States and it is the same for any liberal democracy worth the name. For these reasons, I respectfully dissent. Mark C. Christie, Commissioner. [FR Doc. 2022–04148 Filed 2–28–22; 8:45 am] BILLING CODE 6717–01–P Frm 00034 Fmt 4701 Sfmt 9990 E:\FR\FM\01MRN2.SGM 01MRN2

Agencies

[Federal Register Volume 87, Number 40 (Tuesday, March 1, 2022)]
[Notices]
[Pages 11548-11580]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04148]



[[Page 11547]]

Vol. 87

Tuesday,

No. 40

March 1, 2022

Part III





Department of Energy





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Federal Energy Regulatory Commission





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Certification of New Interstate Natural Gas Facilities; Notice

Federal Register / Vol. 87 , No. 40 / Tuesday, March 1, 2022 / 
Notices

[[Page 11548]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL18-1-000]


Certification of New Interstate Natural Gas Facilities

AGENCY: Federal Energy Regulatory Commission, Department of Energy 
(DOE).

ACTION: Updated Policy Statement on Certification of New Interstate 
Natural Gas Facilities.

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SUMMARY: This Updated Policy Statement describes how the Commission 
will evaluate all factors bearing on the public interest in determining 
whether a new interstate natural gas transportation project is required 
by the public convenience and necessity under the Natural Gas Act.

DATES: Comments that pertain to the Paperwork Reduction Act are due May 
2, 2022.

FOR FURTHER INFORMATION CONTACT: 

Paige Espy (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-6698, 
[email protected]

Brandon Cherry (Technical Information), Office of Energy Projects, 
Federal Energy Regulatory Commission, 888 First Street NE, Washington, 
DC 20426, (202) 502-8328, [email protected]

SUPPLEMENTARY INFORMATION: 
    1. On April 19, 2018, and February 18, 2021, the Commission issued 
Notices of Inquiry (NOI) \1\ to help the Commission explore whether, 
and if so how, it should revise the approach established by its 
currently effective policy statement on the certification of new 
interstate natural gas transportation facilities (1999 Policy 
Statement) \2\ to determine whether a proposed natural gas project ``is 
or will be required by the present or future public convenience and 
necessity,'' as that standard is established in section 7 of the 
Natural Gas Act (NGA).\3\
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    \1\ Certification of New Interstate Natural Gas Facilities, 83 
FR 18020 (Apr. 25, 2018), 163 FERC ] 61,042 (2018); Certification of 
New Interstate Natural Gas Facilities, 86 FR 11268 (Feb. 24, 2021), 
174 FERC ] 61,125 (2021).
    \2\ Certification of New Interstate Natural Gas Pipeline 
Facilities, 88 FERC ] 61,227 (1999), clarified, 90 FERC ] 61,128, 
further clarified, 92 FERC ] 61,094 (2000) (1999 Policy Statement).
    \3\ 15 U.S.C. 717f(e).
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    2. Based on the comments received in this proceeding and the 
significant changes that have occurred since issuance of the 1999 
Policy Statement, and in order to provide stakeholders with more 
clarity on the Commission's decision-making process, we are issuing 
this Updated Certificate Policy Statement (Updated Policy Statement).
    3. This Updated Policy Statement does not establish binding rules 
and is intended to explain how the Commission will consider 
applications to construct new interstate natural gas transportation 
facilities.

I. Background

A. Statutory Authority and Obligations

    4. Section 7 of the NGA authorizes the Commission to issue 
certificates of public convenience and necessity for the construction 
and operation of facilities transporting natural gas in interstate 
commerce.\4\ Under section 7(e), the Commission shall issue a 
certificate to any qualified applicant upon finding that the 
construction and operation of a proposed project ``is or will be 
required by the present or future public convenience and necessity.'' 
\5\ The public convenience and necessity standard encompasses all 
factors bearing on the public interest.\6\
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    \4\ Id. 717f.
    \5\ Id. 717f(e).
    \6\ Atl. Ref. Co. v. Pub. Serv. Comm'n of N.Y., 360 U.S. 378, 
391 (1959) (``This is not to say that rates are the only factor 
bearing on the public convenience and necessity, for [section] 7(e) 
requires the Commission to evaluate all factors bearing on the 
public interest.'').
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    5. The NGA authorizes the Commission to attach to a certificate 
``such reasonable terms and conditions as the public convenience and 
necessity may require.'' \7\ The Commission can also deny an 
application for a certificate if a balancing of all public interest 
factors weighs against authorization of the proposed project.\8\ If an 
applicant receives a certificate from the Commission, section 7(h) of 
the NGA authorizes the certificate holder to acquire the property 
rights necessary to construct and operate its project by use of eminent 
domain if it cannot reach an agreement with a landowner.\9\
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    \7\ 15 U.S.C. 717f(e).
    \8\ See, e.g., FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 
17 (1961) (the Commission ``can only exercise a veto power over 
proposed transportation . . . when a balance of all the 
circumstances weighs against certification'').
    \9\ 15 U.S.C. 717f(h).
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    6. The Commission's consideration of an application generally 
triggers environmental review under the National Environmental Policy 
Act of 1969 (NEPA).\10\ NEPA and its implementing regulations require 
that, before taking or authorizing a major Federal action that may 
significantly affect the quality of the human environment, Federal 
agencies take a ``hard look'' at the environmental consequences of the 
proposed action and disclose their analyses to the public.\11\ NEPA 
also requires that agencies consider whether there are steps that could 
be taken to mitigate any adverse environmental consequences.\12\ While 
NEPA is a procedural statute and does not require an agency to reject a 
proposed project based on its adverse effects or to take action to 
mitigate those effects,\13\ an agency may require mitigation measures 
as a condition of its approval under the NGA,\14\ or withhold approval 
based on significant adverse effects.\15\
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    \10\ 42 U.S.C. 4321-4370j.
    \11\ Id. 4332(2)(C); 40 CFR 1500.1-1508.1; Baltimore Gas & Elec. 
Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) 
(discussing the twin aims of NEPA--to consider environmental impacts 
and to disclose the agency's consideration to the public).
    \12\ Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 
351 (1989) (``To be sure, one important ingredient of an 
[environmental impact statement] is the discussion of steps that can 
be taken to mitigate adverse environmental consequences.'').
    \13\ Id. at 352 (``There is a fundamental distinction, however, 
between a requirement that mitigation be discussed in sufficient 
detail to ensure that environmental consequences have been fairly 
evaluated, on the one hand, and a substantive requirement that a 
complete mitigation plan be actually formulated and adopted, on the 
other.''); see also Baltimore Gas & Elec. Co., 462 U.S. at 97 
(citing Stryckers' Bay Neighborhood Council v. Karlen, 444 U.S. 223, 
227 (1980)).
    \14\ Final Guidance for Federal Departments and Agencies on the 
Appropriate Use of Mitigation and Monitoring and Clarifying the 
Appropriate use of Mitigated Findings of No Significant Impact, 76 
FR 3843, 3848 (Jan. 21, 2011).
    \15\ See, e.g., Sierra Club v. FERC, 867 F.3d 1357, 1373 (D.C. 
Cir. 2017) (Sabal Trail) (explaining that the Commission may ``deny 
a pipeline certificate on the ground that the pipeline would be too 
harmful to the environment'').
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B. Historical Context and the 1999 Certificate Policy Statement

    7. From the enactment of the NGA in 1938 to the 1990s, as a result 
of statutory and regulatory revisions, the natural gas industry evolved 
away from a system of limited competition among vertically integrated 
companies selling bundled commodity and transportation services at 
Commission-regulated prices to one where pipelines provide open-access 
transportation of gas supplies purchased pursuant to non-Commission 
regulated agreements between producers and other parties. Consequently, 
consumers benefitted from competition among non-pipeline entities in an 
unregulated commodity market and from competition among pipeline 
companies providing open-access, unbundled transportation services at 
Commission-regulated rates or, if authorized under certain 
circumstances, market-based rates.

[[Page 11549]]

    8. At the same time that natural gas commodity and transportation 
markets were becoming more competitive, the 1990s saw significant 
growth in natural gas consumption in the industrial and electric 
generation sectors. The resultant expansion of the pipeline system to 
meet this demand raised issues as to who should bear the costs of new 
construction. Before the Commission adopted the 1999 Policy Statement, 
the Commission's pricing policy for new construction generally allowed 
for the costs of expansion projects to be rolled into a pipeline 
company's existing system costs to derive rolled-in rates in a future 
rate case under section 4 of the NGA.\16\ All shippers bore some burden 
of the expansion project's cost, regardless of whether they would 
benefit from the project. Local distribution companies (LDC) and other 
parties believed that this pricing policy sent the wrong price signals 
by masking the real costs of an expansion project and could result in 
overbuilding and subsidization of expansion by a pipeline's existing 
shippers.
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    \16\ Pricing Policy for New and Existing Facilities Constructed 
by Interstate Natural Gas Pipelines, 71 FERC ] 61,241 (1995), order 
on reh'g, 75 FERC ] 61,105 (1996). Under this pricing policy, 
expansion projects received a determination for rolled-in pricing 
upon a showing that the new costs would not increase existing rates 
by more than five percent.
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    9. In response to these and other concerns, in 1998, the Commission 
issued a Notice of Proposed Rulemaking \17\ and an NOI \18\ to explore 
issues related to its policies on the certification and pricing of new 
pipeline projects. Based on the information received from stakeholders 
in response to these notices, the Commission issued the 1999 Policy 
Statement ``to foster competitive markets, protect captive customers, 
and avoid unnecessary environmental and community impacts while serving 
increasing demands for natural gas.'' \19\ These objectives were 
realized primarily by a shift from a presumption of rolled-in pricing 
to a presumption of incremental pricing.\20\ Under incremental pricing, 
existing customers using only existing facilities do not subsidize the 
cost of constructing and operating new projects.\21\
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    \17\ Regulation of Short-Term Natural Gas Transportation 
Services, Notice of Proposed Rulemaking, 63 FR 42,982 (July 29, 
1998), FERC Stats. & Regs. ] 32,533 (1998) (cross-referenced at 84 
FERC ] 61,085).
    \18\ Regulation of Interstate Natural Gas Transportation 
Services, NOI, 63 FR 42974 (Aug. 9, 1998), FERC Stats. & Regs. ] 
35,533 (1998) (cross-referenced at 84 FERC ] 61,087).
    \19\ 1999 Policy Statement, 88 FERC at 61,743.
    \20\ Although incremental pricing was presumed, an applicant 
could demonstrate that a proposed project qualified for a pre-
determination of rolled-in rate treatment through showing that 
inexpensive expansibility was made possible because of earlier, 
costly construction or that the project was designed to improve 
existing service for existing customers. Id. at 61,746 and n.12.
    \21\ Id. at 61,746.
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    10. Pursuant to the 1999 Policy Statement, when reviewing 
applications to construct new interstate transportation facilities the 
Commission would first determine whether a threshold requirement of no 
financial subsidization from existing customers was met. If so, the 
Commission would next consider whether the applicant eliminated or 
minimized any residual adverse effects the project might have on: (1) 
The applicant's existing customers; (2) existing pipelines in the 
market and their captive customers; and (3) landowners and communities 
affected by the proposed project.\22\ Any residual adverse effects 
would be balanced against the anticipated benefits from the 
project.\23\ The Commission allowed an applicant to rely on a variety 
of factors to demonstrate that its proposed project was needed,\24\ 
but, in practice, applicants generally elected to submit, and the 
Commission accepted, precedent agreements with prospective customers 
for long-term firm service as the principal factor in demonstrating 
project need.
---------------------------------------------------------------------------

    \22\ Id. at 61,745.
    \23\ Id. at 61,748.
    \24\ Id. at 61,747.
---------------------------------------------------------------------------

    11. The 1999 Policy Statement introduced a sliding scale approach 
to balance public benefits with adverse effects, where the ``more 
interests adversely affected or the more adverse impact a project would 
have on a particular interest, the greater the showing of public 
benefits from the project required to balance the adverse impact.'' 
\25\ The 1999 Policy Statement provided that, if the Commission found 
that project benefits outweighed adverse impacts on economic interests, 
then the Commission would proceed to consider the environmental impacts 
of the project.\26\
---------------------------------------------------------------------------

    \25\ Id. at 61,749.
    \26\ Id. at 61,745-46. While the Commission only moved to the 
stage of balancing environmental impacts and other considerations if 
a proposed project passed this economic test established by the 1999 
Policy Statement, Commission staff would begin review of the 
environmental impacts following the filing of an application. If a 
project did not pass this economic test, it could be rejected 
without further consideration of environmental factors.
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C. Developments After Issuance of the 1999 Certificate Policy Statement

    12. Much has changed since the Commission issued the 1999 Policy 
Statement. In the last decade, increases in both domestic and 
international demand for natural gas produced in the United States, 
combined with the available supply of competitively-priced gas from 
shale reserves, have reduced prices and price volatility and have 
resulted in more proposals for natural gas transportation and export 
projects.\27\ Much of the increased production is attributable to the 
development of the Marcellus and Utica shale formations in 
Pennsylvania, West Virginia, Ohio, and New York; shale formations in 
the Permian Basin in West Texas and Eastern New Mexico; Eagle Ford 
Shale in South Texas; and Bakken Shale Formation in North Dakota, among 
others; as well as associated new extraction technologies.
---------------------------------------------------------------------------

    \27\ In the early 2000s, there were a number of proposals for 
natural gas import projects. However, as natural gas supplies 
increased and prices decreased, the Commission began to see more 
proposals for natural gas export projects.
---------------------------------------------------------------------------

    13. Contracting patterns are changing significantly as a result of 
this supply growth. In the past, LDCs contracted for a large percentage 
of interstate pipeline capacity, obtaining supplies from the production 
area for their customers. Increasingly, however, LDCs are purchasing 
gas supplies further downstream at market area pooling points or at 
their city gates as other parties increasingly contract for pipeline 
capacity. Natural gas producers are now contracting for a significant 
amount of firm pipeline capacity on expansion projects in an effort to 
provide a secured commercial outlet for their gas.
    14. Over the past decade, there has been greater interest and 
participation by affected landowners and communities, Tribes, 
environmental organizations, and others in natural gas project 
proceedings. Part of this may be attributable to the increase in 
proposals for new natural gas infrastructure in more densely populated 
areas of the eastern half of the nation. These stakeholders have raised 
various concerns with, among other things, the use of eminent domain, 
the need for new projects, and the environmental impacts of project 
construction and operation, including impacts on climate change and 
environmental justice communities.
    15. The Commission's consideration of climate change and greenhouse 
gas emissions (GHG) has also evolved since issuance of the 1999 Policy 
Statement. In the last decade, the Commission began including estimates 
of GHG emissions from project construction (e.g., tailpipe emissions 
from construction equipment) and operation (e.g., fuel combustion at 
compressor stations and gas venting and leaks) in its

[[Page 11550]]

NEPA documents.\28\ Then, starting in late 2016, the Commission began 
to estimate GHG emissions from downstream combustion and upstream 
production.\29\ In 2018, however, the Commission reversed this 
practice,\30\ resulting in a number of judicial decisions finding fault 
with the Commission's approach.\31\ Concurrent with this Updated Policy 
Statement, the Commission is issuing a new policy statement to explain 
how it will assess project impacts on climate change in its NEPA and 
NGA reviews going forward (GHG Policy Statement).\32\
---------------------------------------------------------------------------

    \28\ See, e.g., Environmental Assessment for the Philadelphia 
Lateral Expansion Project, Docket No. CP11-508-000, at 24 (Jan. 18, 
2012) (construction emissions); Environmental Assessment for the 
Minisink Compressor Project, Docket No. CP11-515-000, at 29 (Feb. 
29, 2012) (operation emissions).
    \29\ See, e.g., Columbia Gas Transmission, LLC, 158 FERC ] 
61,046, at PP 116-120 (2017); Tex. E. Transmission, LP, 157 FERC ] 
61,223, at P 41 (2016), reh'g granted, 161 FERC ] 61,226 (2017).
    \30\ Dominion Transmission, Inc., 163 FERC ] 61,128 (2018), pet. 
dismissed, Otsego 2000 v. FERC, 767 F.App'x 19 (D.C. Cir. 2019) 
(unpublished opinion).
    \31\ See infra P 70.
    \32\ Consideration of Greenhouse Gas Emissions in Natural Gas 
Infrastructure Project Reviews, 178 FERC ] 61,108 (2022) (GHG Policy 
Statement).
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    16. Another development since issuance of the 1999 Policy Statement 
is an increasing recognition of the need for Federal agencies to focus 
on environmental justice and equity. In 1994, under Executive Order 
12898, agencies were directed to identify and address 
``disproportionately high and adverse human health or environmental 
effects'' of their actions on minority and low-income populations 
(i.e., environmental justice communities).\33\ In 2021, President Biden 
issued two executive orders to renew and expand upon this directive. 
Specifically, Executive Order 13985, issued on January 20, 2021, 
requires agencies to conduct Equity Assessments to identify and remove 
barriers to underserved communities and ``to increase coordination, 
communication, and engagement with community-based organizations and 
civil rights organizations.'' \34\ And Executive Order 14008, issued on 
January 27, 2021, directs agencies to develop ``programs, policies, and 
activities to address the disproportionately high and adverse human 
health, environmental, climate-related and other cumulative impacts on 
disadvantaged communities, as well as the accompanying economic 
challenges of such impacts.'' \35\
---------------------------------------------------------------------------

    \33\ E.O. 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, 59 FR 
7629, at 7629, 7632 (Feb. 11, 1994).
    \34\ E.O. 13985, Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government, 86 FR 7009, 
7010-11.
    \35\ E.O. 14008, Tackling the Climate Crisis at Home and Abroad, 
86 FR 7619, 7629; see also The White House, Fact Sheet: President 
Biden Takes Executive Actions to Tackle the Climate Crisis at Home 
and Abroad, Create Jobs, and Restore Scientific Integrity Across 
Federal Government (2021).
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II. Notices of Inquiry and Comments

    17. As noted above, on April 19, 2018, the Commission issued an NOI 
(2018 NOI) seeking information and stakeholder perspectives to help the 
Commission explore whether, and if so how, it should revise the 
approach established by the 1999 Policy Statement. The Commission 
identified four general areas for examination in the 2018 NOI: (1) The 
reliance on precedent agreements to demonstrate need for a proposed 
project; (2) the potential exercise of eminent domain and landowner 
interests; (3) the Commission's evaluation of alternatives and 
environmental effects under NEPA and the NGA; and (4) the efficiency 
and effectiveness of the Commission's certificate processes. In 
response to the 2018 NOI, the Commission received more than 3,000 
comments from a diverse range of stakeholders.
    18. On February 18, 2021, the Commission issued another NOI (2021 
NOI) seeking to build upon the existing record established by the 2018 
NOI. The 2021 NOI noted that a number of changes had occurred since the 
Commission issued the 2018 NOI, including regulatory changes, the 
issuance of new executive orders, and increased stakeholder interest in 
certain topics. Accordingly, the 2021 NOI provided stakeholders with an 
opportunity to refresh the record and provide updated information and 
additional viewpoints to help the Commission assess its policy.
    19. The 2021 NOI included the four general areas of examination 
identified in the 2018 NOI, with modifications to the specific 
questions asked, including new questions on how the Commission should 
assess and consider the impacts of proposed projects on climate change. 
The 2021 NOI also identified a fifth area of examination--the 
Commission's identification and consideration of disproportionately 
high and adverse human health or environmental effects of its programs, 
policies, and activities on environmental justice communities and the 
mitigation of those adverse impacts and burdens, as well as the 
Commission's identification of potentially affected environmental 
justice communities and measures for ensuring effective participation 
by these communities in the certificate review process. In response to 
the 2021 NOI, the Commission received more than 35,000 comments, 
including more than 150 unique comment letters, from a diverse range of 
stakeholders.
    20. The comments received in response to the 2018 and 2021 NOIs are 
summarized at a high level below. Comments related to GHG emissions are 
summarized in the aforementioned GHG Policy Statement.\36\ The 
considerable number of comments submitted in this proceeding indicates 
substantial public interest in the Commission's policy for reviewing 
proposed interstate natural gas facilities.
---------------------------------------------------------------------------

    \36\ GHG Policy Statement, 178 FERC ] 61,108.
---------------------------------------------------------------------------

A. The Commission's Determination of Need

    21. A wide range of commenters request that the Commission change 
how it makes its public need determination. Many of these commenters 
argue that the Commission should rely less on precedent agreements.\37\ 
Additionally, commenters request that, in assessing need, there be 
greater consideration of climate change impacts,\38\ increased 
transparency,\39\ and an enlarged participatory role for 
stakeholders.\40\ Some commenters recommend that applicants be required 
to provide specific evidence that need exists, the proposed facilities 
serve that need, and the asserted need cannot be met by existing 
infrastructure.\41\ In contrast, regulated companies and industry trade 
organizations are nearly unanimous in their general support of the 1999 
Policy Statement as it relates to the public need determination.\42\
---------------------------------------------------------------------------

    \37\ E.g., Public Interest Organizations (PIO) 2021 Comments at 
12; Delaware Riverkeeper Network 2018 Comments at 67; Friends of the 
Central Shenandoah 2018 Comments at 36-38. The PIO 2021 Comments 
represent 54 entities from around the country that advocate for the 
protection of environmental resources, including Natural Resources 
Defense Council, Sierra Club, Public Citizen, Conservation Law 
Foundation, and Southern Environmental Law Center.
    \38\ See, e.g., Environmental Protection Agency (EPA) 2021 
Comments at 1-2.
    \39\ E.g., New Jersey Conservation Foundation, Sabin Center for 
Climate Change Law, Watershed Institute, Clean Air Council, 
PennFuture, and New Jersey League of Conservation Voters 
(collectively, New Jersey Conservation Foundation et al.) 2021 
Comments at 31-32.
    \40\ E.g., Ann W. Woll 2021 Comments at 1; Jessica Greenwood 
2021 Comments at 1; Rev. Betsy Sowers 2021 Comments at 1.
    \41\ E.g., Environmental Defense Fund (EDF) 2021 Comments at 8-
12.
    \42\ See, e.g., American Gas Association (AGA) 2021 Comments at 
10-11.
---------------------------------------------------------------------------

    22. Several commenters argue that the public benefits recognized in 
the 1999 Policy Statement are skewed, overly

[[Page 11551]]

narrow, and outdated.\43\ Additionally, some commenters recommend that 
the Commission create clear guidelines for benefits like reliability 
and resilience.\44\ Some commenters suggest that the Commission 
consider additional factors in its benefits analysis, such as 
infrastructure security and how an applicant's proposal fits with, or 
advances, new Federal and State policies and goals.\45\ In contrast, 
industry trade organizations generally support the Commission's 
existing benefits analysis under the 1999 Policy Statement, arguing 
that the Commission's responsibilities under the NGA have not changed, 
and, thus, any changes to the Commission's review of public benefits 
should not impede those responsibilities.\46\ However, some regulated 
companies recommend that the Commission more heavily weigh certain 
benefits, such as reliability and resilience, in light of recent 
extreme cold weather events and ransomware attacks.\47\
---------------------------------------------------------------------------

    \43\ See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 
2021 Comments at 4.
    \44\ E.g., EDF 2021 Comments at 18.
    \45\ See, e.g., New Jersey Division of Rate Counsel 2021 
Comments at 4-8.
    \46\ See, e.g., Natural Gas Supply Association (NGSA) 2021 
Comments at 23.
    \47\ Iroquois Gas Transmission System, L.P. (Iroquois) 2021 
Comments at 10-11.
---------------------------------------------------------------------------

    23. Regarding what evidence the Commission should examine to 
determine project need, many non-governmental organizations (NGO), 
individual commenters, and other entities argue that the Commission 
should analyze factors beyond precedent agreements, such as future 
markets, opportunity costs, Federal and State public policies, and 
effects on competition.\48\ NGOs request that the Commission take a 
more ``holistic'' approach and assess proposed projects in conjunction 
with other projects that are designed to serve the same market, serve 
similar markets, or pass through the same region,\49\ and that there be 
increased coordination with State agencies, including allowing State 
regulators to review and approve precedent agreements prior to the 
Commission making a need determination.\50\ In contrast, regulated 
companies and industry trade organizations State that precedent 
agreements remain powerful indicators of need, as they represent long-
term, binding contractual and financial commitments to a project and 
are more objective evidence than market studies.\51\
---------------------------------------------------------------------------

    \48\ See, e.g., Niskanen Center, Hopewell Township, Horizons 
Village Property Owners Association, Inc., and 28 affected 
landowners (collectively, Niskanen Center et al.) 2021 Comments at 
18; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 
9; New Jersey Division of Rate Counsel 2021 Comments at 8-9; Carolyn 
Elefant 2021 Comments at 2-3.
    \49\ PIO 2018 Comments at 10. The PIO 2018 Comments represent 64 
entities from around the country that advocate for the protection of 
environmental resources; many of these entities also signed on to 
the PIO 2021 Comments.
    \50\ Delaware Riverkeeper Network & Berks Gas Truth 2021 
Comments at 18.
    \51\ See, e.g., WBI Energy Transmission, Inc. (WBI Energy) 2021 
Comments at 3; National Fuel Gas Supply Corporation (National Fuel) 
2021 Comments at 9; Energy Transfer LP 2021 Comments at 4-5; 
Interstate Natural Gas Association of America (INGAA) 2021 Comments 
at 17-19; Boardwalk Pipeline Partners LP (Boardwalk) 2021 Comments 
at 28.
---------------------------------------------------------------------------

    24. Several commenters recommend that when applicants provide 
precedent agreements with affiliates as evidence of need, the 
Commission look beyond those agreements, given that companies with 
common profit interests might have incentives to inflate costs which 
can then be passed on to captive ratepayers.\52\ Additionally, several 
commenters argue that the terms of precedent agreements should be 
subject to close scrutiny \53\ and that the Commission should consider 
the potential for an asset to be rendered obsolete before the end of 
its useful life, as well as the length of time over which an asset's 
costs are recovered.\54\ In contrast, regulated companies and industry 
trade organizations argue that the Commission should not distinguish 
between affiliate and non-affiliate agreements, as standards of conduct 
and nondiscrimination require pipeline companies to treat all customers 
equitably, regardless of whether the customer is an affiliate or a non-
affiliate.\55\ These entities allege that economic risk, financial 
obligation, and oversight by State and local regulators associated with 
precedent agreements demonstrate that they are clear evidence of need, 
regardless of whether the shipper is an affiliate.\56\
---------------------------------------------------------------------------

    \52\ See, e.g., Natural Resources Defense Council, Sierra Club, 
Earthjustice, GreenFaith, Southern Environmental Law Center, 
Conservation Law Foundation, Public Citizen, Catskill 
Mountainkeeper, New Jersey Conservation Foundation, Riverkeeper, 
Inc., and Acadia Center (collectively, Joint NGOs) April 2018 
Comments at 2; Jim Steitz 2018 Comments at 2.
    \53\ See, e.g., Friends of the Central Shenandoah 2018 Comments 
at 47-49; Upstate Forever 2018 Comments at 2.
    \54\ New Jersey Division of Rate Counsel 2021 Comments at 10.
    \55\ See, e.g., WBI Energy 2021 Comments at 5; INGAA 2021 
Comments at 19-20; DTE Energy Company 2018 Comments at 5; Iroquois 
2018 Comments at 12-13.
    \56\ E.g., WBI Energy 2021 Comments at 5.
---------------------------------------------------------------------------

    25. A wide range of commenters assert that the Commission must 
consider the end use of the natural gas to be transported in its 
assessment of need, even if end use could change over time.\57\ Some 
commenters also note that climate change issues cannot be appropriately 
addressed without a firm understanding of end use.\58\ However, 
regulated companies and industry trade organizations argue against 
consideration of expected end use given the practical challenges of 
dynamic gas markets,\59\ the Commission's regulations prohibiting 
pipelines from unduly discriminating among shippers based on end 
use,\60\ and the fact that regulating end use is outside the scope of 
the Commission's statutory authority.\61\
---------------------------------------------------------------------------

    \57\ See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 
2021 Comments at 29-32; Deb Evans and Rob Schaaf 2018 Comments at 3-
5.
    \58\ E.g., Fore River Residents Against the Compressor Station, 
Inc. (FRRACS) 2021 Comments at 2.
    \59\ Enbridge Gas Pipelines (Enbridge) 2021 Comments at 46; WBI 
Energy 2021 Comments at 6.
    \60\ INGAA 2021 Comments at 22 (citing 18 CFR 284.7(b)).
    \61\ Cheniere Energy, Inc. (Cheniere) 2018 Comments at 6.
---------------------------------------------------------------------------

    26. Many commenters recommend that the Commission assess need in a 
regional planning context, including consideration of existing 
infrastructure, in order to avoid unnecessary environmental harm, 
``underutilized or stranded'' assets, and needlessly higher rates for 
captive consumers.\62\ Regulated companies and industry trade 
organizations, however, generally oppose the Commission using a 
regional approach to review natural gas pipeline projects, asserting 
that this could needlessly delay construction,\63\ the proximity of 
pipeline projects does not necessarily indicate that projects serve the 
same need in a region,\64\ and the open season process already serves 
to ensure duplicative projects are not constructed.\65\ Also, these 
entities do not support the Commission further examining whether 
existing infrastructure could sufficiently meet demand.\66\
---------------------------------------------------------------------------

    \62\ See, e.g., EPA 2021 Comments at 1-3; New Jersey Division of 
Rate Council 2018 Comments at 13-15; Friends of Central Shenandoah 
2018 Comments at 57-59.
    \63\ E.g., INGAA 2021 Comments at 23.
    \64\ E.g., INGAA 2021 Comments at 24.
    \65\ E.g., Cheniere 2018 Comments at 8.
    \66\ See, e.g., Energy Transfer LP 2021 Comments at 6; Iroquois 
2021 Comments at 12.
---------------------------------------------------------------------------

    27. Additionally, several commenters assert that the Commission 
must consider future demand as facilities age, as well as national and 
State decarbonization policies and targets.\67\ In contrast, regulated 
companies and industry trade organizations contend that assessment of 
future demand is not

[[Page 11552]]

necessary or prudent, given that sophisticated market participants 
already make these calculations, and do not support the Commission 
performing a comparative or future-looking analysis of energy 
sources.\68\ These entities emphasize that demand for natural gas 
projects will be correlated with demand for, and deployment of, 
variable energy resources.\69\
---------------------------------------------------------------------------

    \67\ See, e.g., New Jersey Division of Rate Counsel 2021 
Comments at 13-14.
    \68\ See, e.g., Williams Companies, Inc. (Williams) 2021 
Comments at 14; Enbridge 2021 Comments at 51; INGAA 2021 Comments at 
25-26.
    \69\ INGAA 2021 Comments at 25-26; Boardwalk 2021 Comments at 
38.
---------------------------------------------------------------------------

    28. Generally, commenters are split on whether, and if so how, the 
Commission should consider the economic, energy security, and social 
attributes of domestic production and use of natural gas in reviewing 
proposed projects. Some regulated companies State that consideration of 
these factors should be limited; \70\ however, others argue that the 
Commission should consider attributes such as job creation and tax 
revenues.\71\ Several individuals and NGOs State that the Commission 
could consider these attributes for particular projects, but that the 
Commission should then also consider the costs of natural gas projects 
associated with increased noise, lowered property values, lowered air 
quality, a lowered tax base, and the loss of landowners' potential use 
of their land.\72\ Commenters also recommend that any need analysis be 
focused on the specific benefits of a proposed project rather than 
hypothetical or general benefits \73\ and that the Commission assess 
the magnitude or extent of both the benefits and burdens of a proposed 
project, including whether the jobs created are temporary or permanent, 
as well as the proportion of the jobs that will be filled by low- to 
middle-income local workers.\74\
---------------------------------------------------------------------------

    \70\ E.g., Southern Company Services, Inc. 2021 Comments at 4.
    \71\ See, e.g., Williams 2021 Comments at 11-12; Boardwalk 2021 
Comments at 39-40; see also American Forest & Paper Association, 
Industrial Energy Consumers of America, Process Gas Consumers Group, 
and the Fertilizer Institute (collectively, American Forest & Paper 
Association et al.) 2021 Comments at 17; INGAA 2021 Comments at 26-
28; AGA 2021 Comments at 32; United Association of Journeymen and 
Apprentices of the Plumbing, Pipe Fitting and Sprinkler Fitting 
Industry of the United States and Canada, AFL-CIO (United 
Association) 2021 Comments at 26-28; NGSA 2021 Comments at 16.
    \72\ See, e.g., PIO 2021 Comments at 12-13; Delaware Riverkeeper 
Network & Berks Gas Truth 2021 Comments at 42; Edward Woll 2021 
Comments at 2; William F. Limpert 2021 Comments at 7-8; 
Massachusetts PipeLine Awareness Network (PLAN) 2021 Comments at 2; 
Rev. Betsy Sowers 2021 Comments at 2.
    \73\ EDF 2021 Comments at 50.
    \74\ EPA 2021 Comments at 4.
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B. The Exercise of Eminent Domain and Landowner Interests

    29. Many commenters suggest that the Commission adjust its approach 
to considering the possible use of eminent domain. For example, some 
commenters assert that eminent domain should only be an option for 
projects that can guarantee domestic use or local benefit, or that the 
Commission should deny certificates that would rely on eminent domain 
for more than twenty percent of the proposed route.\75\ In contrast, 
regulated companies and industry trade organizations State that the 
Commission should maintain its current approach, as it adequately 
protects landowners from the unnecessary use of eminent domain by 
ensuring that only projects that are needed and that do not require 
subsidization from existing customers are approved.\76\ These entities 
also note that it is not possible for the Commission to reliably 
estimate the amount of eminent domain that will ultimately be used 
prior to issuance of a certificate.\77\
---------------------------------------------------------------------------

    \75\ See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 
2021 Comments at 43; Upstate Forever 2018 Comments at 3; Jane 
Twitmyer 2018 Comments at 2; Franklin Regional Council of Gov'ts 
2018 Comments at 2.
    \76\ See, e.g., Boardwalk 2021 Comments at 61-63; TC Energy 
Corporation 2021 Comments at 16; INGAA 2018 Comments at 56.
    \77\ See, e.g., TC Energy Corporation 2021 Comments at 19; 
Spectra Energy Partners LP (Spectra) 2018 Comments at 54; American 
Petroleum Institute (API) 2018 Comments at 13.
---------------------------------------------------------------------------

    30. Some commenters assert that additional measures should be taken 
to minimize the use of eminent domain for projects, including routing 
pipelines in existing utility corridors when possible, requiring proof 
that an applicant's efforts to negotiate with landowners have failed, 
or reporting to the Commission each easement as it is agreed upon.\78\ 
However, many regulated companies state that additional measures to 
minimize the use of eminent domain are unnecessary, as companies have 
already taken steps to ensure it is used infrequently.\79\
---------------------------------------------------------------------------

    \78\ See, e.g., William F. Limpert 2021 Comments at 9; Tom Russo 
2021 Comments at 12; Friends of the Central Shenandoah 2018 Comments 
at 67.
    \79\ See, e.g., Cheniere 2021 Comments at 9-10; Kinder Morgan 
Entities (Kinder Morgan) 2021 Comments at 18-20; API 2021 Comments 
at 11-13; INGAA 2021 Comments at 29.
---------------------------------------------------------------------------

    31. Several commenters recommend that the Commission give greater 
weight to the concerns of impacted landowners and communities.\80\ Some 
assert that landowners have unequal bargaining power with applicants 
and that the Commission should consider whether an applicant's pre-
certificate actions related to landowners demonstrate that the 
applicant acted in good faith.\81\ Additionally, some commenters argue 
that the Commission should expand the regulatory definition of 
``affected landowners'' to ensure all impacted landowners and residents 
are included in the Commission's consideration.\82\
---------------------------------------------------------------------------

    \80\ EDF 2021 Comments at 5; Dr. Susan F. Tierney 2018 Comments 
at 8, 46-48.
    \81\ See, e.g., New Jersey Conservation Foundation, Watershed 
Institute, and Sierra Club 2018 Comments at 35-36; Jody McCaffree 
2018 Comments at 7.
    \82\ See, e.g., Sari DeCesare 2021 Comments at 1; Gary Salata 
2021 Comments at 1.
---------------------------------------------------------------------------

    32. Multiple commenters state that it is the Commission's 
responsibility to explain the certificate process to landowners and to 
ensure that they have the necessary tools to fully participate.\83\ 
Regulated companies and industry trade organizations support the 
creation of the Commission's Office of Public Participation (OPP) to 
guide landowners' understanding of, and participation in, the pipeline 
development and review process.\84\ Several commenters recommend that 
the Commission designate certain staff as non-decisional to act as 
official procedural case managers.\85\
---------------------------------------------------------------------------

    \83\ See, e.g., Duke Energy Corporation 2018 Comments at 45; 
Upstate Forever 2018 Comments at 3.
    \84\ See, e.g., Kinder Morgan 2021 Comments at 20-21; BHE 
Pipeline Group 2021 Comments at 6-8; INGAA 2021 Comments at 31-32.
    \85\ Tom Russo 2021 Comments at 13; American Midstream Partners 
LP, Canyon Midstream Partners LLC, and Cureton Midstream LLC 2018 
Comments at 7-8; Giles County and Roanoke County, Virginia 2018 
Comments at 13-14.
---------------------------------------------------------------------------

    33. Numerous commenters also recommend changes to the Commission's 
process and resources to assist landowners, including incorporating 
non-traditional outreach methods to notify and engage stakeholders 
early and throughout the process, improving the Commission's website 
and eLibrary system, conducting public meetings and site visits focused 
on landowner issues, and providing longer public comment periods.\86\ 
Some commenters propose that the Commission automatically grant all 
affected landowners party status to project proceedings, or, at a 
minimum, provide an updated step-by-step guide for landowners on how to 
intervene.\87\ Industry trade organizations support longer intervention 
periods for landowners,\88\ while some regulated companies argue that 
the Commission

[[Page 11553]]

should limit interventions to entities that have a direct interest in a 
specific project.\89\
---------------------------------------------------------------------------

    \86\ See, e.g., Carolyn Elefant 2021 Comments at 5-6; Niskanen 
Center et al. 2021 Comments at 36-38; Kinder Morgan 2021 Comments at 
22-26; Friends of Central Shenandoah 2018 Comments at 69; Spectra 
2018 Comments at 5.
    \87\ See Niskanen Center et al. 2021 Comments at 28; Deb Evans 
and Ron Schaaf 2021 Comments at 13; Carolyn Elefant 2018 Comments at 
2-3.
    \88\ See INGAA 2021 Comments at 32.
    \89\ See Adelphia Gateway LLC 2018 Comments at 13-14.
---------------------------------------------------------------------------

    34. A wide range of commenters argue that, in order to prevent 
needless condemnations while routes are still subject to change and it 
is uncertain if a project will be authorized, the Commission could 
defer issuing a certificate or condition a certificate holder's 
exercise of eminent domain until an applicant obtains all final Federal 
and State permits and issuance of such permits is sustained if appeal 
is filed.\90\ In contrast, many regulated companies and industry trade 
organizations assert that the Commission has no authority under the NGA 
to condition a certificate holder's exercise of eminent domain because 
eminent domain is a right that arises directly from the NGA.\91\ These 
commenters express concern that if the Commission defers issuing a 
certificate until an applicant has all authorizations needed to 
commence construction, it would create practical challenges and could 
result in unintended consequences (e.g., a pipeline may need survey 
access in order to obtain information necessary for another 
permit).\92\
---------------------------------------------------------------------------

    \90\ See, e.g., Land Trust Alliance 2021 Comments at 9; Jackie 
Freedman 2021 Comments at 1; Pipeline Safety Trust 2021 Comments at 
2; Terese and Joseph Buchanan May 18, 2021 Comments at 1; Gary 
Salata 2021 Comments at 1.
    \91\ See, e.g., INGAA 2021 Comments at 36-38; API 2021 Comments 
at 15-16; Enbridge 2021 Comments at 70; Cheniere 2021 Comments at 9.
    \92\ See, e.g., API 2021 Comments at 17-18; Boardwalk 2021 
Comments at 63-65.
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C. The Commission's Consideration of Environmental Impacts

    35. Many commenters suggest that the Commission revise its approach 
to analyzing alternatives under NEPA. Some commenters recommend that 
the Commission consider a broader scope of alternatives (e.g., 
modifications to existing infrastructure, co-location with existing 
infrastructure, and alternative sources of energy generation) \93\ or a 
broader range of factors to compare alternatives (e.g., the quantified 
and monetized impact of GHG emissions; impact of natural gas exports on 
domestic energy prices; and cost-effectiveness when accounting for all 
significant health, productivity, and opportunity costs).\94\ 
Additionally, commenters assert that the Commission should not blindly 
adopt a project sponsor's project purpose and, consistent with Citizens 
Against Burlington, Inc. v. Busey,\95\ must evaluate alternatives to 
achieve the Commission's goals, shaped by the application before it and 
the Commission's function in the decisional process.\96\ In contrast, 
regulated companies and industry trade organizations state that the 
current scope of the Commission's alternatives analysis is appropriate 
and consistent with NEPA, and has been upheld by the courts.\97\ These 
entities also assert that Busey prohibits the Commission from 
considering alternatives that would not meet the purpose and need of 
the proposed Federal action.\98\
---------------------------------------------------------------------------

    \93\ See Friends of the Central Shenandoah 2018 Comments at 75; 
EPA June 21, 2018 Comments at 1; Leslie Sauer 2018 Comments at 2.
    \94\ See New Jersey Conservation Foundation et al. 2021 Comments 
at 21-22; Institute for Policy Integrity at New York University 
School of Law (Policy Integrity) 2018 Comments at 16, 23-24; 
Pennsylvania Departments of Environmental Protection, Conservation 
and Natural Resources, and Community and Economic Development 2018 
Comments at 6; Carolyn Sellars 2018 Comments at 6.
    \95\ 938 F.2d 190, 199 (D.C. Cir. 1991).
    \96\ See, e.g., PIO 2021 Comments at 21-22.
    \97\ E.g., INGAA 2021 Comments at 39-41.
    \98\ INGAA 2021 Comments at 41; Iroquois 2021 Comments at 13-14; 
API 2021 Comments at 19-20; Competitive Enterprise Institute 2021 
Comments at 2-3; see also Kinder Morgan 2021 Comments at 26-28.
---------------------------------------------------------------------------

    36. Many commenters request that the Commission change how it 
conducts its cumulative effects analysis under NEPA. For example, NGOs 
and other commenters recommend that the Commission conduct regional 
evaluations \99\ and prepare programmatic environmental impact 
statement (EIS) \100\ to address cumulative effects. To determine the 
geographic scope for regional evaluations, commenters recommend that 
the Commission use a radius around the proposed project (e.g., 100 
miles) \101\ or consider the project scale, gas source, and end-use 
location.\102\ In contrast, industry trade organizations and regulated 
companies recommend that the Commission continue to use a project-
specific geographic scope for its cumulative effects analysis.\103\ 
These entities assert that the Commission does not have the authority 
under section 7 of the NGA to conduct regional evaluations, as the 
Commission only reviews individual pipeline applications, not broader 
Federal programs or regional actions where a programmatic review might 
be appropriate.\104\
---------------------------------------------------------------------------

    \99\ See, e.g., Joint NGOs April 2018 Comments at 2.
    \100\ E.g., Nature Conservancy 2018 Comments at 2-3; Appalachian 
Trail Conservancy 2018 Comments at 3.
    \101\ Kirk Frost May 26, 2021 Comments at 8.
    \102\ Delaware Riverkeeper Network & Berks Gas Truth 2021 
Comments at 57.
    \103\ See, e.g., INGAA 2018 Comments at 75; Duke Energy 
Corporation 2018 Comments at 51-53; Edison Electric Institute 2018 
Comments at 16.
    \104\ E.g., Williams 2021 Comments at 34; INGAA 2021 Comments at 
44-45; Boardwalk 2021 Comments at 73.
---------------------------------------------------------------------------

    37. NGOs and individual commenters state that how the Commission 
balances environmental impacts against favorable economic impacts is 
unclear, lacks transparency, and requires updating.\105\ Several 
commenters request that the Commission give environmental impacts 
greater weight.\106\ Other commenters criticize the Commission's phased 
approach to addressing project impacts under the 1999 Policy Statement, 
and recommend that the Commission balance economic and environmental 
impacts together.\107\ In contrast, industry trade organizations state 
that the Commission's approach under the 1999 Policy Statement properly 
balances economic and environmental impacts, giving proportionate 
consideration to all impacted stakeholders.\108\ These entities contend 
that broadening the balancing would exceed the Commission's discretion 
under the NGA \109\ and that the NEPA requirement to take a ``hard 
look'' at environmental consequences should remain separate from 
consideration of economic impacts.\110\
---------------------------------------------------------------------------

    \105\ See, e.g., Delaware Riverkeeper Network 2018 Comments at 
92-93; Friends of the Central Shenandoah 2018 Comments at 92-94; Deb 
Evans and Rob Schaaf 2018 Comments at 12.
    \106\ E.g., PIO 2021 Comments at 56; Elaine Mroz 2018 Comments 
at 4.
    \107\ See, e.g., New Jersey Conservation Foundation et al. 2021 
Comments at 18-22; Policy Integrity 2021 Comments at 4; Chesapeake 
Bay Foundation 2018 Comments at 4.
    \108\ E.g., API 2021 Comments at 23.
    \109\ Williams 2021 Comments at 39.
    \110\ INGAA 2018 Comments at 85-89.
---------------------------------------------------------------------------

    38. Regulated companies and industry trade organizations support 
the adoption of other agencies' categorical exclusions under NEPA, 
including those referenced in Commission staff's presentation at the 
January 19, 2021 Commission meeting (Docket No. RM21-10-000).\111\ 
Additionally, these entities state that a categorial exclusion should 
apply to certain actions that do not currently qualify for the 
Commission's blanket certificate authority (e.g., project amendments 
that would result in no, or minimal, changes to the environment).\112\ 
In contrast, NGOs suggest that there is no need for the Commission to 
expand its existing categorical exclusions, and they request that the 
Commission provide a public notice and comment period for all

[[Page 11554]]

projects in which an applicant proposes to use a categorical 
exclusion.\113\
---------------------------------------------------------------------------

    \111\ INGAA 2021 Comments at 83-85; Enbridge 2021 Comments at 
149-150.
    \112\ E.g., INGAA 2021 Comments at 84; Enbridge 2021 Comments at 
150.
    \113\ PIO 2021 Comments at 72-76.
---------------------------------------------------------------------------

D. The Efficiency and Effectiveness of the Commission's Review Process

    39. Many commenters recommend changes to the Commission's 
application review process. For example, some commenters recommend that 
all affected stakeholders be brought into the process as early as 
possible,\114\ that decisions regarding information requirements be 
summarized in a comprehensive application completeness checklist, and 
that the Commission's regulations be amended to encourage applicants to 
submit complete applications at the outset.\115\ Additionally, several 
commenters recommend changes to the Commission's environmental review 
process, including that the Commission not prepare a NEPA document 
absent substantive environmental data for the entirety of the proposed 
route,\116\ that the Commission consider issuing final EISs and 
certificates at the same time,\117\ or, alternatively, that the 
Commission issue certificates within 90 days of issuance of a final 
NEPA document.\118\ Some commenters also state that the Commission 
should not inject additional regulatory uncertainty into its review 
process by requiring open-ended or unduly expansive environmental 
reviews.\119\
---------------------------------------------------------------------------

    \114\ PIO 2021 Comments at 78; see also Dr. Susan F. Tierney 
2021 Comments at 41-42.
    \115\ New Jersey Conservation Foundation et al. 2021 Comments at 
30-31.
    \116\ New Jersey Conservation Foundation et al. 2021 Comments at 
31.
    \117\ Energy Infrastructure Council (EIC) 2021 Comments at 33; 
Spectra 2018 Comments at 95.
    \118\ WBI Energy 2021 Comments at 11; INGAA 2018 Comments at 94.
    \119\ See, e.g., GPA Midstream Association 2021 Comments at 1; 
Laborers' International Union of North America 2021 Comments at 2.
---------------------------------------------------------------------------

    40. Commenters also make a variety of recommendations to increase 
transparency in the Commission's review process and schedules. For 
example, some commenters propose that the Commission issue a public 
notice when a draft order has been circulated by Commission staff to 
the Commissioners,\120\ establish ``permitting timetables'' for NGA 
section 7(c) projects,\121\ and clarify deadlines for parties to 
intervene or submit studies.\122\ Some commenters also recommend that 
there be a ``cooling off'' period after the issuance of a draft EIS to 
resolve disputes between an applicant and stakeholders with assistance 
from the Commission's Dispute Resolution Service.\123\
---------------------------------------------------------------------------

    \120\ Kinder Morgan 2021 Comments at 46.
    \121\ WBI Energy 2021 Comments at 11.
    \122\ Carolyn Elefant 2021 Comments at 7; Spectra 2018 Comments 
at 94-95; INGAA 2018 Comments at 96.
    \123\ Tom Russo 2021 Comments at 23.
---------------------------------------------------------------------------

    41. Several commenters recommend changes to the duration of the 
pre-filing process. Recommendations include shortening the pre-filing 
process and extending the application review process,\124\ collapsing 
pre-filing into the post-filing process to eliminate lengthy processing 
times,\125\ and condensing the application review process by 
consolidating as much activity as possible in the pre-filing process 
and requiring all interested parties planning to object to a project to 
do so during pre-filing.\126\
---------------------------------------------------------------------------

    \124\ Carolyn Elefant 2021 Comments at 6.
    \125\ American Forest & Paper Association et al. 2021 Comments 
at 26-27; Spectra 2018 Comments at 98-99.
    \126\ United Association 2021 Comments at 35-36; INGAA 2018 
Comments at 102.
---------------------------------------------------------------------------

    42. Many commenters also propose ways to make stakeholder 
participation more effective. For example, some commenters propose that 
applicants provide transportation or access to public transportation to 
public meetings, adequate parking at venues, and options for remote 
participation.\127\ Several commenters also recommend that the 
Commission provide notices and related materials in multiple languages 
\128\ and issue guidance to ensure that pipeline project developers 
provide sufficient and timely information.\129\ Additionally, some 
commenters recommend that the Commission's new OPP be a neutral 
resource to landowners and other stakeholders seeking more information 
on the Commission's review process.\130\ Other commenters recommend 
that staff prioritize input provided by stakeholders that will be 
directly impacted by a project,\131\ and that all comments submitted to 
a docket receive a response or some other indication that a member of 
Commission staff has read the comments.\132\
---------------------------------------------------------------------------

    \127\ E.g., PLAN 2021 Comments at 3; Edward Woll 2021 Comments 
at 4; Rev. Betsy Sowers 2021 Comments at 3; Kim Robinson 2021 
Comments at 2; Surfrider Foundation 2018 Comments at 2; Delaware 
Riverkeeper Network 2018 Comments at 57.
    \128\ Egan Millard 2021 Comments at 3; Robert Kearns 2021 
Comments at 3; Inbal Goldstein 2021 Comments at 4.
    \129\ Dr. Susan F. Tierney 2021 Comments at 42.
    \130\ WBI Energy 2021 Comments at 10.
    \131\ Kinder Morgan 2021 Comments at 47-48.
    \132\ See, e.g., Kim Robinson 2021 Comments at 2; Leslie Sauer 
Jones and Stephanie Jones June 2021 Comments at 1; James and Kathy 
Chandler 2018 Comments at 1.
---------------------------------------------------------------------------

    43. Several commenters note the importance of transparency and 
coordination in the interagency review process. Some regulated 
companies recommend that the Commission strengthen its role as the lead 
agency under NEPA by focusing on educating and training cooperating 
agencies to be better prepared to meet their own statutory 
deadlines.\133\ Other commenters suggest that the Commission consider 
standardized schedules for its review processes, such as publishing 
timelines that include pre-filing, preparation of the NEPA document, 
and issuance of final orders and authorizations by other agencies,\134\ 
and that the Commission create a dedicated task force for coordinating 
with other agencies.\135\
---------------------------------------------------------------------------

    \133\ E.g., Kinder Morgan 2021 Comments at 42-43.
    \134\ Enbridge 2021 Comments at 157.
    \135\ Kirk Frost May 26, 2021 Comments at 13.
---------------------------------------------------------------------------

    44. Many commenters support the separate treatment of different 
classes of projects, recommending that the Commission provide more 
timely review of projects with minimal impacts and certain qualifying 
benefits,\136\ or expedite approvals for projects where only an 
environmental assessment is required and there is no opposition.\137\ 
However, other commenters oppose the separate treatment of different 
classes of projects, expressing concern that separate treatment would 
be arbitrary or discriminatory \138\ and that some projects would be 
left in limbo while the Commission takes action on what it perceives as 
priority projects.\139\ Some commenters also suggest changes to the 
Commission's blanket certificate program, including changing the filing 
requirements to reduce the number of required resource reports, 
eliminating the need for weekly reports,\140\ increasing both the 
automatic and prior notice cost limits,\141\ and adding consideration 
of other factors such as a project's acreage to determine eligibility 
for blanket certificate authority.\142\
---------------------------------------------------------------------------

    \136\ Iroquois 2021 Comments at 18-19.
    \137\ Kinder Morgan 2021 Comments at 44.
    \138\ Americans for Prosperity 2021 Comments at 2.
    \139\ AGA 2021 Comments at 39.
    \140\ EIC 2021 Comments at 34; TransCanada Corporation 2018 
Comments at 32.
    \141\ API 2021 Comments at 36.
    \142\ WEC Energy Group, Inc. 2018 Comment at 6-7.
---------------------------------------------------------------------------

E. The Commission's Consideration of Effects on Environmental Justice 
Communities

    45. Many commenters suggest that the Commission revise its approach 
for identifying environmental justice communities in certificate 
proceedings. For example, some commenters recommend that the Commission 
use

[[Page 11555]]

census block-level data; \143\ on-the-ground surveys; \144\ social, 
environmental, and health indicators; \145\ and other data and tools to 
identify such communities.\146\ Additionally, several commenters 
recommend that the Commission consult with other Federal and State 
agencies for assistance with identifying environmental justice 
communities \147\ or allow communities to identify themselves as 
environmental justice communities.\148\
---------------------------------------------------------------------------

    \143\ See, e.g., PIO 2021 Comments at 86-87; New Jersey 
Conservation Foundation et al. 2021 Comments at 38-40.
    \144\ See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 
2021 Comments at 69; Tom Russo 2021 Comments at 24-25; William F. 
Limpert 2021 Comments at 19.
    \145\ New Jersey Conservation Foundation et al. 2021 Comments at 
35-38; North Carolina Department of Environmental Quality 2021 
Comments at 2; EDF 2021 Comments at 57.
    \146\ Quincy Democratic City Committee 2021 Comments at 1-2; 
Natural Resources Defense Council May 2021 Comments at 14-15.
    \147\ EPA 2021 Comments at 7; Jeannie Ambrose 2021 Comments at 
2.
    \148\ See Save Our Illinois Land (SOIL) 2021 Comments at 1; 
William F. Limpert 2021 Comments at 19; Delaware Riverkeeper Network 
& Berks Gas Truth 2021 Comments at 69.
---------------------------------------------------------------------------

    46. Many commenters also recommend changes to how the Commission 
evaluates project impacts on environmental justice communities. For 
example, NGOs assert that the Commission should always use a reference 
or comparison group when evaluating disproportionately high and adverse 
impacts on such communities \149\ and ensure that such a group is 
neither too geographically narrow nor too demographically similar to 
avoid masking disproportionate impacts.\150\ NGOs and individual 
commenters recommend that the Commission consider the existing burden 
from specific environmental and health indicators when it evaluates 
cumulative and historic exposures, including the presence of other 
infrastructure and existing pollution levels in the project area.\151\ 
Additionally, these commenters recommend changes to how the Commission 
evaluates the impacts of direct and indirect air pollution on 
environmental justice communities.\152\ In contrast, regulated 
companies and industry trade organizations state that the Commission 
should not make substantive changes to how it evaluates impacts on 
environmental justice communities at this time, and recommend that the 
Commission wait for further guidance from the White House, EPA, and the 
Council on Environmental Quality (CEQ) to ensure consistency across the 
Federal Government.\153\
---------------------------------------------------------------------------

    \149\ New Jersey Conservation Foundation et al. 2021 Comments at 
39-40.
    \150\ Policy Integrity 2021 Comments at 49-52.
    \151\ See, e.g., New Jersey Conservation Foundation et al. 2021 
Comments at 36-37; Ann W. Woll 2021 Comments at 5; SOIL 2021 
Comments at 3.
    \152\ Delaware Riverkeeper Network & Berks Gas Truth 2021 
Comments at 77-82; EDF 2021 Comments at 58.
    \153\ API 2021 Comments at 37-39; Enbridge 2021 Comments at 167-
168.
---------------------------------------------------------------------------

    47. Many commenters state that there are barriers to the 
participation of environmental justice communities in Commission 
proceedings, including inadequate translation services and the 
Commission's reliance on electronic media.\154\ Other commenters state 
that Commission proceedings can be highly technical in nature, 
rendering them inaccessible to the general public unless a participant 
can invest significant time and resources.\155\ A wide range of 
commenters recommend changes to the Commission's public notice and 
outreach processes to ensure meaningful engagement with environmental 
justice communities,\156\ including the Commission's process for 
consulting with Tribes.\157\ Many commenters also support the 
Commission's formation of OPP \158\ and recommend that the Commission 
coordinate with community-based organizations and institutions to 
further encourage the participation of environmental justice 
communities in Commission proceedings.\159\
---------------------------------------------------------------------------

    \154\ Terese and Joseph Buchanan May 18, 2021 Comments at 1; PIO 
2021 Comments at 87-89; Robert Kearns 2021 Comments at 4; Jackie 
Freedman 2021 Comments at 1; Deborah Brown 2021 Comments at 1.
    \155\ New Jersey Conservation Foundation et al. 2021 Comments at 
34.
    \156\ See, e.g., Kinder Morgan 2021 Comments at 58-59; Ohio 
Environmental Council 2021 Comments at 3.
    \157\ Coharie Intra-Tribal Council, Haliwa-Saponi Indian Tribe, 
Lumbee Tribe of North Carolina, Meherrin Indian Nation of North 
Carolina, Nottoway Indian Tribe of Virginia, and Occaneechi Band of 
Saponi Nation 2021 Comments at 2; Haliwa-Saponi Indian Tribe 2021 
Comments at 2; Delaware Riverkeeper Network & Berks Gas Truth 2021 
Comments at 71.
    \158\ See, e.g., API 2021 Comments at 41; EPA 2021 Comments at 
8; National Fuel 2021 Comments at 22.
    \159\ New Jersey Conservation Foundation et al. 2021 Comments at 
33-35; Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments 
at 73-74.
---------------------------------------------------------------------------

    48. Several commenters assert that section 7(e) of the NGA provides 
the Commission with broad conditioning authority to address project 
impacts on environmental justice communities in its certificates.\160\ 
Some commenters state that the Commission should use its NEPA 
alternatives analysis to identify and evaluate ways to mitigate impacts 
on environmental justice communities.\161\ If mitigating adverse 
impacts on environmental justice communities is not possible, other 
commenters assert that the Commission should deny a certificate.\162\
---------------------------------------------------------------------------

    \160\ New Jersey Division of Rate Counsel 2021 Comments at 23; 
PIO 2021 Comments at 105.
    \161\ INGAA 2021 Comments at 98-99; EPA 2021 Comments at 8-9.
    \162\ See, e.g., Attorneys General of Massachusetts, 
Connecticut, Maryland, Minnesota, New Jersey, New York, Oregon, 
Rhode Island, and the District of Columbia 2021 Comments at 32-33 
(Attorneys General of Massachusetts et al.); see also PLAN 2021 
Comments at 5; Katherine Manuel 2021 Comments at 5; Elizabeth Moulds 
2021 Comments at 4; Jessica Greenwood 2021 Comments at 4; Shayna 
Gleason 2021 Comments at 3; Rick Mattila 2021 Comments at 3.
---------------------------------------------------------------------------

    49. In contrast, many regulated companies and industry trade 
organizations state that no Federal statute requires the Commission to 
implement specific remedial measures to address project impacts on 
environmental justice communities, but they assert that NEPA provides 
an appropriate framework in which to analyze such impacts.\163\ These 
entities also contend that that the Commission's conditioning authority 
under section 7(e) of the NGA is limited to direct project impacts and 
the Commission could not require measures to redress prior industrial 
impacts on environmental justice communities or impacts outside of the 
Commission's jurisdiction.\164\
---------------------------------------------------------------------------

    \163\ See, e.g., Williams 2021 Comments at 60-62, 65; Enbridge 
2021 Comments at 178-180, 186; Kinder Morgan 2021 Comments at 48, 
57; INGAA 2021 Comments at 88-90.
    \164\ See, e.g., Enbridge 2021 Comments at 181; API 2021 Comment 
at 44-45.
---------------------------------------------------------------------------

III. Goals and Objectives of the Updated Certificate Policy Statement

    50. While significant changes have occurred in the past 23 years, 
the Commission's goals and objectives with this Updated Policy 
Statement remain consistent with those of the 1999 Policy Statement, 
including to: (1) ``appropriately consider the enhancement of 
competitive transportation alternatives, the possibility of over 
building, the avoidance of unnecessary disruption of the environment, 
and the unneeded exercise of eminent domain;'' \165\ (2) ``provide 
appropriate incentives for the optimal level of construction and 
efficient customer choices;'' \166\ and (3) ``provide an incentive for 
applicants to structure their projects to avoid, or minimize, the 
potential adverse impacts that could result from construction of the 
project.'' \167\
---------------------------------------------------------------------------

    \165\ 1999 Policy Statement, 88 FERC at 61,737.
    \166\ Id. at 61,743.
    \167\ Id.

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[[Page 11556]]

    51. As discussed above, the 1999 Policy Statement included an 
analytical framework for how the Commission would evaluate the effects 
of certificating new projects on economic interests. With this Updated 
Policy Statement, the Commission intends to provide a more 
comprehensive analytical framework for its decision-making process. 
Specifically, we provide clarity on how the Commission will evaluate 
all factors bearing on the public interest, including the balancing of 
economic and environmental interests in determining whether a project 
is required by the public convenience and necessity, thus providing 
more regulatory certainty in the Commission's review process and public 
interest determinations.

IV. Updated Certificate Policy Statement

A. Factors To Be Balanced in Assessing the Public Convenience and 
Necessity

    52. In determining whether to issue a certificate of public 
convenience and necessity, the Commission will weigh the public 
benefits of a proposal, the most important of which is the need that 
will be served by the project, against its adverse impacts.
1. Consideration of Project Need
    53. To demonstrate that a project is required by the public 
convenience and necessity, an applicant must first establish that the 
proposed project is needed. As indicated above, the Commission's 
expectations and requirements for how applicants should demonstrate 
project need have evolved over time. In the 1999 Policy Statement, the 
Commission noted concerns associated with relying ``primar[ily]'' \168\ 
or ``almost exclusively'' \169\ on contracts to establish need for a 
new project. Those concerns included the ``additional issues [that 
arise] when the contracts are held by pipeline affiliates'' \170\ and 
the difficulty such a policy creates for ``articulat[ing] to landowners 
and community interests why their land must be used for a new pipeline 
project.'' \171\ Thus, the 1999 Policy Statement provided that:
---------------------------------------------------------------------------

    \168\ Id. at 61,744.
    \169\ Id.
    \170\ Id.
    \171\ Id.

[r]ather than relying only on one test for need, the Commission will 
consider all relevant factors reflecting on the need for the 
project. These might include, but would not be limited to, precedent 
agreements, demand projections, potential cost savings to consumers, 
or a comparison of projected demand with the amount of capacity 
currently serving the market.\172\
---------------------------------------------------------------------------

    \172\ Id. at 61,747 (emphasis added).

    54. However, in practice, the Commission has relied almost 
exclusively on precedent agreements to establish project need. Although 
courts have upheld the Commission's practice in certain contexts,\173\ 
we find that we cannot adequately assess project need without also 
looking at evidence beyond precedent agreements. After all, as the 
Commission's 1999 Policy Statement noted, many different factors may 
indicate the need--or lack thereof--for a new interstate pipeline. 
While precedent agreements may indicate one or more shipper's 
willingness to contract for new capacity, such willingness may not in 
all circumstances be sufficient to sustain a finding of need--e.g., in 
the face of contrary evidence or where there is reason to discount the 
probative value of those precedent agreements. Accordingly, we find 
that looking only to precedent agreements, and ignoring other, 
potentially contrary, evidence may cause the Commission to reach a 
determination on need that is inconsistent with the weight of the 
evidence in any particular proceeding, in violation of both the NGA and 
the Commission's responsibilities under the Administrative Procedure 
Act.\174\ We reaffirm the Commission's commitment to consider all 
relevant factors bearing on the need for a project. Although precedent 
agreements remain important evidence of need, and we expect that 
applicants will continue to provide precedent agreements, the existence 
of precedent agreements may not be sufficient in and of themselves to 
establish need for the project. The Commission will also consider, as 
relevant, the circumstances surrounding the precedent agreements (e.g., 
whether the agreements were entered into before or after an open season 
and the results of the open season, including the number of bidders, 
whether the agreements were entered into in response to LDC or 
generator requests for proposals (RFP) and, if so, the details around 
that RFP process, including the length of time from RFP to execution of 
the agreement), as well as other evidence of need, as discussed below.
---------------------------------------------------------------------------

    \173\ See, e.g., Minisink Residents for Envtl. Pres. & Safety v. 
FERC, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014) (noting that the 1999 
Policy Statement ``permits'' but does not ``require[ ]'' the 
Commission to '' look[ ] beyond the market need reflected by the 
applicant's existing contracts with shippers''). But see 
Environmental Defense Fund v. FERC, 2 F.4th 953, 973 (D.C. Cir. 
2021) (finding that is was arbitrary and capricious for the 
Commission to rely solely on a single precedent agreement with an 
affiliate shipper to establish need when demand for natural gas in 
the area was flat and the Commission neglected to make a finding as 
to whether the proposed pipeline would result in a more economical 
alternative to existing pipelines).
    \174\ Under the Administrative Procedure Act, an agency cannot 
ignore substantial evidence bearing on the agency decision. See 5 
U.S.C. 706; see also, e.g., Motor Vehicles Mfrs. Ass'n of U.S., Inc. 
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (holding 
that an agency decision is arbitrary and capricious if it ``entirely 
fail[s] to consider an important aspect of the problem'').
---------------------------------------------------------------------------

    55. For all categories of proposed projects, we encourage 
applicants to provide specific information detailing how the gas to be 
transported by the proposed project will ultimately be used, why the 
project is needed to serve that use, and the expected utilization rate 
of the proposed project. To the extent applicants do not have 
information on the end use of the gas, they are encouraged to work with 
their prospective shippers to obtain it. The absence of this 
information may prevent an applicant from meeting its burden to 
demonstrate that a project is needed.
    56. For a market-driven project that is responding to increased 
natural gas demand, the evidence relating to the need for the project 
could include a market study that projects volumetric or peak day load 
growth. An applicant may rely on publicly available analyses by the 
Energy Information Administration or other third parties showing 
projections of market growth. The applicant could also provide its best 
assessment, based on publicly available information or data, of whether 
other transportation suppliers may be able to meet the incremental 
demand with existing capacity to demonstrate why new pipeline 
construction is necessary. For individual shippers, load growth 
profiles, gas supply portfolios, and any advanced approval of contracts 
by State public service commissions would also be helpful in showing 
evidence of project need.
    57. Some projects may not directly serve a customer but rather are 
being undertaken to add supplies of natural gas to the market. Such 
projects may be driven by natural gas producers or natural gas 
utilities attempting to provide supply at lower cost or support 
reliability by increasing the volumes of natural gas available to 
customers. For these projects, evidence to demonstrate consumer 
benefits may include projections of the net benefits, for example 
projected lower natural gas prices for consumers due to increased 
supply competition, compared to the incremental costs of transportation 
on the new pipeline. The Commission will consider record evidence of 
regional projections for both gas supply and market growth, as well as 
pipeline-specific studies in these areas.

[[Page 11557]]

    58. Other pipeline projects may be intended to support more 
efficient system operations by replacing older and inefficient 
facilities (e.g., compressors and leak-prone pipes) and performing 
other infrastructure improvements, or to respond to changing State and 
Federal Government pipeline safety or environmental requirements. For 
these projects, applicants may document how proposed facilities, for 
example pipeline or compressor replacements, provide expected system 
benefits, such as reduced operating costs, improved pipeline integrity, 
or reduced natural gas leaks. In addition, an applicant may document 
how a project avoids adverse impacts or satisfies any changing State or 
Federal Government regulations.
    59. The Commission will consider both current and projected future 
demand for a project based on the evidence in the record. Applicants 
are encouraged to submit analyses showing how market trends as well as 
current and expected policy and regulatory developments would affect 
future need for the project. Applicants are also encouraged to provide 
a thorough assessment of alternatives, including supporting data, to 
facilitate the Commission's review. In assessing the strength of the 
applicant's need showing, the Commission will consider record evidence 
of alternatives to the proposed project. The Commission's evaluation 
will include information indicating that other suppliers would be able 
to meet some or all of the needs to be served by the proposed project 
on a timely, competitive basis or whether other factors may eliminate 
or curtail such needs.
    60. As the Commission noted in the 1999 Policy Statement, projects 
supported by precedent agreements with affiliates raise unique concerns 
regarding need for the project.\175\ And, as the United States Court of 
Appeals for the District of Columbia Circuit (D.C. Circuit) recently 
held in Environmental Defense Fund v. FERC, ``evidence of `market need' 
is too easy to manipulate when there is a corporate affiliation between 
the proponent of a new pipeline and a single shipper who have entered 
into a precedent agreement.'' \176\ Given those concerns, affiliate 
precedent agreements will generally be insufficient to demonstrate 
need. Instead, where projects are backed primarily by precedent 
agreements with affiliates, the Commission will consider additional 
information, such as the evidence outlined above.\177\ We will 
determine how much additional evidence is required on a case-by-case 
determination.
---------------------------------------------------------------------------

    \175\ 1999 Policy Statement, 88 FERC at 61,739-40 (noting that 
the ``use of contracts with affiliates to demonstrate market support 
for projects has generated opposition from affected landowners and 
competitor pipelines who question whether the contracts represent 
real market demand'') and 61,744 (stating that ``[u]sing contracts 
as the primary indicator of market support for the proposed pipeline 
project also raises additional issues when the contracts are held by 
pipeline affiliates.'').
    \176\ 2 F.4th at 973.
    \177\ See supra P 55.
---------------------------------------------------------------------------

    61. To the extent the Commission receives information in the record 
from third parties addressing the need for a project, that too will be 
considered in our analysis. Where an applicant fails to carry its 
burden of demonstrating the proposed project is needed, the Commission 
will not undertake any further consideration of the project's benefits 
or adverse effects.
2. Consideration of Adverse Effects
    62. In determining whether to issue a certificate of public 
convenience and necessity, the Commission will consider four major 
interests that may be adversely affected by the construction and 
operation of new projects: (1) The interests of the applicant's 
existing customers; (2) the interests of existing pipelines and their 
captive customers; (3) environmental interests; and (4) the interests 
of landowners and surrounding communities, including environmental 
justice communities. The Commission may deny an application based on 
any of these types of adverse impacts.
a. Impacts on Existing Customers of the Pipeline Applicant
    63. Existing customers of the pipeline applicant may be adversely 
affected if a proposed project causes an increase in rates or a 
degradation in service. Regarding potential rate increases, although we 
are no longer characterizing this issue as a ``threshold question'' in 
this Updated Policy Statement, our policy of no financial subsidies 
remains unchanged.\178\ That is, the pipeline applicant must be 
prepared to financially support its proposed project without relying on 
subsidization by its existing customers. As to other potential impacts 
to existing customers, like a degradation in service, we will consider 
the applicant's efforts to eliminate or minimize any such impacts.
---------------------------------------------------------------------------

    \178\ 1999 Policy Statement, 88 FERC at 61,746-47, clarified, 90 
FERC at 61,391-96.
---------------------------------------------------------------------------

    64. As the Commission stated in the 1999 Policy Statement, the 
policy of no financial subsidies does not mean that a project sponsor 
has to bear all the financial risk of the project; the risk can be 
shared with new customers, but it generally cannot be shifted to 
existing customers.\179\ One of the Commission's regulatory goals is to 
protect captive customers from rate increases during the terms of their 
contracts that are unrelated to the costs associated with their 
service. And existing customers of the expanding pipeline should not 
have to subsidize a project that does not serve them.
---------------------------------------------------------------------------

    \179\ 1999 Policy Statement, 88 FERC at 61,746. For new pipeline 
companies, without existing customers, this requirement has no 
application.
---------------------------------------------------------------------------

    65. The 1999 Policy Statement also stated that the requirement that 
a new project must be financially viable without subsidies does not 
eliminate the possibility that, in some instances, project costs should 
be rolled into the rates of existing customers.\180\ In most instances, 
incremental pricing will avoid subsidies for the new project, but the 
situation may be different in cases of inexpensive expansibility that 
is made possible because of earlier, costly construction.\181\ In that 
instance, because the existing customers bear the cost of the earlier, 
more costly construction in their rates, incremental pricing could 
result in the new customers receiving a subsidy from the existing 
customers because the new customers would not face the full cost of the 
construction that makes their new service possible.
---------------------------------------------------------------------------

    \180\ Id.
    \181\ Id.
---------------------------------------------------------------------------

    66. Additionally, expansion costs could still be included in 
existing shippers' rates when proposed projects are designed to improve 
service for existing customers.\182\ Increasing the rates of existing 
customers to pay for projects designed to benefit those customers 
(i.e., by replacing existing capacity, improving reliability, or 
providing flexibility) is not a subsidy.\183\
---------------------------------------------------------------------------

    \182\ Order Clarifying Statement of Policy, 90 FERC at 61,391.
    \183\ Id. at 61,393.
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b. Impacts on Existing Pipelines and Their Customers
    67. As the Commission stated in the 1999 Policy Statement, existing 
pipelines that already serve the market to be served by the proposed 
new capacity may be affected by the potential loss of market share and 
the possibility that they may be left with unsubscribed capacity 
investment.\184\ Additionally, captive customers of existing pipelines 
may be affected if they must pay for the resulting unsubscribed 
capacity in their rates. These remain important concerns.
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    \184\ 1999 Policy Statement, 88 FERC at 61,748.

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[[Page 11558]]

    68. It has been the Commission's long-standing position that it has 
an obligation to ensure fair competition, but that it is not the role 
of the Commission to protect existing pipelines from the effects of 
competition.\185\ While we continue to maintain this position, we also 
emphasize that it is not just unfair competition that can harm captive 
customers. The Commission must consider the possible harm to captive 
customers that can result from a new pipeline, regardless of whether 
there is evidence of unfair competition.
---------------------------------------------------------------------------

    \185\ See Ruby Pipeline, L.L.C., 128 FERC ] 61,224, at PP 37-39 
(2009); see also 1999 Policy Statement, 88 FERC at 61,748.
---------------------------------------------------------------------------

    69. Congress enacted the NGA ``with the principal aim of 
encouraging the orderly development of plentiful supplies of . . . 
natural gas at reasonable prices, and protecting consumers against 
exploitation at the hands of natural gas companies.'' \186\ Ensuring 
the orderly development of natural gas supplies includes preventing 
overbuilding. One way that the Commission can prevent overbuilding is 
through careful consideration of a proposed project's impacts on 
existing pipelines. To the extent that a proposed project is designed 
to substantially serve demand already being met on existing pipelines, 
that could be an indication of potential overbuilding. Nevertheless, in 
such instances, the Commission will also consider whether the proposed 
project would offer certain advantages (e.g., providing lower costs to 
consumers or enhancing system reliability).
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    \186\ City of Clarksville, Tennessee v. FERC, 888 F.3d at 479 
(quoting NAACP v. FPC, 425 U.S. at 669-70 and FPC v. Hope Nat. Gas 
Co., 320 U.S. at 610).
---------------------------------------------------------------------------

    70. Comments from existing pipelines and their captive customers 
about the potential impacts from a proposed project will be an 
important piece of our review. Additionally, comments from State 
utility or public service commissions as to how a proposed project may 
impact existing pipelines will be particularly useful.
c. Environmental Impacts
    71. As noted above, the 1999 Policy Statement included an 
analytical framework for how the Commission would evaluate the effects 
of certificating new projects on economic interests. However, the 1999 
Policy Statement did not describe how the Commission would consider 
environmental interests in its decision-making process and, more 
specifically, how it would balance these interests with the economic 
interests of a project. Instead, it stated that environmental interests 
would be ``separately considered'' in a certificate proceeding after 
the balancing of public benefits against the residual adverse effects 
on economic interests.\187\
---------------------------------------------------------------------------

    \187\ 1999 Policy Statement, 88 FERC at 61,747.
---------------------------------------------------------------------------

    72. While the 1999 Policy Statement focused on economic impacts, 
the consideration of environmental impacts is an important part of the 
Commission's responsibility under the NGA to evaluate all factors 
bearing on the public interest.\188\ In the years immediately following 
issuance of the 1999 Policy Statement, the Commission would sometimes 
issue a preliminary determination on the non-environmental issues 
associated with a proposed project, and then issue a subsequent 
decision on the certificate application following the environmental 
review process; however, in practice, Commission staff would begin 
review of both the economic and environmental impacts following the 
filing of an application. Today, the Commission no longer issues 
preliminary determinations on non-environmental issues, and the 
Commission and staff continue to review the economic and environmental 
impacts of projects concurrently. Thus, the sequential framing of these 
analyses in the 1999 Policy Statement has created some confusion and 
incorrectly conveyed how the Commission considers environmental 
impacts. In addition to questions about sequencing, we have seen a 
significant increase in comments from a range of stakeholders 
expressing concerns about how the Commission considers environmental 
impacts, including impacts on climate change and environmental justice 
communities, in its public interest determinations.
---------------------------------------------------------------------------

    \188\ See Atl. Ref. Co. v. Pub. Serv. Comm'n of N.Y., 360 U.S. 
at 391 (holding that the NGA requires the Commission to consider 
``all factors being on the public interest''); see also Sabal Trail, 
867 F.3d at 1373 (explaining that the Commission must consider a 
pipeline's direct and indirect GHG emissions because the Commission 
may ``deny a pipeline certificate on the ground that the pipeline 
would be too harmful to the environment'').
---------------------------------------------------------------------------

    73. To provide more clarity and regulatory certainty to all 
participants in certificate proceedings, we explain here how the 
Commission will consider environmental impacts.\189\ The Commission 
will balance all impacts, including economic and environmental impacts, 
together in its public interest determinations under the NGA. As 
discussed further below, the potential adverse impacts will be weighed 
against the evidence of need and other potential benefits of a proposal 
in determining whether to issue a certificate of public convenience and 
necessity.
---------------------------------------------------------------------------

    \189\ Recognizing that CEQ is in the process of revising its 
NEPA regulations, the Commission will consider the comments in this 
docket regarding NEPA in our future review of our regulations, 
procedures, and practices for implementing NEPA.
---------------------------------------------------------------------------

    74. We will consider environmental impacts and potential mitigation 
in both our environmental reviews under NEPA and our public interest 
determinations under the NGA. The Commission expects applicants to 
structure their projects to avoid, or minimize, potential adverse 
environmental impacts. Additionally, we expect applicants to propose 
measures for mitigating impacts, and we will consider those measures--
or the lack thereof--in balancing adverse impacts against the potential 
benefits of a proposal. Further, the NGA grants the Commission broad 
authority to attach reasonable terms and conditions to certificates of 
public convenience and necessity.\190\ Should we deem an applicant's 
proposed mitigation of impacts inadequate to enable us to reach a 
public interest determination, we may condition the certificate to 
require additional mitigation. We may also deny an application based on 
any of the types of adverse impacts described herein, including 
environmental impacts, if the adverse impacts as a whole outweigh the 
benefits of the project and cannot be mitigated or minimized.
---------------------------------------------------------------------------

    \190\ 15 U.S.C. 717f(e); see also, e.g., ANR Pipeline Co. v. 
FERC, 876 F.2d 124, 129 (D.C. Cir. 1989) (noting the Commission's 
``extremely broad'' conditioning authority).
---------------------------------------------------------------------------

    75. As noted above, since issuance of the 1999 Policy Statement, 
the Commission's policy for considering climate impacts has 
evolved.\191\ In addition to the significant increase in comments from 
stakeholders, the courts have issued several decisions addressing the 
Commission's evaluation of GHG emissions in certificate proceedings. 
The D.C. Circuit recently held that reasonably foreseeable downstream 
GHG emissions are an indirect effect of the Commission authorizing 
proposed projects \192\ and are relevant to the Commission's 
determination of whether proposed projects are required by the public 
convenience and necessity.\193\
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    \191\ Supra P 15.
    \192\ Sabal Trail, 867 F.3d at 1374.
    \193\ Id. at 1373. In Birckhead v. FERC, 925 F.3d 510, 518 (D.C. 
Cir. 2019), the D.C. Circuit rejected the Commission's position that 
Sabal Trail is limited to the narrow facts of that case. While the 
court in Birckhead acknowledged that downstream emissions may not 
always be a foreseeable effect of natural gas projects, it rejected 
the notion that downstream GHG emissions are a reasonably 
foreseeable indirect effect of a natural gas project only if a 
specific end destination is identified. The court further noted that 
the Commission should attempt to obtain information on downstream 
uses to determine whether downstream GHG emissions are a reasonably 
foreseeable effect of the project. Birckhead, 925 F.3d at 518-19.

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[[Page 11559]]

    76. Concurrently with this Updated Policy Statement, we are issuing 
a separate policy statement to explain how the Commission will assess 
project impacts on climate change in certificate proceedings going 
forward.\194\ This separate policy statement describes Commission 
procedures for evaluating climate impacts under NEPA and explains how 
the Commission will integrate climate considerations into its public 
convenience and necessity findings under the NGA, including how the 
Commission will consider measures to mitigate climate impacts. When 
making public interest determinations, we intend to fully consider 
climate impacts, in addition to other environmental impacts.
---------------------------------------------------------------------------

    \194\ GHG Policy Statement, 178 FERC ] 61,108.
---------------------------------------------------------------------------

d. Impacts on Landowners and Surrounding Communities
    77. The construction and operation of new natural gas 
infrastructure has the potential to result in adverse impacts on the 
landowners and communities surrounding a project. As the Commission 
stated in the 1999 Policy Statement:

[l]andowners whose land would be condemned for the new pipeline 
right-of-way, under eminent domain rights conveyed by the 
Commission's certificate, have an interest as does the community 
surrounding the right-of-way. The interest of these groups is to 
avoid unnecessary construction, and any adverse effects on their 
property associated with a permanent right-of-way.\195\
---------------------------------------------------------------------------

    \195\ 1999 Policy Statement, 88 FERC at 61,748.

    In the over 20 years that have passed since issuance of the 1999 
Policy Statement, the Commission has seen an increase in proposals for 
projects in more densely populated areas, as well as a significant 
increase in comments from landowners raising a multitude of economic, 
environmental, and others concerns with proposed projects.
    78. While the 1999 Policy Statement focused primarily on the 
economic impact associated with a permanent right-of-way on a 
landowner's property,\196\ going forward, and as discussed below, our 
analysis of impacts to landowners will be more expansive. This fuller 
consideration of landowner impacts is consistent with the Commission's 
approach in recent years of more fully engaging with landowners to 
ensure that their concerns are properly considered in our proceedings. 
For example, in June 2021, the Commission established OPP, in part, to 
facilitate public participation in Commission proceedings.
---------------------------------------------------------------------------

    \196\ Id. at 61,749 (``The balancing of interests and benefits 
that will precede the environmental analysis will largely focus on 
economic interests such as the property rights of landowners.'').
---------------------------------------------------------------------------

    79. In addition to the increase in comments from landowners since 
issuance of the 1999 Policy Statement, the Commission has also seen a 
significant increase in comments raising environmental justice 
concerns. In recent years, issues surrounding environmental justice and 
equity have received increased focus and attention at both the State 
and Federal levels, as demonstrated by the recent issuance of Executive 
Orders 13985 and 14008, referenced above.\197\ The Commission is 
committed to ensuring that environmental justice and equity concerns 
are better incorporated into our decision-making processes. 
Accordingly, we clarify that our consideration of impacts to 
communities surrounding a proposed project will include an assessment 
of impacts to any environmental justice communities and of necessary 
mitigation to avoid or lessen those impacts.
---------------------------------------------------------------------------

    \197\ Supra P 16.
---------------------------------------------------------------------------

    80. The Commission and applicants have a shared responsibility to 
engage communities that may be impacted by a proposed project. This 
responsibility includes ensuring effective communication with 
landowners and environmental justice communities about potential 
impacts and giving careful consideration to the input of such parties 
during the agency proceeding. Below, we further discuss our 
expectations for how pipeline applicants will engage with landowners, 
steps the Commission has taken to protect landowner interests, and how 
the Commission will consider potential impacts to landowners and 
environmental justice communities.
i. Impacts on Landowners
    81. As noted above, once the Commission grants a certificate of 
public convenience and necessity, section 7(h) of the NGA authorizes a 
certificate holder to acquire the necessary land or property to 
construct the approved facilities by exercising the right of eminent 
domain for those lands for which it could not negotiate an easement 
with landowners.\198\ As the Commission has previously recognized:
---------------------------------------------------------------------------

    \198\ 15 U.S.C. 717f(h).

[t]here is no question that eminent domain is among the most 
significant actions that a government may take with regard to an 
individual's private property. And the harm to an individual from 
having their land condemned is one that may never be fully remedied, 
even in the event they receive their constitutionally-required 
compensation.\199\
---------------------------------------------------------------------------

    \199\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order 871-B, 86 FR 26150 (May 13, 
2021), 175 FERC ] 61,098, at P 47 (2021).

Thus, looking only at the economic impacts associated with eminent 
domain does not sufficiently account for the full scope of impact on 
landowners. Landowners whose property is subject to eminent domain 
often experience intangible impacts, which cannot always be monetized. 
Our consideration of landowner impacts will be based upon robust early 
engagement with all interested landowners, as well as continued 
evaluation of input from such parties during the course of any given 
proceeding. And we will, to the extent possible, assess a wider range 
of landowner impacts.
    82. Given the serious impacts associated with the use of eminent 
domain, we expect pipeline applicants to take all appropriate steps to 
minimize the future need to use eminent domain. This includes engaging 
with the public and interested stakeholders during the planning phase 
of projects to solicit input on route concerns and incorporate 
reroutes, where practicable, to address landowner concerns, as well as 
providing landowners with all necessary information. Additionally, we 
expect pipelines to take seriously their obligation to attempt to 
negotiate easements respectfully and in good faith with impacted 
landowners. The Commission will look unfavorably on applicants that do 
not work proactively with landowners to address concerns.
    83. Additionally, we note that that, while a certificate provides 
the holder with significant rights and privileges, it also imposes 
concomitant responsibilities, including complying with all certificate 
conditions. Specifically, certificate holders must comply with 
requirements regarding restoration of the pipeline right-of-way. 
Failure to comply with such requirements could mean that a pipeline is 
out of compliance with its certificate, and could lead to compliance 
action by the Commission, including referral to the Commission's Office 
of Enforcement for further investigation and potential civil 
penalties.\200\
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    \200\ See, e.g., Midship Pipeline Co., LLC, 177 FERC ] 61,187 
(2021).
---------------------------------------------------------------------------

    84. Although the Commission does not have the authority to deny or 
restrict the power of eminent domain in a section 7 certificate,\201\ 
or to oversee the

[[Page 11560]]

acquisition of property rights through eminent domain, including issues 
regarding the timing of and just compensation for the acquisition of 
property rights,\202\ the Commission has recently taken steps within 
its authority to protect landowner interests. Specifically, the 
Commission issued Order No. 871-B, which precludes authorization of 
construction during the rehearing period for certificate orders and 
pending resolution of rehearing requests reflecting opposition to 
project construction, operation, or need (subject to a time 
limitation), and which establishes a general policy, subject to a case-
by-case determination, of staying certificate orders during the 
rehearing period and pending Commission resolution of any timely 
requests for rehearing filed by landowners (also subject to a time 
limitation).\203\
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    \201\ See Midcoast Interstate Transmission, Inc. v. FERC, 198 
F.3d 960, 973 (D.C. Cir. 2000) (``The Commission does not have the 
discretion to deny a certificate holder the power of eminent 
domain.'').
    \202\ PennEast Pipeline Co., LLC, 174 FERC ] 61,056, at P 10 
(2021) (citing Atl. Coast Pipeline, LLC, 164 FERC ] 61,100, at P 88 
(2018); Mountain Valley Pipeline, LLC, 163 FERC ] 61,197, at P 76 
(2018); PennEast Pipeline Co., LLC, 164 FERC ] 61,098, at P 33 n.82 
(2018)).
    \203\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order 871-B, 86 FR 26150 (May 13, 
2021), 175 FERC ] 61,098, order on reh'g, Order 871-C, 86 FR 43077 
(Aug. 6, 2021), 176 FERC ] 61,062 (2021).
---------------------------------------------------------------------------

    85. We acknowledge that in many cases pipeline applicants will not 
be able to acquire all the necessary right-of-way by negotiation and in 
such instances may need to use eminent domain. In assessing potential 
impacts to landowners, the Commission will consider the steps a 
pipeline applicant has already taken to acquire lands through 
respectful and good faith negotiation, as well as the applicant's plans 
to minimize the use of eminent domain upon receiving a certificate. 
And, as discussed further below, the potential adverse impacts to 
landowners, along with other adverse impacts, will be weighed against 
the evidence of need and potential benefits of a proposal in 
determining whether to issue a certificate of public convenience and 
necessity.
ii. Impacts on Environmental Justice Communities
    86. Our evaluation of the impacts of a proposed interstate natural 
gas pipeline will include a robust consideration of its impacts on 
environmental justice communities.\204\ We recognize that environmental 
justice communities have long borne a disproportionate share of the 
impacts associated with industrial development near their residences, 
workplaces, religious institutions, and schools. That history often 
comes with significant, deleterious consequences. For example, 
environmental justice communities frequently experience health 
disparities, such as higher rates of asthma and certain cancers 
relative to society at large, which can render individuals in those 
communities particularly susceptible to incremental pollution and other 
adverse impacts that may be caused by a new project.\205\ The 
Commission's public interest responsibility demands that we seriously 
evaluate these considerations and incorporate them into the balancing 
test outlined below.\206\
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    \204\ We recognize that the Commission's environmental justice 
analysis will also apply to the Commission's authorization of 
liquefied natural gas facilities, pursuant to section 3 of the NGA. 
While those authorizations are not the subject of this Updated 
Policy Statement, this commitment is worth noting in this discussion 
of impacts on environmental justice communities.
    \205\ Policy Integrity 2021 Comments at 46-47, 55-56.
    \206\ Vecinos para el Bienestar de la Comunidad Costera v. FERC, 
6 F.4th 1321 (D.C. Cir. 2021) (Vecinos) (remanding a Commission 
order based in part on a ``deficient'' environmental justice 
analysis).
---------------------------------------------------------------------------

    87. For the Commission to adequately evaluate the impacts of a 
proposed project on environmental justice communities, it is essential 
to promptly and properly identify such communities. Commenters noted 
the insufficiency of relying only on initial screening tools to 
identify environmental justice communities.\207\ While data from 
screening tools such as the EPA's EJSCREEN may be useful, additional 
data collection methods may be necessary to properly identify 
environmental justice communities. We encourage applicants to consult 
with guidance provided by EPA, CEQ, and other authoritative 
sources,\208\ to ensure that the Commission has before it all the data 
needed to adequately identify environmental justice communities 
potentially affected by a proposed project. We will evaluate and 
incorporate, as appropriate, any subsequently issued guidance when 
considering how to identify environmental justice communities affected 
by a proposed project. We encourage project developers to do the same.
---------------------------------------------------------------------------

    \207\ For example, screening tool data ``may need to be 
supplemented with additional or more localized information and/or 
ground truthing.'' EPA 2021 Comments at 7, 9.
    \208\ This may include, for example, relevant State or local 
agencies. We also note that Federal agencies, including EPA and CEQ, 
are in the process of updating their guidance regarding 
environmental justice.
---------------------------------------------------------------------------

    88. Many commenters encourage the Commission to factor in 
demographic considerations--such as disability, age, household income, 
pre-existing health conditions, and level of education.\209\ We 
recognize that such demographic considerations may be appropriate to 
consider on a project-by-project basis or as Federal guidance evolves.
---------------------------------------------------------------------------

    \209\ North Carolina DEQ 2018 Comments at 8. See also Niskanen 
Center 2018 Comments at 17-19.
---------------------------------------------------------------------------

    89. Additionally, we recognize that proper selection of both the 
geographic unit of analysis (e.g., census block group) within the 
affected environment and the reference community (e.g., county/parish, 
or State) is necessary to ensure that affected environmental justice 
communities are properly identified for consideration in the 
Commission's analysis.\210\ The affected environment for environmental 
justice analysis purposes may vary according to the characteristics of 
the particular project and the surrounding communities.\211\ 
Accordingly, the Commission will ensure that the delineation of the 
affected area, selected geographic unit of analysis, and reference 
community are consistent with best practices and Federal guidance and 
will not be limited to a one-size-fits-all approach.\212\
---------------------------------------------------------------------------

    \210\ An overly broad geographic unit of analysis, for example, 
could dilute the presence of environmental justice communities. See 
Policy Integrity 2021 Comments at 46-48; see also Federal 
Interagency Working Group on Environmental Justice & NEPA Committee, 
Promising Practices for EJ Methodologies in NEPA Reviews at 21, 26 
(March 2016), https://www.epa.gov/sites/production/files/2016-08/documents/nepa_promising_practices_document_2016.pdf (EJ IWG & NEPA 
Committee).
    \211\ See Vecinos, 6 F.4th at 1330 (``When conducting an 
environmental justice analysis, an agency's delineation of the area 
potentially affected by the project must be `reasonable and 
adequately explained,' . . . and include `a rational connection 
between the facts found and the decision made.' '' (citations 
omitted)).
    \212\ See EJ IWG & NEPA Committee at 21-28.
---------------------------------------------------------------------------

    90. The consideration of cumulative impacts \213\ is particularly 
important when it comes to conducting an environmental justice 
analysis.\214\ An environmental analysis that, for example, considers 
incremental impacts of a project in isolation will, almost by 
definition, fail to adequately consider the project's impact on a 
community that already experiences elevated levels of pollution or 
other adverse impacts. To adequately capture the effects of

[[Page 11561]]

cumulative impacts, it is essential that the Commission consider those 
pre-existing conditions and how the adverse impacts of a proposed 
project may interact with and potentially exacerbate them. To that end, 
several commenters provide recommendations for specific health and 
environmental indicators that the Commission should consider when it 
evaluates cumulative exposures. These include factors such as air 
pollution, heat vulnerability, as well as the effects of pre-existing 
infrastructure (e.g., bus depots, highways, and waste facilities).\215\ 
That analysis can be informed by a wide range of data, including, for 
example, health statistics such as cancer clusters, asthma rates, 
social vulnerability data, and community resilience data.\216\ We will 
carefully examine cumulative impacts on environmental justice 
communities and encourage applicants to identify and submit any such 
data that may be relevant for the particular environmental justice 
communities affected by their proposed project.
---------------------------------------------------------------------------

    \213\ `` `Cumulative impact' is the impact on the environment 
which results from the incremental impact of the action when added 
to other past, present, and reasonably foreseeable future actions 
regardless of what agency (Federal or non-Federal) or person 
undertakes such other actions. Cumulative impacts can result from 
individually minor but collectively significant actions taking place 
over a period of time.'' 40 CFR 1508.7 (1978).
    \214\ See EDF 2021 Comments at 58; Attorneys General of 
Massachusetts et al. 2021 Comments at 31; Delaware Riverkeeper & 
Berks Gas Truth 2021 Comments at 78 and 83; and SOIL 2021 Comments 
at 3.
    \215\ New Jersey Conservation Foundation et al. 2021 Comments 
2021 at 36-37.
    \216\ EPA, EnviroAtlas Interactive Map, https://www.epa.gov/enviroatlas/enviroatlas-interactive-map (last visited Feb. 1, 2022); 
Centers for Disease Control and Prevention, Social Vulnerability 
Index Interactive Map, https://svi.cdc.gov/map.html (last visited 
Feb. 1, 2022).
---------------------------------------------------------------------------

    91. The Commission will also consider measures to eliminate or 
mitigate a project's adverse impacts on environmental justice 
communities. We recognize that mitigation must be tailored to the needs 
of different environmental justice communities. This will require close 
consultation between the project developer, the communities in 
question, and the Commission, consistent with our ex parte 
regulations.\217\ We will look with disfavor on mitigation proposals 
that are proposed without sufficient community input. In addition, we 
note that effective mitigation will require the Commission to consider, 
among other things, the feasibility of proposed mitigation and methods 
for ensuring compliance, the timing of proposed mitigation, and, where 
useful, a range of potential mitigation options.
---------------------------------------------------------------------------

    \217\ 18 CFR 385.2201.
---------------------------------------------------------------------------

    92. As described above, in June 2021, the Commission established 
OPP to help facilitate public participation in Commission proceedings. 
We anticipate that OPP will similarly play an important role in 
ensuring that environmental justice communities are able to participate 
meaningfully in section 7 certificate proceedings that affect their 
interests. We also recognize the adverse impacts that natural gas 
infrastructure can have on Native American Tribes and Tribal resources, 
and we will continue to review our existing processes to ensure that 
the Commission is engaging in effective government-to-government 
consultation with Tribes and receiving and considering Tribal input on 
proposals.
    93. In sum, we recognize that ``environmental justice is not merely 
a box to be checked'' \218\ and we commit to ensuring that such 
concerns are fully considered in our public interest analysis under NGA 
section 7. We expect the principles and concerns outlined above will 
guide that consideration as the Commission continues to develop its 
environmental justice precedent. Finally, as noted above, we recognize 
that Federal agencies, including EPA and CEQ, are in the process of 
updating their guidance regarding environmental justice and we will 
review and incorporate, as appropriate, any future guidance in our 
case-by-case decision-making process.
---------------------------------------------------------------------------

    \218\ Friends of Buckingham v. State Air Pollution Control Bd., 
947 F.3d 68, 92 (4th Cir. 2020).
---------------------------------------------------------------------------

B. Assessing Public Benefits and Adverse Effects

    94. In deciding whether to issue a certificate of public 
convenience and necessity, the Commission must decide whether, on 
balance, the project will serve the public interest. In order to make 
such a determination, the Commission must consider all of the benefits 
of a proposal together with all of the adverse impacts, including the 
economic and environmental impacts.
    95. As discussed above, under the 1999 Policy Statement, the 
Commission would first determine whether, given an applicant's efforts 
to mitigate or minimize impacts, there would be any residual adverse 
effects on the economic interests of the existing customers of the 
pipeline applicant, existing pipelines in the market and their captive 
customers, or landowners and communities affected by the proposal. If 
so, the Commission would balance the evidence of public benefits to be 
achieved by the project against those residual adverse effects on 
economic interests. If the benefits outweighed the adverse economic 
effects, the Commission would then consider the environmental impacts 
associated with the proposal.\219\
---------------------------------------------------------------------------

    \219\ 1999 Policy Statement, 88 FERC at 61,745-46.
---------------------------------------------------------------------------

    96. As noted above, today, the Commission and staff review the 
economic and environmental impacts of projects concurrently. Thus, the 
sequential framing of these analyses in the 1999 Policy Statement has 
created some confusion and incorrectly conveyed how the Commission 
considers economic and environmental impacts. Accordingly, to provide 
clarity regarding our decision-making process, we explain that, in 
order to determine whether a proposed project is in the public 
interest, we must look at the entirety of a proposal and balance all 
its benefits against all of its adverse impacts.
    97. In assessing the public benefits of a project, the Commission 
intends to consider all benefits that will be provided by the project. 
The most important consideration in assessing benefits will be the 
evidence demonstrating that a project is needed, as discussed in more 
detail above. The Commission will also consider any benefits beyond 
demand that are alleged by the applicant and supported in the record, 
which may include evidence that the project will displace more 
pollution-heavy generation sources, facilitate the integration of 
renewable energy sources, and/or result in a significant source of jobs 
or tax revenues (we note that temporary impacts associated with a 
proposal will generally be given less weight).
    98. In assessing the adverse impacts of a proposal, we will 
consider the range of impacts to: (1) Existing customers of the 
pipeline applicant; (2) existing pipelines in the market and their 
captive customers; (3) environmental resources; and (4) landowners and 
surrounding communities, including environmental justice communities. 
In reviewing those adverse impacts, the Commission will carefully 
consider the extent to which an applicant will be able to mitigate any 
adverse impacts through applicant-proposed measures or additional 
measures that the Commission could require.
    99. Consistent with the 1999 Policy Statement, we believe that 
``[t]he more interests adversely affected or the more adverse impact a 
project would have on a particular interest, the greater the showing of 
public benefits from the project required to balance the adverse 
impact.'' \220\ And, as the Commission did in the 1999 Policy 
Statement, we decline to adopt any bright-line standards for how we 
will carry out this balancing; \221\ rather, the approach must remain 
flexible enough for the Commission to resolve specific cases and take 
into account the different interests that must be considered. We do 
make clear, however, that there may be proposals denied solely on the 
magnitude of a particular adverse

[[Page 11562]]

impact to any of the four interests described above if the adverse 
impacts, as a whole, outweigh the benefits of the project and cannot be 
mitigated or minimized. On the other hand, there may be proposals that 
have significant impacts but are still found to be in the public 
interest if the public benefits outweigh those impacts.
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    \220\ Id. at 61,749.
    \221\ Id.
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V. Applicability of the Updated Certificate Policy Statement

    100. A major purpose of this Updated Policy Statement is to provide 
clarity and regulatory certainty regarding the Commission's decision-
making process. Therefore, the Updated Policy Statement will not be 
applied retroactively to cases where a certificate has already been 
issued and investment decisions have been made. However, the Commission 
will apply the Updated Policy Statement to any currently pending 
applications for new certificates. Applicants will be given the 
opportunity to supplement the record and explain how their proposals 
are consistent with this Updated Policy Statement, and stakeholders 
will have an opportunity to respond to any such filings.

VI. Information Collection Statement

    101. The collection of information discussed in the Updated Policy 
Statement is being submitted to the Office of Management and Budget 
(OMB) for review under section 3507(d) of the Paperwork Reduction Act 
of 1995 \222\ and OMB's implementing regulations.\223\ OMB must approve 
information collection requirements imposed by agency rules.\224\ 
Respondents will not be subject to any penalty for failing to comply 
with a collection of information if the collection does not display a 
valid OMB control number.
---------------------------------------------------------------------------

    \222\ 44 U.S.C. 3507(d).
    \223\ 5 CFR 1320.
    \224\ This Updated Policy Statement does not require the 
collection of any information, but rather discusses information that 
entities may elect to provide. The Commission is following Paperwork 
Reduction Act procedures to ensure compliance with that act.
---------------------------------------------------------------------------

    102. The Commission solicits comments from the public on the 
Commission's need for this information, whether the information will 
have practical utility, the accuracy of the burden estimates, 
recommendations to enhance the quality, utility, and clarity of the 
information to be collected, and any suggested methods for minimizing 
respondents' burden, including the use of automated information 
techniques. Public comments are due May 2, 2022. The burden estimates 
are focused on implementing the voluntary information collection 
pursuant to this Updated Policy Statement. The Commission asks that any 
revised burden estimates submitted by commenters include the details 
and assumptions used to generate the estimates.
    103. The following estimate of reporting burden is related only to 
this Updated Policy Statement.
    104. Public Reporting Burden: The collection of information related 
to this Updated Policy Statement falls under FERC-537 and impacts the 
burden estimates associated with the ``Interstate Certificate and 
Abandonment Applications'' component of FERC-537. The Updated Policy 
Statement will not impact the burden estimates related to any other 
component of FERC-537.\225\ The estimated annual burden \226\ and cost 
\227\ follow.
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    \225\ The Updated Policy Statement will not impact burden 
estimates to the following components of FERC-537: Pipeline Purging/
Testing Exemptions, Blanket Certificates Prior Notice Filings, 
Blanket Certificates-Annual Reports, Section 311 Construction-Annual 
Reports, Request for Waiver of Capacity Release Regulations, 
Interstate and Intrastate Bypass Notice, Blanket Certificates, or 
Hinshaw Blanket Certificates.
    \226\ Burden is defined as the total time, effort, or financial 
resources expended by persons to generate, maintain, retain, or 
disclose or provide information to or for a Federal agency. See 5 
CFR 1320 for additional information on the definition of information 
collection burden.
    \227\ Commission staff estimates that the industry's average 
hourly cost for this information collection is approximated by the 
Commission's average hourly cost (for wages and benefits) for 2021, 
or $87.00/hour.

                            Modifications to FERC-537 (Gas Pipeline Certificates: Construction, Acquisition, and Abandonment)
                                                                as a Result of PL18-1-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Annual number                                          Total annual burden
                                     Number of     of responses    Total number of     Average burden &      hours & total      Cost per respondent ($)
                                    respondents   per respondent      responses       cost per response       annual cost
                                             (1)             (2)    (1) * (2) = (3)  (4)................  (3) * (4) = (5)....  (5) / (1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interstate Certificate and                    40               1                 40  880 hours; $76,560   35,200 hours;        $76,560 Increase.
 Abandonment Applications.                                                            Increase.            $3,062,400
                                                                                                           Increase.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    105. Title: FERC-537, Gas Pipeline Certificates: Construction, 
Acquisition and Abandonment.
    106. Action: Proposed revisions to an existing information 
collection.
    107. OMB Control No.: 1902-0060.
    108. Respondents: Entities proposing natural gas projects under 
section 7 of the NGA.
    109. Frequency of Information Collection: On occasion.
    110. Necessity of Voluntary Information Collection: The 
Commission's existing FERC-537 information collection pertains to 
regulations implementing section 7 of the NGA, which authorizes the 
Commission to issue certificates of public convenience and necessity 
for the construction and operation of facilities transporting natural 
gas in interstate commerce. The information collected pursuant to this 
Updated Policy Statement should help the Commission in making its 
public interest determinations.
    111. Internal Review: The opportunity to file the information 
conforms to the Commission's plan for efficient information collection, 
communication, and management within the natural gas pipeline industry. 
The Commission has assured itself, by means of its internal review, 
that there is specific, objective support for the burden estimates 
associated with the opportunity to file the information.
    112. Interested persons may provide comments on this information 
collection by one of the following methods:
     Electronic Filing (preferred): Documents must be filed in 
acceptable native applications and print-to-PDF, but not in scanned or 
picture format.
     USPS: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street NE, Washington, DC 20426.
     Hard copy other than USPS: Federal Energy Regulatory 
Commission, Office of the Secretary, 12225 Wilkins Avenue, Rockville, 
Maryland 20852.

[[Page 11563]]

VII. Document Availability

    113. In addition to publishing the full text of this document in 
the Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (https://www.ferc.gov). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room due to the President's March 13, 2020 
proclamation declaring a National Emergency concerning the Novel 
Coronavirus Disease (COVID-19).
    114. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    115. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].
    By the Commission. Commissioner Danly is dissenting with a separate 
statement attached.
    Commissioner Christie is dissenting with a separate statement 
attached.

    Issued: February 18, 2022.
Kimberly D. Bose,
Secretary.

DEPARTMENT OF ENERGY FEDERAL ENERGY REGULATORY COMMISSION

Certification of New Interstate Natural Gas Facilities

Docket No. PL18-1-000
DANLY, Commissioner, dissenting:

    1. I dissent from the issuance of the Updated Policy Statement on 
Certification of New Interstate Natural Gas Facilities.\1\ Before I 
explain my reasons for dissenting, I would like to state from the 
outset that I voted for the Commission's most recent revised Notice of 
Inquiry \2\ considering changes to its Original Policy Statement.\3\
---------------------------------------------------------------------------

    \1\ Certification of New Interstate Nat. Gas Facilities, 178 
FERC ] 61,107 (2022) (Updated Policy Statement).
    \2\ Certification of New Interstate Nat. Gas Facilities, 174 
FERC ] 61,125 (2021).
    \3\ Certification of New Interstate Nat. Gas Pipeline 
Facilities, 88 FERC ] 61,227 (1999), clarified, 90 FERC ] 61,128, 
further clarified, 92 FERC ] 61,094 (2000) (Original Policy 
Statement).
---------------------------------------------------------------------------

    2. I cannot, however, support today's issuance because it will, in 
combination with the Interim Greenhouse Gas (GHG) Policy Statement,\4\ 
have profound implications for the ability of natural gas companies to 
secure capital, on the timelines for Natural Gas Act (NGA) section 7 
\5\ applications to be processed, and on the costs that a pipeline and 
its customers will bear as a result of the potentially unmeasurable 
mitigation that the majority expects each company to propose when 
filing its application \6\ and the possibility of further mitigation 
measures added unilaterally by the Commission. As I explain in more 
detail below, this policy statement contravenes the purpose of the NGA 
which, as the Supreme Court has held, is to ``encourage the orderly 
development of plentiful supplies of . . . natural gas at reasonable 
prices.'' \7\
---------------------------------------------------------------------------

    \4\ Consideration of Greenhouse Gas Emissions in Nat. Gas 
Infrastructure Project Reviews, 178 FERC ] 61,108 (2022) (Interim 
GHG Policy Statement). I note that today's issuance in Docket No. 
PL21-3-000 ``is subject to revision'' and is described as an 
``interim'' policy statement. Id. P 1.
    \5\ 15 U.S.C. 717f.
    \6\ See Updated Policy Statement, 178 FERC ] 61,107 at P 74 
(``[W]e expect applicants to propose measures for mitigating 
impacts, and we will consider those measures--or the lack thereof--
in balancing adverse impacts against the potential benefits of a 
proposal.'').
    \7\ NAACP v. FPC, 425 U.S. 662, 669-70 (1976) (citations 
omitted) (NAACP); accord Myersville Citizens for a Rural Cmty., Inc. 
v. FERC, 783 F.3d 1301, 1307 (D.C. Cir. 2015) (quoting NAACP, 425 
U.S. at 669-70) (Myersville).
---------------------------------------------------------------------------

I. The Commission's Jurisdiction and the Public Convenience and 
Necessity Standard Are Not as Broad as the Updated Policy Statement 
Suggests

    3. As an initial matter, the Commission ``is a `creature of 
statute,' having `no constitutional or common law existence or 
authority, but only those authorities conferred upon it by Congress.' 
'' \8\ The applicable statute is the NGA, and the statutory standard 
applicable to NGA section 7(c) certificate applications \9\ is whether 
a proposed project ``is or will be required by the present or future 
public convenience and necessity.'' \10\
---------------------------------------------------------------------------

    \8\ Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) 
(quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) 
(emphasis in original).
    \9\ 15 U.S.C. 717f(c).
    \10\ Id. Sec.  717f(e) (``[A] certificate shall be issued to any 
qualified applicant therefor, . . . if it is found that the 
applicant is able and willing properly to do the acts and to perform 
the service proposed and to conform to the provisions of this 
chapter and the requirements, rules, and regulations of the 
Commission thereunder, and that the proposed service, sale, 
operation, construction, extension, or acquisition, to the extent 
authorized by the certificate, is or will be required by the present 
or future public convenience and necessity; otherwise such 
application shall be denied.'') (emphasis added); see Okla. Nat. Gas 
Co. v. FPC, 257 F.2d 634, 639 (D.C. Cir. 1958) (``The granting or 
denial of a certificate of public convenience and necessity is a 
matter peculiarly within the discretion of the Commission.'').
---------------------------------------------------------------------------

    4. Notably, public convenience and necessity is not anywhere 
defined in the language of the NGA.\11\ That phrase is famously 
ambiguous, and the statute fails to provide factors to be weighed in 
arriving at a determination that a proposed project ``is or will be 
required by the present or future public convenience and necessity.'' 
\12\ Accordingly, ``the Natural Gas Act `vests the Commission with 
broad discretion to invoke its expertise in balancing competing 
interests and drawing administrative lines.' '' \13\ This does not, of 
course, mean that we are wholly without guideposts in construing the 
meaning of the public convenience and necessity standard. As recognized 
by my colleagues, the Supreme Court has found that NGA section ``7(e) 
requires the Commission to evaluate all factors bearing on the public 
interest.'' \14\ This finding, however, cannot not be read in a vacuum. 
The Court has explained that the inclusion of the phrase ``public 
interest'' in a statute is not ``a broad license to promote the general 
public welfare''--instead, it ``take[s] meaning from the purposes of 
the regulatory legislation.'' \15\ Thus, we turn, as we must, to the 
purpose of the NGA: ``to encourage the orderly development of plentiful 
supplies of . . . natural gas at reasonable prices.'' \16\ Any 
balancing under the public convenience and necessity standard should 
``take meaning'' from that purpose.
---------------------------------------------------------------------------

    \11\ Cf. ICC v. Parker, 326 U.S. 60, 65 (1945) (``Public 
convenience and necessity is not defined by the statute. The nouns 
in the phrase possess connotations which have evolved from the half-
century experience of government in the regulation of 
transportation.''); see generally S. Rep. No. 75-1162 at 5 (1937) 
(recognizing similarities in the provisions requiring certificates 
for public convenience and necessity under the other statutes, e.g., 
the Interstate Commerce Act).
    \12\ 15 U.S.C. 717f(e).
    \13\ Envtl. Def. Fund v. FERC, 2 F.4th 953, 975 (D.C. Cir. 2021) 
(internal quotation marks omitted).
    \14\ Updated Policy Statement, 178 FERC ] 61,107 at P 4 n.6 
(quoting Atl. Ref. Co. v. Pub. Serv. Comm'n of N.Y., 360 U.S. 378, 
391 (1959)).
    \15\ NAACP, 425 U.S. at 669.
    \16\ Id. at 669-70; accord Myersville, 783 F.3d at 1307 (quoting 
NAACP, 425 U.S. at 669-70). I note that the Supreme Court has also 
recognized the Commission has authority to consider ``other 
subsidiary purposes,'' such as ``conservation, environmental, and 
antitrust questions.'' NAACP, 425 U.S. at 670 & n.6 (citations 
omitted). But all subsidiary purposes are, necessarily, subordinate 
to the statute's primary purpose.
---------------------------------------------------------------------------

    5. We also know that ``[n]othing contained in [NGA section 7] shall 
be construed as a limitation upon the power of the Commission to grant

[[Page 11564]]

certificates of public convenience and necessity for service of an area 
already being served by another natural-gas company.'' \17\ Therefore, 
the Commission is not barred from finding a proposed project required 
by the public convenience and necessity when it is in an area that is 
already served by another company.\18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 717f(g).
    \18\ See Panhandle E. Pipe Line Co. v. FPC, 169 F.2d 881, 884 
(D.C. Cir. 1948) (``[N]othing in the Natural Gas Act suggests that 
Congress thought monopoly better than competition or one source of 
supply better than two, or intended for any reason to give an 
existing supplier of natural gas for distribution in a particular 
community the privilege of furnishing an increased supply.'').
---------------------------------------------------------------------------

    6. Another consideration relevant to the Commission's evaluation of 
the public interest is our jurisdiction and, specifically, which areas 
of regulation Congress identified as being reserved to states--and thus 
outside of our jurisdiction. NGA section 1(b) sets forth that division 
of jurisdiction, providing that,

[t]he provisions of [the NGA] shall apply to the transportation of 
natural gas in interstate commerce, to the sale in interstate 
commerce of natural gas for resale for ultimate public consumption 
for domestic, commercial, industrial, or any other use, and to 
natural-gas companies engaged in such transportation or sale, and to 
the importation or exportation of natural gas in foreign commerce 
and to persons engaged in such importation or exportation, but shall 
not apply to any other transportation or sale of natural gas or to 
the local distribution of natural gas or to the facilities used for 
such distribution or to the production or gathering of natural 
gas.\19\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 717(b) (emphasis added).

    The Commission's authority therefore extends to: (1) The 
``transportation of natural gas in interstate commerce,'' (2) the 
``sale in interstate commerce of natural gas for resale,'' and (3) 
``natural-gas companies engaged in such transportation or sale.'' \20\ 
Exempted from our jurisdiction are production, gathering and local 
distribution.\21\ From these exemptions, it may be gleaned that the 
Commission does not have jurisdiction over the ``gas once it moves 
beyond the high-pressure mains into the hands of an end user.'' \22\ 
Another exemption from federal regulation is contained in NGA section 
1(c), which states:
---------------------------------------------------------------------------

    \20\ Id.
    \21\ See id.
    \22\ Pub. Utils. Comm'n of Cal. v. FERC, 900 F.2d 269, 277 (D.C. 
Cir. 1990).

    The provisions of this chapter shall not apply to any person 
engaged in or legally authorized to engage in the transportation in 
interstate commerce or the sale in interstate commerce for resale, 
of natural gas received by such person from another person within or 
at the boundary of a State if all the natural gas so received is 
ultimately consumed within such State, or to any facilities used by 
such person for such transportation or sale, provided that the rates 
and service of such person and facilities be subject to regulation 
by a State commission.\23\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 717(c).

    By declaring the foregoing exemptions from federal regulation, 
Congress has carefully delineated the limits of the Commission's 
jurisdiction.\24\
---------------------------------------------------------------------------

    \24\ See FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 8 
(1961) (Transco) (``Congress, in enacting the Natural Gas Act, did 
not give the Commission comprehensive powers over every incident of 
gas production, transportation, and sale. Rather, Congress was 
`meticulous' only to invest the Commission with authority over 
certain aspects of this field leaving the residue for State 
regulation.'') (citation omitted); see also FPC v. Panhandle E. Pipe 
Line Co. 337 U.S. 498, 502-03 (1949) (``[S]uffice it to say that the 
Natural Gas Act did not envisage federal regulation of the entire 
natural-gas field to the limit of constitutional power. Rather it 
contemplated the exercise of federal power as specified in the Act, 
particularly in that interstate segment which the states were 
powerless to regulate because of the Commerce Clause of the Federal 
Constitution.'') (footnote omitted).
---------------------------------------------------------------------------

    7. These limits on the Commission's jurisdiction are not extended 
by the National Environmental Policy Act (NEPA).\25\ In fact, NEPA 
cannot extend our jurisdiction because NEPA is not a means of 
``mandating that agencies achieve particular substantive environmental 
results''; \26\ rather, it serves to ``impose[ ] only procedural 
requirements on federal agencies with a particular focus on requiring 
agencies to undertake analyses of the environmental impact of their 
proposals and actions.'' \27\ Indeed, ``NEPA not only does not require 
agencies to discuss any particular mitigation plans that they might put 
in place, it does not require agencies--or third parties--to effect 
any.'' \28\ It is necessary to acknowledge the limited, procedural 
nature of NEPA's requirements since it almost appears as though some of 
my colleagues have become convinced that it is necessary to ensure that 
environmental impacts are mitigated before one can make a finding that 
a proposed project is required by the public convenience and 
necessity.\29\ Neither NEPA nor the NGA establishes such a requirement.
---------------------------------------------------------------------------

    \25\ See Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 129 
(D.C. Cir. 1987) (``NEPA, as a procedural device, does not work a 
broadening of the agency's substantive powers.'') (citations 
omitted); Cape May Greene, Inc. v. Warren, 698 F.2d 179, 188 (3d 
Cir. 1983) (``The National Environmental Policy Act does not expand 
the jurisdiction of an agency beyond that set forth in its organic 
statute.'') (citations omitted); Gage v. U.S. Atomic Energy Comm'n, 
479 F.2d 1214, 1220 n.19 (D.C. Cir. 1973) (``NEPA does not mandate 
action which goes beyond the agency's organic jurisdiction.'') 
(citation omitted).
    \26\ Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 371 (1989); 
accord Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 
350 (1989) (Methow Valley) (``[I]t is now well settled that NEPA 
itself does not mandate particular results, but simply prescribes 
the necessary process.''); see also Baltimore Gas & Elec. Co. v. 
Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (``Congress in 
enacting NEPA . . . did not require agencies to elevate 
environmental concerns over other appropriate considerations.'').
    \27\ Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 756-57 
(2004) (citation omitted); accord Winter v. Nat. Res. Def. Council, 
Inc., 555 U.S. 7, 23 (2008) (``NEPA imposes only procedural 
requirements to `ensur[e] that the agency, in reaching its decision, 
will have available, and will carefully consider, detailed 
information concerning significant environmental impacts.' '') 
(quoting Methow Valley, 490 U.S. at 349); see also Vt. Yankee 
Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 
558 (1978) (``NEPA does set forth significant substantive goals for 
the Nation, but its mandate to the agencies is essentially 
procedural.'') (citations omitted).
    \28\ Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 
206 (D.C. Cir. 1991) (citing Methow Valley, 490 U.S. at 353 & n.16).
    \29\ See Updated Policy Statement, 178 FERC ] 61,107 at P 74 
(``We will consider environmental impacts and potential mitigation 
in both our environmental reviews under NEPA and our public interest 
determinations under the NGA. The Commission expects applicants to 
structure their projects to avoid, or minimize, potential adverse 
environmental impacts.''); id. (``Should we deem an applicant's 
proposed mitigation of impacts inadequate to enable us to reach a 
public interest determination, we may condition the certificate to 
require additional mitigation.''); id. P 79 (``[W]e clarify that our 
consideration of impacts to communities surrounding a proposed 
project will include an assessment of impacts to any environmental 
justice communities and of necessary mitigation to avoid or lessen 
those impacts.'').
---------------------------------------------------------------------------

    8. And, any attempt to justify such action through the Commission's 
conditioning authority is unsupported.\30\ Under its conditioning 
authority, ``[t]he Commission shall have the power to attach to the 
issuance of the certificate and to the exercise of the rights granted 
thereunder such reasonable terms and conditions as the public 
convenience and necessity may require.'' \31\ But the Commission's 
conditioning authority cannot be used to impose conditions beyond the 
Commission's jurisdiction.\32\ Nor can the Commission find support 
under NEPA for its expectation that applicants propose mitigation 
measures in order for a project to be deemed required by the public 
convenience and necessity.\33\
---------------------------------------------------------------------------

    \30\ But see id. P 74 (concluding because the Commission's 
conditioning authority is broad, if the Commission determines that 
the applicant's proposed mitigation of impacts are inadequate, the 
Commission has the authority to condition the certificate to require 
additional mitigation).
    \31\ 15 U.S.C. 717f(e).
    \32\ See Richmond Power & Light of City of Richmond, Ind. v. 
FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (``What the Commission is 
prohibited from doing directly it may not achieve by indirection.'') 
(footnote omitted).
    \33\ See Methow Valley, 490 U.S. at 352-53 (``There is a 
fundamental distinction, however, between a requirement that 
mitigation be discussed in sufficient detail to ensure that 
environmental consequences have been fairly evaluated, on the one 
hand, and a substantive requirement that a complete mitigation plan 
be actually formulated and adopted, on the other. . . . Even more 
significantly, it would be inconsistent with NEPA's reliance on 
procedural mechanisms--as opposed to substantive, result-based 
standards--to demand the presence of a fully developed plan that 
will mitigate environmental harm before an agency can act.'') 
(citing Baltimore Gas & Elec. Co., 462 U.S. at 100 (``NEPA does not 
require agencies to adopt any particular internal decisionmaking 
structure'')).

---------------------------------------------------------------------------

[[Page 11565]]

II. A Number of the Changes to the Certificate Policy Statement Are 
Misguided

 Changes in the Commission's Need Determination

    9. In the Original Policy Statement, the Commission stated that, in 
evaluating the need for a project, it would:

consider all relevant factors reflecting on the need for the 
project. These might include, but would not be limited to, precedent 
agreements, demand projections, potential cost savings to consumers, 
or a comparison of projected demand with the amount of capacity 
currently serving the market. The objective would be for the 
applicant to make a sufficient showing of the public benefits of its 
proposed project to outweigh any residual adverse effects discussed 
below.\34\
---------------------------------------------------------------------------

    \34\ Original Policy Statement, 88 FERC ] 61,227 at 61,747.

    Although the Commission stated in its Original Policy Statement 
that it would consider other factors, the Commission has also 
``explained that the [Original] Policy Statement does not require a 
certain percentage of a proposed project's capacity be subscribed, and 
that with respect to affiliate shippers, `it is . . . Commission policy 
to not look beyond precedent or service agreements to make judgments 
about the needs of individual shippers.' '' \35\
---------------------------------------------------------------------------

    \35\ NEXUS Gas Transmission, LLC, 172 FERC ] 61,199, at P 5 
(2020) (citation omitted).
---------------------------------------------------------------------------

    10. In the Updated Policy Statement, the Commission now is revising 
how it determines need. The Updated Policy Statement explains that 
``[i]n determining whether to issue a certificate of public convenience 
and necessity, the Commission will weigh the public benefits of a 
proposal, the most important of which is the need that will be served 
by the project, against its adverse impacts.'' \36\ The Commission 
acknowledges that its prior reliance on precedent agreements to 
determine need has been upheld by courts,\37\ but then proclaims that 
``we cannot adequately assess project need without also looking at 
evidence beyond precedent agreements.'' \38\ An expectation is then 
established that applicants continue to provide precedent agreements 
but ``the existence of precedent agreements may not be sufficient in 
and of themselves to establish need for the project.'' \39\
---------------------------------------------------------------------------

    \36\ Updated Policy Statement, 178 FERC ] 61,107 at P 52 
(emphasis added).
    \37\ See id. P 54 (citing Minisink Residents for Envtl. Pres. & 
Safety v. FERC, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014) (noting that 
the 1999 Policy Statement ``permits'' but does not ``require[ ]'' 
the Commission to ``look[ ] beyond the market need reflected by the 
applicant's existing contracts with shippers'')).
    \38\ Id.
    \39\ Id. P 54 (listing other considerations that it views as 
relevant to a need determination, including whether the agreements 
were entered into before or after an open season, the results of the 
open season, the number of bidders, whether the agreements were 
entered into in response to a local distribution company or 
generator request for proposals (RFP), the details of any such RFP 
process, demand projections underlying the capacity subscribed, 
estimated capacity utilization rates, potential cost savings to 
customers, regional assessments, and filings or statements from 
State regulatory commissions or local distribution companies 
regarding the proposed project).
---------------------------------------------------------------------------

    11. The Commission underscores what it views as necessary for the 
Commission to determine need for all categories of proposed projects: 
``specific information detailing how the gas to be transported by the 
proposed project will ultimately be used,'' i.e., the end use and, 
``why the project is needed to serve that use.'' \40\ And if the 
applicant does not have information regarding the intended end use? 
Applicants are ``encouraged'' to turn to their shippers to obtain 
it.\41\ In the absence of such information, the Commission suggests 
that the applicant may not satisfy its burden to demonstrate need for 
the proposed project.\42\ The projected end use and an explanation of 
the reasons why the project is needed to serve that use are not the 
only information the Commission requests--``[f]or all categories of 
proposed projects,'' the majority also ``encourage[s] applicants to 
provide specific information detailing . . . the expected utilization 
rate of the proposed project.'' \43\ The majority also suggests types 
of ``evidence'' for various categories of projects.\44\
---------------------------------------------------------------------------

    \40\ Id. P 55.
    \41\ Id.
    \42\ See id.
    \43\ Id.
    \44\ See id. PP 55-59.
---------------------------------------------------------------------------

    12. And when precedent agreements are with an affiliate of the 
applicant, the majority states that those precedent agreements, will 
generally not be sufficient to demonstrate need.\45\
---------------------------------------------------------------------------

    \45\ Id. P 60.
---------------------------------------------------------------------------

    13. I agree that, as a legal matter, the Commission may take into 
account considerations other than precedent agreements in its need 
determination. I also agree that there may be circumstances--such as 
when there is evidence of self-dealing in the execution of a precedent 
agreement with an affiliated shipper--where ``the existence of 
precedent agreements may not be sufficient in and of themselves to 
establish need for the project.'' \46\
---------------------------------------------------------------------------

    \46\ Id. P 54. I am generally skeptical of affiliate 
transactions and think that in most circumstances, the Commission 
should scrutinize agreements with an affiliate. As I have previously 
explained, I agree with the U.S. Court of Appeals for District of 
Columbia Circuit's decision to remand the Commission's orders and 
the court's explanation for doing so in Environmental Defense Fund 
v. FERC, 2 F.4th 953. See Spire STL Pipeline LLC, 176 FERC ] 61,160 
(2021) (Danly, Comm'r, dissenting at P 9).
---------------------------------------------------------------------------

    14. To the extent, however, that today's order suggests that the 
Commission must look beyond precedent agreements in every circumstance 
to determine need, I disagree. In my view, precedent agreements are 
strong evidence of need and the Commission need not look further in 
most circumstances. As my colleagues acknowledge, courts have upheld on 
numerous occasions the Commission's application of its Original Policy 
Statement and the Commission's reliance on precedent agreements to 
support multiple findings of market need.\47\
---------------------------------------------------------------------------

    \47\ See, e.g., City of Oberlin, Ohio v. FERC, 937 F.3d 599, 606 
(D.C. Cir. 2019) (``[T]his Court has also recognized that `it is 
Commission policy to not look behind precedent or service agreements 
to make judgments about the needs of individual shippers.' '') 
(citation omitted); Minisink Residents for Envtl. Pres. & Safety v. 
FERC, 762 F.3d at 111 (``Petitioners identify nothing in the policy 
statement or in any precedent construing it to suggest that it 
requires, rather than permits, the Commission to assess a project's 
benefits by looking beyond the market need reflected by the 
applicant's existing contracts with shippers. To the contrary, the 
policy statement specifically recognizes that such agreements 
`always will be important evidence of demand for a project.' '') 
(quoting Original Policy Statement, 88 FERC ] 61,227 at 61,748); see 
also Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 
1301, 1311 (D.C. Cir. 2015) (explaining that ``[f]or a variety of 
reasons related to the nature of the market, `it is Commission 
policy to not look behind precedent or service agreements to make 
judgments about the needs of individual shippers.' . . . In keeping 
with its policy, the Commission concluded that the evidence that the 
Project was fully subscribed was adequate to support the finding of 
market need.'') (citation omitted).
---------------------------------------------------------------------------

    15. In terms of precedent agreements with affiliates, the 
Commission recently received guidance in the form of the narrow holding 
in Environmental Defense Fund v. FERC.\48\ There, the court found the 
Commission's public convenience and necessity determination to be 
arbitrary and capricious due to the Commission's
---------------------------------------------------------------------------

    \48\ Envtl. Def. Fund v. FERC, 2 F.4th 953.

rel[iance] solely on a precedent agreement to establish market need 
for a proposed pipeline when (1) there was a single precedent 
agreement for the pipeline; (2) that precedent agreement was with an 
affiliated shipper; (3) all parties agreed that projected demand for 
natural gas in the area to be served by the

[[Page 11566]]

new pipeline was flat for the foreseeable future; and (4) the 
Commission neglected to make a finding as to whether the 
construction of the proposed pipeline would result in cost savings 
or otherwise represented a more economical alternative to existing 
pipelines.\49\
---------------------------------------------------------------------------

    \49\ Id. at 976.

    That case does not stand for the proposition that in every 
circumstance, the Commission must always look beyond the precedent 
agreements. Instead, that case should be read as a failure on the part 
of the Commission to engage in reasoned decision making based on the 
facts presented.
    16. Next, I disagree with the majority's position that the 
Commission should weigh end use in its determination of need. I agree 
with Enbridge Gas Pipeline that ``[p]rioritizing certain end uses in 
determining project need would be inconsistent with the Commission's 
policies of open access, open seasons and awarding capacity to those 
that value the capacity the most.'' \50\ More importantly, the 
Commission does not have jurisdiction over the end use of the gas and 
has been purposefully deprived of its upstream and downstream 
authorities by Congress. The breadth of the subject matters that inform 
our public interest determinations must be informed by the limits of 
our jurisdiction.
---------------------------------------------------------------------------

    \50\ Enbridge Gas Pipelines May 26, 2021 Comments at 42. 
``[U]nder the Commission's open-access regulatory regime, pipelines 
must provide transportation service without `undue discrimination or 
preference of any kind.' '' NEXUS Gas Transmission, LLC, 172 FERC ] 
61,199, at P 17 (2020) (quoting 18 CFR 284.7(b)). The Commission's 
new consideration of the intended end use of the gas and why the gas 
is needed to serve that use may also cause tension with NGA section 
4. Updated Policy Statement, 178 FERC ] 61,107 at P 52. NGA section 
4(b) states that ``[n]o natural-gas company shall, with respect to 
any transportation or sale of natural gas subject to the 
jurisdiction of the Commission, (1) make or grant any undue 
preference or advantage to any person or subject any person to any 
undue prejudice or disadvantage, or (2) maintain any unreasonable 
difference in rates, charges, service, facilities, or in any other 
respect, either as between localities or as between classes of 
service.'' 15 U.S.C. 717c(b).
---------------------------------------------------------------------------

    17. I recognize that in Transco the Supreme Court stated that `` 
`end-use' . . . was properly of concern to the Commission.'' \51\ As 
commenters observe,\52\ however, the Transco decision was made prior to 
Congress' enactment of the Natural Gas Policy Act of 1978 (NGPA) \53\ 
and the Natural Gas Wellhead Decontrol Act of 1989 (Wellhead Decontrol 
Act).\54\ These later enactments are instructive as to whether the 
Commission should consider end use as part of its public convenience 
and necessity determination.
---------------------------------------------------------------------------

    \51\ Transco, 365 U.S. at 22.
    \52\ See, e.g., TC Energy Corporation May 26, 2021 Comments at 
12-13 (explaining that after the Supreme Court's Transco decision 
``was issued in 1961, Congress passed the NGPA, the Wellhead 
Decontrol Act, EPAct 1992, and the Commission issued Orders Nos. 636 
and 637. These statutes and regulatory orders fundamentally altered 
the natural gas markets by acting to facilitate the development of 
competitive natural gas markets served by competitive interstate 
natural gas transportation.''); id. (``Under the current regulatory 
framework, there is no basis for the Commission to deny a 
certificate application based on end use, because the current 
framework requires equal access to a plentiful gas supply for all 
buyers and sellers. The end use of natural gas is outside the 
objectives of the current statutory framework, and the Commission 
should not take end use into consideration when assessing the public 
need for a pipeline project under the NGA.''); Boardwalk Pipeline 
Partners, LP May 26, 2021 Comments at 34 (``FPC v. Transco was 
decided prior to the NGPA's and Wellhead Decontrol Act's creation of 
a competitive natural gas market that allows all consumers to 
benefit from the United States' plentiful gas supplies . . . . 
[G]iven all of the changes that have occurred over the past 60 
years'' and ``[u]nder the current open-access regime, there is no 
legal basis for the Commission to deny a certificate application 
based on end use.'') (emphasis omitted).
    \53\ 15 U.S.C. 3301-3432.
    \54\ Natural Gas Wellhead Decontrol Act of 1989, Public Law 101-
60, 103 Stat. 157 (1989).
---------------------------------------------------------------------------

    18. The NGPA ``was designed to phase out regulation of wellhead 
prices charged by producers of natural gas, . . . to `promote gas 
transportation by interstate and intrastate pipelines' for third 
parties'' \55\ and also ``to provide investors with adequate incentives 
to develop new sources of supply.'' \56\ Later, the enactment of the 
Wellhead Decontrol Act resulted in deregulating upstream natural gas 
production, and the legislative history suggests the enactment would 
serve to encourage competition of natural gas at the wellhead.\57\ In 
combination, these acts effectively deprived the Commission of 
authority upstream of the jurisdictional pipeline.
---------------------------------------------------------------------------

    \55\ Gen. Motors Corp. v. Tracy, 519 U.S. 278, 283 (1997) 
(quoting 57 FR 13271 (1992)).
    \56\ Pub. Serv. Comm'n of State of N.Y. v. Mid-Louisiana Gas 
Co., 463 U.S. 319, 334 (1983).
    \57\ See S. Rep. No. 101-39, at 1 (1989) (``[T]he purpose . . . 
is to promote competition for natural gas at the wellhead in order 
to ensure consumers an adequate and reliable supply of natural gas 
at the lowest reasonable price.''); H.R. Rep. No. 101-29, at 6 
(1989) (``All sellers must be able to reasonably reach the highest-
bidding buyer in an increasingly national market. All buyers must be 
free to reach the lowest-selling producer, and obtain shipment of 
its gas to them on even terms with other supplies.'').
---------------------------------------------------------------------------

    19. In 1987, Congress repealed sections of the Power Plant and 
Industrial Fuel Use Act of 1978 (Fuel Use Act), further deregulating 
downstream considerations. My former colleague, Commissioner McNamee 
previously explained that the Fuel Use Act had ``restricted the use of 
natural gas in electric generation so as to conserve it for other 
uses'' and ``[w]ith the repeal of the Fuel Use Act, Congress made clear 
that natural gas could be used for electric generation and that the 
regulation of the use of natural gas by power plants unnecessary.'' 
\58\ A House report stated:
---------------------------------------------------------------------------

    \58\ Adelphia Gateway, LLC, 169 FERC ] 61,220 (2019) (McNamee, 
Comm'r, concurring at P 36).

    By amending [the Fuel Use Act], H.R. 1941 will remove artificial 
government restrictions on the use of oil and gas; allow energy 
consumers to make their own fuel choices in an increasingly 
deregulated energy marketplace; encourage multifuel competition 
among oil, gas, coal, and other fuels based on their price, 
availability, and environmental merits; preserve the `coal option' 
for new baseload electric powerplants which are long-lived and use 
so much fuel; and provide potential new markets for financially 
distressed domestic oil and gas producers.\59\
---------------------------------------------------------------------------

    \59\ H.R. Rep. 100-78, at 2 (1987).

    These later, deregulatory enactments were not at play in Transco. 
And I agree that ``the current framework requires equal access to a 
plentiful gas supply for all buyers and sellers.'' \60\ Taking the 
foregoing into account, I am not convinced that the Commission has 
authority to deny a certificate of public convenience and necessity on 
the basis of end use, and the Commission should not consider end use in 
its need determination.
---------------------------------------------------------------------------

    \60\ TC Energy Corporation May 26, 2021 Comments at 13.
---------------------------------------------------------------------------

b. Consideration of Adverse Effects
    20. The Commission explains in its Updated Policy Statement that it 
will consider four categories of adverse impacts from the construction 
and operation of new projects: (1) The interests of the applicant's 
existing customers; (2) the interests of existing pipelines and their 
captive customers; (3) environmental interests; and (4) the interests 
of landowners and surrounding communities, including environmental 
justice communities.\61\ The Commission also states that it may deny an 
application based on any of the foregoing types of adverse impacts.\62\ 
Further, the Commission will ``consider environmental impacts and 
potential mitigation in both our environmental reviews under NEPA and 
our public interest determinations under the NGA.'' \63\ And the 
Commission ``expects applicants to structure their projects to avoid, 
or minimize, potential adverse environmental impacts.'' \64\
---------------------------------------------------------------------------

    \61\ Updated Policy Statement, 178 FERC ] 61,107 at P 62.
    \62\ Id.
    \63\ Id. P 74 (emphasis added).
    \64\ Id.
---------------------------------------------------------------------------

    21. First, regarding the interests of the applicant's existing 
customers, the Commission announces that while our

[[Page 11567]]

policy of no financial subsidies remains unchanged, the Commission will 
no longer treat this as a threshold requirement.\65\ This 
reprioritization is fine; it is merely a policy choice with no obvious 
legal infirmity.
---------------------------------------------------------------------------

    \65\ Id. P 63.
---------------------------------------------------------------------------

    22. Next, the Commission turns to its considerations of existing 
pipelines and their customers with an emphasis on the prevention of 
overbuilding. In an order clarifying the Original Policy Statement, the 
Commission discussed the consideration of overbuilding and explained 
that ``[s]ending the wrong price signals to the market can lead to 
inefficient investment and contracting decisions which can cause 
pipelines to build capacity for which there is not a demonstrated 
market need,'' and that ``[s]uch overbuilding, in turn, can exacerbate 
adverse environmental impacts, distort competition between pipelines 
for new customers, and financially penalize existing customers of 
expanding pipelines and customers of the pipelines affected by the 
expansion.'' \66\ I agree that the concern of overbuilding is worthy of 
consideration in the Commission's balancing and consistent with the 
purpose of ``encourag[ing] the orderly development of plentiful 
supplies of . . . natural gas at reasonable prices.'' \67\
---------------------------------------------------------------------------

    \66\ Certification of New Interstate Nat. Gas Pipeline 
Facilities, 90 FERC ] 61,128, at 61,391.
    \67\ NAACP, 425 U.S. at 670 (emphasis added).
---------------------------------------------------------------------------

    23. The Commission also states that ``[t]o the extent that a 
proposed project is designed to substantially serve demand already 
being met on existing pipelines, that could be an indication of 
potential overbuilding.'' \68\ In my view, the Commission should weigh 
this consideration with NGA section 7(g) in mind, which provides that 
``[n]othing contained in [NGA section 7] shall be construed as a 
limitation upon the power of the Commission to grant certificates of 
public convenience and necessity for service of an area already being 
served by another natural-gas company.'' \69\ In considering whether a 
proposed project is designed to substantially serve demand that is 
already met, the Commission should also consider whether the proposed 
project would allow for further competition, send appropriate price 
signals and improve the efficiency or reliability of service to 
existing customers. This is worth noting because of the statement in 
today's order that states that ``[t]he Commission may deny an 
application based on any of these types of adverse impacts,'' \70\ 
including impacts to existing pipelines and their customers.
---------------------------------------------------------------------------

    \68\ Updated Policy Statement, 178 FERC ] 61,107 at P 69.
    \69\ 15 U.S.C. 717f(g).
    \70\ Updated Policy Statement, 178 FERC ] 61,107 at P 62 
(emphasis added); see also id. P 99 (``[T]here may be proposals 
denied solely on the magnitude of a particular adverse impact to any 
of the four interests described above if the adverse impacts, as a 
whole, outweigh the benefits of the project and cannot be mitigated 
or minimized.'').
---------------------------------------------------------------------------

    24. Third, the majority addresses environmental impacts, stating: 
``While the 1999 Policy Statement focused on economic impacts, the 
consideration of environmental impacts is an important part of the 
Commission's responsibility under the NGA to evaluate all factors 
bearing on the public interest.'' \71\ As explained by the majority, 
the Original Policy Statement ``included an analytical framework for 
how the Commission would evaluate the effects of certificating new 
projects on economic interests,'' and it ``did not describe how the 
Commission would consider environmental interests in its decision-
making process and, more specifically, how it would balance these 
interests with the economic interests of a project.'' \72\ The 
Commission now adjusts that framework to include environmental impacts 
as a consideration in its Updated Policy Statement.
---------------------------------------------------------------------------

    \71\ Id. P 72 (citation omitted).
    \72\ Id. P 71.
---------------------------------------------------------------------------

    25. The Commission explains that it will consider environmental 
impacts and potential mitigation in both our environmental reviews 
under NEPA and our public interest determinations under the NGA.\73\ 
The majority ``expect[s] applicants to propose measures for mitigating 
impacts,'' for consideration in the Commission's balancing of adverse 
impacts against the potential benefits of a proposal.\74\ The 
Commission may condition the certificate with further mitigation.\75\ 
Moreover, the Commission states that it may ``deny an application based 
on . . . environmental impacts, if the adverse impacts as a whole 
outweigh the benefits of the project and cannot be mitigated or 
minimized.'' \76\ Finally, the majority indicates its intent when 
making its public convenience and necessity determination to fully 
consider climate impacts.\77\
---------------------------------------------------------------------------

    \73\ Id. P 74.
    \74\ Id.
    \75\ Id.
    \76\ Id.
    \77\ Id. P 76.
---------------------------------------------------------------------------

    26. I discuss the reasons why I disagree with the majority's 
Interim GHG Policy Statement in my dissent to that order.\78\ In terms 
of the change from an economic focus in the Original Policy Statement, 
my view is that the Commission should retain its economic framework as 
the basis of its policy statement. I am concerned that several of the 
changes made in today's Updated Policy Statement include issues outside 
the scope of that which the Commission is able to consider under the 
NGA. Though time has passed since the NGA's enactment, it is Congress' 
role to amend the statute should it see fit to include in the 
Commission's authority matters such as the conditioning of certificates 
to mitigate GHG emissions. Congress has done so before and could do so 
again.\79\ To restate the approach that should be taken to determine 
the public convenience and necessity: Any balancing under that standard 
must ``take meaning'' from the interests articulated in the NGA.
---------------------------------------------------------------------------

    \78\ See Interim GHG Policy Statement, 178 FERC ] 61,108 (Danly, 
Comm'r, dissenting).
    \79\ See Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 468 
(2001) (``Congress, we have held, does not alter the fundamental 
details of a regulatory scheme in vague terms or ancillary 
provisions--it does not, one might say, hide elephants in 
mouseholes.'') (citations omitted).
---------------------------------------------------------------------------

    27. Although courts have recognized that the Commission's NGA 
section 7(e) ``conditioning authority is `extremely broad,' '' \80\ 
such authority is not without limit. ``The Commission may not, however, 
when it lacks the power to promote the public interest directly, do so 
indirectly by attaching a condition to a certificate that is, in 
unconditional form, already in the public convenience and necessity.'' 
\81\ There have been circumstances where the courts have found the 
Commission exceeded its conditioning authority.\82\ Its use must be

[[Page 11568]]

consistent with the other provisions of the NGA and the Commission may 
not use conditions under the guise of acting in the public interest in 
order to do something it would otherwise not have authority to do.
---------------------------------------------------------------------------

    \80\ ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 (D.C. Cir. 
1989) (citation omitted).
    \81\ Nat'l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 
(D.C. Cir. 1990) (citing Sunray Mid-Continent Oil Co. v. FPC, 364 
U.S. 137, 152 (1960) (``once want of power to do this directly were 
established, the existence of power to achieve the same end 
indirectly through the conditioning power might well be doubted''); 
Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) 
(the Commission may not achieve indirectly through conditioning 
power of Federal Power Act what it is otherwise prohibited from 
achieving directly)); see also Am. Gas Ass'n v. FERC, 912 F.2d 1496, 
1510 (D.C. Cir. 1990) (``[T]he Commission may not use its section 7 
conditioning power to do indirectly . . . things that it cannot do 
at all.'').
    \82\ See, e.g., Nat'l Fuel Gas Supply Corp. v. FERC, 909 F.2d at 
1520, 1522 (D.C. Cir. 1990) (finding that the Commission exceeded 
the scope of its NGA section 7(e) authority in conditioning the 
approval of an off-system sales certificate upon certificate 
holder's acceptance of a blanket transportation certificate because 
``the Commission squarely found that National's proposed `sales are 
required by the public convenience and necessity,' quite apart from 
conditioning their certification upon the pipeline's filing for a 
blanket transportation certificate.''); N. Nat. Gas Co., Div. of 
InterNorth v. FERC, 827 F.2d 779, 792-93 (D.C. Cir. 1987) (granting 
rehearing en banc, reaffirming the holding in Panhandle E. Pipe Line 
Co. v. FERC, 613 F.2d 1120, 1133 (D.C. Cir. 1979), which provides 
``that `the Commission does not have authority under section 7 to 
compel flow-through of revenues to customers of services not under 
consideration in that proceeding for certification,' '' and vacating 
a condition that violates that holding).
---------------------------------------------------------------------------

    28. There are also practical considerations in the Commission 
finding in today's policy statement that ``[s]hould [the Commission] 
deem an applicant's proposed mitigation of impacts inadequate to enable 
us to reach a public interest determination, we may condition the 
certificate to require additional mitigation.'' \83\ The costs that 
attend the proposed mitigation of GHG emissions may be unmeasurable, 
may not be readily apparent, and may also be more than the natural gas 
companies and its shippers are willing or able to bear. There will 
perhaps be difficulty in measuring the costs of conditions, such as 
market-based mitigation,\84\ when the costs are determined based on a 
changing market. For instance, the cost of purchasing renewable energy 
credits may be different at the time an application is filed in 
comparison to when the certificate is issued. And there is no guarantee 
that the potentially extraordinary costs incurred by a pipeline to 
comply with the Commission's public interest determination will be 
recovered in the pipeline's rates.\85\ These practical considerations 
have not been taken into account by the Commission. Without these 
considerations, I am not convinced that the Commission has engaged in 
reasoned decision making.
---------------------------------------------------------------------------

    \83\ Updated Policy Statement, 178 FERC ] 61,107 at P 74.
    \84\ See Interim GHG Policy Statement, 178 FERC ] 61,108 at PP 
114-115 (encouraging project sponsors to propose mitigation 
measures, stating that project sponsors ``are free to propose any 
type of mitigation mechanism,'' and providing the following examples 
of market-based mitigation: ``[the] purchase [of] renewable energy 
credits, participat[ion] in a mandatory compliance market (if 
located in a State that requires participation in such a market), or 
participat[ion] in a voluntary carbon market'').
    \85\ See id. P 129 (``Pipelines may seek to recover GHG 
emissions mitigation costs through their rates, similarly to how 
they seek to recover other costs associated with constructing and 
operating a project, such as the cost of other construction 
mitigation requirements or the cost of fuel. Additionally, the 
Commission's process for section 7 and section 4 rate cases is 
designed to protect shippers from unjust or unreasonable rates and 
will continue to do so with respect to the recovery of costs for 
mitigation measures.'').
---------------------------------------------------------------------------

    29. Turning to the Commission's consideration of impacts on 
landowners and surrounding communities, as the majority recognizes, the 
Original Policy Statement's primary focus was on economic impacts 
associated with a permanent right-of-way on a landowner's property.\86\ 
Going forward, the consideration ``of impacts to landowners will be 
more expansive.'' \87\ The majority clarifies that the ``consideration 
of impacts to communities surrounding a proposed project will include 
an assessment of impacts to any environmental justice communities and 
of necessary mitigation to avoid or lessen those impacts.'' \88\ And 
``expectations'' are established ``for how pipeline applicants will 
engage with landowners.'' \89\
---------------------------------------------------------------------------

    \86\ See Updated Policy Statement, 178 FERC ] 61,107 at P 78 
(citing Original Policy Statement, 88 FERC ] 61,227 at 61,749 (``The 
balancing of interests and benefits that will precede the 
environmental analysis will largely focus on economic interests such 
as the property rights of landowners.''))
    \87\ Id.
    \88\ Id. P 79.
    \89\ Id. P 80.
---------------------------------------------------------------------------

    30. The majority also commits itself to ``robust early engagement 
with all interested landowners, as well as continued evaluation of 
input from such parties during the course of any given proceeding'' and 
states that the Commission ``will, to the extent possible, assess a 
wider range of landowner impacts.'' \90\ Further, the majority states 
that it ``expect[s] pipeline applicants to take all appropriate steps 
to minimize the future need to use eminent domain,'' including 
``engage[ment] with the public and interested stakeholders during the 
planning phase of projects to solicit input on route concerns and 
incorporate reroutes, where practicable, to address landowner concerns, 
as well as providing landowners with all necessary information.'' \91\
---------------------------------------------------------------------------

    \90\ Id. P 81.
    \91\ Id. P 82.
---------------------------------------------------------------------------

    31. The majority states that it ``expect[s] pipelines to take 
seriously their obligation to attempt to negotiate easements 
respectfully and in good faith with impacted landowners'' and indicates 
that ``[t]he Commission will look unfavorably on applicants that do not 
work proactively with landowners to address concerns.'' \92\ Does this 
mean that the majority plans to weigh, in its balancing of interests, 
allegations concerning whether the applicant has engaged in good faith 
negotiation of easements and collaboration with landowners to address 
concerns? It appears so. The Commission later states that ``[i]n 
assessing potential impacts to landowners, the Commission will consider 
the steps a pipeline applicant has already taken to acquire lands 
through respectful and good faith negotiation, as well as the 
applicant's plans to minimize the use of eminent domain upon receiving 
a certificate.'' \93\
---------------------------------------------------------------------------

    \92\ Id.
    \93\ Id. P 85.
---------------------------------------------------------------------------

    32. It is worth reminding my colleagues that on the very same 
meeting that this order is issued, the Commission also issues an order 
\94\ that reaffirms a decision to deny landowners' request for the 
Commission to interpret the scope of NGA section 7(h) because, in my 
colleagues' view, NGA section 7(h) is ``a provision that gives courts a 
particular implementing role'' and therefore ``is better resolved by 
the courts than the Commission.'' \95\ And yet here, the Commission 
contemplates considering in its balancing whether applicants have 
engaged in good faith negotiations for easements pursuant to NGA 
section 7(h).
---------------------------------------------------------------------------

    \94\ See Spire STL Pipeline LLC, 178 FERC ] 61,109 at P 10 
(2022) (citation omitted).
    \95\ Spire STL Pipeline LLC, 177 FERC ] 61,147, at P 70 (2021) 
(citation omitted); see id. (Danly, Comm'r, concurring in part and 
dissenting in part) (disagreeing with the Commission's decision to 
not interpret NGA section 7(h) in the first instance and to leave 
the interpretation to the courts).
---------------------------------------------------------------------------

    33. Finally, the Commission discusses how it will consider impacts 
to environmental justice communities. In explaining its objectives, the 
majority states that ``[t]he consideration of cumulative impacts is 
particularly important when it comes to conducting an environmental 
justice analysis.'' \96\ In support, the Commission has the following 
footnote:
---------------------------------------------------------------------------

    \96\ Updated Policy Statement, 178 FERC ] 61,107 P 90 (relying 
on a repealed definition for ``cumulative impacts,'' formerly 40 CFR 
1508.7 (1978), in the Council on Environmental Quality's (CEQ) 
regulations) (citations omitted).

    `` `Cumulative impact' is the impact on the environment which 
results from the incremental impact of the action when added to 
other past, present, and reasonably foreseeable future actions 
regardless of what agency (Federal or non-Federal) or person 
undertakes such other actions. Cumulative impacts can result from 
individually minor but collectively significant actions taking place 
over a period of time.'' 40 CFR 1508.7 (1978).\97\
---------------------------------------------------------------------------

    \97\ Id. P 90 n.213.

    34. There is no problem with announcing the paradigm by which a 
particular type of analysis will be conducted, but this looks very much 
as though my colleagues have decided that they can disregard currently-
effective regulations and adopt their own definition of the ``effects'' 
that should be considered in the Commission's

[[Page 11569]]

analysis.\98\ The current NEPA regulations repealed the definition of 
``Cumulative impact'' previously contained in 40 CFR 1508.7.\99\ The 
Commission, in attempting to go farther than the CEQ's regulations, 
reasons that ``[t]o adequately capture the effects of cumulative 
impacts, it is essential that the Commission consider those pre-
existing conditions and how the adverse impacts of a proposed project 
may interact with and potentially exacerbate them.'' \100\
---------------------------------------------------------------------------

    \98\ Cf. Updated Policy Statement, 178 FERC ] 61,107 at P 74 
n.189 (``Recognizing that CEQ is in the process of revising its NEPA 
regulations, the Commission will consider the comments in this 
docket regarding NEPA in our future review of our regulations, 
procedures, and practices for implementing NEPA.)
    \99\ See 40 CFR 1508.1(g)(3) (``An agency's analysis of effects 
shall be consistent with this paragraph (g). Cumulative impact, 
defined in 40 CFR [Sec.  ] 1508.7 (1978), is repealed.'').
    \100\ Updated Policy Statement, 178 FERC ] 61,107 at P 90.
---------------------------------------------------------------------------

    35. I disagree with the Commission's decision to disregard CEQ's 
regulations.\101\ The Commission, in its own regulations, states that 
it ``will comply with the regulations of the [CEQ] except where those 
regulations are inconsistent with the statutory requirements of the 
Commission.'' \102\ Regardless of the latitude the majority thinks we 
may enjoy when conducting our analyses, it is a matter of black letter 
law that we are constrained by our regulations which adopt CEQ's 
regulations; we are also unable to conjure rubrics out of thin air 
without explanation.
---------------------------------------------------------------------------

    \101\ See 40 CFR 1508.1(g) (defining ``effects or impacts'').
    \102\ 18 CFR 380.1.
---------------------------------------------------------------------------

III. The Commission's Approach of ``Expecting'' Self-Imposed Mitigation 
Appears Calculated To Circumvent Statutory Limits on the Commission's 
Authority

    36. In the Updated Policy Statement, as well as in the Interim GHG 
Policy Statement, the Commission has asserted a dramatic expansion of 
its conditioning authority. As explained above, the Commission likely 
does not have the statutory authority to enter this new territory. It 
is not surprising, therefore, to see a consistent theme in the Updated 
Policy Statement that the Commission has expectations of 
applicants.\103\ The Commission expects more of applicants going 
forward. Should those expectations not be met to the Commission's 
satisfaction, the Commission suggests that it will weigh that against 
finding that the project is required by the public convenience and 
necessity.\104\
---------------------------------------------------------------------------

    \103\ See Updated Policy Statement, 178 FERC ] 61,107 at P 53 
(stating that ``the Commission's expectations and requirements for 
how applicants should demonstrate project need have evolved over 
time'').
    \104\ See, e.g., id. P 74 (``Should we deem an applicant's 
proposed mitigation of impacts inadequate to enable us to reach a 
public interest determination, we may condition the certificate to 
require additional mitigation. We may also deny an application based 
on any of the types of adverse impacts described herein, including 
environmental impacts, if the adverse impacts as a whole outweigh 
the benefits of the project and cannot be mitigated or 
minimized.''); id. P 82 (``[W]e expect pipelines to take seriously 
their obligation to attempt to negotiate easements respectfully and 
in good faith with impacted landowners. The Commission will look 
unfavorably on applicants that do not work proactively with 
landowners to address concerns.'').
---------------------------------------------------------------------------

    37. Instead of saying that it is imposing or requiring the legally 
dubious conditions itself, the Commission is expecting the natural gas 
companies to play a game of ``sentence first--verdict afterwards,'' 
\105\ where the applicants choose their own sentence--their proposed 
mitigation measures--in an effort to guess at the Commission's 
expectations. Only then will the Commission rule on whether the project 
is required by the public convenience and necessity and reveal whether 
the proposed mitigation is sufficient.
---------------------------------------------------------------------------

    \105\ Lewis Carroll, Alice's Adventures in Wonderland and 
Through the Looking-Glass 107 (Hugh Haughton ed., Penguin Classics 
1998).
---------------------------------------------------------------------------

    38. It works in the Commission's favor for applicants to impose 
their own mitigation measures. If the applicant proposes the mitigation 
instead of having it imposed by the Commission, it is less likely that 
a court would deem such condition unreasonable or beyond the 
Commission's authority should it come to be challenged at all.\106\ How 
can a condition be unreasonable or beyond the Commission's jurisdiction 
if it is imposed at the suggestion of the applicant--the party who 
needs to satisfy such conditions?
---------------------------------------------------------------------------

    \106\ See 15 U.S.C. 717f(e) (``The Commission shall have the 
power to attach to the issuance of the certificate and to the 
exercise of the rights granted thereunder such reasonable terms and 
conditions as the public convenience and necessity may require.'') 
(emphasis added).
---------------------------------------------------------------------------

IV. It Is Unclear Whether the Updated Policy Statement Is Actually 
Binding and Whether the Commission Should Have Proceeded Through 
Rulemaking

    39. Whether the Commission can impose mitigation as contemplated 
here, or whether the Commission lacks authority to do so with its 
conditioning authority will ultimately be addressed by the courts. I 
recognize the Commission's assertion that the Updated Policy Statement 
is not binding.\107\ I question whether that is actually the case.\108\
---------------------------------------------------------------------------

    \107\ Updated Policy Statement, 178 FERC ] 61,107 at P 3 
(stating that the Updated Policy Statement does not establish 
binding rules, but rather it is intended to explain how the 
Commission will consider NGA section 7 certificate applications).
    \108\ See Interstate Nat. Gas Ass'n of Am. v. FERC, 285 F.3d 18, 
59 (D.C. Cir. 2002) (``The distinction between substantive rule and 
policy statement is said to turn largely on whether the agency 
position is one of `present binding effect,' i.e., whether it 
`constrains the agency's discretion.' '') (citations omitted); Brown 
Express, Inc. v. United States, 607 F.2d 695, 701 (5th Cir. 1979) 
(``An announcement stating a change in the method by which an agency 
will grant substantive rights is not a `general statement of 
policy.' '').
---------------------------------------------------------------------------

    40. Given the non-binding designation, there may indeed be well-
founded concerns by parties seeking to challenge the Updated Policy 
Statement.\109\ But as explained above, the Commission has established 
its expectations regarding what information it wants included in 
certificate applications and plans to apply the Updated Policy 
Statement to both currently-pending \110\ and future applications for a 
certificate of public convenience and necessity. For parties hesitant 
to challenge a ``non-binding'' policy statement, I submit that a court 
may perhaps be receptive to arguments of aggrievement based on the 
interests of shippers who will now likely have to renegotiate their 
agreements for proposed projects with currently-pending certificate 
applications.
---------------------------------------------------------------------------

    \109\ See Panhandle E. Pipe Line Co. v. FERC, 198 F.3d 266, 270 
(D.C. Cir. 1999) (denying the petition for review because ``[t]he 
challenged opinions [were] non-binding policy statements'' and 
therefore, the court found that the party petitioning for review was 
``not aggrieved and has not suffered an injury-in-fact.'').
    \110\ See Updated Policy Statement, 178 FERC ] 61,107 at P 100 
(``[T]he Commission will apply the Updated Policy Statement to any 
currently pending applications for new certificates. Applicants will 
be given the opportunity to supplement the record and explain how 
their proposals are consistent with this Updated Policy Statement, 
and stakeholders will have an opportunity to respond to any such 
filings.'').
---------------------------------------------------------------------------

    41. Moreover, natural gas companies \111\ and their shippers likely 
have not contemplated the increased costs that will come with the 
Commission's new policies. It is likely that companies with pending 
applications have not yet presented proposals for mitigation of the 
proposed project's GHG emissions. But the need for developing such 
proposals will arise--the Commission has requested that companies with 
pending applications supplement their

[[Page 11570]]

applications.\112\ The resulting cost increases will, at a minimum, 
make these projects more expensive and thus increase pipeline rates 
that may ultimately be passed on to consumers. But it is entirely 
possible that, in at least some cases, applicants will not accept the 
certificate.
---------------------------------------------------------------------------

    \111\ `` `Natural-gas company' means a person engaged in the 
transportation of natural gas in interstate commerce, or the sale in 
interstate commerce of such gas for resale.'' 15 U.S.C. 717a(6).
    \112\ See Updated Policy Statement, 178 FERC ] 61,107 at P 100.
---------------------------------------------------------------------------

    42. One final thought is that it may have been more appropriate for 
the Commission to have proceeded through rulemaking instead of through 
a policy statement. The Commission details the types of information 
that it expects to be included in applications. However, the 
Commission's regulations already address what the ``General content[s] 
of [an] application'' should include in 18 CFR 157.6(b). Nothing in 
that section supports the Commission's expectation for information 
regarding end use and proposals for mitigation measures.\113\ Our 
regulations do state that ``[a]pplications under section 7 of the 
Natural Gas Act shall set forth all information necessary to advise the 
Commission fully concerning the operation, sales, service, 
construction, extension, or acquisition for which a certificate is 
requested . . . .'' \114\ But nowhere do our regulations permit the 
Commission to add to the requirements set forth therein regarding the 
contents necessary for an NGA section 7(c) application. The Commission 
may, of course, request information from an applicant through a data 
request to assist with its determination of whether the project is 
required by the public convenience and necessity. But to expect (in 
other words require) information, such as that regarding end use and 
proposals for mitigation of impacts, is perhaps something that should 
have been done through a rulemaking. Can a party ignore the 
Commission's requests for additional information? Yes, but the cost 
would be the potential further delay to the issuance of already stalled 
certificates and perhaps the ultimate rejection of a proposal that 
fails to meet the Commission's expectations.
---------------------------------------------------------------------------

    \113\ See 18 CFR 157.6(b) (``Each application filed other than 
an application for permission and approval to abandon pursuant to 
section 7(b) shall set forth the following information . . . .'').
    \114\ Id. Sec.  157.5(a).
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V. Today's Decision Will Have Profound Reliability Implications

    43. I cannot overstate the implications of the Updated Policy 
Statement.\115\ It will subvert the purpose of the NGA: To ``encourage 
the orderly development of plentiful supplies of . . . natural gas at 
reasonable prices.'' \116\ Further, we leave the public and the 
regulated community--including investors upon whom we rely to provide 
billions of dollars for critical infrastructure--with profound 
uncertainty regarding how the Commission will determine whether a 
proposed project is required by the public convenience and necessity. 
With that uncertainty comes reliability concerns.
---------------------------------------------------------------------------

    \115\ Cf. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 
218, 228 (1994) (``It might be good English to say that the French 
Revolution `modified' the status of the French nobility--but only 
because there is a figure of speech called understatement and a 
literary device known as sarcasm.'').
    \116\ NAACP, 425 U.S. at 669-70 (citations omitted); accord 
Myersville, 783 F.3d at 1307 (quoting NAACP, 425 U.S. at 669-70).
---------------------------------------------------------------------------

    44. The North American Electric Reliability Corporation (NERC) 
recently highlighted just how important natural gas is to our electric 
system when it explained in its most recent Long Term Reliability 
Assessment that ``[n]atural gas is the reliability `fuel that keeps the 
lights on,' and natural gas policy must reflect this reality.'' \117\ 
Today's issuance is unlikely to allay NERC's reliability concerns. I 
began this statement with the consequences that could attend today's 
issuance of the Updated Policy Statement. As a reminder those 
consequences include, but are not limited to, further delay in the 
issuance of certificates, the incurrence of unmeasurable and 
unrecoverable costs that may result from the Commission's imposition of 
mitigation measures to address GHG and environmental justice impacts 
(which are now both considered in the Commission's balancing), and 
difficulty in securing capital for proposed projects. It is foreseeable 
that the result will be to cause a reliability crisis in areas that 
need the gas the most. This arises because of the uncertain criteria to 
be applied by the Commission, the delays in obtaining the Commission's 
approval, and the resulting increases in costs--including the cost of 
mitigation. Individually and collectively, these could be so severe 
that a natural gas company might be unable to accept the conditions of 
its certificate and proceed with a project that otherwise is needed to 
maintain reliability.
---------------------------------------------------------------------------

    \117\ NERC, Long Term Reliability Assessment, at 5 (Dec. 2021), 
https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2021.pdf (emphasis added).
---------------------------------------------------------------------------

VI. Conclusion

    45. Many in the industry have asked for certainty. The majority 
says that they have provided it.\118\ Regrettably, the majority is 
wrong on that point, as well. The only certainty to be found in the 
Updated Policy Statement is that confusion will reign hereafter, at the 
expense of those who depend on natural gas.
---------------------------------------------------------------------------

    \118\ See Updated Policy Statement, 178 FERC ] 61,107 at P 51 
(asserting that the Commission is ``providing more regulatory 
certainty in the Commission's review process and public interest 
determinations''); id. P 73 (``To provide more clarity and 
regulatory certainty to all participants in certificate proceedings, 
we explain here how the Commission will consider environmental 
impacts.''); id. P 100 (``A major purpose of this Updated Policy 
Statement is to provide clarity and regulatory certainty regarding 
the Commission's decision-making process.'').

---------------------------------------------------------------------------
    For these reasons, I respectfully dissent.

James P. Danly,

Commissioner

DEPARTMENT OF ENERGY FEDERAL ENERGY REGULATORY COMMISSION

Certification of New Interstate Natural Gas Facilities

Docket No. PL18-1-000
CHRISTIE, Commissioner, dissenting:

    1. Last year I voted to re-issue this Notice of Inquiry (NOI) for 
another round of comment \1\ because I believed--and still do--that 
there are reasonable updates to the 1999 policy statement that would be 
worthwhile.\2\ For example, I agree that precedent agreements between 
corporate affiliates, because of the obvious potential for self-
dealing, should not, in and of themselves and without additional 
evidence, prove need.\3\ I also believe that the Commission's 
procedures for guaranteeing due process to affected property owners, 
which, as Justice Frankfurter taught, consists of the two core elements 
of notice and opportunity to be heard,\4\ could be strengthened.
---------------------------------------------------------------------------

    \1\ Certification of New Interstate Natural Gas Facilities, 174 
FERC ] 61,125 (2021).
    \2\ I also voted for the 2021 changes to the procedures for 
imposing a stay on the certificate and use of eminent domain during 
periods when petitions for reconsideration and appeals were pending. 
Limiting Authorizations to Proceed with Construction Activities 
Pending Rehearing, Order No. 871-B, 175 FERC ] 61,098 (2021). These 
changes were largely opposed by the pipeline industry, but in my 
opinion represented a reasonable approach to bring more certainty 
and fairness to our procedures for handling petitions for 
reconsideration and the use of eminent domain during the pending 
period.
    \3\ See Certification of New Interstate Natural Gas Facilities, 
178 FERC ] 61,107 (2022) (Certificate Policy Statement) at PP 53-57. 
The need for enhanced scrutiny of contracts among corporate 
affiliates is recognized in State utility regulation. See, e.g., Va. 
Code Sec.  56-76 et seq., known as the ``Virginia Affiliates Act.''
    \4\ See Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 
123 (1951) (Frankfurter, J., concurring).
---------------------------------------------------------------------------

    2. Unfortunately, the new certificate policy the majority approves 
today \5\

[[Page 11571]]

does not represent a reasonable update to the 1999 statement. On the 
contrary, what the majority does today is arrogate to itself the power 
to rewrite both the Natural Gas Act (NGA) \6\ and the National 
Environmental Policy Act (NEPA),\7\ a power that only the elected 
legislators in Congress can exercise. Today's action represents a truly 
radical departure from decades of Commission practice and precedent 
implementing the NGA.
---------------------------------------------------------------------------

    \5\ Certificate Policy Statement; Consideration of Greenhouse 
Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 
FERC ] 61,108 (2022) (GHG Policy Statement). Although styled as an 
``interim'' policy statement, it goes into effect immediately and 
will inflict major new costs and uncertainties on certificate 
applications that have been pending with the Commission for months 
or years. Id. at PP 1, 130. I consider both policy statements to be 
indivisible parts of a new policy governing certificates. Thus, my 
statement applies to both, and I am entering this dissent in both 
dockets.
    \6\ 15 U.S.C. 717 et seq. See, e.g., Certificate Policy 
Statement at P 62.
    \7\ 42 U.S.C. 4321 et seq.
---------------------------------------------------------------------------

    3. The fundamental changes the majority imposes today to the 
Commission's procedures governing certificate applications are wrong as 
both law and policy. They clearly exceed the Commission's legal 
authority under the NGA and NEPA and, in so doing, violate the United 
States Supreme Court's major questions doctrine.\8\
---------------------------------------------------------------------------

    \8\ Nat'l Fed'n of Indep. Bus. v. Dep't of Labor, OSHA, 142 S. 
Ct. 661 (2022) (NFIB); Alabama Ass'n. of Realtors v. Dep't of Health 
and Human Services, 141 S. Ct. 2485 (2021) (Ala. Ass'n.); Util. Air 
Regulatory Grp. v. EPA, 573 U.S. 302 (2014) (UARG); FDA v. Brown & 
Williamson Tobacco Corp., 529 U.S. 120 (2000) (Brown & Williamson). 
I discuss this doctrine in Section I.B., infra.
---------------------------------------------------------------------------

    4. The new policy also threatens to do fundamental damage to the 
nation's energy security by making it even more costly and difficult to 
build the infrastructure that will be critically needed to maintain 
reliable power service to consumers as the generation mix changes to 
incorporate lower carbon-emitting resources such as wind and solar. And 
as recent events in Europe and Ukraine graphically illustrate, 
America's energy security is an inextricable part of our national 
security.\9\ The majority's proposal on GHG impacts is obviously 
motivated by a desire to address climate change, but will actually make 
it more difficult to expand the deployment of low or no-carbon 
resources, because it will make it more difficult to build or maintain 
the gas infrastructure essential to keep the lights on as more 
intermittent resources are deployed.\10\ In addition to the essential 
need for natural gas to keep our power supply reliable, a dependable 
and adequate natural gas supply is critically needed for our 
manufacturing industries and the millions of jobs for American workers 
in those industries.\11\
---------------------------------------------------------------------------

    \9\ See, e.g., Natasha Bertrand, US putting together 'global' 
strategy to increase gas production if Russia invades Ukraine, 
officials say, CNN (Jan. 24, 2022), available at https://www.cnn.com/2022/01/23/politics/us-gas-production-strategy-russia-ukraine-invasion/ https://www.cnn.com/2022/01/23/politics/us-gas-production-strategy-russia-ukraine-invasion/; and, 
Stephen Stapczynski and Sergio Chapa, U.S. Became World's Top LNG 
Exporter, Spurred by Europe Crisis, Bloomberg (Jan 4, 2022), 
available at https://www.bloomberg.com/news/articles/2022-01-04/u-s-lng-exports-top-rivals-for-first-time-on-shale-revolution.
    \10\ See NERC December 2021 Long-Term Reliability Assessment, at 
5 (Dec. 2021) (``Natural gas is the reliability `fuel that keeps the 
lights on,' and natural gas policy must reflect this reality.'') 
(emphasis added) (available at https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2021.pdf); id. at 6 
(``Sufficient flexible [dispatchable] resources are needed to 
support increasing levels of variable [intermittent] generation 
uncertainty. Until storage technology is fully developed and 
deployed at scale, (which cannot be presumed to occur within the 
time horizon of this LTRA), natural gas-fired generation will remain 
a necessary balancing resource to provide increasing flexibility 
needs.'') (emphasis added); NERC 2020 Long-Term Reliability 
Assessment, December 2020, at 7 (Dec. 2020) (``As more solar and 
wind generation is added, additional flexible resources are needed 
to offset their resources' variability. This is placing more 
operating pressure on those (typically natural gas) resources and 
makes them the key to securing [Bulk Power System] reliability.'' 
(emphases added) (available at https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2020.pdf).
    \11\ Letter from Industrial Energy Consumers of America to Sen. 
Joe Manchin III, Sen. John Barrasso, Sen. Frank Pallone, Jr., Sen. 
Cathy McMorris Rodgers, Lack of Interstate Natural Gas Pipeline 
Capacity Threatens Manufacturing Operations, Investments, Jobs, and 
Supply Chain (Feb. 9, 2022).
---------------------------------------------------------------------------

    5. And while I agree that reducing carbon emissions that impact the 
climate is a compelling policy goal,\12\ this Commission--an 
administrative agency that only has the powers Congress has explicitly 
delegated to it--has no open-ended license under the U.S. Constitution 
or the NGA to address climate change or any other problem the majority 
may wish to address.
---------------------------------------------------------------------------

    \12\ Since we are regulators with an advisory role, not Article 
III judges, my personal view is that the most politically realistic 
and sustainable way to reduce carbon emissions significantly without 
threatening the reliability of our grid and punishing tens of 
millions of American workers and consumers with lost jobs and 
skyrocketing energy prices (see, e.g., Europe) is by massive public 
investment in the research, development and deployment of the 
technologies that can achieve that goal economically and 
effectively. See, e.g., Press Release, Bipartisan Policy Center, New 
AEIC Report Recommends DOE Combine Loan and Demonstration Offices, 
Jumpstart American Clean Energy Deployment (Jan. 21, 2022), 
available at https://bipartisanpolicy.org/press-release/new-aeic-report-recommends-doe-combine-loan-and-demonstration-offices-jumpstart-american-clean-energy-deployment/ (citing to American 
Energy Innovation Council, Scaling Innovation: A Proposed Framework 
for Scaling Energy Demonstrations and Early Deployment (Jan. 2022)). 
Once developed to commercial scale, marketable technologies will 
roll out globally on their own, without the market-distorting 
mandates and subsidies that only enrich rent-seekers and impoverish 
consumers. More specifically with regard to natural gas facilities, 
there is also the potential with available technology to reduce 
direct methane emissions from the existing oil and gas system within 
existing legal authority. And such initiatives do not obviate the 
need for near-term mitigation measures, such as preparing the 
electric grid to maintain power during extreme weather events.
---------------------------------------------------------------------------

I. Legal Questions

    6. The long-running controversy over the role and use of GHG 
analyses in natural-gas facility certificate cases raises two central 
questions of law and a third that flows from the first two:
    7. First, whether the Commission can use a GHG analysis to reject a 
certificate--or attach conditions (including the use of coercive 
deficiency letters) amounting to a de facto rejection by rendering the 
project unfeasible--based on the NGA's ``public convenience and 
necessity'' \13\ provision, even when the evidence otherwise supports a 
finding under the NGA that the facility is both ``convenient and 
necessary'' to provide the public with essential gas supply? Today's 
orders assume that the answer is yes.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 717f.
    \14\ Certificate Policy Statement at P 62; GHG Policy Statement 
at PP 4, 99.
---------------------------------------------------------------------------

    8. Second, whether the Commission can, or is required to, reject a 
certificate--or attach conditions (including the use of coercive 
deficiency letters) amounting to a de facto rejection by rendering the 
project unfeasible--based on a GHG analysis conducted as part of an 
environmental review under NEPA,\15\ when the certificate application 
would otherwise be approved as both ``convenient and necessary'' under 
the NGA? Again, today's orders assume the answer is yes.\16\
---------------------------------------------------------------------------

    \15\ See Certificate Policy Statement at P 6, GHG Policy 
Statement at P 27.
    \16\ Certificate Policy Statement at P 62; GHG Policy Statement 
at PP 27, 99.
---------------------------------------------------------------------------

    9. Third, which, if any, conditions related to a GHG analysis may 
be attached to a certificate under NGA section 7(e),\17\ or demanded 
through the use of deficiency letters? Today's orders seem to assume 
that there is essentially no limit to the conditions the Commission can 
impose.\18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 717f(e).
    \18\ See Certificate Policy Statement at P 74; GHG Policy 
Statement at P 99.
---------------------------------------------------------------------------

    10. As discussed below, today's orders get each of these questions 
wrong.

[[Page 11572]]

A. The ``Public Interest'' in the Natural Gas Act

    11. The starting point for answering all of these questions must be 
what ``public interest'' analysis the NGA empowers the Commission to 
make. Can the Commission's statutory responsibility to determine the 
``public convenience and necessity'' be used to reject a project 
otherwise needed by the public based solely on adverse impacts to 
``environmental interests'' \19\ (a term today's orders leave undefined 
but which could be reduced to an unspecified level of GHG emissions) as 
the Commission today asserts? \20\ Or can the Commission reject a 
project solely due to ``the interests of landowners and environmental 
justice communities'' as the majority also asserts? \21\ The short 
answer is no. There is nothing in the text or history of the NGA to 
support such a claim about, or application of, the Commission's public 
interest responsibilities under the NGA.
---------------------------------------------------------------------------

    \19\ Certificate Policy Statement at P 62.
    \20\ Id.
    \21\ Id. The notion that a certificate could be rejected based 
solely on the interests of ``landowners'' or ``environmental justice 
communities'' (a term the majority leaves largely undefined) 
illustrates the radical divergence from both law and long Commission 
practice of what the Commission purports to do today. While a 
regulatory commission should always be mindful of and sensitive to 
the impacts on affected property owners and communities in every 
case involving the potential use of eminent domain--particularly on 
the question of the project's route or siting--and should generally 
seek wherever possible to reduce or minimize such impacts, specific 
measures to reduce or minimize such impacts are governed by the 
statutes applicable to each proceeding. Under both the Constitution 
and the NGA, if a project is needed for a public purpose, then 
landowners are made whole through just compensation. U.S. Const. 
amend. V. Questions of compensation are adjudicated in State or 
Federal court--not by this Commission. NGA section 7(h), 15 U.S.C. 
717f(h). Bringing such extra-jurisdictional considerations into the 
Commission's public convenience and necessity analyses under NGA 
section 7 is just another expansion of Commission power far beyond 
anything justified in law.
---------------------------------------------------------------------------

    12. As discussed herein, any claim that a ``public interest'' 
analysis under the NGA gives FERC the authority to reject a project 
based solely on GHG emissions is specious and ahistorical. The history 
of the NGA indicates that Congress intended the statute to promote the 
development of pipelines and other natural-gas facilities. As one 
Federal judge has observed, ``nothing in the text of [the NGA] . . . 
empowers the Commission to entirely deny the construction of an export 
terminal or the issuance of a certificate based solely on an adverse 
indirect environmental effect regulated by another agency.'' \22\
---------------------------------------------------------------------------

    \22\ Sabal Trail, 867 F.3d 1357, 1382 (D.C. Cir. 2017) (Sabal 
Trail) (Brown, J., dissenting in part and concurring in part).
---------------------------------------------------------------------------

    13. I recognize that the Commission and the courts have construed 
``public convenience and necessity'' to require the Commission to 
consider ``all factors bearing on the public interest,'' \23\ but the 
Supreme Court has been very clear that any public interest analysis 
undertaken in the course of determining ``public necessity and 
convenience'' is constrained by the purposes and limitations of the 
statute.\24\ It is not an open-ended license to use this Commission's 
certificating authority to promote whatever a majority of Commissioners 
from time to time may happen to view as the ``public interest.''
---------------------------------------------------------------------------

    \23\ Atl. Refining Co. v. Pub. Serv. Comm'n of State of N.Y., 
360 U.S. 378, 391 (1959) (``This is not to say that rates are the 
only factor bearing on the public convenience and necessity, for 
Sec.  7(e) requires the Commission to evaluate all factors bearing 
on the public interest.''); N.C. Gas Corp., 10 FPC 469, 476 (1950) 
(``Public convenience and necessity comprehends a question of the 
public interest. Or, stated another way: Is the proposal conducive 
to the public welfare? Is it reasonably required to promote the 
accommodation of the public? The public interest we referred to has 
many facets. To the limit of our authority under the law our 
responsibility encompasses them all'') (emphasis added) (quoting 
Commonwealth Nat. Gas Corp., 9 FPC 70 (1950)).
    \24\ NAACP v. FPC, 425 U.S. 662, 669 (1976) (``This Court's 
cases have consistently held that the use of the words `public 
interest' in a regulatory statute is not a broad license to promote 
the general public welfare. Rather, the words take meaning from the 
purposes of the regulatory legislation.''). Where the Supreme Court 
has permitted the Commission to consider end use, those 
considerations have related directly to its core statutory 
responsibilities under the NGA, namely, ensuring adequate supply at 
reasonable rates. See FPC v. Transcontinental Pipe Line Co., 365 
U.S. 1 (1961) (permitting the Commission to consider whether the end 
use was ``wasteful'' of limited gas resources).
---------------------------------------------------------------------------

    14. With regard to GHG emissions that may be associated with 
upstream production activities or downstream distribution to, or 
consumption by, retail consumers, the Commission simply has no 
authority over such activities. That authority was left to the 
states.\25\ Congress intended for the NGA to fill ``a regulatory gap'' 
over the ``interstate shipment and sale of gas.'' \26\
---------------------------------------------------------------------------

    \25\ NGA section 1(b), 15 U.S.C. 717(b).
    \26\ ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378 (2015) 
(emphasis added); see also, FPC v. Panhandle E. Pipe Line Co., 337 
U.S. 498, 502-503 (1949) (``suffice it to say that the Natural Gas 
Act did not envisage federal regulation of the entire natural-gas 
field to the limit of constitutional power. Rather it contemplated 
the exercise of federal power as specified in the Act, particularly 
in that interstate segment which states were powerless to regulate 
because of the Commerce Clause of the Federal Constitution. The 
jurisdiction of the Federal Power Commission was to complement that 
of the state regulatory bodies.'') (emphasis added) (footnotes 
omitted); Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 
F.3d 1301, 1315 (D.C. Cir. 2015) (``the Commission's power to 
preempt state and local law is circumscribed by the Natural Gas 
Act's savings clause, which saves from preemption the `rights of 
States' under the Clean Air Act and two other statutes.'') 
(citations omitted).
---------------------------------------------------------------------------

    15. Even if the Commission were to undertake some estimate of the 
indirect GHG impacts of third-party activities that it has no authority 
to regulate, it does not follow that the Commission can then reject a 
certificate based on those impacts.\27\ To do so would be to ignore the 
undeniable purpose of the NGA, which was enacted to facilitate the 
development and bringing to market of natural gas resources. The 
Commission's role under the NGA is to promote the development of the 
nation's natural gas resources and to safeguard the interests of 
ratepayers.\28\ Any consideration of environmental impacts, while 
important, is necessarily subsidiary to that role.\29\
---------------------------------------------------------------------------

    \27\ Ofc. of Consumers' Counsel v. FERC, 655 F.2d 1132, 1142 
(D.C. Cir. 1980) (``We bear in mind the caveat that an agency may 
not bootstrap itself into an area in which it has no jurisdiction by 
violating its statutory mandate.'') (citations, quotation marks, 
ellipsis omitted).
    \28\ City of Clarksville, Tenn. v. FERC, 888 F.3d 477, 479 (D.C. 
Cir. 2018) (City of Clarksville) (``Congress enacted the Natural Gas 
Act with the principal aim of `encouraging the orderly development 
of plentiful supplies of natural gas at reasonable prices,' and 
`protect[ing] consumers against exploitation at the hands of natural 
gas companies,'') (citations omitted); see also Alexandra B. Klass & 
Danielle Meinhardt, Transporting Oil and Gas: U.S. Infrastructure 
Challenges, 100 Iowa L. Rev. 947, 990-99 (Mar. 2015).
    \29\ City of Clarksville, 888 F.3d. at 479. (``Along with those 
main objectives, there are also several `subsidiary purposes 
including conservation, environmental, and antitrust issues.''') 
(quoting Pub. Utils. Comm'n of Cal. v. FERC, 900 F.2d 269, 281 (D.C. 
Cir. 1990)) (cleaned up). This does not mean that the Commission 
cannot properly impose conditions or mitigation to address 
environmental impacts directly related to the jurisdictional 
project; it merely recognizes that the Commission's main objective 
is to facilitate the expansion and preservation of natural gas 
service at just and reasonable rates and that doing so will 
inevitably entail some measure of environmental costs. These can 
sometimes be reduced or minimized, but never completely eliminated. 
Every project ever built has some degree of environmental impacts. 
The standard under the NGA cannot be zero impacts.
---------------------------------------------------------------------------

    16. It is a truism that FERC is an economic regulator, not an 
environmental regulator. This Commission was not given certification 
authority in order to advance environmental goals; \30\ it was given

[[Page 11573]]

certification authority to ensure the development of natural gas 
resources and their availability--this includes pipeline 
infrastructure--at just and reasonable rates. To construe the 
Commission's analysis of the public convenience and necessity as a 
license to prohibit the development of needed natural gas resources 
using the public interest language in the NGA would be to negate the 
very legislative purpose of the statute.\31\ Put another way, the 
premise of the NGA is that the production and transportation of natural 
gas for ultimate consumption by end users is socially valuable and 
should be promoted, not that the use of natural gas (which inevitably 
results in some discharge of GHGs) is inherently destructive and must 
be curbed, mitigated, or discouraged.
---------------------------------------------------------------------------

    \30\ Congress could easily have conferred that authority if it 
had wanted to. There is no indication that Congress intended or 
expected FERC to perform any environmental regulation when it 
created the agency. See generally, Clark Byse, The Department of 
Energy Organization Act: Structure and Procedure, 30 Admin. L. Rev. 
193 (1978). This Commission's predecessor, the Federal Power 
Commission, existed for decades before EPA was created in 1970. And 
Congress began enacting legislation bearing on emissions decades 
before then as well. See Christopher D. Ahlers, Origins of the Clean 
Air Act: A New Interpretation, 45 Envtl. L. 75 (2015). Nor were the 
effects of GHG emissions unknown at that time. See Danny Lewis, 
Scientists Have Been Talking About Greenhouse Gases for 191 Years, 
Smithsonian Magazine (Aug. 3, 2015) (citing to Nobel Laureate Svante 
Arrhenius' 1896 paper ``On the Influence of Carbonic Acid in the Air 
upon the Temperature of the Ground'').
    \31\ See United States v. Pub. Utils. Comm'n of Cal., 345 U.S. 
295, 315 (1953) (explaining that recourse to legislative history is 
appropriate where ``the literal words would bring about an end 
completely at variance with the purpose of the statute.'') 
(citations omitted). The present circumstance is very nearly the 
opposite: We are urged to pursue ``an end completely at variance 
with the purpose of the statute'' and for which there is no support 
in the ``literal words.'' Id.; see also Ctr. for Biological 
Diversity v. U.S. Army Corps of Eng'rs, 941 F.3d 1288, 1299 (11th 
Cir. 2019) (Ctr. for Biological Diversity) (``Regulations cannot 
contradict their animating statutes or manufacture additional agency 
power.'') (citing Brown & Williamson, 529 U.S. at 125-26).
---------------------------------------------------------------------------

    17. To those who say ``well, times have changed and Congress was 
not thinking about climate change when it passed the NGA,'' here's an 
inconvenient truth: If Congress wants to change the Commission's 
mission under the NGA it has that power; FERC does not.
    18. Any authority to perform a public interest analysis under the 
NGA must be construed with reference to the animating purposes of the 
Act. It is not a free pass to pursue any policy objective--however 
important or compelling it may be--that is related in some way to 
jurisdictional facilities.\32\ As the Court of Appeals for the D.C. 
Circuit has explained:
---------------------------------------------------------------------------

    \32\ NAACP v. FPC, 425 U.S. at 665-670 (noting that, although 
``the eradication of discrimination in our society is an important 
national goal,'' the Supreme Court has ``consistently held that the 
use of the words `public interest' in a regulatory statute is not a 
broad license to promote the general welfare. Rather, the words take 
meaning from the purposes of the regulatory legislation'' which, for 
the [Federal Power Act] and [Natural Gas Act], are ``to encourage 
the orderly development of plentiful supplies of electricity and 
natural gas at reasonable prices.''); see also Brown & Williamson, 
529 U.S. at 161 (``no matter how important, conspicuous, and 
controversial the issue, and regardless of how likely the public is 
to hold the Executive Branch politically accountable, . . . an 
administrative agency's power to regulate in the public interest 
must always be grounded in a valid grant of authority from 
Congress.'') (quotation marks, citation omitted).

    Any such authority to consider all factors bearing on ``the 
public interest'' must take into account what ``the public 
interest'' means in the context of the Natural Gas Act. FERC's 
authority to consider all factors bearing on the public interest 
when issuing certificates means authority to look into those factors 
which reasonably relate to the purposes for which FERC was given 
certification authority. It does not imply authority to issue orders 
regarding any circumstance in which FERC's regulatory tools might be 
useful.\33\
---------------------------------------------------------------------------

    \33\ Office of Consumers' Counsel v. FERC, 655 F.2d at 1147 
(emphases added).

    19. Whereas the Commission's role in certificating facilities under 
the NGA is explicit,\34\ any purported authority for the Commission to 
regulate GHGs is conspicuously absent. The claim that the Commission 
can reject a needed facility due to GHG emissions using the public 
interest component in the NGA seems to be based on the following logic: 
To ascertain whether a facility serves the public convenience and 
necessity, the Commission must first determine whether the facility is 
in ``the public interest,'' which in turn entails considering factors 
such as ``environmental'' impacts from construction and operation of 
the proposed facility, as well as estimating and quantifying greenhouse 
gas emissions from the proposed facility, including both upstream 
emissions associated with gathering the gas and downstream emissions 
associated with its use, which the Commission is somehow empowered to 
deem to be too excessive to grant the certificate.\35\ Suffice it to 
say, this tortured logic breaks apart in multiple places.\36\
---------------------------------------------------------------------------

    \34\ See, e.g., NGA section 7(e), 15 U.S.C. 717f(e) (apart from 
statutory exceptions, ``a certificate shall be issued to any 
qualified applicant . . . if it is found that the applicant is able 
and willing properly to do the acts and to perform the service 
proposed,'' and, among other things, to comply with ``the 
requirements, rules and regulations of the Commission . . .'') 
(emphasis added).
    \35\ Certificate Policy Statement at PP 4-6; GHG Policy 
Statement at P 39 (citing Sabal Trail, 867 F.3d at 1372-73).
    \36\ I won't belabor the point, but just to reiterate: A 
``public convenience and necessity'' analysis is not a generalized 
``public interest'' analysis, as courts have recognized. See, supra, 
P 13 & n.24 and infra, P 27. The ``environmental'' impacts 
appropriately considered in a certification proceeding must surely 
be limited in some way to the proposed facility itself since both 
upstream gathering and downstream use are beyond the Commission's 
statutory jurisdiction. See City of Clarksville, 888 F.3d at 479 
(identifying ``environmental'' concerns as a ``subsidiary'' purpose 
of the NGA).
---------------------------------------------------------------------------

    20. Surely if Congress had any intention that GHG analyses should 
(or could) be the basis for rejecting certification of natural-gas 
facilities, it would have given the Commission clear statutory guidance 
as to when to reject on that basis. Instead, those who want the 
Commission to conjure up a standard on GHG emissions for deciding how 
much is too much are advocating for a standard resembling Justice 
Stewart's famous method for identifying obscenity, to wit, that he 
could not describe it, but ``I know it when I see it.'' \37\ And the 
Supreme Court eventually had the good sense to abandon that ocular 
standard.\38\
---------------------------------------------------------------------------

    \37\ Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., 
concurring); see also Catherine Morehouse, Glick, Danly spar over 
gas pipeline reviews as FERC considers project's climate impacts for 
first time, Utility Dive (Mar. 19, 2021) (quoting Chairman Glick 
regarding use of GHG emissions analysis in N. Natural Gas Co., 174 
FERC ] 61,189 (2021): ``We essentially used the eyeball test. . . 
.''). Shorn of its irrelevant disquisition on EPA's stationary 
source regulations, today's GHG policy statement enshrines an 
eyeball test as the trigger for subjecting virtually all certificate 
applicants to the time-consuming and costly EIS process. GHG 
Statement at PP 88-95.
    \38\ Miller v. California, 413 U.S. 15 (1973).
---------------------------------------------------------------------------

    21. Using GHG analysis to reject a certificate implicates an 
important judicial doctrine used in evaluating just how far an 
administrative agency can go in essentially creating public policy 
without clear textual support in statutory law. Now let's turn to that 
doctrine in this context.

B. The Major Questions Doctrine and the NGA

    22. The Commission's actions today implicate the ``major questions 
doctrine,'' which Justice Gorsuch has recently explained as follows:

    The federal government's powers . . . are not general, but 
limited and divided. Not only must the federal government properly 
invoke a constitutionally enumerated source of authority to regulate 
in this area or any other, it must also act consistently with the 
Constitution's separation of powers. And when it comes to that 
obligation, this Court has established at least one firm rule: ``We 
expect Congress to speak clearly'' if it wishes to assign to an 
executive agency decisions ``of vast economic and political 
significance.'' We sometimes call this the major questions 
doctrine.\39\
---------------------------------------------------------------------------

    \39\ NFIB, 142 S. Ct. at 667 (Gorsuch, J., concurring) 
(citations omitted).

In short, the major questions doctrine presumes that Congress reserves 
major issues to itself, so unless a grant of authority to address a 
major issue is explicit in a statute administered by an agency, it 
cannot be inferred to have been granted.
    23. Whether this Commission can reject a certificate based on a GHG 
analysis--a certificate that otherwise would be approved under the 
NGA--is undeniably a major question of public

[[Page 11574]]

policy. It will have enormous implications for the lives of everyone in 
this country, given the inseparability of energy security from economic 
security. Yet the Supreme Court has made it clear that broad deference 
to administrative agencies on major questions of public policy is not 
in order when statutes are lacking in any explicit statutory grant of 
authority.\40\ ``When much is sought from a statute, much must be 
shown. . . . [B]road assertions of administrative power demand 
unmistakable legislative support.'' \41\
---------------------------------------------------------------------------

    \40\ UARG, 573 U.S. 302, 324 (2014) (``When an agency claims to 
discover in a long-extant statute an unheralded power to regulate `a 
significant portion of the American economy,' Brown & Williamson, 
529 U.S. at 159 . . . , we typically greet its announcement with a 
measure of skepticism. We expect Congress to speak clearly if it 
wishes to assign to an agency decisions of vast `economic and 
political significance.' Id. at 160.''); Gundy v. United States, 139 
S. Ct. 2116, 2141-42 (2019) (Gundy) (Gorsuch, J., dissenting) 
(``Under our precedents, an agency can fill in statutory gaps where 
`statutory circumstances' indicate that Congress meant to grant it 
such powers. But we don't follow that rule when the `statutory gap' 
concerns `a question of deep economic and political significance' 
that is central to the statutory scheme. So we've rejected agency 
demands that we defer to their attempts to rewrite rules for 
billions of dollars in healthcare tax credits, to assume control 
over millions of small greenhouse gas sources, and to ban 
cigarettes.) (citations omitted).
    \41\ In re MCP No. 165, 20 F.4th 264, 267-268 (6th Cir. 2021) 
(Sutton, C.J., dissenting from denial of initial hearing en banc) 
(emphases added).
---------------------------------------------------------------------------

    24. There is no ``unmistakable legislative support'' for the powers 
the Commission asserts today. A broad power to regulate upstream and 
downstream GHG emissions and their global impacts has simply not been 
delegated to this Commission.\42\ To the extent the federal government 
has such power, it has been delegated elsewhere. ``Of necessity, 
Congress selects different regulatory regimes to address different 
problems.'' \43\ The U.S. Environmental Protection Agency (EPA) is 
charged with regulating greenhouse gas emissions under the Clean Air 
Act.\44\ By contrast, Congress established in the NGA a regulatory 
regime to address entirely different problems, namely, the need to 
develop the nation's natural gas resources and to protect ratepayers 
from unjust and unreasonable rates for gas shipped in the flow of 
interstate commerce. If it chose, Congress could enact legislation that 
would invest the Commission with authority to constrain the development 
and bringing to market of natural gas resources, but the fact is that 
Congress has chosen not to do so. On the contrary, every time Congress 
has enacted natural gas legislation, it has been to promote the 
development of natural gas resources, not throw up barriers to 
them.\45\
---------------------------------------------------------------------------

    \42\ Panhandle E. Pipe Line Co. v. Pub. Serv. Comm'n of Ind., 
332 U.S. 507, 516 (1947) (``three things, and three things only 
Congress drew within its own regulatory power, delegated by the 
[Natural Gas] Act to its agent, the Federal Power Commission. These 
were: (1) The transportation of natural gas in interstate commerce; 
(2) its sale in interstate commerce for resale; and (3) natural gas 
companies engaged in such transportation or sale.''); cf. Ala. 
Assn., 141 S. Ct. at 2488 (invalidating the CDC's eviction 
moratorium because the ``downstream connection between eviction and 
the interstate spread of disease is markedly different from the 
direct targeting of disease that characterizes the measures 
identified in the statute'').
    \43\ Am. Elec. Power Co. v. Conn., 564 U.S. 410, 426 (2011).
    \44\ Id. (``Congress delegated to EPA the decision whether and 
how to regulate carbon-dioxide emissions from powerplants'') 
(emphasis added); Am. Lung Ass'n. v. EPA, 985 F.3d at 959-60 (D.C. 
Cir. 2021) (``there is no question that the regulation of greenhouse 
gas emissions by power plants across the Nation falls squarely 
within the EPA's wheelhouse.''). Consider for a moment how strange 
it would be for Congress to delegate regulation of GHG emissions 
from electric power plants to EPA, while somehow delegating 
regulation of GHG emissions from natural gas fired power plants to 
FERC. Yet that is what today's orders presuppose.
    \45\ See Mountain Valley Pipeline, LLC, 171 FERC ] 61,232 (2020) 
(McNamee, Comm'r, concurring at PP 32-40) (discussing decades' worth 
of legislative enactments, all of which ``indicates that the 
Commission's authority over upstream production and downstream use 
of natural gas has been further limited by Congress.'').
---------------------------------------------------------------------------

    25. The fact that the NGA requires the Commission to make some form 
of public interest determination in the course of a certificate 
proceeding does not furnish a basis for the Commission to arrogate to 
itself the authority to constrain the development of natural gas 
resources on the grounds of their potential greenhouse gas emissions. 
As now-Justice Kavanaugh has explained: ``If an agency wants to 
exercise expansive regulatory authority over some major social or 
economic activity . . . regulating greenhouse gas emitters, for 
example--an ambiguous grant of statutory authority is not enough. 
Congress must clearly authorize an agency to take such a major 
regulatory action.'' \46\ Congress has not ``clearly authorize[d]'' 
this Commission to regulate greenhouse gas emitters, nor to deny 
certificates to facilities whose construction and operation would be in 
the public convenience and necessity, simply because the construction 
and operation of such infrastructure may result in some amount of 
greenhouse gas emissions.\47\ ``Even if the text were ambiguous, the 
sheer scope of the . . . claimed authority . . . would counsel 
against'' such an expansive interpretation.\48\
---------------------------------------------------------------------------

    \46\ U.S. Telecom Ass'n v. FCC, 855 F.3d 381, 422 (Kavanaugh, J. 
dissenting) (emphases added); see also NFIB, 142 S. Ct. at 665 
(``the question . . . is whether the Act plainly authorizes the 
Secretary's mandate. It does not.'').
    \47\ We cannot assume a Congressional intent to regulate every 
incidence of greenhouse gas emissions. As Justice Ginsberg observed, 
``we each emit carbon dioxide merely by breathing.'' Am. Elec. Power 
Co. v. Conn., 564 U.S. at 426.
    \48\ Ala. Ass'n., 141 S. Ct. at 2489.
---------------------------------------------------------------------------

    26. The fact that the Commission has absolutely no standard against 
which to measure the impact of natural gas production upstream or use 
downstream of the facilities it certificates is also important. In 
order for Congress to delegate any authority to an executive agency, it 
must legislatively set forth an intelligible principle for the agency 
to follow.\49\ There is no such ``intelligible principle'' for the 
Commission to follow when it comes to greenhouse gas emissions.
---------------------------------------------------------------------------

    \49\ Congress may ``delegate power under broad general 
directives'' so long as it sets forth ``an intelligible principle'' 
to guide the delegee. Mistretta v. United States, 488 U.S. 361, 372 
(1989). See Gundy, 139 S. Ct. at 2129 (``a delegation is 
constitutional so long as Congress has set out an `intelligible 
principle' to guide the delegee's exercise of authority. Or in a 
related formulation, the Court has stated that a delegation is 
permissible if Congress has made clear to the delegee the general 
policy he must pursue and the boundaries of his authority.'') 
(citations, internal quotations omitted).
---------------------------------------------------------------------------

    27. Although the NGA requires the Commission to determine whether a 
proposed facility is in the ``public convenience and necessity,'' the 
term ``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.'' \50\ The term ``public convenience and 
necessity'' has long been understood to refer most essentially to the 
public's need for service on terms that are just and reasonable, i.e., 
that are low enough for the public to pay the rates and high enough for 
the provider to maintain a profitable business.\51\ That understanding 
was reflected in various statutes employing the term, including the 
Natural Gas Act.\52\ And it was

[[Page 11575]]

further reflected in the earliest ``public convenience and necessity'' 
analyses under the NGA.\53\
---------------------------------------------------------------------------

    \50\ Mountain Valley, 171 FERC ] 61,232 (McNamee, Comm'r, 
concurring at P 41); see also id. PP 15-47.
    \51\ See generally, Ford P. Hall, Certificates of Public 
Convenience and Necessity, 28 Mich. L. Rev. 276 (1930) (analyzing 
the meaning of ``public convenience and necessity'' in State laws 
antedating passage of the NGA, and concluding that it is the need of 
the consuming public, without which it will be inconvenienced, that 
is the critical question to be answered).
    \52\ The first such statute appears to have been the Interstate 
Commerce Act (ICA). The Supreme Court explicitly held that the use 
of the term ``public convenience and necessity'' was chosen in the 
knowledge that it would be understood against the background of its 
historical usage. ICC v. Parker, 326 U.S. 60, 65 (1945) (construing 
``public convenience and necessity'' under the ICA and recognizing 
that Congress' decision to use a term with such a long history 
indicated Congress intended ``a continuation of the administrative 
and judicial interpretation of the language.'') When it passed the 
NGA, Congress was similarly cognizant of having employed the same 
concept as in the ICA. See, Robert Christin et al., Considering the 
Public Convenience and Necessity in Pipeline Certificate Cases under 
the Natural Gas Act, 38 Energy L.J. 115, 120 (2017) (citing Comm. on 
Interstate Commerce, Interstate Transportation and Sale of Natural 
Gas, S. Rep. No. 75-1162, at 5 (Aug. 9, 1937) and noting that ``the 
concept of a regulatory agency determining whether a private 
entity's proposal was in the public convenience and necessity was an 
established practice when the NGA was enacted.'').
    \53\ See In re Kan. Pipe Line & Gas Co., 2 FPC 29, 56 (1939) 
(``We view the term [public convenience and necessity] as meaning a 
public need or benefit without which the public is inconvenienced to 
the extent of being handicapped in 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.'')
---------------------------------------------------------------------------

    28. To summarize: Whether and how to regulate GHG emissions is a 
major question of vast economic and political significance. Congress 
has not explicitly authorized the Commission to regulate in this area 
as required under the major questions doctrine, nor has it laid down an 
intelligible principle for the Commission to follow as required by the 
non-delegation doctrine. Moreover, EPA, in coordination with the 
states, already has authority to regulate in this area as specified in 
Federal statutes, which is far removed from this Commission's core 
expertise and traditional responsibilities.
    29. Let's now turn to the second major question.

C. GHG Analysis Under NEPA

    30. Is this Commission required or allowed by NEPA \54\ to reject a 
certificate for a natural gas facility--one that would otherwise be 
approved under the NGA--based on a GHG analysis conducted as part of 
the NEPA environmental review? And rejection includes attaching 
mitigation conditions so onerous (or coercing through deficiency 
letters) that they render the project unfeasible.\55\
---------------------------------------------------------------------------

    \54\ NEPA, 42 U.S.C. 4321 et seq., requires all federal agencies 
to undertake an ``environmental assessment'' of their actions, 
typically including the preparation of an ``environmental impact 
statement'' of proposed ``major federal actions.'' As discussed 
below, the purpose of the EA and EIS is for the agency to be fully 
informed of the impact of its decisions. NEPA does not mandate any 
specific action by the agency in response to an EA or EIS, other 
than to make an informed decision. See, e.g., Steven M. Siros, et 
al., Pipeline Projects--The Evolving Role of Greenhouse Gas 
Emissions Analyses under NEPA, 41 Energy L.J. 47 (May 2020); see 
also Sabal Trail, 867 F.3d at 1367-68 (describing NEPA as 
``primarily information-forcing'' and noting that courts ``should 
not ```flyspeck'' an agency's environmental analysis, looking for 
any deficiency no matter how minor.''') (quoting Nevada v. Dep't of 
Energy, 457 F.3d 78, 93 (D.C. Cir. 2006)).
    \55\ NGA section 7(e), 15 U.S.C. 717f(e), authorizes the 
Commission to attach to a certificate ``such reasonable terms and 
conditions as the public convenience and necessity may require.'' 
There is no analytical difference between the Commission's authority 
to reject a certificate application and its authority to mitigate 
it. See Nat'l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 
(D.C. Cir. 1990) (``The Commission may not, . . . when it lacks the 
power to promote the public interest directly, do so indirectly by 
attaching a condition to a certificate that is, in its unconditional 
form, already in the public convenience and necessity.'') (citations 
omitted). That the Commission may be tempted to abuse its 
conditioning authority has long been recognized. See Carl I. Wheat, 
Administration by the Federal Power Commission of the Certificate 
Provisions of the Natural Gas Act, 14 Geo. Wash. L. Rev. 194, 214-
215 (1945) (``It is particularly important that the Commission . . . 
steel itself against the somewhat natural temptation to attempt to 
use such `conditions' as substitutes or `shortcuts' for other (and 
more appropriate) methods of regulation prescribed in the statute. . 
. . . [W]hatever may be said with respect to conditions concerning 
rates and other matters over which the Commission has specific 
authority under other provisions of the Act, it would appear clear 
that the power to prescribe `reasonable conditions' in certificates 
cannot be greater in scope than the statutory authority of the 
Commission.'')
---------------------------------------------------------------------------

    31. Again, the short answer is no. NEPA does not contain a shred of 
specific textual authority requiring or allowing the Commission to 
reject based on a NEPA review of estimated GHG impacts (indirect or 
direct) a certificate application for a facility that otherwise would 
be found necessary to serve the public under the NGA. Nor would it: As 
an information-forcing statute, NEPA imposes no substantive 
obligations.\56\
---------------------------------------------------------------------------

    \56\ ``[I]t is now well settled that NEPA itself does not 
mandate particular results, but simply prescribes the necessary 
process. If the adverse environmental effects of the proposed action 
are adequately identified and evaluated, the agency is not 
constrained by NEPA from deciding that other values outweigh the 
environmental costs. . . . Other statutes may impose substantive 
environmental obligations on federal agencies, . . . but NEPA merely 
prohibits uninformed--rather than unwise--agency action.'' Robertson 
v. Methow Valley Citizens Council, 490 U.S. 332, 350-51 (1989) 
(citations omitted; emphases added). See also, e.g., Minisink 
Residents for Envtl. Preserv. & Safety v. FERC, 762 F.3d 97, 112 
(D.C. Cir. 2014) (same).
---------------------------------------------------------------------------

    32. Even conducting an analysis of indirect GHG effects under NEPA 
goes too far. The Supreme Court has explicitly rejected the idea that 
an ``an agency's action is considered a cause of an environmental 
effect [under NEPA] even when the agency has no statutory authority to 
prevent that effect.'' \57\ Rather, NEPA ``requires a reasonably close 
causal relationship between the environmental effect and the alleged 
cause,'' that is analogous to ``the familiar doctrine of proximate 
cause from tort law.'' \58\ While this might leave some difficult 
judgments at the margins, estimates of the potential global impacts of 
possible non-jurisdictional upstream or downstream activity--as today's 
orders purport to require \59\--is not a close call.
---------------------------------------------------------------------------

    \57\ Dep't. of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) 
(Pub. Citizen). This principle has been incorporated into the 
implementing regulations of the Council of Environmental Quality 
(CEQ), an executive branch agency. See 40 CFR 1508.1(g)(2) (2021) 
(``Effects do not include those effects that the agency has no 
ability to prevent due to its limited statutory authority or would 
occur regardless of the proposed action'').
    \58\ Pub. Citizen, 541 U.S. at 767 (citations omitted).
    \59\ Certificate Policy Statement at PP 73-76; GHG Policy 
Statement at PP 28-31.
---------------------------------------------------------------------------

    33. First off, in determining how far an agency's NEPA 
responsibilities run, one ``must look to the underlying policies or 
legislative intent in order to draw a manageable line between those 
causal changes that may make an actor responsible for an effect and 
those that do not.'' \60\ As discussed at length above, there is no way 
of drawing a plausible line, much less a manageable one, from the 
Commission's certificating responsibilities under the NGA and the 
possible consequences of global climate change--consequences which, 
however potentially grave, are remote from this agency's limited 
statutory mission under the NGA.
---------------------------------------------------------------------------

    \60\ Pub. Citizen, 541 U.S. at 767 (citations omitted).
---------------------------------------------------------------------------

    34. Second, speculating about the possible future impact on global 
climate change of a facility's potential GHG emissions does not assist 
the Commission in its decision-making and therefore violates the ``rule 
of reason'': Where an agency lacks the power to do anything about the 
possible environmental impacts, it is not obligated to analyze them 
under NEPA.\61\ Again, the Supreme Court has explained, ``inherent in 
NEPA and its implementing regulations is a `rule of reason,' which 
ensures that agencies determine whether and to what extent to prepare 
an EIS based on the usefulness of any new potential

[[Page 11576]]

information to the decision-making process. Where the preparation of an 
EIS would serve `no purpose' in light of NEPA's regulatory scheme as a 
whole, no rule of reason worthy of the title would require an agency to 
prepare an EIS.'' \62\
---------------------------------------------------------------------------

    \61\ See, e.g., Sabal Trail, 867 F.3d at 1372 (citing Pub. 
Citizen, 541 U.S. at 770) (``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.'') (emphasis in original); Citizens Against Burlington, Inc. 
v. Busey, 938 F.2d 190, 195 (D.C. Cir. 1991) (``an agency need 
follow only a `rule of reason' in preparing an EIS . . . and . . . 
this rule of reason governs both which alternatives the agency must 
discuss, and the extent to which it must discuss them.'') (internal 
citations and quotations omitted, emphasis in original). To state 
the obvious: We have absolutely no way of knowing how much an 
individual project may or may not contribute to global climate 
change for any number of reasons, including because there is no way 
for us to meaningfully evaluate the release of GHG emissions if the 
facility in question were not to be certificated. Notwithstanding, 
today, the majority boasts of forcing virtually every certificate 
applicant into the EIS process. GHG Policy Statement at PP 80, 88.
    \62\ Pub. Citizen, 541 U.S. at 767 (citations omitted).
---------------------------------------------------------------------------

    35. This conclusion becomes even more obvious when considered 
alongside the undeniable fact that neither NEPA nor any other statute 
contains a scintilla of guidance as to which specific metrics are to be 
used to determine when the Commission can or must reject a project 
based on a GHG analysis. The Commission today establishes a threshold 
of 100,000 metric tons of CO2e of annual project emissions 
for purposes of its analysis of natural gas projects under NEPA \63\ 
The rationale for establishing this threshold has literally nothing to 
do with the Commission's NGA obligations, or even with its NEPA 
obligations. It consists of little more than piggybacking on EPA's 
approach to regulating stationary sources.\64\ Today's order boasts 
that this new threshold will capture projects ``transporting an average 
of 5,200 dekatherms per day and projects involving the operation of one 
or more compressor stations or LNG facilities'' \65\ and that this 
threshold ``will capture over 99% of GHG emissions from Commission-
regulated natural gas projects.'' \66\
---------------------------------------------------------------------------

    \63\ GHG Policy Statement at P 80, 88. For purposes of 
determining what emissions count toward the 100,000 metric tons per 
year threshold, the majority states that this number is measured 
based on ``the construction, operational, downstream, and, where 
determined to be reasonably foreseeable, upstream GHG emissions that 
reoccur annually over the life of the project.'' Id. P 80 & n.197.
    \64\ Id. PP 88-93 (acknowledging that the Supreme Court has 
partially invalidated EPA's regulatory regime).
    \65\ Id. P 89 (emphasis added).
    \66\ Id. P 95. It appears that the majority's intent is to force 
all applicants into the EIS process. This will undeniably cause each 
application to become far more costly and time-consuming, both 
obvious disincentives to even trying.
---------------------------------------------------------------------------

    36. These are just arbitrarily chosen numbers. A proliferation of 
quantification does not constitute reasoned decision-making. All of the 
important questions about the creation and application of this 
threshold remain unanswered: Is there anything in either the NGA or 
NEPA to indicate how much is too much and should be rejected? Or how 
little is low enough to get under the red line? No. If the Commission 
is attempting to quantify indirect global GHG impacts, as EPA now 
suggests we do,\67\ how much global impact is too much and requires 
rejection of the certificate? How much impact is not too much? Should 
rejection only be based on impacts on the United States? North America? 
The Western Hemisphere? The planet? Where is the line? Again, there is 
absolutely no statutory provision that answers these questions as to 
the application of GHG metrics in a certificate proceeding brought 
under the NGA. The complete absence of any statutory guidance on the 
seminal question of ``how much is too much?'' would render any action 
by the Commission to reject a certificate based on any metric as 
``arbitrary and capricious'' in the fullest sense.\68\
---------------------------------------------------------------------------

    \67\ EPA Comments, Iroquois Gas Transmission Sys., L.P., Docket 
No. CP20-48-000 at 1-2 (filed Dec. 20, 2021) (EPA Dec. 20, 2021 
Letter).
    \68\ And yet, as a practical matter, applicants must spend years 
of work and possibly millions of dollars (or more) in preparatory 
tasks like lining up financing, securing local political support, 
obtaining permits, etc. All this extensive legwork is needed just to 
put an application in to the Commission. Today's orders effectively 
tell applicants that their application could be rejected for any 
reason or no reason at all. Nor does the majority even do the 
courtesy of providing a target for the applicant to aim at.
---------------------------------------------------------------------------

    37. I recognize that the 100,000 metric tons marker adopted in 
today's orders is not a threshold for rejecting a proposed project but 
only for subjecting it to further scrutiny in the form of an EIS. But 
this is no small matter--completion of an EIS is extremely cost-
intensive and time-consuming and, in addition, creates a plethora of 
opportunities for opponents of the project who otherwise lack 
meritorious objections to it, to run up the costs, to cause delays, and 
to create new grounds for the inevitable appeals challenging the 
certificate even if the applicant does manage to obtain it.\69\
---------------------------------------------------------------------------

    \69\ See Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J 
. 333, 339 & n.31 (2004) (noting that ``Department of Energy EISs 
produced prior to 1994 had a mean cost of $6.3 million and a median 
cost of $1.2 million; following an aggressive effort to reduce 
costs, after 1994 the mean cost fell to $5.1 million, but the median 
cost rose to $2.7 million.'')
---------------------------------------------------------------------------

    38. NEPA provides no statutory authority to reject a gas project 
that would otherwise be approved under the NGA. How could it? As is 
well-known, the duties NEPA imposes are essentially procedural and 
informational.\70\ The Commission's regulations implementing NEPA 
reflect its limits by noting that, ``[t]he Commission will comply with 
the regulations of the Council on Environmental Quality except where 
those regulations are inconsistent with the statutory requirements of 
the Commission.'' \71\
---------------------------------------------------------------------------

    \70\ See, Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 129 
(D.C. Cir. 1987) (``NEPA, as a procedural device, does not work a 
broadening of the agency's substantive powers. Whatever action the 
agency chooses to take must, of course, be within its province in 
the first instance.'') (citations omitted, emphasis added); Balt. 
Gas & Elec. Co. v. Natural Res. Defense Council, Inc., 462 U.S. 87, 
97 (1983) (acknowledging NEPA's ``twin aims'' as obligating an 
agency ``to consider every significant aspect of the environmental 
impact of a proposed action'' and ensuring ``that the agency will 
inform the public that it has indeed considered environmental 
concerns in its decision-making process,'' but noting that 
``Congress in enacting NEPA, however, did not require agencies to 
elevate environmental concerns over other appropriate 
considerations.'') (citations, alterations omitted).
    \71\ 18 CFR 380.1 (2021) (emphasis added); see also 40 CFR 
1500.3(a) (2021) (compliance with the CEQ regulations ``is 
applicable to and binding on all Federal agencies . . . except where 
compliance would be inconsistent with other statutory 
requirements'').
---------------------------------------------------------------------------

    39. It's not actually very difficult to see how the approach the 
majority adopts today is ``inconsistent with the statutory requirements 
of the Commission.'' \72\ I will repeat that the purpose of the NGA is 
to promote the development, transportation, and sale at reasonable 
rates of natural gas. I will repeat that the NGA conveys only limited 
jurisdictional authority; that NEPA conveys no jurisdictional 
authority; that a different agency is responsible for regulating GHGs; 
and that such regulation is a major issue that Congress would have to 
speak to unambiguously, which it clearly has not done. And yet under 
the analysis embraced by the majority today, this Commission purports 
to impose onerous--possibly fatal--regulatory requirements on 
certificate applicants in order to generate reams of highly speculative 
data that have no meaningful role to play in the execution of this 
agency's statutory duties.\73\ In fact, it contravenes the purposes of 
the NGA in at least two obvious ways: First, by bringing extrinsic 
considerations to bear on the Commission's decision-making, and second, 
by causing needless delay in the process.\74\
---------------------------------------------------------------------------

    \72\ 18 CFR 380.1 (2021). See The Hon. Joseph T. Kelliher Jan. 
7, 2022 Comments, Technical Conference on Greenhouse Gas Mitigation: 
Natural Gas Act Sections 3 and 7 Authorizations, Docket No. PL21-3-
000 at 2 (The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments) (``if 
imposing mitigation for direct and indirect emissions discourages or 
forestalls pipeline development, the mitigation policy is directly 
contrary to the principal purpose of the Natural Gas Act and must be 
set aside.'').
    \73\ Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 
345-346 (noting that fear of NEPA challenges has led agencies to 
```kitchen sink' EISs'' to reduce the risk of reversal, but that 
almost nobody actually reads them ``and those who attempt to do so 
may find it difficult to separate the good information from the 
junk. Contrary to conventional wisdom, more information is not 
always better.''); see also, Pub. Citizen, 541 U.S. at 768-769 
(``NEPA's purpose is not to generate paperwork--even excellent 
paperwork--but to foster excellent action.'') (quoting then-in 
effect 40 CFR 1500.1(c) (2003)).
    \74\ The delay is clearly part of the point. Why else funnel 
virtually every certificate applicant into the EIS process? See 
e.g., Bradley C. Karkkainen, Whither NEPA?, N.Y.U. Envtl. L.J. at 
339-40 (observing that NEPA has become ``a highly effective tool 
that environmental NGOs and others can use to raise the financial 
and political costs of projects they oppose and stretch out 
decisions over an extended time frame, giving time to rally 
political opposition.''). See also P 47, infra.

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[[Page 11577]]

    40. There is no meaningful way of evaluating any of the critical 
issues, and no statutory authority to actually do anything about 
upstream or downstream emissions,\75\ but unlimited ways to find fault 
with any analysis. Even though they aren't supposed to ``flyspeck'' an 
agency's NEPA analysis, judges who wish to impose their own policy 
preferences will be tempted to do exactly that. And once the agency 
undertakes to address an issue in its NEPA analysis, it is subject to 
the APA's ``reasoned decision-making'' standard of review.\76\ Thus the 
effect is to ramp up dramatically the legal uncertainties and costs 
facing any certificate applicant.
---------------------------------------------------------------------------

    \75\ In fact, even if the Commission had the authority to impose 
upstream or downstream GHG emissions mitigation, or to deny 
certificates of public convenience and necessity on that basis, the 
majority admits that it is by no means obvious that doing so would 
actually prevent or even meaningfully reduce global climate change 
or the problems associated with it. See GHG Policy Statement at P 88 
(noting that ``[e]ven if deep reductions in GHG emissions are 
achieved, the planet is projected to warm by at least 1.5 degrees 
Celsius ([deg]C) by 2050;'' and that ``even relatively minor GHG 
emissions pose a significant threat'').
    \76\ Vecinos Para El Bienestar de la Comunidad Costera v. FERC, 
6 F.4th 1321, 1329 (D.C. Cir. 2021) (Vecinos) (``Because the 
Commission failed to respond to significant opposing viewpoints 
concerning the adequacy of its analyses of the projects' greenhouse 
gas emissions, we find its analyses deficient under NEPA and the 
APA.'').
---------------------------------------------------------------------------

D. The Policy Statements Rest on Inadequate Legal Authority

    41. Today's orders rely to a remarkable degree on a smattering of 
statements from a handful of recent orders. Simply put, these 
authorities are simply ``too slender a reed'' \77\ to support the great 
weight today's orders place on them.
---------------------------------------------------------------------------

    \77\ Cf. The Hon. Joseph T. Kelliher Jan. 7, 2022 Comments at 3.
---------------------------------------------------------------------------

    42. Neither Sabal Trail \78\ nor Birckhead,\79\ nor the more recent 
Vecinos \80\ opinion from the D.C. Circuit changes any of the analysis 
above. Indeed, to the extent language from those cases is interpreted 
as requiring the Commission to exercise authority not found in 
statutes--and these opinions are more confusing than clear, as well as 
inconsistent with the D. C. Circuit's own precedent--then such an 
interpretation would be contrary to the Supreme Court's major question 
doctrine. Be that as it may, while I recognize that Sabal Trail and 
Vecinos are presently applicable to this Commission, neither of those 
cases individually nor both of them together provide a lawful basis for 
rejecting a certificate for a facility that is otherwise found to be 
needed under the NGA solely because of its estimated potential impacts 
on global climate change.\81\
---------------------------------------------------------------------------

    \78\ Sabal Trail, 867 F.3d 1357. In support of its assertion of 
broad discretion in attaching conditions to a certificate, the 
majority also cites to ANR Pipeline Co. v. FERC, 876 F.2d 124, 129 
(D.C. Cir. 1989) (ANR Pipeline). Certificate Policy Statement at P 
74 & n. 190. Since the Commission's conditioning authority is 
limited in the same way as its certificating authority, there is 
little reason to discuss it separately. I will only note in passing 
that, although the court described the Commission's conditioning 
authority as ``extremely broad,'' the only issue actually before the 
court in ANR Pipeline was the validity of certificate terms imposed 
in furtherance of the Commission's core duty to ensure that rates 
are non-discriminatory. Id.
    \79\ Birckhead v. FERC, 925 F.3d 510 (D.C. Cir. 2019) 
(rejecting, for failure to raise the issue before the Commission, a 
claim that NEPA requires FERC to analyze downstream GHG emissions). 
Since Birckhead was decided on jurisdictional grounds, any 
substantive commentary in that order is mere dicta and I will not 
discuss it further.
    \80\ Vecinos, 6 F.4th 1321.
    \81\ Both orders suffer from a number of infirmities that don't 
bear belaboring in this context. In brief, however, Sabal Trail 
reads the Commission's duty to ``balance `the public benefits 
against the adverse effects of the project, including adverse 
environmental effects,''' Sabal Trail, 867 F.3d at 1373 (quoting 
Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97 at 
101-02 and citing Myersville Citizens for a Rural Cmty. v. FERC, 783 
F.3d at 1309), far too expansively, and Vecinos compounds that 
error. Both orders are discussed below.
---------------------------------------------------------------------------

    43. Virtually the entire structure of the majority's fundamental 
policy changes rests on a single line from Sabal Trail.\82\ That 
statement is itself predicated on an idiosyncratic reading of Public 
Citizen and the D.C. Circuit's own precedents.\83\ Sabal Trail rather 
facilely distinguished existing D.C. Circuit precedent on the grounds 
that, in contrast to those cases, the same agency that was performing 
the EIS was also authorized to approve or deny the certificate.\84\ It 
reasoned that because the Commission could take ``environmental'' 
issues into account in its public interest analysis, and GHG emissions 
raise ``environmental'' issues, it must therefore follow that the 
Commission could deny a certificate based on projected GHG emissions 
estimates.
---------------------------------------------------------------------------

    \82\ Namely, ``[b]ecause FERC could deny a pipeline certificate 
on the ground that the pipeline would be too harmful for the 
environment, the agency is a `legally relevant cause' of the direct 
and indirect environmental effects of pipelines that it approves.'' 
Sabal Trail, 867 F.3d at 1373. The other orders the majority relies 
on depend vitally on this statement. See, e.g., Certificate Policy 
Statement at PP 75 & n. 192 (citing Birckhead); 86 & n. 207 (citing 
Vecinos); GHG Policy Statement at PP 13, 36-38 (citing Birckhead) 
and P 14 & n. 38 (citing Vecinos).
    \83\ See Ctr. for Biological Diversity, 941 F.3d at 1300 (``the 
legal analysis in Sabal Trail is questionable at best. It fails to 
take seriously the rule of reason announced in Public Citizen or to 
account for the untenable consequences of its decision. The Sabal 
Trail court narrowly focused on the reasonable foreseeability of the 
downstream effects, as understood colloquially, while breezing past 
other statutory limits and precedents--such as Metropolitan [Edison 
Co. v. People Against Nuclear Energy, 460 U.S. 776 (1983)] and 
Public Citizen--clarifying what effects are cognizable under 
NEPA.'').
    \84\ Sabal Trail, 867 F.3d at 1372-1373. In each of the D.C. 
Circuit orders Sabal Trail purported to distinguish, the court had 
found that FERC did not have to analyze, because it could not 
regulate, downstream emissions.
---------------------------------------------------------------------------

    44. Sabal Trail acknowledged that ``Freeport and its companion 
cases rested on the premise that FERC had no legal authority to prevent 
the adverse environmental effects of natural gas exports.'' \85\ 
Specifically, ``FERC was forbidden to rely on the effects of gas 
exports as a justification for denying an upgrade license.'' \86\ In 
contrast with those cases--all of which addressed certification of LNG 
facilities under NGA section 3 as opposed to interstate transportation 
facilities under NGA section 7--the court in Sabal Trail concluded 
that, under NGA section 7, by contrast, ``FERC is not so limited. 
Congress broadly instructed the agency to consider `the public 
convenience and necessity' when evaluating applications to construct 
and operate interstate pipelines.'' \87\ It thus concluded that, 
``[b]ecause FERC could deny a pipeline certificate on the ground that 
the pipeline would be too harmful for the environment, the agency is a 
`legally relevant cause' of the direct and indirect environmental 
effects of pipelines that it approves. See Freeport, 827 F.3d at 47. 
Public Citizen thus did not excuse FERC from considering these indirect 
effects.'' \88\
---------------------------------------------------------------------------

    \85\ Id. at 1373 (citing Sierra Club v. FERC (Freeport), 827 
F.3d 36, 47 (D.C. Cir. 2016). The ``companion cases'' are Sierra 
Club v. FERC (Sabine Pass), 827 F.3d 59 (D.C. Cir. 2016) and 
EarthReports, Inc. v. FERC, 828 F.3d 949 (D.C. Cir. 2016).
    \86\ Sabal Trail, 867 F.3d at 1373 (emphasis in original).
    \87\ Id. (citations omitted).
    \88\ Id.
---------------------------------------------------------------------------

    45. But the Sabal Trail court never considered with reference to 
the Commission's statutory authority the proper scope of that public 
interest analysis or the extent to which ``environmental'' issues could 
be considered in that context. It simply assumed the Commission's 
authority to be unlimited. But as discussed above, Congress drafted the 
NGA for the purpose of filling a specific gap in regulatory authority. 
The only way Sabal Trail would be correct is if Congress had ``clearly 
authorized'' the Commission to evaluate geographically and temporally 
remote impacts of non-jurisdictional activity in its ``public 
convenience and necessity'' determinations. As discussed above,

[[Page 11578]]

that conclusion is clearly, irredeemably, wrong.\89\
---------------------------------------------------------------------------

    \89\ Supra, Section I.B. Cf. ICC v. Parker, 326 U.S. 60, 65 
(1945) (construing ``public convenience and necessity'' under the 
Interstate Commerce Act and recognizing that Congress' decision to 
use a term with such a long history indicated Congress intended ``a 
continuation of the administrative and judicial interpretation of 
the language.''). Far from being ``a continuation of the 
administrative and judicial interpretation of the language,'' 
construing it to extend to an analysis of global GHG emissions is 
novel and unprecedented.
---------------------------------------------------------------------------

    46. As for Vecinos, there, the court compounds that error both by 
relying uncritically on Sabal Trail and by finding fault with the 
Commission for failing to connect its decision not to use the Social 
Cost of Carbon to Petitioners' argument that it was required to do so 
under 40 CFR 1502.21(c).\90\ That regulation sets forth an agency's 
obligations when ``information relevant to reasonably foreseeable 
significant adverse impacts cannot be obtained.'' \91\ But global 
climate change is only a ``foreseeable significant adverse impact'' of 
the Commission's action if the Commission's authority extends as far as 
the Sabal Trail court said it does. For the reasons set out in this 
statement, I respectfully disagree. Nor am I alone in my 
disagreement.\92\
---------------------------------------------------------------------------

    \90\ Vecinos, 6 F.4th at 1328-30.
    \91\ 40 CFR 1502.21(c).
    \92\ See supra, n. 83.
---------------------------------------------------------------------------

    47. Finally, as to the contention that the Commission is bound to 
follow Sabal Trail notwithstanding its errors, I would simply point out 
that intervening Supreme Court precedents--such as NFIB \93\ and Ala. 
Ass'n.\94\--have not just significantly weakened, but utterly 
eviscerated the conceptual underpinnings of Sabal Trail's limitless 
construction of the Commission's public interest inquiry under the 
NGA's ``public convenience and necessity'' analysis.\95\ It is folly 
for this Commission to proceed heedless of the Supreme Court's recent 
rulings that agencies may not use ambiguous or limited grants of 
statutory authority in unprecedented ways to make policy on major 
questions that Congress has reserved for itself. But that's exactly 
what the Commission does today.\96\
---------------------------------------------------------------------------

    \93\ NFIB, 142 S. Ct. 661.
    \94\ Ala. Ass'n., 141 S. Ct. 2485 at 2489.
    \95\ See generally, Allegheny Def. Project v. FERC, 964 F.3d 1, 
18 (D.C. Cir. 2020) (noting that circuit court precedent may be 
departed from ``when intervening developments in the law--such as 
Supreme Court decisions--have removed or weakened the conceptual 
underpinnings of the prior decision.'') (cleaned up, citation 
omitted).
    \96\ In his NFIB concurrence, Justice Gorsuch states: 
``Sometimes Congress passes broadly worded statutes seeking to 
resolve important policy questions in a field while leaving an 
agency to work out the details of implementation. Later, the agency 
may seek to exploit some gap, ambiguity, or doubtful expression in 
Congress's statutes to assume responsibilities far beyond its 
initial assignment. The major questions doctrine guards against this 
possibility by recognizing that Congress does not usually hide 
elephants in mouseholes.'' 142 S. Ct. at 669 (Gorsuch, J., 
concurring) (citations, alterations omitted). It would be hard to 
find a better description of the path the Commission has taken to 
arrive at today's orders.
---------------------------------------------------------------------------

    48. We are indeed bound to follow judicial precedent, but we don't 
get to ``cherry pick'' one precedent such as Sabal Trail because we 
like that particular opinion, while ignoring the many other conflicting 
precedents, especially those more recent rulings from the Supreme Court 
itself applying the major question doctrine. These more recent opinions 
light up Sabal Trail as a clear outlier.

II. The Real Debate Is About Public Policy Not Law

    49. Preventing the construction of each and every natural gas 
project is the overt public-policy goal of many well-funded interest 
groups working to reduce or eliminate natural gas usage.\97\ Today's 
orders, whatever the intent, will have the undeniable effect of 
advancing that policy goal, and we should not deny the obvious. Rather 
than bringing legal certainty to the Commission's certificate 
orders,\98\ today's orders will greatly increase the costs and 
uncertainty associated with this Commission's own handling of 
certificate applications. In fact, by purporting to apply today's new 
policy retroactively on applications that have already been submitted 
(and in many instances pending for years), today's action is deeply 
unfair: It judges by an entirely new set of standards applications that 
were prepared and submitted to meet the old standards and essentially 
opens all of them to be relitigated.\99\ The undoubted effect of these 
orders will be to interpose additional months or years of delay on 
project applicants and to increase exponentially the vulnerability on 
appeal of any Commission orders that do approve a project.
---------------------------------------------------------------------------

    \97\ See, e.g., Bloomberg Philanthropies, https://www.bloomberg.org/environment/moving-beyond-carbon/ (``Launched in 
2019 with a $500 million investment from Mike Bloomberg and 
Bloomberg Philanthropies, Beyond Carbon . . . . works . . . to . . . 
stop the construction of proposed gas plants.'') (last visited Feb. 
8, 2022) (emphasis added); Sierra Club, https://www.sierraclub.org/policy/energy/fracking, (``There are no `clean' fossil fuels. The 
Sierra Club is committed to eliminating the use of fossil fuels, 
including coal, natural gas and oil, as soon as possible'') 
(emphases added) (last visited Feb. 8, 2022); Natural Resources 
Defense Council, https://www.nrdc.org/issues/reduce-fossil-fuels 
(``Oil, gas, and other fossil fuels come with grave consequences for 
our health and our future. . . . NRDC is pushing America to move 
beyond these dirty fuels. We fight dangerous energy development on 
all fronts'') (emphases added) (last visited Feb. 8, 2022); Press 
Release, NRDC Receives $100 million from Bezos Earth Fund to 
Accelerate Climate Action (Nov. 16, 2020), available at https://www.nrdc.org/media/2020/201116 (``The Bezos Earth Fund grant will be 
used to help NRDC advance climate solutions and legislation at the 
State level, move the needle on policies and programs focused on 
reducing oil and gas production'') (emphasis added) (last visited 
Feb. 8, 2022); Sebastian Herrera, Jeff Bezos Pledges $10 Billion to 
Tackle Climate Change, Wall Street Journal (Feb. 17, 2020) (``Mr. 
Bezos . . . said the Bezos Earth Fund would help back scientists, 
activists, [non-governmental organizations]'') (emphasis added); see 
also, Ellie Potter, Environmentalists launch campaign to ban gas 
from US clean energy program, S&P Global Platts (Sep. 2, 2021) 
(quoting Collin Rees, U.S. Campaign Manager for Oil Change 
International, ``Clean energy means no gas and no other fossil 
fuels, period.'') (emphases added); Sean Sullivan, FERC sets sights 
on gas infrastructure policy in 2022, S&P Capital IQ (Dec. 31, 2021) 
(quoting Maya van Rossum, head of Delaware Riverkeeper Network, ``we 
are not changing course at all: We continue to take on every 
pipeline, LNG, and fracked gas project as urgently as we did before, 
knowing we will have to invest heavily to stop it . . .'') (emphases 
added).
    \98\ See Letter of Chairman Richard Glick to Sen. John Barasso, 
M.D. (Feb. 1, 2022) (``Preparing an EIS to consider the reasonably 
foreseeable GHG emissions that may be attributed to a project 
proposed under section 7 of the NGA allows the Commission to issue 
more legally durable orders on which all stakeholders can depend, 
including project developers.''); Letter of Commissioner Allison 
Clements to Sen. John Barasso, M.D. (Feb. 1, 2022) (``I will do my 
part to assure that the updated policy will be a legally durable 
framework for fairly and efficiently considering certificate 
applications--one that serves the public interest and increases 
regulatory certainty for all stakeholders.''); see also, Corey Paul, 
FERC Dems argue legal benefits from climate reviews outweigh gas 
project delays, S&P Capital IQ Pro (Feb. 3, 2022).
    \99\ Certificate Policy Statement at P 100 (``the Commission 
will apply the Updated Policy Statement to any currently pending 
applications for new certificates. Applicants will be given the 
opportunity to supplement the record and explain how their proposals 
are consistent with this Updated Policy Statement, and stakeholders 
will have an opportunity to respond to any such filings.'')
---------------------------------------------------------------------------

    50. Recently I said the Commission's new rule on unlimited late 
interventions in certificate cases was ``not a legal standard, but a 
legal weapon.'' \100\ The new certificate policy approved today is the 
mother of all legal weapons. There is no question that it will be 
wielded against each and every natural gas facility both at the 
Commission and in the inevitable appeals, making the costs of even 
pursuing a natural gas project insuperable.
---------------------------------------------------------------------------

    \100\ Adelphia Gateway, LLC, 178 FERC ] 61,030 (2022) (Christie, 
Comm'r concurring at P 4) (available at: https://www.ferc.gov/news-events/news/item-c-3-commissioner-christies-partial-concurrence-and-partial-dissent-adelphia).
---------------------------------------------------------------------------

    51. Let me emphasize that every person or organization pursuing the 
policy goal of ending the use of natural gas by opposing every natural 
gas facility has an absolute right under the First Amendment to engage 
in such advocacy. However, whether to end the use of natural gas by 
banning the construction of all new natural gas projects is a public 
policy question of

[[Page 11579]]

immense importance, one that affects the lives and livelihoods of tens 
of millions of Americans and their communities, as well as the 
country's national security. In a democracy, such a huge policy 
question should only be decided by legislators elected by the people, 
not by unelected judges or administrative agencies.\101\
---------------------------------------------------------------------------

    \101\ See Am. Lung Ass'n v. EPA, 985 F.3d at 1003 (Walker, J., 
concurring in part and dissenting in part) (``whatever multi-
billion-dollar regulatory power the federal government might enjoy, 
it's found on the open floor of an accountable Congress, not in the 
impenetrable halls of an administrative agency--even if that agency 
is an overflowing font of good sense.'') (citing U.S. Const. art I, 
section 1).
---------------------------------------------------------------------------

    52. This public-policy context is absolutely relevant to these 
orders because it illustrates that the long-running controversy at this 
Commission over the use of GHG analyses in natural-gas certificate 
cases, whether it's a demand to quantify indirect impacts from upstream 
production and downstream use,\102\ or a demand to apply an 
administratively-constructed metric such as the Social Cost of Carbon 
\103\--and then use GHG analyses to reject (or mitigate to death, or 
impose costly delays on) a gas project--has far less to do with the law 
itself and far more to do with promoting preferred public policy goals.
---------------------------------------------------------------------------

    \102\ GHG Policy Statement at PP 27-28, 31, & n.97. See also, 
EPA Dec. 20, 2021 Letter.
    \103\ GHG Policy Statement at P 96. See also, e.g., Vecinos, 6 
F.4th at 1328-1329.
---------------------------------------------------------------------------

    53. EPA admits as much in a remarkably (perhaps unwittingly) 
revealing passage in a letter to this Commission:

    EPA reaffirms the suggestion that the Commission avoid 
expressing project-level emissions as a percentage of national or 
State emissions. Conveying the information in this way 
inappropriately diminishes the significance of project-level GHG 
emissions. Instead, EPA continues to recommend disclosing the 
increasing conflict between GHG emissions and national, State, and 
local GHG reduction policies and goals . . .\104\
---------------------------------------------------------------------------

    \104\ EPA Dec. 20, 2021 Letter at 4 (emphases added).

    54. So according to EPA, this Commission--which is supposed to be 
independent of the current (or any) presidential administration, by the 
way--should literally manipulate how it presents GHG data in order to 
avoid ``inappropriately'' diminishing the impact. As EPA reveals, this 
is really not about data or any specific GHG metric at all, but is 
really about pursuing public policy goals, especially those of the 
current presidential administration that runs EPA.\105\
---------------------------------------------------------------------------

    \105\ This Commission's independence reflects a conscious choice 
on Congress' part to insulate certain of its functions from the 
vicissitudes of political pressure. See generally, Sharon B. Jacobs, 
The Statutory Separation of Powers, 129 Yale L.J. 378 (2019) 
(explaining that some but not all of the Federal Power Commission's 
authorities were transferred to FERC, which was intended at least in 
part to counterbalance presidential influence). Succumbing to the 
pressure of EPA and others would sacrifice that crucial independence 
in meaningful ways.
---------------------------------------------------------------------------

    55. The EPA's purported guidance to this Commission illustrates 
that the real debate here is not over the minutiae of one methodology 
versus another, or whether one methodology is ``generally accepted in 
the scientific community'' and another is not,\106\ or whether one 
particular esoteric formula is purportedly required by a regulation 
issued by the CEQ \107\ and another does not meet the CEQ's directives.
---------------------------------------------------------------------------

    \106\ Cf. Vecinos, 6 F.4th at 1329.
    \107\ It has been observed that the values associated with the 
imputed social costs of GHG emissions have fluctuated dramatically 
from one administration to the next. See, e.g., Garrett S. Kral, 
What's In a Number: The Social Cost of Carbon, Geo. Envtl. L. Rev. 
Online 1 (Aug. 19, 2021) (comparing the social cost of GHG emissions 
under the Trump administration with the interim social cost under 
the Biden administration and noting ``the value of SC-GHGs have 
fluctuated. A lot.''). This degree of abrupt fluctuation--e.g., the 
social cost of carbon increasing from $7 per ton to $51 per ton--can 
only be explained by politics, not science.
---------------------------------------------------------------------------

    56. The real debate over the use of GHG analyses in certificate 
proceedings is about public policy, not law, and ultimately comes down 
to these questions: Who makes major decisions of public policy in our 
constitutional system? Legislators elected by the people or unelected 
administrative agencies or judges? Who decides? \108\
---------------------------------------------------------------------------

    \108\ NFIB, 142 S. Ct. at 667 (Gorsuch, J. Concurring). (``The 
central question we face today is: Who decides?'') (emphasis added).
---------------------------------------------------------------------------

III. Conclusions

    57. Based on the analysis above the following legal conclusions can 
be drawn:
    58. First, the Commission may not reject a certificate based solely 
on an estimate of the impacts of GHG emissions, indirect or direct. 
Nor, on the basis of such GHG estimates, may the Commission attach to a 
certificate (or coerce through deficiency letters) conditions that 
represent a de facto rejection by rendering the project financially or 
technically unfeasible.
    59. Second, the Commission can consider the direct GHG impacts of 
the specific facility for which a certificate is sought, just as it 
analyzes other direct environmental impacts of a project, and can 
attach reasonable and feasible conditions to the certificate designed 
to reduce or minimize the direct GHG impacts caused by the facility, 
just as it does with other environmental impacts.
    60. Third, the conditions the Commission can impose are, like its 
other powers, limited to the authorities granted to it by Congress and 
the purposes for which they are given. So, no, the Commission may not 
impose conditions on a certificate to mitigate upstream or downstream 
GHG emissions arising from non-jurisdictional activity.
    61. These legal conclusions do not mean that responding to climate 
change is not a compelling policy necessity for the nation. In my view 
it is, as I stated above.\109\
---------------------------------------------------------------------------

    \109\ See P 5 and n.12, supra.
---------------------------------------------------------------------------

    62. However, neither my policy views--nor those of any other member 
of this Commission--can confer additional legal authority on FERC.\110\ 
For in our democracy, it is the elected legislators who have the 
exclusive power to determine the major policies that respond to a 
global challenge such as climate change. Further, the argument that 
administrative agencies must enact policies to address major problems 
whenever Congress is too slow, too polarized, or too prone to 
unsatisfying compromises, must be utterly rejected.\111\ That is not 
how it is supposed to work in a democracy.
---------------------------------------------------------------------------

    \110\ Office of Consumers Counsel, 655 F.2d at 1142 (``an agency 
may not bootstrap itself into an area in which it has no 
jurisdiction by violating its statutory mandate'') (quoting FMC v. 
Seatrain Lines, Inc., 411 U.S. 726, 745 (1973)) (ellipsis omitted); 
see also In re MCP No. 165, 20 F.4th 264, 269 (6th Cir. 2021) 
(Sutton, C.J., dissenting) (``As the Supreme Court recently 
explained in invalidating an eviction moratorium promulgated by the 
Center for Disease Control, `our system does not permit agencies to 
act unlawfully even in pursuit of desirable ends.' Ala. Ass'n of 
Realtors, 141 S. Ct. at 2490. Shortcuts in furthering preferred 
policies, even urgent policies, rarely end well, and they always 
undermine, sometimes permanently, American vertical and horizontal 
separation of powers, the true mettle of the U.S. Constitution, the 
true long-term guardian of liberty.'') (emphasis added).
    \111\ This argument is often put forth by the legal, academic, 
and corporate elites who assume that an administrative agency will 
enact the public policies they prefer when Congress will not. Such 
an expectation is perfectly rational since these elites 
disproportionately have the resources that are most effective in 
achieving desired outcomes in the administrative process, which is 
largely an insiders' game. The body of work on the economic theory 
of regulatory capture over the past half-century is relevant to this 
topic. See generally, Susan E. Dudley, Let's Not Forget George 
Stigler's Lessons about Regulatory Capture, Regulatory Studies 
Center (May 20, 2021) (available at https://regulatorystudies.columbian.gwu.edu/let%E2%80%99s-not-forget-george-stigler%E2%80%99s-lessons-about-regulatory-capture). And it is not 
just for-profit corporate elites at work here, so are other special 
interests who seek desired policy outcomes from administrative 
action rather than from the often messy and hard democratic 
processes of seeking to persuade voters to elect members of Congress 
who agree with you. See, e.g., n. 97, supra.
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    63. For if democracy means anything at all, it means that the 
people have an inherent right to choose the legislators to whom the 
people grant the power to

[[Page 11580]]

decide the major questions of public policy that impact how the people 
live their daily lives. Unelected Federal judges and executive-branch 
administrators, no matter how enlightened they and other elites may 
regard themselves to be, do not have the power to decide such 
questions; they only have the power to carry out the duly-enacted laws 
of the United States, including the most important law of all, the 
Constitution. That is the basic constitutional framework of the United 
---------------------------------------------------------------------------
States and it is the same for any liberal democracy worth the name.

    For these reasons, I respectfully dissent.

Mark C. Christie,

Commissioner.

[FR Doc. 2022-04148 Filed 2-28-22; 8:45 am]
BILLING CODE 6717-01-P

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