Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 14104-14142 [2022-04536]

Download as PDF 14104 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices established in this policy statement in the interim. Doing so will allow the Commission to evaluate and act on pending applications under sections 3 and 7 of the NGA without undue delay and with an eye toward greater certainty and predictability for all stakeholders. DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. PL21–3–000] Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews Federal Energy Regulatory Commission. ACTION: Interim policy statement. AGENCY: This interim policy statement describes Commission procedures for evaluating climate impacts under NEPA and describes how the Commission will integrate climate considerations into its public interest determinations under the NGA. DATES: Public comments are due on or before April 4, 2022. Comments on the information collection are due May 10, 2022. ADDRESSES: Comments, identified by docket number, may be filed electronically at https://www.ferc.gov in acceptable native applications and print-to-PDF, but not in Scanned or picture format. For those unable to file electronically, comments may be filed by mail or hand-delivery to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426. The Comment Procedures section of this document contains more detailed filing procedures. FOR FURTHER INFORMATION CONTACT: Karin Larson (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502–8236, Karin.Larson@ ferc.gov Eric Tomasi (Technical Information), Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502–8097, Eric.Tomasi@ ferc.gov SUPPLEMENTARY INFORMATION: 1. The Commission is issuing this interim policy statement to explain how the Commission will assess the impacts of natural gas infrastructure projects on climate change in its reviews under the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). We seek comment on all aspects of the interim policy statement, including, in particular, on the approach to assessing the significance of the proposed project’s contribution to climate change. Although the guidance contained herein is subject to revision based on the record developed in this proceeding, we will begin applying the framework lotter on DSK11XQN23PROD with NOTICES2 SUMMARY: VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 I. Introduction 2. Climate change poses a severe threat to the nation’s security, economy, environment, and to the health of individual citizens. Human-made greenhouse gas (GHG) emissions, including carbon dioxide and methane, are the primary cause of climate change.1 GHG emissions are released in large quantities through the production, transportation, and consumption of natural gas. Accordingly, to fulfill its statutory responsibilities, it is critical that the Commission consider and document how its authorization of infrastructure projects under the NGA, particularly natural gas transportation facilities, will affect emissions of GHGs.2 3. This policy statement describes Commission procedures for evaluating climate impacts under NEPA, both those caused by a project’s contribution to climate change and the impacts of climate change on the project, and describes how the Commission will integrate climate considerations into its public interest determinations under the NGA. For purposes of assessing the appropriate level of NEPA review, Commission staff will apply the 100% utilization or ‘‘full burn’’ rate for the proposed project’s emissions to determine whether to prepare an Environmental Impact Statement (EIS) or an environmental assessment (EA). Commission staff will proceed with the preparation of an EIS, if the proposed project may result in 100,000 metric tons per year of CO2e or more.3 As further described below, the Commission believes this estimate is appropriate because it captures Commission projects that may result in incremental GHG emissions that may have a significant effect upon the 1 Intergovernmental Panel on Climate Change, United Nations, Summary for Policymakers of Climate Change 2021: The Physical Science Basis SPM–5 (Valerie Masson-Delmotte et al. eds.) (2021), https://www.ipcc.ch/report/ar6/wg1/downloads/ report/IPCC_AR6_WGI_SPM.pdf (IPCC Report). 2 See Sierra Club v. FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail) (requiring the Commission to consider the reasonably foreseeable GHG emissions resulting from natural gas projects). 3 Carbon dioxide equivalent is the combination of the emissions that contribute to climate change adjusted using each pollutant’s global warming potential. This allows the Commission to aggregate all GHG emissions into a single value that accounts for each chemical’s specific potential to trap heat in the atmosphere. PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 human environment.4 This approach is consistent with the overall goal of NEPA to require a ‘‘hard look’’ at adverse environmental impacts and assess whether those can be minimized or avoided.5 To appropriately assess possible mitigation, as further explained below, the Commission will determine a project’s reasonably foreseeable GHG emissions based on a projection of the amount of capacity that will be actually used (projected utilization rate), as opposed to assuming 100% utilization, and any other factors impacting the quantification of project emissions. The Commission’s NEPA analysis will examine any proposed measures to reduce reasonably foreseeable emissions. 4. When considering under the NGA whether a project is in the public interest, the Commission considers a project’s impacts on climate change, and, accordingly, will consider proposals by the project sponsor to mitigate all or a portion of the project’s climate change impacts, and the Commission may condition its authorization on the project sponsor further mitigating those impacts. 5. This policy statement does not establish binding rules and is intended to explain how the Commission will consider these issues when they arise.6 4 See, e.g., Grand Canyon Trust v. FAA, 290 F.3d 339, 340 (D.C. Cir. 2002) (‘‘If any ‘significant’ environmental impacts might result from the proposed agency action[,] then an EIS must be prepared before agency action is taken.’’ (quoting Sierra Club v. Peterson, 717 F.2d 1409, 1415 (D.C. Cir. 1983))); Found. for N. Am. Wild Sheep v. U.S. Dep’t of Agr., 681 F.2d 1172, 1178 (9th Cir. 1982) (‘‘If substantial questions are raised whether a project may have a significant effect upon the human environment, an EIS must be prepared.’’). 5 See 42 U.S.C. 4331(a); 4332(c). 6 Commissioner Danly’s dissent claims that today’s interim policy statement is ‘‘a substantive, binding rule that is subject to judicial review.’’ Danly Dissent at P 46. This interim document is intended to provide all interested entities with guidance as to how the Commission will approach application under NGA sections 3 and 7. It does not ‘‘impose[] an obligation, den[y] a right, or fix[] some legal relationship.’’ Reliable Automatic Sprinkler Co. v. Consumer Prod. Safety Comm’n, 324 F.3d 726, 731 (D.C. Cir. 2003). Parties that disagree with the approach outlined in the statement retain their full rights to litigate their concerns in any individual proceeding. Cf. id. (‘‘Final agency action ‘marks the consummation of the agency’s decisionmaking process’ and is ‘one by which rights or obligations have been determined, or from which legal consequences will flow.’) (quoting Bennett v. Spear, 520 U.S. 154, 178 (1997)). In addition, Commissioner Danly speculates that ‘‘no project sponsor will believe that mitigation is optional or that submitting an application exceeding the Interim Policy Statement’s 100,000 tpy threshold without a mitigation proposal would be anything other than a waste of time and money.’’ Danly Dissent PP 46–47. In response, we note only that the Commission will consider mitigation on a caseby-case basis and that we have not suggested that GHG emissions must be mitigated to insignificant levels in order for us to conclude that a proposed E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices A. GHG Emissions and Climate Change 6. Climate change is the variation in the Earth’s climate (including temperature, precipitation, humidity, wind, and other meteorological variables) over time. Climate change is driven by accumulation of GHGs in the atmosphere due to the increased consumption of fossil fuels (e.g., coal, petroleum, and natural gas) since the early beginnings of the industrial age and accelerating in the mid- to late-20th century.7 The GHGs produced by fossilfuel combustion are carbon dioxide, methane, and nitrous oxide. 7. In 2017 and 2018, the U.S. Global Change Research Program 8 issued its Climate Science Special Report: Fourth National Climate Assessment, Volumes I and II.9 This report and the recently released report by the Intergovernmental Panel on Climate Change, Climate Change 2021: The Physical Science Basis, state that climate change has resulted in a wide range of impacts across every region of the country and the globe. Those impacts extend beyond atmospheric climate change and include changes to water resources, agriculture, ecosystems, human health, and ocean systems.10 According to the Fourth Assessment Report, the United States and the world are warming, global sea level is rising and oceans are acidifying, and certain weather events are becoming more frequent and more severe.11 These impacts have accelerated throughout the end of the 20th century and into the 21st century.12 B. Council on Environmental Quality Guidance on Climate Change emissions and the climate change effects of proposed actions.20 8. In 2010, the Council on Environmental Quality (CEQ) issued its first draft guidance on how federal agencies can consider the effects of GHG emissions and climate change under NEPA.13 CEQ revised the draft guidance in 2014,14 and issued final guidance in 2016.15 Throughout the guidance’s evolution, CEQ advised agencies to quantify GHG emissions and to consider both the extent to which a proposed project’s GHG emissions would contribute to climate change and how a changing climate may impact the proposed project. The 2016 guidance, however, explicitly declined to establish a quantity or threshold of GHGs for determining whether a proposed project will have a significant impact on climate.16 9. CEQ rescinded the 2016 guidance in April 2017, as directed by Executive Order 13783 Promoting Energy Independence and Economic Growth,17 and issued revised draft guidance in June 2019.18 In January 2021, Executive Order 13990 Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis revoked Executive Order 13783 and directed CEQ to rescind the 2019 draft guidance and to review, revise, and update the 2016 guidance.19 CEQ has not yet issued an update to the 2016 guidance, but, in the interim, has directed agencies to consider all available tools and resources, including the 2016 guidance, in assessing GHG project is required by the public convenience and necessity or consistent with the public interest. 7 IPCC Report at SPM–5. Other forces contribute to climate change, such as agriculture, forest clearing, and other anthropogenically driven sources. 8 The U.S. Global Change Research Program is the leading U.S. scientific body on climate change. It comprises representatives from 13 federal departments and agencies and issues reports every 4 years that describe the state of the science relating to climate change and the effects of climate change on different regions of the United States and on various societal and environmental sectors, such as water resources, agriculture, energy use, and human health. 9 U.S. Global Change Research Program, Climate Science Special Report, Fourth National Climate Assessment | Volume I (Donald J. Wuebbles et al. eds) (2017), https://science2017.globalchange.gov/ downloads/CSSR2017_FullReport.pdf; U.S. Global Change Research Program, Fourth National Climate Assessment, Volume II Impacts, Risks, and Adaptation in the United States (David Reidmiller et al. eds.) (2018), https://nca2018.globalchange. gov/downloads/NCA4_2018_FullReport.pdf (USGCRP Report Volume II). 10 IPCC Report at SPM–5 to SPM–10. 11 USGCRP Report Volume II at 73–75. 12 See, e.g., USGCRP Report Volume II at 99 (describing accelerating flooding rates in Atlantic and Gulf Coast cities). 13 CEQ, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions (Feb. 18, 2010), https://ceq.doe.gov/ docs/ceq-regulations-and-guidance/20100218-nepaconsideration-effects-ghg-draft-guidance.pdf. 14 Revised Draft Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in NEPA Reviews, 79 FR 77802 (Dec. 24, 2014). 15 CEQ, Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews (Aug. 1, 2016), https://ceq.doe.gov/docs/ceq-regulationsand-guidance/nepa_final_ghg_guidance.pdf (2016 CEQ Guidance). 16 2016 CEQ Guidance at 9–10 (‘‘This guidance does not establish any particular quantity of GHG emissions as ‘significantly’ affecting the quality of the human environment or give greater consideration to the effects of GHG emissions and climate change over other effects on the human environment.’’). 17 Exec. Order No. 13783, 82 FR 16576 (Apr. 5, 2017). 18 Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions, 84 FR 30097 (June 26, 2019). 19 Exec. Order No. 13990, 86 FR 7037 (Jan. 20, 2021). C. Previous Commission Policy on Consideration of Climate Change Under NEPA 10. Commission staff has addressed climate change in some fashion in its NEPA documents for at least a decade.21 Commission staff’s NEPA documents have included direct GHG emission estimates from project construction (e.g., tailpipe emissions from construction equipment) and/or operation (e.g., fuel combustion at compressor stations and gas venting and leaks).22 Starting in late 2016, the Commission began to conservatively estimate indirect downstream GHG emissions by assuming full combustion of the maximum annual volume of gas that could be transported by the project.23 For indirect upstream, productionrelated GHG emissions, Commission orders during that time period relied on Department of Energy studies to calculate broad estimates.24 For upstream impacts, the Commission generally indicated that these analyses were not required by NEPA because the Commission lacked detailed information about the precise source of the gas to be transported, but provided estimates for informational purposes.25 11. In 2017, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in Sierra Club v. FERC (Sabal Trail) 26 found that downstream GHG emissions were an indirect effect of the Sabal Trail pipeline project and required the Commission to give a quantitative estimate of the downstream GHG emissions resulting from the burning of the natural gas to be II. Background lotter on DSK11XQN23PROD with NOTICES2 14105 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 20 Notice of Rescission of Draft Guidance, 86 FR 10252 (Feb. 19, 2021). 21 For details on GHG analysis in the Commission’s NEPA documents through April 2018, see Certification of New Interstate Natural Gas Facilities, 83 FR 18020, 163 FERC ¶ 61,042, at PP 44–50 (2018) (2018 NOI). 22 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). 23 See, e.g., Columbia Gas Transmission, LLC, 158 FERC ¶ 61,046, at P 120 (2017); Tex. E. Transmission, LP, 157 FERC ¶ 61,223, at P 41 (2016), reh’g granted, 161 FERC ¶ 61,226 (2017). 24 See, e.g., Columbia Gas Transmission, LLC, 158 FERC ¶ 61,046 at PP 116–119. 25 With respect to upstream emissions, the D.C. Circuit subsequently noted that the Commission does not violate NEPA in not considering upstream GHG emissions where there is no evidence to predict the number and location of additional wells that would be drilled as a result of a project. Birckhead v. FERC, 925 F.3d 510, 518 (D.C. Cir. 2019) (Birckhead). 26 867 F.3d 1357. E:\FR\FM\11MRN2.SGM 11MRN2 14106 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices transported by the pipeline or explain why the Commission could not do so, and to discuss the significance of these emissions.27 On remand, the Commission compared the estimated downstream GHG emissions from the project to state and national GHG emission inventories.28 However, the Commission concluded that it could not determine whether those downstream GHG emissions were significant and rejected the use of the Social Cost of Carbon (SCC) tool to inform the Commission’s analysis.29 12. In 2018, the Commission stated in Dominion Transmission, Inc.30 that end use consumption of gas and upstream production of gas were generally not reasonably foreseeable or causally related to the project (no party had identified the specific end use of the gas) and thus the Commission was not required to consider upstream or downstream emissions as indirect impacts under NEPA.31 The Commission stated it would continue to ‘‘analyze upstream and downstream environmental effects when those effects are sufficiently causally connected to and are reasonably foreseeable effects of the proposed action.’’ 32 The Commission reiterated that without an accepted methodology it could not find whether a particular quantity of GHG emissions was significant.33 13. However, in Birckhead, 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.34 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.35 27 Id. at 1374. Se. Connection, LLC, 164 FERC ¶ 61,099, at P 5 (2018). 29 Id. No party petitioned for judicial review of the Commission’s determination on remand. 30 163 FERC ¶ 61,128 (2018), pet. dismissed, Otsego 2000 v. FERC, 767 F.App’x 19 (D.C. Cir. 2019) (unpublished opinion). 31 Id. PP 41–44, 61–62. 32 Id. P 44; see also Tenn. Gas Pipeline Co., LLC, 163 FERC ¶ 61,190, at PP 61–62 (2018). 33 Dominion Transmission, Inc., 163 FERC ¶ 61,128 at PP 67–70. 34 Birckhead, 925 F.3d at 518–19. 35 Id. at 520. lotter on DSK11XQN23PROD with NOTICES2 28 Fla. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 14. In 2021, in Northern Natural Gas Co., the Commission explained that it had reconsidered its position that it was unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change.36 The Commission found that that project’s reasonably foreseeable GHG emissions—construction and operation emissions only, as the project proposed no new capacity—would not significantly contribute to climate change.37 Later in 2021, the D.C. Circuit further criticized the Commission’s stance prior to Northern Natural Gas Co. that it was unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change, holding that the Commission failed to appropriately analyze the significance of three natural gas projects’ contribution to climate change using ‘‘theoretical approaches or research methods generally accepted in the scientific community,’’ such as the SCC tool.38 D. Certificate Policy Statement Notices of Inquiry 15. On April 19, 2018, the Commission issued a Notice of Inquiry (2018 NOI) 39 seeking information and stakeholder perspectives to help the Commission explore whether, and if so how, it should revise its approach for determining whether proposed projects are consistent with the public convenience and necessity under the currently effective policy statement on the certification of new interstate natural gas transportation facilities (Certificate Policy Statement).40 The 2018 NOI included a background section discussing how the legal standards and historical context informed the creation of the Certificate Policy Statement in 1999, how the Commission’s evaluations under the Certificate Policy Statement and under NEPA have evolved, and how changed 36 174 FERC ¶ 61,189, at P 29 (2021). PP 29–36. 38 Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1328 (D.C. Cir. 2021) (Vecinos) (citing 40 CFR 1502.21(c), which requires an EIS to include an evaluation of impacts based upon theoretical approaches or research methods generally accepted in the scientific community where the information relevant to the reasonably foreseeable significant adverse impacts cannot be obtained because the means to obtain it are not known). The case is pending on remand with the Commission. 39 2018 NOI, 163 FERC ¶ 61,042. 40 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). The Commission must 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 NGA section 7. 15 U.S.C. 717f. 37 Id. PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 circumstances since 1999 have required the present review.41 Notably, the Commission sought input on whether, and if so how, the Commission should adjust its evaluation of the environmental impacts of a proposed project. 16. In response to the 2018 NOI, the Commission received more than 3,000 comments from stakeholders including landowners; tribal, federal, state, and local government officials; nongovernmental organizations; consultants, academic institutions, and think tanks; natural gas producers, Commission-regulated companies, local distribution companies, and industry trade organizations; electricity generators and utilities; and others. Many comments addressed GHG emissions. 17. On February 18, 2021, the Commission issued a new, refreshed Notice of Inquiry (2021 NOI),42 seeking comments to build upon the existing record established by the 2018 NOI. The Commission posed several updated questions relating to GHG emissions, including asking: How the Commission could consider upstream impacts from natural gas production and downstream end-use impacts; how the Commission should determine the significance of a project’s GHG emissions’ contribution to climate change; whether the NGA, NEPA, or another federal statute authorize or mandate the use of the SCC analysis by the Commission; how the Commission could determine whether a proposed project’s GHG emissions could be offset by reduced GHG emissions resulting from the project’s operations; and how the Commission could impose GHG emission limits or mitigation to reduce the significance of impacts from a proposed project on climate change.43 18. With respect to determining significance, the 2021 NOI sought comment on (1) what type of metrics and models the Commission should consider in determining significance, (2) whether any level of emissions should be considered de minimis, and (3) how the SCC tool or other tools could factor into determining significance.44 19. The public comment period for the 2021 NOI closed on May 26, 2021.45 The Commission received over 35,000 comments and approximately 150 41 2018 NOI, 163 FERC ¶ 61,042 at PP 5–50. of New Interstate Natural Gas Facilities, 174 FERC ¶ 61,125 (2021). 43 Id. P 17. 44 Id. (citations omitted). 45 See Notice Extending Time for Comments, Docket No. PL18–1–000 (Mar. 31, 2021) (extending the original comment deadline from April 26, 2021, to May 26, 2021). 42 Certification E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices unique comment letters from a wide range of stakeholders, as noted above. 20. Comments relevant to this policy statement are addressed in Section III below. III. Statutory Authority/Obligations A. NGA 21. 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.46 The Commission does not have authority to regulate intrastate transportation facilities or other facilities that affect interstate transportation, such as those used for the production, gathering, or local distribution of natural gas. Congress did not displace state authority over such subjects.47 22. Section 3(a) of the NGA provides for federal jurisdiction over the siting, construction, and operation of facilities used to import or export gas.48 To date, the Commission has exercised section 3 authority to authorize: (1) LNG terminals located at the site of import or export and (2) the site and facilities at the place of import/export where a pipeline crosses an international border.49 Additionally, NGA section 3(e) states that ‘‘[t]he Commission shall have the exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG terminal.’’ 50 23. Both NGA sections 7 and 3 authorize the Commission to attach terms and conditions to its 46 15 U.S.C. 717f. section 1(b) states that Commission authority applies to interstate transportation of natural gas and sales for resale, ‘‘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.’’ Id. 717(b). 48 The 1977 Department of Energy Organization Act (42 U.S.C. 7151(b)) placed all section 3 jurisdiction under the Department of Energy. The Secretary of Energy subsequently delegated authority to the Commission to ‘‘[a]pprove or disapprove the construction and operation of particular facilities, the site at which such facilities shall be located, and with respect to natural gas that involves the construction of new domestic facilities, the place of entry for imports or exit for exports.’’ Department of Energy Delegation Order No. 00– 004.00A, section 1.21A (May 16, 2006). 49 In addition to pipelines that cross the international border with Canada and Mexico, the Commission has also asserted authority over the portions of subsea pipelines planned to cross the ‘‘border’’ of the Exclusive Economic Zone between the U.S. and the Bahamas. See, e.g., Tractebel Calypso Pipeline, LLC, 106 FERC ¶ 61,273 (2004), vacated, Calypso U.S. Pipeline, LLC, 137 FERC ¶ 61,098 (2011). 50 15 U.S.C. 717b(e)(1). lotter on DSK11XQN23PROD with NOTICES2 47 NGA VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 authorization.51 Courts have interpreted these provisions broadly and given the Commission latitude in deciding what types of mitigation to require.52 In issuing authorizations, the Commission has required project sponsors to comply with conditions to prevent or mitigate project impacts on environmental resources.53 B. NEPA 24. NEPA and its implementing regulations require agencies, before taking or authorizing a major federal action that may significantly affect the quality of the human environment, to take a ‘‘hard look’’ at the environmental consequences of the proposed action and disclose their analyses to the public by preparing an EIS.54 Alternatively, agencies can first prepare an Environmental Assessment (EA) for a proposed action that is not likely to have significant effects or when the significance is unknown, to determine whether an EIS is necessary for a particular action.55 Depending on the outcome of the EA, agencies can either prepare an EIS or issue a finding of no significant impact.56 25. Previous CEQ regulations and court cases have examined a proposed project’s ‘‘context’’ and ‘‘intensity’’ or the severity of the impact as factors for determining what constitutes a significant effect.57 In assessing 51 Id. 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.’’); see also id. 717b(a) (stating that the Commission may ‘‘grant such application, in whole or in part, with such modification and upon such terms and conditions as the Commission may find necessary or appropriate’’); id. 717b(e)(3)(A) (providing the authority to approve an application for an LNG Terminal, ‘‘in whole or part, with such modifications and upon such terms and conditions as the Commission find[s] necessary or appropriate’’). 52 See Twp. of Bordentown v. FERC, 903 F.3d 234, 261 n.15 (3d Cir. 2018) (concluding that the Commission’s authority to enforce any required remediation is amply supported by provisions of the NGA); Sabal Trail, 867 F.3d at 1374 (holding that the Commission has legal authority to mitigate reasonably foreseeable indirect effects). 53 See, e.g., Atl. Coast Pipeline, LLC, 161 FERC ¶ 61,042, at app. A (2017), on reh’g, 164 FERC ¶ 61,100 (2018). 54 42 U.S.C. 4332(2)(C); 40 CFR 1502.3; see Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (discussing the twin aims of NEPA). 55 40 CFR 1501.5, 1508.1(h). 56 40 CFR 1508.1(l) (defining a finding of no significant impact as a document that briefly presents the reasons why an action that is not otherwise categorically excluded under § 1501.4 will not have a significant effect on the human environment and for which an EIS will therefore not be prepared). 57 Vieux Carre Prop. Owners, Residents & Assocs., Inc. v. Pierce, 719 F.2d 1272, 1279 (5th Cir. 1983) PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 14107 significance, Commission staff considers, for each resource, the duration of the impact as well as the geographic, biological, or social context in which the effects would occur, and the intensity (e.g. severity) of the impact.58 This analysis may draw on both qualitative and quantitative information.59 Using both types of data, the Commission routinely makes significance determinations for impacts to various resources from natural gas projects.60 26. In evaluating whether an impact is significant, the Commission determines whether ‘‘it would result in a substantial adverse change in the physical environment.’’ 61 In making that determination, the Commission considers available evidence, giving that evidence such weight as it deems appropriate using its experience, judgment, and expertise.62 Notably, (stating there is ‘‘no hard and fast definition of ‘significant’ ’’ but considering the proposed project’s context in assessing whether a finding of no significance impact was reasonable). The regulations implementing NEPA previously addressed the term ‘‘significantly,’’ but that provision was removed by amendments effective September 14, 2020 and replaced with 40 CFR 1501.3(b). ‘‘Whether a project has significant environmental impacts, thus triggering the need to produce an EIS, depends on its ‘context’ (region, locality) and ‘intensity’ (‘severity of impact’).’’ Nat’l Parks Conservation Ass’n v. Semonite, 916 F.3d 1075, 1082 (D.C. Cir.) (quoting 40 CFR 1508.27 (2018)), amended in part by 925 F.3d 500 (D.C. Cir. 2019). The new 40 CFR 1501.3(b) calls for agencies to consider the ‘‘potentially affected environment and degree of the effects of the action’’ and to consider the short-term, long-term, beneficial, and adverse effects, and effects on public safety and those that would violate laws. 58 See, e.g. Final EIS for the Alaska LNG Project, Docket No. CP17–178–000, at 4–1. 59 See Sabal Trail, 867 F.3d at 1371 (‘‘The EIS also gave the public and agency decisionmakers the qualitative and quantitative tools they needed to make an informed choice for themselves. NEPA requires nothing more.’’). 60 See, e.g., Transcon. Gas Pipe Line Co., LLC, 158 FERC ¶ 61,125, at P 79 (describing how the final EIS for the Atlantic Sunrise Project concluded that the project would result in adverse impacts that would be mitigated to less than significant levels), order on reh’g, 161 FERC ¶ 61,250 (2017), petition denied sub nom., Allegheny Def. Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020); see also infra note 61; see also Magnum Gas Storage, LLC, 134 FERC ¶ 61,197, at P 115 (2011) (explaining that ‘‘‘significantly,’ as used in NEPA, requires considerations of both context and intensity, which varies with the setting of each proposed action.’’). 61 N. Nat. Gas Co., 174 FERC ¶ 61,189, at P 32 (citing Magnum Gas Storage, LLC, 134 FERC ¶ 61,197 at P 114 (‘‘[A]n impact was considered to be significant if it would result in a substantial adverse change in the physical environment or natural condition and could not be mitigated to less-than-significant level.’’)). 62 See, e.g., Tex. LNG Brownsville LLC, 169 FERC ¶ 61,130, at P 56 (2019) (‘‘Due to the relatively undeveloped nature of the project area, the visual sensitivity of nearby recreation areas, and the lack of feasible visual screening measures, the Final EIS concluded that the project would result in a E:\FR\FM\11MRN2.SGM Continued 11MRN2 14108 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 NEPA does not require that the studies, metrics, and models on which an agency relies be universally accepted or otherwise uncontested.63 Instead, NEPA permits agencies to rely on the best available evidence, quantitative and qualitative, even where that evidence has certain limitations when assessing the significance of their actions,64 and an agency’s determination is entitled to deference.65 27. In addition to determining whether its actions may significantly affect the quality of the human environment, NEPA requires the Commission to consider whether there are steps that could be taken to mitigate any adverse environmental consequences.66 While NEPA is a procedural statute and does not require a federal agency to reject a proposed project with significant adverse effects or take action to mitigate adverse effects,67 an agency may require mitigation of impacts as a condition of significant impact on visual resources when viewed from the adjacent Laguna Atascosa National Wildlife Refuge.’’), order on reh’g, 170 FERC ¶ 61,139, at P 32 (2020), remanded on other grounds, Vecinos, 6 F.4th 1321; Final EIS for the Alaska LNG Project, Docket No. CP17–178–000, at ES–4 (Mar. 2020) (explaining the significant, longterm to permanent project impacts from the loss of thousands of acres of permafrost from construction that would permanently alter hydrology and vegetation within and past the project footprint). 63 Sierra Club v. U.S. Dep’t of Transp., 753 F.2d 120, 128 (D.C. Cir. 1985) (‘‘It is clearly within the expertise and discretion of the agency to determine proper testing methods.’’); see also Hughes River Watershed Conservancy v. Johnson, 165 F.3d 283, 289 (4th Cir. 1999) (‘‘Agencies are entitled to select their own methodology as long as that methodology is reasonable. The reviewing court must give deference to an agency’s decision.’’). 64 See Spiller v. White, 352 F.3d 235, 244 n.5 (5th Cir. 2003) (rejecting petitioner’s contention that the significance determination must be objective, factual, and quantitative and should not involve any qualitative judgment calls). 65 See La. Crawfish Producers Ass’n-W. v. Rowan, 463 F.3d 352, 355 (5th Cir. 2006) (NEPA-related decisions are accorded a considerable degree of deference); Spiller v. White, 352 F.3d at 244 n.5 (‘‘We should note that our deference to the [l]ead [a]gencies[’] fact-finding and conclusions includes deference to their judgment as to whether any particular environmental impact of the proposed pipeline rises to the level of significance’’); Powder River Basin Res. Council v. U.S. Bureau of Land Mgmt., 37 F.Supp. 3d 59, 74 (D.D.C. 2014) (agencies are afforded discretion to use their expertise to determine the best method to evaluate the significance of an impact to a particular resource, so long as that method is reasonable). 66 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 351 (1989) (‘‘To be sure, one important ingredient of an EIS is the discussion of steps that can be taken to mitigate adverse environmental consequences.’’). 67 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.’’). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 its permitting or approval,68 and the Commission routinely does so.69 IV. Discussion A. Quantifying GHG Emissions and Determining Significance 28. Consistent with CEQ regulations,70 the Commission will quantify a project’s GHG emissions that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action, including those effects that occur at the same time and place as the proposed action and effects that are later in time or farther removed in distance from the proposed action. This will include GHG emissions resulting from construction and operation of the project 71 as well as, in most cases, GHG emissions resulting from the downstream combustion of transported gas.72 29. The Commission will consider all evidence in the record relating to a project’s estimated GHG emissions,73 utilization rate, or offsets: Estimates presented by project sponsors, as well as opposing evidence from other parties. Going forward, in determining the level of GHG emissions attributed to a project, the Commission will estimate a project’s GHG emissions based on a projection of what amount of project capacity will be actually used (projected utilization rate), as opposed to assuming 100% 68 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). 69 See, e.g., Columbia Gas Transmission, LLC, 170 FERC ¶ 61,045, at P 66, app. (2020) (conditioning certificate authority on site-specific mitigation measures when crossing abandoned mine lands, including the management and disposal of contaminated groundwater, and mitigation measures for acid mine drainage); PennEast Pipeline Co., LLC, 170 FERC ¶ 61,198, at PP 29–30, app. A (2020) (conditioning certificate authority on mitigation of construction impacts on karst features); Atl. Coast Pipeline, LLC, 161 FERC ¶ 61,042 at app. A (conditioning certificate authority on the mitigation of construction impacts on karst features and on a nearby inn and mitigation of impacts from the discovery of invasive aquatic species during construction); Port Arthur LNG, LP, 115 FERC ¶ 61,344, at PP 68–71, app. A (conditioning sections 3 and 7 authority on the mitigation of construction impacts on aquatic resources and wetlands), order on reh’g, 117 FERC ¶ 61,213 (2006), vacated, 136 FERC ¶ 61,196 (2011). 70 40 CFR 1508.1(g) (defining the effects or impacts that must be considered when conducting a review under NEPA). 71 Emissions quantification also includes loss of carbon storage/sinks through land use conversions, forest clearing, wetland conversions, etc. 72 As discussed below, the vast majority of all natural gas consumed in the United States is combusted. See infra note 101. 73 Additionally, the Commission will consider evidence regarding whether certain emissions associated with a proposed project, such as upstream and downstream emissions, are reasonably foreseeable. PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 utilization.74 The Commission will also consider evidence of factors expected to reduce or offset the estimated direct or reasonably foreseeable downstream emissions of the project. 1. Categories of Emissions 30. CEQ regulations implementing NEPA require agencies to consider effects or impacts that ‘‘are reasonably foreseeable and have a reasonably close causal relationship to the proposed action . . . including those effects that occur at the same time and place as the proposed action . . . and may include effects that are later in time or farther removed in distance for the proposed action . . . .’’ 75 A ‘‘but for’’ causal relationship is insufficient to make an agency responsible for a particular effect,76 and effects should not be considered if they are the ‘‘product of a lengthy causal chain.’’ 77 Further, effects to be considered do not include those that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.78 Regarding reasonable foreseeability, courts have found that an impact is reasonably foreseeable if it is ‘‘sufficiently likely to occur that a person of ordinary prudence would take it into account in reaching a decision.’’ 79 Although courts have held that NEPA requires ‘‘reasonable forecasting,’’ 80 an agency ‘‘is not required to engage in speculative analysis’’ 81 or ‘‘to do the impractical, if 74 See Certification of New Interstate Natural Gas Pipeline Facilities, 178 FERC ¶ 61,107, at P 55 (2022) (explaining that project sponsors are encouraged to provide the Commission with information on estimated utilization rates and the intended end use of gas to demonstrate project need). 75 40 CFR 1508.1(g). 76 Id. § 1508.1(g)(2); see also U.S. Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Pub. Citizen) (finding that ‘‘NEPA requires ‘a reasonably close causal relationship’ between the environmental effect and the alleged cause’’ in order ‘‘to make an agency responsible for a particular effect under NEPA’’ (quoting Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 (1983) (Metro. Edison Co.))). 77 40 CFR 1508.1(g)(2); see also Metro. Edison Co., 460 U.S. at 774 (finding that ‘‘[s]ome effects that are ‘caused by’ a change in the physical environment in the sense of ‘but for’ causation,’’ will not fall within NEPA if ‘‘the causal chain is too attenuated’’). 78 40 CFR 1508.1(g)(2); see also Pub. Citizen, 541 U.S. at 770 (‘‘[W]here an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant ‘cause’ of the effect.’’). 79 EarthReports, Inc. v. FERC, 828 F.3d 949, 955 (DC Cir. 2016) (citations omitted); see also Sierra Club v. Marsh, 976 F.2d 763, 767 (1st Cir. 1992). 80 N. Plains Res. Council, Inc. v. Surface Transp. Bd., 668 F.3d 1067, 1079 (9th Cir. 2011) (quoting Selkirk Conservation All. v. Forsgren, 336 F.3d 944, 962 (9th Cir. 2003)). 81 Id. at 1078. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices not enough information is available to permit meaningful consideration.’’ 82 31. As discussed below, the Commission proposes to: • Consider direct emissions of a project a reasonably foreseeable effect; • Find that an NGA section 3 export facility project is not the legally relevant cause of upstream and downstream emissions; 83 • Consider on a case-by-case basis whether downstream emissions are a reasonably foreseeable effect of an NGA section 7 interstate project; and • Consider on a case-by-case basis whether upstream emissions are a reasonably foreseeable effect of an NGA 7 project. a. Direct Emissions lotter on DSK11XQN23PROD with NOTICES2 32. Several commenters assert that the Commission must consider fugitive emissions from the transportation of gas.84 New Jersey Conservation Foundation, Sabin Center for Climate Change Law (Sabin Center), The Watershed Institute, Clean Air Council, PennFuture, and New Jersey League of Conservation Voters (collectively, New Jersey Conservation Foundation) argue that natural gas leakage from both pipeline operation and natural gas production is worse than combustion because methane has a higher global warming potential than carbon dioxide.85 33. As the Commission has long held, direct GHG emissions from the project’s short-term construction 86 and long-term operational activities 87 are an effect of the proposed project. Under current Commission regulations, the project sponsor provides an estimate of construction emissions and an estimate of the project’s potential operational emissions, including fugitive emissions from both pipeline and aboveground facilities, in its application for Commission authorization.88 82 Id. (quoting Envtl. Prot. Info. Ctr. v. U.S. Forest Serv., 451 F.3d 1005, 1014 (9th Cir. 2006)). 83 EarthReports, Inc. v. FERC, 828 F.3d at 955 (citing Sierra Club v. FERC, 827 F.3d 36, 47, 59, 68 (D.C. Cir. 2016) (Freeport). 84 See, e.g., Egan Millard 2021 Comments at 3; New Jersey Conservation Foundation 2021 Comments at 21; Shayna Gleason 2021 Comments at 2. 85 New Jersey Conservation Foundation 2021 Comments at 21. 86 Construction emissions include emissions from gasoline- and diesel-powered construction equipment. 87 Operational emissions include emissions from combustion units at compressor stations and fugitive leaks from compressor stations, meter/valve stations, and the pipeline. 88 The project sponsor provides emissions information in Resource Report No. 9. 18 CFR 380.12(k). Operational emissions are also estimated in the project’s air permit application, which is VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 b. Downstream Emissions 34. Some commenters argue that the Commission must consider the downstream emissions of natural gas projects,89 including fugitive emissions.90 In contrast, other commenters generally assert that the Commission should not consider downstream emissions, or at most, should only do a qualitative assessment of downstream emissions, because they are not reasonably foreseeable impacts or do not have a close causal relationship under NEPA to gas transportation.91 35. As discussed above, in August 2017, the D.C. Circuit issued Sabal Trail, which involved a greenfield pipeline project that would deliver all gas transported by the project to specific gas-fired generating plants. The D.C. Circuit found that downstream emissions from the use of the transported natural gas were an indirect, reasonably foreseeable effect of the proposed pipeline and that in the circumstances of that case—where the vast majority of throughput on the proposed project was destined for a limited number of specifically identified electric generation facilities—the downstream GHG emissions could be reasonably quantified by the Commission.92 typically submitted to the state agency with delegated Clean Air Act authority. Further, the Commission’s guidance manual for NGA certificate applications instructs project sponsors to provide the GHGs in tons per year for the construction and operation of the proposed project. See Guidance Manual for Environmental Report Preparation for Applications Filed under the NGA, Volume I, at 4– 123, 4–125 to 4–127 (Guidance Manual). 89 See, e.g., Food and Water Watch 2021 Comments at 1; New Jersey Conservation Foundation 2021 Comments at 19; Attorneys General of Massachusetts, Illinois, Maryland, New Jersey, Rhode Island, Washington, and the District of Columbia (Attorneys General of Massachusetts et al.) 2018 Comments at 12–17. 90 For example, the Massachusetts PipeLine Awareness Network states that the Commission should consider fugitive emissions from the distribution and burning of transported gas. Massachusetts PipeLine Awareness Network 2021 Comments at 2; see also, e.g., Egan Millard 2021 Comments at 3; Shayna Gleason 2021 Comments at 2. 91 See, e.g., American Petroleum Institute (API) Technical Conference Comments at 3–5 (stating the Commission and developers cannot accurately forecast downstream emissions due to lack of knowledge of the end use of the gas, variability in utilization rates and regulatory requirements, and unpredictable changes in supply and demand, among other factors); Boardwalk Pipeline Partners LP (Boardwalk) Technical Conference Comments at 21; Enbridge Gas Pipelines (Enbridge) Technical Conference Comments at 11, 25–26; Interstate Natural Gas Association of America (INGAA) 2021 Comments at 58–60; The Williams Companies, Inc. (Williams) 2021 Comments at 37–38; Natural Gas Supply Association (NGSA) 2018 Comments at 15– 16. 92 The court concluded ‘‘that the EIS for the Southeast Market Project should have either given PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 14109 36. The D.C. Circuit reiterated this determination in two subsequent cases. First, in Birckhead, the court rejected the claim that downstream emissions are only a foreseeable effect in factual circumstances akin to Sabal Trail, i.e., where all transported gas will be burned at specifically identified destinations, but also rejected the argument that downstream emissions are always a foreseeable effect of a natural gas certificate project.93 Then, in Allegheny Defense Project v. FERC,94 the court stated that the downstream emissions of a project designed to deliver gas into large interstate pipeline systems, which in turn deliver gas to 16 states, are an indirect effect of the project.95 37. INGAA and others read the Supreme Court’s Public Citizen decision as requiring an agency to consider an environmental effect only when the agency has the authority to control the outcome and note that the Commission has no authority to regulate the end use (or production) of natural gas.96 INGAA states that attempting to regulate downstream (or upstream) activities would invade the jurisdiction of other regulators, that most projects will not result in reasonably foreseeable downstream GHG emissions like those in Sabal Trail, and thus, downstream emissions should only be considered on a case-by-case basis.97 INGAA suggests the Commission look for guidance to Center for Biological Diversity v. U.S. Army Corps of Engineers,98 which criticizes Sabal Trail as ‘‘breezing past . . . statutory limits and precedents . . . clarifying what effects are cognizable under NEPA.’’ 99 38. Given that data show that the vast majority of consumed gas is ultimately combusted,100 there appears to be a a quantitative estimate of the downstream greenhouse emissions that will result from burning the natural gas that the pipelines will transport or explained more specifically why it could not have done so.’’ Sabal Trail, 867 F.3d at 1374. 93 Birckhead, 925 F.3d at 518–20 (criticizing the Commission for not attempting to obtain data on downstream uses). 94 932 F.3d 940 (DC Cir. 2019). 95 Id. at 945–46. 96 See, e.g., INGAA 2021 Comments at 50–51. 97 INGAA 2021 Comments at 49–51, 57; see also INGAA Technical Conference Comments at 14 (adding that NEPA’s requirements would exclude downstream emissions occurring after a ‘‘long and attenuated chain of intermediate causal factors, as when natural gas is transported to an interconnect for further shipment on the interstate grid, eventually reaching end-use consumers only through a long intermediate path’’). 98 941 F.3d 1288 (11th Cir. 2019) (Center for Biological Diversity). 99 Id. at 1300 (citing Pub. Citizen, 541 U.S. 752 and Metro. Edison Co., 460 U.S. 766). 100 U.S. Energy Info. Admin., December 2021 Monthly Energy Review 24, 101 (2021) (reporting E:\FR\FM\11MRN2.SGM Continued 11MRN2 14110 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 substantial likelihood of GHG emissions from the end-use combustion of transported gas as a result of a natural gas project proposed under NGA section 7.101 However, as contemplated by the court in Birckhead, there may be circumstances where downstream emissions are not a foreseeable effect of an authorized project, and the court stated that each project must be analyzed on a case-by-case basis.102 Accordingly, project sponsors may submit any evidence they believe indicates that downstream emissions are not a reasonably foreseeable effect of a proposed project. 39. We disagree with commenters’ assertions that Public Citizen prohibits the Commission from considering downstream GHG emissions. The question is not whether the Commission has regulatory authority over downstream emissions. Rather, as the Sabal Trail court reasoned in applying Public Citizen, the Commission ‘‘has no obligation to gather or consider environmental information [only] if it has no statutory authority to act on that information.’’ 103 Because the Commission can reject a section 7 certificate based on the project’s environmental impacts, including GHG emissions, the court held that the Commission was required to consider downstream emissions resulting from the Sabal Trail project’s construction.104 For section 7 projects—unlike section 3 projects, described below—there is no independent decision, such as the DOE authorization critical in Freeport, to ‘‘break the NEPA causal’’ chain.105 Accordingly, the Commission’s authorization for section 7 projects is a ‘‘legally relevant cause’’ of the emissions, meeting Public Citizen’s direction that ‘‘NEPA requires ‘a reasonably close causal relationship’ between the environmental effect and the alleged cause,’’ analogous to the that, in 2020, 1,036 Bcf of natural gas had a noncombustion use compared to 30,476 Bcf of total consumption), https://www.eia.gov/totalenergy/ data/monthly/pdf/mer.pdf; see also Jayni Hein et al., Institute for Policy Integrity, Pipeline Approvals and Greenhouse Gas Emissions 25 (2019) (explaining that, in 2017, 97% of all natural gas consumed was combusted). 101 See Birckhead, 925 F.3d at 518; Sabal Trail, 867 F.3d at 1371–72. 102 Birckhead, 925 F.3d at 518–19 (rejecting, in dicta, that downstream emissions are always a foreseeable effect of a proposed certificate project). 103 Sabal Trail, 867 F.3d at 1372–73 (emphasis in original) (explaining Pub. Citizen, 541 U.S. 752). 104 See id. at 1373 (‘‘Because FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment, the agency is a ‘legally relevant cause’ of the direct and indirect environmental effects of pipelines it approves.’’ (quoting Freeport, 827 F.3d at 47). 105 Freeport, 827 F.3d at 47. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 ‘‘familiar doctrine of proximate cause from tort law.’’ 106 40. The Commission finds this and subsequent direction from the D.C. Circuit more instructive than Center for Biological Diversity, which determined that a specific effect was too tenuous to be considered in analysis of a U.S. Army Corps of Engineers discharge permit for mining activities under the Clean Water Act.107 41. However, for proposed export projects under NGA section 3, the Commission will not consider downstream GHG emissions an effect requiring analysis under NEPA regulations. The Department of Energy, not the Commission, has sole authority to license and consider the environmental impacts of the export of any natural gas.108 As courts have explained, the Commission need not consider the effects of downstream transportation, consumption, or combustion of exported gas because the Department of Energy’s ‘‘independent decision to allow exports . . . breaks the NEPA causal chain and absolves the Commission of responsibility to include [these considerations] in its NEPA analysis.’’ 109 c. Upstream Emissions 42. Some commenters state that the Commission must consider the upstream GHG emissions of natural gas projects, including fugitive emissions from production,110 to assess the project’s total impact on climate change.111 Other commenters argue that 106 Pub. Citizen, 541 U.S. at 767 (quoting Metro. Edison Co., 460 U.S. at 774). 107 See Center for Biological Diversity, 941 F.3d at 1292 (describing whether the U.S. Army Corps of Engineers legally declined to address, in issuing discharge permits for phosphate mining, the effects of a radioactive byproduct of fertilizer production (phosphogypsum), where the phosphogypsum is neither a byproduct of dredging and filling or phosphate mining or beneficiation). The court criticized the reasoning in Sabal Trail but also observed that the ‘‘causal relationship between the agency action and the putative downstream effect was much closer [in Sabal Trail] than it is here’’ and that the Commission’s scope of statutory authority is ‘‘much broader’’ than that of the U.S. Army Corps of Engineers. Id. at 1299–1300. 108 Freeport, 827 F.3d at 47 (holding that the Commission does not have to address the indirect effects of the anticipated export of natural gas because the Department of Energy, not the Commission, has sole authority to license and consider the environmental impacts of the export of any natural gas going through LNG facilities); Freeport, 827 F.3d at 62–63 (same); EarthReports, Inc. v. FERC, 828 F.3d at 956 (same); Sabal Trail, 867 F.3d at 1372 (explaining Freeport). 109 Freeport, 827 F.3d at 48. 110 See, e.g., Egan Millard 2021 Comments at 3; Shayna Gleason 2021 Comments at 2. 111 See, e.g., Institute for Policy Integrity at New York University School of Law (Policy Integrity) Technical Conference Comments at 17; Food and Water Watch 2021 Comments at 1; New Jersey Conservation Foundation 2021 Comments at 19. PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 upstream emissions are not a reasonably foreseeable effect of a natural gas transportation project, and therefore should not be considered by the Commission.112 Some commenters focus on how to obtain sufficient information to account for upstream GHG emissions. For example, EPA recommends that the Commission require project sponsors to provide available information on reasonably foreseeable induced production demand. EPA states that environmental documents under NEPA should disclose this information as well as items such as the proposal’s regionally known hydrocarbon accumulations and a decline curve analysis to allow for appropriate regional and local impact analysis.113 43. In various NGA section 7 proceedings, the Commission has considered upstream emissions on a case-by-case basis—sometimes acknowledging it is difficult to quantify upstream emissions due to several unknown factors, including the location of the supply source and whether transported gas will come from new or existing production.114 The Commission will continue to consider on a case-bycase basis whether the environmental effects resulting from natural gas production are either likely caused by a proposed NGA section 7 project or reasonably foreseeable consequences of our approval of such projects. To the extent known, project sponsors are encouraged to submit information on the reasonably foreseeable upstream impacts caused by the project or an explanation as to why there are none for Commission consideration. 2. Calculating GHG Emissions 44. To calculate operational emissions, project sponsors should continue to follow the existing guidance outlined in section 4.9.1.3 of the Commission’s Guidance Manual for Environmental Report Preparation for 112 See, e.g., Boardwalk Technical Conference Comments at 21; Enbridge Technical Conference Comments at 11, 25–26; TC Energy Corporation (TC Energy) Technical Conference Comments at 5; Williams Technical Conference Comments at 4; INGAA 2021 Comments at 56–57; Williams 2021 Comments at 37–38. 113 EPA 2021 Comments at 5. 114 See Birckhead, 925 F.3d at 516–18. See, e.g., Double E Pipeline, LLC, 173 FERC ¶ 61,074, at P 97 (2020); Cent. N.Y. Oil & Gas Co., LLC, 137 FERC ¶ 61,121, at PP 81–101 (2011), order on reh’g, 138 FERC ¶ 61,104, at PP 33–49 (2012), petition for review dismissed sub nom., Coal. for Responsible Growth v. FERC, 485 F.App’x 472, 474–75 (2d Cir. 2012) (unpublished opinion); see also Adelphia Gateway, LLC, 169 FERC ¶ 61,220, at P 243 (2019), order on reh’g, 171 FERC ¶ 61,049, at P 89 (2020). E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 Applications Filed under the NGA.115 However, under this policy statement, for purposes of assessing the impact of a project’s GHG emissions on climate change, the Commission will consider operational GHG emissions calculated based on a projected utilization rate for the project, as described below.116 45. Additionally, the Commission recognizes that there may be other factors that might serve to reduce a proposed project’s climate impacts. For example, the installation of emissionreduction technology or purchase of offsets by downstream users would reduce the impacts. Thus, to enable the Commission’s use of the best estimate of a project’s GHG emissions, project sponsors are encouraged to calculate project GHG emissions using a projected utilization rate and submit evidence of any other factors that might impact a project’s net emissions such as the factors identified by commenters below. 46. Commenters recommend that the Commission consider factors that might impact a project’s net emissions, such as (1) whether the transported gas will phase out use of a more carbonintensive energy source, like coal or fuel oil, and will prevent the use of more carbon-intensive energy sources in the future; (2) whether the pipeline will transport gas that would otherwise be transported by vehicles, thereby reducing the emissions from transporting the gas; (3) whether the proposed project will transport gas volumes that would have otherwise been delivered to the same consumers through a different pipeline or may ultimately end up transporting fuel blends including renewable natural gas or hydrogen; (4) whether the project sponsor will purchase offsets to counter project emissions; or (5) whether the project may be backed by a local distribution company serving customer demand in states with established emissions caps.117 INGAA states that in 115 We note that thresholds for Clean Air Act and state air permits are typically based on the regulated source’s potential to emit, or the maximum capacity of a stationary source to emit any air pollutant under its physical and operational design, rather than its actual emissions, and that air permits themselves are expressed in potential to emit. See 40 CFR 70.2. This policy statement does not apply to any other air pollutants than GHGs. For all other air pollutants, we will continue to evaluate a project’s air quality impacts based on its potential to emit. 116 See infra section III.A.2.a. 117 See, e.g., American Gas Association (AGA) Technical Conference Comments at 28, 40; API Technical Conference Comments at 3; Boardwalk Technical Conference Comments at 23 (stating that the Commission should rely on local distribution companies’ air permits to determine GHG emissions); Enbridge Technical Conference Comments at 31–34; Hon. Joseph T. Kelliher Technical Conference Comments at 5–6 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 the absence of reliable and verifiable predictive models to the contrary, the requirement of reasonable foreseeability arguably dictates that the Commission cannot adopt any default assumption that a natural gas infrastructure project will increase (rather than decrease, or leave unchanged) net global GHG emissions, and that at minimum, the Commission would have to provide a rational justification for any such assumption.118 By contrast, New Jersey Conservation Foundation and others contend that the Commission should consider whether the project may be displacing renewable energy sources, thereby increasing GHG emissions.119 47. INGAA and other commenters strongly urge the Commission to calculate a project’s downstream emissions, if at all, based on the likely utilization rate of the proposed project, instead of relying on a full-burn estimate.120 (Commissioner Kelliher, Principal at Three Acorns, was a panelist at the GHG Technical Conference on Panel 1.); INGAA Technical Conference Comments at 17–18 (suggesting the net emissions analysis must be undertaken on a global level); Kinder Morgan Entities (Kinder Morgan) Technical Conference Comments at 12–15; National Grid Gas Companies Technical Conference Comments at 3– 7 (describing the Distributed Infrastructure Solution that it has developed in coordination with the State of New York); Williams Technical Conference Comments at 7–8; Charles River Associates 2021 Comments at 4–5; Ohio Environmental Council 2021 Comments at 3. See Environmental Assessment for the Iroquois Gas Transmission System, L.P. (Iroquois) Enhancement by Compression Project, Docket No. CP20–48–000, at B–110 (Sept. 30, 2020) (citing Iroquois’ end-use GHG analysis that projected greater GHG emissions if the project was not built under scenarios where the energy needs of all new buildings are met by fuel oil as opposed to gas supplied by the project). One industrial end user expresses concern about the potential of integrating renewable natural gas due to concerns about pipeline integrity or increased costs. American Forest and Paper Association and Process Gas Consumers Group (collectively, American Forest) Technical Conference Comments at 13–14. 118 INGAA Technical Conference Comments at 19. 119 See, e.g., New Jersey Conservation Foundation 2021 Comments at 23. 120 See, e.g., Enbridge Technical Conference Comments at 12, 29–30; Hon. Joseph T. Kelliher Technical Conference Comments at 5–6; INGAA Technical Conference Comments at 15–16 (describing an analysis it commissioned concluding that in 2020, the maximum utilization on an average annual basis for any of the pipeline ‘‘corridors’’ between different regions is not higher than 65% and it is over 50% only for 7 of the 30 regional corridors); TC Energy Technical Conference Comments at 18; Charles River Associates 2021 Comments at 6; INGAA 2021 Comments at 58; see also Boardwalk Technical Conference Comments at 3, 23; Williams Technical Conference Comments at 7. API, on the other hand, asserts that use of utilization estimates or emissions data forces the Commission to pick winners among competing pipeline projects and asserts that such decisions are best made by market forces after the Commission authorizes a project. API Technical Conference Comments at 3–4. PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 14111 48. Conversely, New Jersey Conservation Foundation and others argue the Commission must calculate direct, downstream, and upstream GHG emissions by assuming the maximum authorized operating conditions, unless, some add, the project sponsor can demonstrate otherwise.121 Further, other commenters propose their own methods of how to calculate the downstream emissions of a proposed project.122 New Jersey Conservation Foundation urges the Commission to recommend or require the use of specified emissions factors to calculate project emissions.123 Some commenters argue that the Commission must, beyond asking project sponsors, require certain information to be provided, conduct independent research, or otherwise compile missing information.124 Dr. Susan F. Tierney states that the Commission should articulate a default methodology, set of assumptions, and sources of data (suggesting multiple sources including data from the U.S. Department of Energy’s National Energy Technology Laboratory’s 2019 life-cycle estimates of GHG emissions for the natural gas supply chain) to establish a default maximum emissions rate, which could then be supplemented by an applicant’s own estimate or an intervenor’s alternative estimate.125 a. Projected Utilization Rate 49. In previous environmental documents and certificate orders, the Commission has disclosed a project’s operational emissions 126 and estimates 121 See, e.g., New Jersey Conservation Foundation 2021 Comments at 21–22; Public Interest Organizations 2018 Comments at 91; Washington State Department of Commerce and Washington State Department of Ecology 2018 Comments at 6. Public Interest Organizations’ 2018 comments represent 63 entities including Natural Resources Defense Council. 122 See, e.g., Charles River Associates 2021 Comments at 6–8 (proposing a regional analysis to estimate downstream emissions of a gas project). 123 New Jersey Conservation Foundation 2021 Comments at 22. 124 See, e.g., Berkshire Environmental Action Team 2021 Comments at 3; North Carolina Department of Environmental Quality 2018 Comments at 5–8. 125 Dr. Susan F. Tierney, Senior Advisor with the Analysis Group, Inc., was a panelist at the GHG Technical Conference on Panel 1. Dr. Susan F. Tierney Technical Conference Statement at 4–10. The applicant could supplement its estimate with an alternative estimate, and intervenors could also submit estimates. 126 See Environmental Assessment for the Lake City 1st Branch Line Abandonment and Capacity Replacement Project, Docket No. CP20–504–000, at 51–53 (Feb. 2021); see also 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, E:\FR\FM\11MRN2.SGM Continued 11MRN2 14112 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices of downstream emissions 127 by assuming a 100% utilization rate estimate of the project (e.g., the maximum capacity is transported 365 days per year, 24 hours a day and fully combusted downstream). This represents the maximum potential downstream GHG emissions. However, most projects do not operate at 100% utilization at all times. In fact, many projects are designed to address peak demand. For example, traditionally, in the Northeast, demand for gas is highest in the winter months, resulting in high utilization rates during those months due to heating needs, but lower in the summer, resulting in low annual utilization rates.128 50. Because in most instances a 100% utilization rate estimate does not accurately capture the project’s climate impacts, estimated emissions that reflect a projected utilization rate will provide more useful information. The project’s projected utilization rate may be calculated using, for example: • Expected utilization data from project shippers; • Historical usage data; 129 • Demand projections; • An estimate of how much capacity will be used on an interruptible basis. 51. The project sponsor is encouraged to file its projected utilization rate, as well as its justification for the rate and any supporting evidence, in its application for authorization under NGA section 3 or 7. The Commission will also consider evidence submitted by commenters and protesters in support of or opposition to the projected utilization rate. b. Other Evidence Considered lotter on DSK11XQN23PROD with NOTICES2 52. Further, the Commission will consider any other evidence in the record that impacts the quantification of the project’s reasonably foreseeable emissions. For example, the Commission will consider: Evidence of a net-reduction in GHG emissions where the use of transported gas displaces the use of a higher emitting alternative fuel; 130 evidence of anticipated changes Docket No. CP11–515–000, at 29 (Feb. 29, 2012) (operation emissions). 127 See Atl. Coast Pipeline, LLC, 161 FERC ¶ 61,042 at P 305. 128 Some commenters point out that daily pipeline load factors vary significantly based on seasonal trends. See, e.g., Charles River Associates 2021 Comments at 3; Williams 2021 Comments at 46. 129 We note that for a greenfield pipeline project, historic data will not be available. In those cases, the project sponsor could use data from other similar projects or regional data. 130 For instance, in a downstream end-use analysis, Iroquois projected that its Enhancement by Compression project could result in net GHG VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 in downstream usage rates over time; evidence of any real, verifiable, and measurable reduction efforts taken by the pipeline or downstream users to reduce their GHG emissions or offset their impacts; 131 and evidence that a project would displace zero-emissions electric generation. Further, other agencies, notably the EPA, have proposed regulations that may impact the emission of methane from Commission-regulated facilities.132 If such regulations are adopted, the Commission will consider them when examining project GHG emissions. Similarly, the Commission will consider evidence from commenters and protestors supporting or challenging such estimates and assumptions. B. Level of Review and Significance 53. Under NEPA, an agency must prepare an EIS for every ‘‘major [f]ederal action[ ] significantly affecting the quality of the human environment.’’ 133 To determine whether an EIS is necessary for a particular action, the agency may prepare an EA,134 described as a ‘‘concise public document’’ providing ‘‘sufficient evidence and analysis,’’ to determine whether to prepare an EIS or issue a finding of no significant impact.135 54. To assess significance, the Commission determines whether the impact ‘‘would result in a substantial adverse change in the physical environment,’’ 136 which, as discussed, reductions when considering the alternative fuel that may be used (e.g., fuel oil for heating) by the end use customer in the event that gas is not available. Iroquois Gas Transmission, LP, Downstream GHG Report, Docket No. CP20–48–000 (filed May 19, 2020). 131 For example, the Commission may consider evidence that a downstream user purchases credits to offset its GHG emissions from the consumption of transported gas. The Commission will consider downstream user’s mitigation measures according to the criteria outlined in infra section III.C.3 for applicant-proposed mitigation measures. With regards to construction and operational emissions, project sponsors should continue to provide evidence of measures that minimize emissions, such as using low-sulfur diesel fuel and limiting equipment idling during construction, as outlined in the Guidance Manual. Guidance Manual at 4– 124. However, as described supra section III.A.2.a, operational emissions should now be calculated based on the project’s projected utilization rate. 132 See, e.g., Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 63,110 (Nov. 15, 2020). 133 42 U.S.C. 4332(C); 40 CFR 1502.3. 134 40 CFR 1501.5, 1508.1(h). 135 See 40 CFR 1501.3, 1501.5, 1501.6, 1508.1(h), (l). 136 See Magnum Gas Storage, LLC, 134 FERC ¶ 61,197 at P 114 (‘‘[A]n impact was considered to be significant if it would result in a substantial adverse change in the physical environment or natural condition and could not be mitigated to less-than-significant level.’’). PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 is based on considerations of the severity of adverse environmental impacts. In making that determination, the Commission uses its experience, judgment, and expertise to give record evidence appropriate weight.137 The Commission found that ‘‘there is nothing about GHG emissions or their resulting contribution to climate change that prevents us from making that same type of significance determination.’’ 138 55. Specifically, in Northern Natural Gas Co., the Commission explained that: The U.S. Court of Appeals for the District of Columbia Circuit has explained that a proposed interstate natural gas pipeline’s reasonably foreseeable GHG emissions are relevant to whether the pipeline is required by the public convenience and necessity. A rigorous review of a project’s reasonably foreseeable GHG emissions is also an essential part of the Commission’s responsibility under NEPA to take a ‘‘hard look’’ at a project’s environmental impacts. Determining the significance of the impacts from a proposed project’s GHG emissions informs the Commission’s review in a number of important respects, including its decision whether to prepare an environmental impact statement.139 56. To date, no federal agency, including the Commission, has established a threshold for determining what level of project-induced GHG emissions is significant. The Commission received a number of comments, discussed below, offering perspectives on whether and at what level it should assess the significance of a proposed project’s GHG emissions. 1. Comments 57. The Commission received relevant comments in response to both the 2018 and 2021 NOIs on whether the Commission should: Determine 137 For example, for an impact where there are no established federal standards, the Commission makes qualitative assessments to determine whether a proposed project would have a significant impact on a particular resource. See, e.g., Tex. LNG Brownsville LLC, 169 FERC ¶ 61,130 at P 56 (‘‘Due to the relatively undeveloped nature of the project area, the visual sensitivity of nearby recreation areas, and the lack of feasible visual screening measures, the Final EIS concluded that the project would result in a significant impact on visual resources when viewed from the adjacent Laguna Atascosa National Wildlife Refuge.’’); Alaska Gasline Dev. Corp., 171 FERC ¶ 61,134, at PP 25, 89 (describing how the final EIS for the Alaska LNG Project found that construction and operation of the project would have significant impacts on resources such as permafrost, wetlands, forests, and caribou, but less than significant impacts on resources such as scrub and herbaceous plant communities), order on reh’g, 172 FERC ¶ 61,214 (2020); Transcon. Gas Pipe Line Co., LLC, 158 FERC ¶ 61,125 at P 79 (describing how the final EIS for the Atlantic Sunrise Project concluded that the project would result in adverse impacts that would be mitigated to less than significant levels). 138 N. Nat. Gas Co., 174 FERC ¶ 61,189 at P 32. 139 174 FERC ¶ 61,189 at P 30 (citations omitted). E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices significance at all; set a specific significance threshold and at what level; and/or use various inventories, goals, and tools to set the threshold. a. Whether the Commission Should Determine Significance 58. Numerous commenters (Delaware Riverkeeper, Food and Water Watch, North Carolina Department of Environmental Quality, Sabin Center, and others) argue that the Commission should make a significant impact determination based on a project’s GHG emissions, which they argue would include the project’s associated upstream and downstream emissions. Some commenters, for example the Sabin Center in 2018, direct the Commission to the NEPA regulation at 40 CFR 1508.27 (that was removed by amendments effective September 14, 2020), which provides that ‘‘significantly’’ as used in NEPA requires considerations of both the context of the action and the intensity of the impacts associated with any proposal.140 59. In contrast, some regulated entities and other commenters express concern about the Commission determining the significance of a project’s impacts on the basis of GHG emissions, especially upstream and downstream emissions. For example, INGAA and others (Energy Infrastructure Council, Williams, etc.) argue that the Commission should, at most, engage in a qualitative discussion of downstream GHG emissions because net GHG emissions are not reasonably foreseeable, and that the Commission should not assess the significance of upstream or downstream emissions.141 Commenters such as Boardwalk state that the Commission cannot reject a project because of downstream GHG emissions or consider upstream GHG emissions, may only include a general disclosure of downstream emissions in limited circumstances (such as where all end use is known), and should generally decline to assess significance and only engage in a qualitative discussion.142 140 See, e.g., Sabin Center 2018 Comments at 8– lotter on DSK11XQN23PROD with NOTICES2 9. 141 See, e.g., INGAA 2021 Comments at 58–64. INGAA’s 2021 comments update its 2018 position that the Commission should not presume that all GHG emissions are significant and should instead make a reasoned judgment whether: (1) A meaningful assessment can be made with reasonable effort based upon available information and (2) if so, whether a meaningful judgment can be formed regarding if the contribution of GHGs is likely to have a significant impact on the resource as a whole. INGAA 2018 Comments at 81–84. 142 Boardwalk 2021 Comments at 77–78, 86–90, 92–93. These comments are generally echoed by the VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 60. Commenters argue that the Commission lacks the ability to make a significance determination and has no objective basis upon which to evaluate the impacts of GHG emissions associated with any specific proposed project.143 Other commenters state that setting any significance threshold would be arbitrary 144 and potentially outside of the Commission’s authority or jurisdiction.145 61. Finally, commenters state that the Commission should defer to other agencies, such as CEQ or EPA, in setting a significance threshold, citing: The lack of a national energy policy or federal GHG limits; the EPA’s existing authority to regulate GHG emissions under the Clean Air Act; the direction of Executive Orders 13990 and 14008, which commenters say direct EPA to examine its own GHG emissions standards; and the ongoing Interagency Work Group efforts on the SCC.146 A few industry commenters also caution against creating uncertainty or a moving target for industry while waiting for a significance threshold to be established.147 b. What the Threshold Should Be 62. Some commenters argue that the Commission should consider any net increase in GHG emissions as significant.148 Attorneys General of Massachusetts, Connecticut, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, and the District of Columbia (Attorneys General of Massachusetts et al.) argues that any investment in pipeline infrastructure is inconsistent with new national emissions reductions targets and thus, Energy Infrastructure Council. Energy Infrastructure Council 2021 Comments at 15–16, 22–27. 143 See, e.g., Enbridge 2021 Comments at 103. 144 See, e.g., U.S. Chamber of Commerce 2021 Comments at 9. 145 See, e.g., API 2021 Comments at 29–32; NGSA 2021 Comments at 21–22; TC Energy 2021 Comments at 52–56; U.S. Chamber of Commerce 2021 Comments at 9. 146 See, e.g., Cheniere Energy Inc. 2021 Comments at 14–16; Enbridge 2021 Comments at 104; Williams 2021 Comments at 35–38. Energy Transfer LP and the NGSA also cite CEQ’s recent NEPA regulatory update and direction to agencies to propose revisions to their NEPA procedures by September 14, 2023. Energy Transfer LP 2021 Comments at 14; NGSA 2021 Comments at 19–20. The Commission’s current regulations provide that the Commission will comply with CEQ’s regulations except where those regulations are inconsistent with the statutory requirements of the Commission. 18 CFR 380.1. Therefore, any action taken by the Commission in a future rulemaking pursuant to CEQ’s regulatory update does not prevent the Commission from issuing this policy statement. 147 See, e.g., BHE Pipeline Group 2021 Comments at 8–10; Cheniere Energy Inc. 2021 Comments at 17–18. 148 Ohio Environmental Council 2021 Comments at 3. PO 00000 Frm 00011 Fmt 4701 Sfmt 4703 14113 project emissions can be significant on that basis alone, even if they represent a small share of national emissions, or that emissions are significant if they impede the ability of a state to meet its clean energy goals.149 63. A few commenters suggest specific numerical thresholds. The Sabin Center recommends that the Commission assess the magnitude of GHG emissions impacts using EPA’s quantification threshold of 25,000 tons per year of CO2e to identify major emitters under the Clean Air Act, social cost of GHG tools to assign a dollar value to the potential impacts of the emissions, and EPA’s GHG Equivalencies Calculator as a comparison tool.150 One commenter cites to EIS examples where the Commission stated that monetized benefits of $8 million and $28 million would be ‘‘significant’’ for local economies and suggests that gross climate damages between roughly $8 and $20 million should be considered significant.151 64. Conversely, a few commenters state that emissions from all individual projects could be considered de minimis and individually too small to impact climate change.152 Others urge the Commission away from taking a bright line approach to determining significance,153 while Driftwood Pipeline LLC urges that significance, if appropriate, requires the Commission to disclose a clear threshold.154 65. CEQ points the Commission to its 2016 guidance as an existing resource to help agencies assess GHG emissions and the effects of climate change in NEPA reviews.155 c. Use of Inventories, Climate Goals, Programmatic Analyses, Etc. in Determining Significance 66. Some commenters recommend that the Commission use state, regional, and global GHG reduction goals to provide context and/or define 149 Attorneys General of Massachusetts et al. 2021 Comments at 6–11. The 2021 commenters are made up of a slightly different group of state attorneys general than those filing comments in 2018. 150 Sabin Center 2018 Comments at 8–9. 151 Environmental Defense Fund, Food & Water Watch, Policy Integrity, Montana Environmental Information Center, Natural Resources Defense Council, Sierra Club, Union of Concerned Scientists, and Western Environmental Law Center (EDF) 2021 Comments at 14–15. 152 See, e.g., Competitive Enterprise Institute 2021 Comments at 4, 6. 153 See, e.g., Enbridge 2021 Comments at 108; Russo on Energy 2021 Comments at 17–18. 154 Driftwood Pipeline LLC 2021 Comments at 3. 155 CEQ 2021 Comments at 1. E:\FR\FM\11MRN2.SGM 11MRN2 14114 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 significance of GHG emissions.156 For example, Attorneys General of Massachusetts et al. comments that the Commission already analyzes whether a proposed pipeline project is consistent with various energy and climate policies and goals and that this can be used as a metric for evaluating significance.157 Others argue that the Commission’s analysis of a proposed project’s public benefits should weigh the effect of project GHG emissions on states’ and the nation’s abilities to comply with climate and clean energy laws and policies, such as specific energy and climate change action plans and policies.158 The Ohio Environmental Council recommends that the Commission consider the total proposed upstream and downstream GHG emissions of all gas projects pending in any given year, giving weight to the total possible GHG emissions that could be locked in by those projects and comparing this total with international goals.159 67. Other commenters suggest alternative means or tools for assessing significance. For example, commenters suggest that the Commission should use a ‘‘Climate Test.’’ 160 Patricia Weber comments that the Commission should use such a test to determine if a project is viable in a scenario where the climate goals of the Paris agreement are met using climate and global energy market models. One commenter urges the Commission to examine acres of wetlands that will be lost due to climate impacts of proposed projects as a proxy for significance.161 Some commenters suggest the Commission consider a programmatic or regional analysis of pipelines.162 68. EDF comments that a comparison of a project’s emissions to international, state, or regional carbon budgets, or assessing geophysical impacts such as 156 See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 2021 Comments at 62; Ron Schaaf and Deb Evans 2021 Comments at 8; California Public Utilities Commission 2018 Comments at 11– 12. 157 Attorneys General of Massachusetts et al. 2018 Comments at 17–20. 158 See, e.g., Attorneys General of Massachusetts et al. 2018 Comments at 17–20; Franklin Governments 2018 Comments at 2. 159 Ohio Environment Council 2018 Comments at 12–13. 160 Natural Resources Defense Council (NRDC) also suggests the Commission use its forthcoming ‘‘Climate Test,’’ which is a tool being developed by NRDC to quantify the consistency of individual infrastructure projects with climate goals. NRDC 2021 Comments at 6. However, NRDC has not filed additional information on its ‘‘Climate Test.’’ 161 Healthy Gulf 2021 Comments at 14. 162 E.g., Attorneys General of Massachusetts et al. 2021 Comments at 8–11; EPA 2021 Comments at 1; Attorneys General of Massachusetts et al. 2018 Comments at 12–17. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 increases in carbon dioxide levels, global temperatures, or sea levels can be misleading and trivialize the project’s impacts.163 69. Some industry commenters state that any comparison of direct or indirect emissions should be made to global GHG inventories, not national or state inventories.164 However, Williams states that, while the Commission should consider only direct construction and operation emissions, the Commission should compare those emissions against national GHG inventories and not against international agreements or regional targets.165 Others oppose use of a regional analysis of GHG emissions from pipeline projects.166 d. Use of the Social Cost of Greenhouse Gases 70. Several commenters generally argue for a monetization of climate damages using the Social Cost of Greenhouse Gas (SC–GHG) tools 167 to determine significance.168 EDF recommends that the approach should be consistent with the Commission’s practices for determining the significance of other monetized effects, such as economic impacts.169 Public Interest Organizations comment that an established numerical significance threshold is not necessary, but if one is established, it should be used in tandem with the SCC tool and should not be based solely on one metric, especially not on a comparison to global emissions. Rather, they urge a holistic review of how a proposed project’s impacts weigh against any benefits.170 EDF states that if the climate damages exceeded monetized project benefits, the Commission could reject the project.171 163 EDF 2021 Comments at 9–12, 16. e.g., Boardwalk 2021 Comments at 82–83; NGSA 2021 Comments at 15. Enbridge states that comparison to these inventories would be arbitrary, but that such an approach could help contextualize the GHG emissions for the Commission and the public. Enbridge 2021 Comments at 105, 108–109. 165 Williams 2021 Comments at 38. 166 See, e.g., Competitive Enterprise Institute 2021 Comments at 3–4. 167 The SC–GHG collectively includes the values for the SCC, the social cost of methane (SCM), and social cost of nitrous oxide (SCN). 168 See, e.g., Policy Integrity Technical Conference Comments at 22–26; EPA 2021 Comments at 6; Ohio Environmental Council 2021 Comments at 2; Public Interest Organizations 2021 Comments at 43–45; Attorneys General of Massachusetts et al. 2018 Comments at 17–22; EDF 2018 Comments at 8–11. The 2018 EDF comments were filed by a slightly different set of entities than in 2021. Public Interest Organizations’ 2021 comments represent 53 entities including Natural Resources Defense Council. 169 EDF 2021 Comments at 14–16. 170 Public Interest Organizations 2021 Comments at 43–45, 50–53, 60. 171 EDF 2021 Comments at 9. 164 See, PO 00000 Frm 00012 Fmt 4701 Sfmt 4703 71. Conversely, other commenters oppose use of the SCC tool in determining significance 172 or of using the SCC tool at all.173 The Attorneys General of Missouri, Alabama, Alaska, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, and West Virginia (Attorneys General of Missouri et al.) contends that the NGA does not allow use of the SCC tool to calculate speculative damages and that its use is contrary to the Commission’s public interest responsibilities. Further, they argue that NEPA does not permit the use of the SCC because NEPA does not allow agencies to rely on conclusions that are speculative or reflect substandard or outdated science.174 72. Public Interest Organizations state that, while neither the NGA nor NEPA explicitly reference the SCC tool, there is nothing in these or other federal statutes that would prohibit its use.175 New Jersey Conservation Foundation notes that President Biden’s Executive Order 13990 supports the use of the SC– GHG tools by agencies to capture the full costs of GHG emissions as accurately as possible.176 New Jersey Conservation Foundation states that following issuance of Executive Order 13990, the Interagency Working Group on the Social Cost of Greenhouse Gases (GHG IWG) published interim SC–GHG values, which the Commission should use.177 172 See, e.g., Kinder Morgan 2021 Comments at 32–40 (stating the Commission should use the SCC tool only as a qualitative comparison tool). 173 See, e.g., American Forest Technical Conference Comments at 9; Competitive Enterprise Institute Technical Conference Comments at 1–2, 7– 35; Enbridge 2021 Comments at 111; Energy Infrastructure Council 2021 Comments at 24–25; Williams 2021 Comments 41–43. 174 Attorneys General of Missouri et al. 2021 Comments at 2–7. A similar group, consisting of the Attorneys General of Missouri, Alabama, Alaska, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah, West Virginia, and Wyoming (Attorneys General of Missouri et al.), also submitted comments in response to the Commission’s technical conference, see infra section III.C.1, extensively critiquing potential use of the SCC. Attorneys General of Missouri et al. Technical Conference Comments at 3–15. Mr. Kirk Frost also provided comments on use of the SCC, urging the Commission to use the tool to assess GHG emissions impacts. Kirk Frost December 23, 2021 Technical Conference Comments at 4. 175 Public Interest Organizations 2021 Comments at 58. 176 New Jersey Conservation Foundation 2021 Comments at 23–24 (citing Exec. Order No. 13990, 86 FR 7037, 7040 (Jan. 25, 2021)). 177 New Jersey Conservation Foundation 2021 Comments at 24. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 73. CEQ notes that it was working with representatives on the GHG IWG to develop additional guidance regarding the application of the SC–GHG tools in decision-making processes, including NEPA analysis.178 NGSA and API urge the Commission to wait for this review to be completed.179 NGSA further states that it would be inappropriate for the Commission to develop a likely conflicting approach for utilizing the SCC tool.180 API states that it would violate principles of consistency for the Commission to apply the interim SC– GHG values to current proposals (i.e., for the remainder of this year), knowing that these values may change and lead to different treatment for future proposals.181 EPA states that in cases where the Commission determines that a monetary comparison between benefits and costs is appropriate, the Commission should take into account established practices for benefit-cost analyses (e.g., the Office of Management and Budget’s Circular A–4 and references therein). If the Commission chooses to use the SC–GHG tools, EPA states that it should disclose all assumptions and levels of uncertainty associated with the analysis.182 74. The Public Interest Organizations state that monetizing impacts using the SCC tool provides the public and decisionmakers with accessible figures useful in determining whether a project is in the public interest and allows the Commission to easily compare project harms and economic benefits, whereas other metrics can misleadingly minimize climate impacts due to inadequate contextualization.183 75. Kinder Morgan asserts that the SCC tool relies on inputs or assumptions that introduce too much uncertainty.184 Similarly, Attorneys General of Missouri et al. contends that the SCC tool is too speculative and arbitrary to hold up to the hard-look requirement under NEPA.185 Rebutting this, EDF emphasizes that the GHG IWG’s methodology is rigorous and based on the best available data and economic practices, such as utilizing a 300-year time horizon.186 INGAA states that the significant variation in output 178 CEQ 2021 Comments at 2. C.f. Louisiana v. Biden, No. 21–cv–1074–JDC–KK (W.D. La.) Order Granting Preliminary Injunction (Feb. 11, 2022). 179 API 2021 Comment at 24–25; NGSA 2021 Comments at 20–21. 180 NGSA 2021 Comments at 20–21. 181 API 2021 Comment at 25, 27–28. 182 EPA 2021 Comments at 2–3. 183 Public Interest Organizations 2021 Comments at 58. 184 Kinder Morgan 2021 Comments at 34–35. 185 Attorneys General of Missouri et al. 2021 Comments at 9. 186 EDF 2021 Comments at 21. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 among GHG IWG’s interim values shows that discount rates reflect a high level of uncertainty in the models and that an agency’s chosen discount rate wields an outsized influence on the end result.187 INGAA states that the Commission should: (1) Only use the SCC tool within the NEPA evaluation, not the NGA evaluation; (2) use the SCC tool as a relative, but not absolute, measure; (3) use the SCC tool only as a threshold indicator; and (4) place any SCC estimates in the proper context.188 76. New Jersey Conservation Foundation recommends that the Commission use all of the GHG IWG’s interim values provided for the SC–GHG tools (GHG IWG recommends using a discount rate of 3%, but also provides values associated with discount rates of 2.5% and 5%).189 77. Boardwalk and Kinder Morgan argue that the Commission should only use the SCC tool as a qualitative tool.190 Boardwalk further asserts that there should not be any triggering levels that would result in adverse action by the Commission or a significance determination. Boardwalk contends that the use of trigger levels would create substantial regulatory uncertainty. Kinder Morgan and Williams also express concern that the SCC tool yields inherently one-sided GHG data if it is applied to a project in a manner that monetizes only the project’s GHG costs and not the corresponding project benefits.191 Energy Infrastructure Council asserts that the SCC tool is meaningless without a standard or threshold for significance and its use requires a monetized cost-benefit analysis of an entire project.192 78. Kinder Morgan states that the SCC tool was not designed for projectspecific analysis but could be used as a screening tool in a qualitative analysis. If the Commission uses the SCC tool, Kinder Morgan recommends that it should explain why and how it was used.193 This explanation should include information about the SCC’s function, its mechanism, its embedded limitations and assumptions, and the specific reason for its application in a given circumstance. Kinder Morgan states that this type of explanation is 187 INGAA 2021 Comments at 67. 2021 Comments at 70–73. 189 New Jersey Conservation Foundation 2021 Comments at 24; see also EDF 2021 Comments at 6–7. 190 Boardwalk 2021 Comments at 103; Kinder Morgan 2021 Comments at 32–33. 191 Kinder Morgan 2021 Comments at 32–33; Williams 2021 Comments at 44–45. 192 Energy Infrastructure Council 2021 Comments at 26–27. 193 Kinder Morgan 2021 Comments at 42. 188 INGAA PO 00000 Frm 00013 Fmt 4701 Sfmt 4703 14115 vital to avoid misleading the public about the purpose of the SCC calculation and the meaning of its results.194 Spectra Energy Partners, LP and Seneca Resources Corporation contend that the Commission has no basis to designate a particular SCC dollar amount as significant, and any such designation would be arbitrary and could not meaningfully inform the Commission’s decision making or the public.195 Additionally, Kinder Morgan states that the Commission should not use the SCC tool to determine mitigation measures or conditions because no statute requires that the Commission implement mitigation based on calculations from such a tool.196 2. Appropriate Level of NEPA Review and Significance Determination 79. To determine the appropriate level of NEPA review, the Commission is establishing a significance threshold of 100,000 metric tons or more per year of CO2e. In calculating this emissions estimate, Commission staff will apply the 100% utilization or ‘‘full burn’’ rate for natural gas supplies delivered by the proposed project and will prepare an EIS if the estimated emissions from the proposed project may exceed the 100,000 metric tons per year threshold. 80. An emissions threshold of 100,000 metric tons per year of CO2e captures the majority of annual emissions generated by Commission authorized projects, including those that may result in incremental GHG emissions over a long duration that may have a significant effect upon the human environment. Establishing a threshold for NEPA purposes also provides Commission staff, industry, and other stakeholders clarity regarding whether a particular project will result in the preparation of either an EA or an EIS. We believe that such clarity ultimately benefits both the regulated community and public by ensuring certainty regarding the Commission’s process for reviewing applications for natural gas infrastructure. 81. In its NEPA document, staff will estimate the proposed project’s GHG emissions based on all relevant evidence submitted in the record— including the project’s utilization rate, offsets, and mitigation. A project with estimated emissions of 100,000 metric tons per year of CO2e or greater will be presumed to have a significant effect, unless record evidence refutes that 194 Id. 195 Seneca Resources Corp. 2018 Comments at 9; Spectra Energy Partners, LP 2018 Comments at 87. 196 Kinder Morgan 2021 Comments at 42. E:\FR\FM\11MRN2.SGM 11MRN2 14116 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices presumption.197 While the 100,000 metric ton presumption will serve as a guidepost, facilitating transparent, predictable analysis of a proposed project’s contribution to climate change, our analysis will continue to consider all evidence in the record on a case-bycase basis. As part of that analysis, the Commission will continue to consider any emerging tools as well as any forthcoming frameworks or analysis issued by CEQ or other agencies on this issue. Finally, as noted at the outset, we encourage commenters to address this approach to assessing significance— including the 100,000 metric ton CO2e threshold. lotter on DSK11XQN23PROD with NOTICES2 a. Commission Authority To Establish a Threshold 82. Section 3 of the NGA requires the Commission to approve an application for the exportation or importation of natural gas unless the proposal ‘‘will not be consistent with the public interest.’’ 198 Similarly, under section 7, the Commission must find a proposed project is or will be required by the present or future public convenience and necessity.199 The Commission has long regarded section 3’s ‘‘public interest’’ standard and section 7’s ‘‘public convenience and necessity’’ standard as substantially equivalent.200 In considering applications under section 3 or section 7, the Commission must ‘‘evaluate all factors bearing on the public interest.’’ 201 The Commission has recognized from its earliest decisions that it may consider the end use of gas as a factor in assessing the public interest 202 and has long considered the impact of natural gas combustion on air pollution.203 197 When examining a project’s GHG emissions, the Commission will consider record evidence of the construction, operational, and, where determined to be reasonably foreseeable, downstream and upstream GHG emissions that reoccur annually over the life of the project. 198 15 U.S.C. 717b(a). 199 Id. 717f(c), (e). 200 Distrigas Corp. v. FPC, 495 F.2d 1057, 1065 (D.C. Cir.). 201 Atl. Ref. Co. v. Pub. Serv. Comm’n of State of N.Y., 360 U.S. 378, 391 (1959). 202 See, e.g., Hope Nat. Gas Co., 4 FPC 59, 59, 66– 67 (1944) (stating that ‘‘considerations of conservation are material to the issuance of certificates of public convenience and necessity under section 7’’ and authorizing a project in large part because of the particular end use of the gas); see N. Nat. Gas Co., 15 FPC 1634, 1641 (1956) (Connole, Comm’r, dissenting) (contending that the Commission has ‘‘long held that considerations of conservation, inferior and superior uses, and related matters are relevant to determining whether the public convenience and necessity require the issuance of a certificate’’). 203 Transwestern Pipeline Co., 36 FPC 176, 185– 186, 189–191 (1966) (citing FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1 (1961) (Transco), for the proposition that the ‘‘end use of gas was properly VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 83. As discussed above, the courts have interpreted the Commission’s obligations under NEPA to require analysis of downstream GHG emissions for NGA section 7 certificate projects, but do not require an analysis of either downstream or upstream GHG emissions for section 3 export projects.204 As also discussed above, the Commission has previously acknowledged that upstream emissions for NGA section 7 certificate projects may be difficult to quantify. However, as noted, the Commission will continue to consider on a case-by-case basis whether GHG emissions from upstream production activities are a reasonably foreseeable and causally connected result of a proposed project.205 84. Contrary to the suggestion of some commenters, the Commission would not intrude into another agency’s domain by establishing a significance threshold. The Commission does not propose to set an emissions standard that projects will be expected to meet; rather, the threshold would be an indication of potential significance for purposes of the Commission’s review of a project’s environmental impacts under NEPA and trigger the preparation of an EIS.206 85. As discussed above, NEPA requires the Commission to take a ‘‘hard look’’ at the environmental consequences of a proposed action and to prepare an EIS disclosing its analysis to the public where its action may significantly affect the quality of the human environment, or to prepare an EA for a proposed action that is not likely to have significant effects or when the significance is unknown to determine if an EIS is necessary. We note that neither EPA nor CEQ raise objections to the Commission determining the significance of GHG emissions; in fact, EPA points to Executive Order 14008, which directs the federal government to prioritize assessment, disclosure, and mitigation of climate pollution and climate-related of concern to [the Commission], and made it clear that air pollution was a relevant consideration’’). Cf. Am. La. Pipe Line Co., 16 FPC 897, 899–900 (1956) (‘‘[T]here is a public need for and will be a public benefit from [the proposed] natural-gas service . . . . This need and benefit arise from the facts, among others, . . . that natural gas is a clean, convenient and efficient fuel.’’). 204 See supra PP 34–37. 205 See supra P 42. 206 The Commission notes that CEQ and EPA are undertaking initiatives that may culminate in the establishment of a significance threshold for GHG emissions or that may further impact the Commission’s determination of GHG significance in its NEPA analysis. If CEQ or EPA issues any future guidance regarding the evaluation of GHG emissions, the Commission may adjust its methods for determining the significance of GHG emissions consistent with that guidance. PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 risks, in response to the Commission’s query on how it could determine the significance of a project’s GHG emissions.207 86. As discussed above, NEPA requires the Commission to determine whether a project would have any significant effects on the environment, including the effects of GHG emissions on the climate.208 Moreover, courts have rejected the claim that under the NEPA framework, the determination of whether an impact is significant must not involve any subjective judgment calls.209 87. We are establishing a uniform GHG emissions threshold because GHG emissions affect climate to the same degree, regardless of the location or specifics of a particular project. Establishing such a threshold will provide the Commission a workable and consistent path forward to analyze proposed projects. Further, a numerical threshold is a clear, consistent standard that can be easily understood and applied by the regulated community and interested stakeholders. b. Rationale for an Emissions Threshold of 100,000 Metric Tons per Year 88. Human impact on the warming of the global climate system is unequivocal.210 Even if deep reductions in GHG emissions are achieved, the planet is projected to warm by at least 1.5 degrees Celsius (°C) by 2050.211 This level of warming will present major global consequences. For example, extreme temperature events that may have occurred once in 10 years on average in a climate without human influence will occur 4.1 times as frequently and be 1.9 °C hotter.212 Agricultural and ecological drought events that may have occurred once in 10 years on average across drying regions in a climate without human influence will occur twice as frequently.213 Warming beyond 1.5 °C presents even more severe consequences. The Intergovernmental Panel on Climate Change states that ‘‘[w]ith every additional increment of global warming, changes in extremes continue to become larger.’’ 214 For example, every subsequent 0.5 °C of warming ‘‘causes clearly discernible increases in the intensity and frequency of hot extremes, including heatwaves (very likely), and heavy precipitation 207 EPA 2021 Comments at 6. supra PP 23–25. 209 Spiller v. White, 352 F.3d at 244 n.5. 210 IPCC Report at SPM–5. 211 See IPCC Report at SPM–17. 212 IPCC Report at SPM–23. 213 IPCC Report at SPM–23. 214 IPCC Report at SPM–19. 208 See E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices (high confidence), as well as agricultural and ecological droughts in some regions (high confidence).’’ 215 Because of the dire effects at stake, even relatively minor GHG emissions pose a significant threat, 100,000 metric tons per year of project GHG emissions will capture all natural gas projects that have what we believe to be the potential for causing significant impacts on climate, given the typical lifespans of authorized projects. For a single natural gas project with a lifespan of 30 years, this threshold represents a total of three million metric tons of GHG emissions. 89. Based on an internal review of natural gas projects from 2008 to 2021, a 100,000 metric tons per year threshold will cover the vast majority of potential GHG emissions from natural gas projects authorized by the Commission. For context, projects that likely have 100,000 metric tons per year or more of GHG emissions include projects transporting an average of 5,200 dekatherms per day and projects involving the operation of one or more compressor stations or LNG facilities. 90. Outside the NEPA context, other federal and state agencies that have established thresholds to evaluate or regulate GHG emissions from an analysis of the emissions from regulated sources. Most notably, in 2012, EPA issued the Tailoring Rule to regulate GHG emissions from stationary sources of air pollution under the Prevention of Significant Deterioration (PSD) 216 and 215 IPCC Report at SPM–19 (emphasis in original). PSD permitting program is part of the New Source Review program, which requires new stationary sources and major modifications to existing major sources to obtain preconstruction permits. PSD is designed to prevent air quality deterioration in regions that are attaining the National Ambient Air Quality Standards by requiring major sources or major modifications to install the Best Available Control Technology (BACT). Major sources under the PSD program are defined as facilities that emit or have the potential to emit 250 tons per year of any criteria air pollutant or 100 tons per year of any criteria air pollutant for specific types of facilities listed in the statute. 42 U.S.C. 7479(1). The six criteria pollutants are carbon monoxide, ground-level ozone, lead, nitrogen dioxide, particulate matter, and sulfur dioxide. 40 CFR pt. 50. lotter on DSK11XQN23PROD with NOTICES2 216 The VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 Title V 217 permitting programs 218 and proposed to phase in the regulation of GHG emissions in two steps. Under Step 1, sources already subject to the PSD permitting program for at least one nonGHG pollutant (‘‘anyway’’ sources) were required to utilize best available control technology (BACT) for GHG emissions 219 if they increased net GHG emissions by at least 75,000 tons per year of CO2e. 91. Under Step 2, EPA expanded the Tailoring Rule by requiring a new source or a major modification to an existing source to obtain PSD and/or Title V permits based on GHG emissions alone. Sources that had the potential to emit at least 100,000 tons per year of CO2e would become newly subject to the PSD and/or Title V requirements, even if they did not exceed the statutory threshold for any other pollutant. Additionally, modifications to an existing source already subject to PSD and/or Title V that increased net GHG emissions by at least 75,000 tons per year of CO2e would be subject to PSD requirements regardless of whether there was an increase in the emissions of any other pollutant.220 92. In setting the 75,000 tons and 100,000 tons per year of GHGs thresholds, EPA considered the administrative burden of permitting the estimated number of additional facilities under each threshold and the percentage of total national stationary source GHG emissions that would be covered under the threshold.221 For example, under Step 1, EPA estimated a 5% increase in the total annual cost 217 The Title V program requires major stationary sources to obtain a single operating permit that consolidates all of the permitting requirements in the Clean Air Act into a single permit, including PSD, New Source Performance Standards, and National Emission Standards for Hazardous Air Pollutants. Major sources under the Title V program are defined as any stationary facility that emits or has the potential to emit 100 tons per year of any hazardous air pollutant, except GHGs. 42 U.S.C. 7602(j). The Clean Air Act Amendments of 1990 originally designated over 180 chemicals as hazardous air pollutants, and EPA has the authority to modify the list through rulemaking. 42 U.S.C. 7412(b)–(c). 218 Prevention of Significant Deterioration and the Title V Greenhouse Gas Tailoring Rule, 75 FR 31514 (June 3, 2010) (Tailoring Rule). 219 BACT is used to minimize emissions based on the maximum degree of control that the facility can achieve as determined by the permitting authority on a case-by-case basis. BACT may be a design, equipment, work practice, or operational standard, such as add-on control equipment, fuel cleaning or treatment, or innovative fuel combustion techniques. Note that BACT for minimizing GHG emissions at natural gas facilities is limited. 220 EPA also planned a Step 3 to further reduce the threshold, although not below 50,000 tons per year of CO2e. The Supreme Court struck down relevant portions of the Tailoring Rule before EPA finalized Step 3. 221 Tailoring Rule, 75 FR at 31533–80. PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 14117 to run the permitting programs and that approximately 65% of GHG emissions would be covered. Under Step 2, EPA estimated that approximately 550 new sources would become subject to the PSD and Title V programs, increasing total annual costs to run the programs by 42% and covering 67% of GHG emissions. EPA further found that lowering the threshold to 50,000 or 25,000 tons per year of CO2e would drastically increase both the number of new facilities requiring permits and the cost of administering the programs but would only marginally increase the percentage of GHG emissions covered to 70% and 75%, respectively. 93. In 2014, the Supreme Court invalidated portions of the Tailoring Rule, holding that EPA may not use GHG emissions as the sole basis for determining whether a source is subject to a PSD or Title V permitting requirements.222 While the Supreme Court’s ruling struck down Step 2 of the Tailoring Rule, it upheld Step 1 and allowed EPA to continue to regulate GHG emissions from ‘‘anyway’’ sources. Notably, the decision did not discuss EPA’s methodology for establishing the thresholds; it only ruled that deviating from the 100 and 250 tons per year statutory thresholds in the Clean Air Act when requiring sources to newly obtain PSD or Title V permits based solely on GHG emissions under Step 2 was impermissible. 94. Further, at least two agencies in California that are directed to determine the significance of GHG emissions and climate impacts of proposed projects under the California Environmental Quality Act have also proposed or established thresholds of significance based on an analysis of regulated sources. First, in 2008, the California Air Resources Board (California ARB) proposed finding a less than significant impact for a proposed industrial project that, with mitigation, emits no more than 7,000 metric tons per year of CO2e from non-transportation sources, including combustion and fugitive emissions.223 Second, the South Coast Air Quality Management District (South Coast AQMD) adopted an interim GHG significance threshold of 10,000 metric tons of CO2e per year for stationary 222 Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 320 (2014). 223 California ARB, Preliminary Draft Staff Proposal, Recommended Approaches for Setting Interim Thresholds for Greenhouse Gases under the California Environmental Quality Act (Oct. 24, 2008) (CEQA Proposed Interim Thresholds). In addition, California ARB proposed to require these projects to meet performance standards for construction-related emissions and transportation to support a finding of less than significant impacts. CEQA Proposed Interim Thresholds at attach. A. E:\FR\FM\11MRN2.SGM 11MRN2 14118 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices sources of air pollution in 2008.224 Both California ARB and South Coast AQMD found that their thresholds would capture approximately 90% of emissions from their respective regulated sources.225 95. Like EPA and the California agencies, we are basing our threshold on an analysis of regulated sources. Although we are adopting a conceptually similar methodology in establishing our threshold, we note that our approach will cover a larger number of emissions than the threshold established by EPA in the Tailoring Rule. EPA’s thresholds of 75,000 and 100,000 tons per year accounted for only 65% and 67% of emissions from EPA-regulated sources, respectively, whereas our proposed threshold of 100,000 metric tons per year would deem nearly three-quarters of Commission-regulated natural gas project, which collectively account for roughly 99% of GHG emissions from Commission-regulated natural gas projects, to have a significant impact on climate change. lotter on DSK11XQN23PROD with NOTICES2 3. Other Metrics 96. As noted above, commenters argue for and against the use of various existing GHG inventories or goals as a comparison tool to determine significance. Comparison to an existing GHG inventory or goal presents substantially different percentages based on the chosen goal (international, state, regional, or local). Because different projects may have different potential purposes and the purpose of a project may be characterized to support or oppose a particular viewpoint, we do not believe that tying the Commission’s significance determination for a proposed project’s GHG emissions to a particular inventory or goal is appropriate. However, we recognize that this type of comparison can be helpful to inform the Commission’s analysis and the public, especially when presented using a consistent metric across proposed projects under consideration by the Commission. We note that many commenters reference the SC–GHG as one tool. To the extent permitted by law,226 the Commission 224 South Coast AQMD, Interim CEQA GHG Significance Threshold for Stationary Sources, Rules and Plans (Dec. 5, 2008), https:// www.aqmd.gov/docs/default-source/ceqa/ handbook/greenhouse-gases-(ghg)-ceqasignificance-thresholds/ghgboardsynopsis. pdf?sfvrsn=2. 225 Id. at 4; CEQA Proposed Interim Thresholds at attach. A. 226 Currently, two pending court cases challenge use of the IWG’s interim values by federal agencies. Mo. v. Biden, —— F. Supp. 3d ——, 2021 WL 3885590 (E.D. Mo. Aug. 31, 2021), appeal filed, No. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 could consider the SC–GHG in the future. section 3 authorization or section 7 certificate. C. Mitigation 1. Technical Conference on GHG Mitigation 99. On November 19, 2021, the Commission held a Commission staffled technical conference to discuss methods project sponsors may use to mitigate the effects of direct and indirect greenhouse gas emissions resulting from Natural Gas Act sections 3 and 7 authorizations.230 Representatives from industry, academia, non-governmental organizations, and state regulatory commissions participated as panelists, with discussion topics including: How the Commission could determine the quantity of reasonably foreseeable GHG emissions resulting from a project proposed under section 3 or 7 of the NGA and the appropriate level of mitigation for such emissions; types of mitigation measures a project sponsor could employ to reduce the amount of GHG emissions associated with a proposed project; and methods for the continued verification and accounting of GHG mitigation during project operation, as well as cost impacts to the industry from implementing GHG mitigation measures and how project sponsors might recover those costs. 100. In addition to the panelists’ written statements, the Commission received over 20 comments in response to the technical conference. The Commission considered these statements and comments in developing the mitigation policy described below. 97. Federal agencies can use mitigation to minimize the potential adverse environmental effects of their actions,227 and mitigation is used by the Commission in reviewing NGA sections 3 and 7 proposals.228 98. The NGA grants the Commission broad authority to attach reasonable terms and conditions to NGA section 7 certificates of public convenience and necessity and NGA section 3 authorizations.229 The Commission has consistently exercised this authority to attach environmental conditions that mitigate the adverse environmental impacts of a proposed project, and the Commission is not precluded from utilizing this authority to require a project sponsor to mitigate all, or a portion of, the impacts related to a proposed project’s GHG emissions. Therefore, consistent with the discussion provided herein, going forward project proponents are encouraged to propose mitigation that will minimize climate impacts. The Commission will consider any mitigation measures proposed by the project sponsor on a case-by-case basis when balancing the need for a project against its adverse environmental impacts and may require additional mitigation as a condition of an NGA 21–3013 (8th Cir.); La. v. Biden, No. 21–cv–1074– JDC–KK (W.D. La). 227 Mitigation is measures that avoid, minimize, or counterbalance effects caused by a proposed action by: (1) Avoiding the impact altogether by not taking a certain action or parts of an action; (2) minimizing impacts by limiting the degree or magnitude of the action and its implementation; (3) rectifying the impact by repairing, rehabilitating, or restoring the affected environment; (4) reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action; and/or (5) compensating for the impact by replacing or providing substitute resources or environments. 40 CFR 1508.1. 228 As discussed supra P 26, NEPA contains no substantive requirement that environmental impacts be mitigated or avoided, however, the environmental document must include a mitigation discussion that provides ‘‘sufficient detail’’ to indicate that environmental impacts have been fairly evaluated. S. Fork Band Couns. of W. Shoshone of Nev. v. U.S. Dep’t of Interior, 588 F.3d 718, 727 (9th Cir. 2009); see also Nat’l Parks & Conservation Ass’n v. U.S. Dep’t of Transp., 222 F.3d 677, 681 n.5 (9th Cir. 2000) (stating that mitigation measures proposed in an EIS ‘‘need not be legally enforceable, funded, or even in final form to comply with NEPA’s procedural requirements’’). 229 See supra P 22; see also 15 U.S.C. 717b(e)(3)(A) (providing the authority to approve an application for an LNG Terminal, ‘‘in whole or part, with such modifications and upon such terms and conditions as the Commission find[s] necessary or appropriate’’). PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 2. Authority To Require Mitigation 101. Some commenters state that the Commission has broad authority under the NGA to place conditions in certificate authorizations requiring pipeline companies to mitigate GHG impacts,231 while others argue that the Commission does not have authority under the NGA or NEPA to impose mitigation measures,232 especially 230 See Transcript of Greenhouse Gas Mitigation: Natural Gas Act Sections 3 and 7 Authorizations, Docket No. PL21–3–000 (issued Dec. 22, 2021) (Technical Conference Transcript). 231 See, e.g., Policy Integrity Technical Conference Comments at 2; Policy Integrity 2021 Comments at 14–15, 21; Public Interest Organizations 2021 Comments at 71–72; see also American Forest Technical Conference Comments at 4–5, 7–10 (stating that to the extent the courts have clarified the Commission’s duty to consider GHG emissions and require mitigation for such impacts, that it supports the Commission considering mitigation on a case-by-case basis to avoid the uncertainty posed by the threat of litigation and the possibility of a court vacating the project’s certificate). 232 See, e.g., Boardwalk Technical Conference Comments at 7; Dr. Jason Scott Johnston Technical Conference Comments at 1; TC Energy Technical Conference Comments at 4; API 2021 Comments at E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 measures to mitigate upstream or downstream GHG emissions.233 Specifically, commenters argue that the Commission’s authority under NGA section 7(e) to place conditions on a certificate is limited by the statutory purpose to regulate interstate transportation to ensure reliable access to plentiful natural gas at reasonable prices.234 Commenters further assert that the Commission has no authority to establish environmental policy and that the Commission cannot use its conditioning authority to indirectly mitigate an effect that it has no authority to directly mitigate.235 102. Commenters also claim that any attempt to mitigate indirect GHG emissions would infringe on the regulatory authority of other federal and state agencies and result in back-door regulation of energy policy.236 29–30; see also Williams Technical Conference Comments at 17 (claiming that there is no reasonable basis for the Commission to require project sponsors to submit mitigation proposals with their applications because the technical conference demonstrated a lack of evidentiary support for any specific mitigation methods, offered no specific proposals regarding the levels of fees, offsets, or caps, and proposed no concrete and costeffective means to mitigate emissions). 233 API Technical Conference Comments at 5; Boardwalk Technical Conference Comments at 10; Consolidated Edison Company of New York, Inc. and Orange and Rockland Utilities, Inc. (collectively, Con Edison) Technical Conference Comments at 5; Hon. Joseph T. Kelliher Technical Conference Comments at 1; INGAA Technical Conference Comments at 6–7; TC Energy Technical Conference Comments at 8; API 2021 Comments at 31; INGAA 2021 Comments at 74–83; TC Energy 2021 Comments at 56–58. 234 See, e.g., Hon. Joseph T. Kelliher Technical Conference Comments at 1 (citing NAACP v. FPC, 425 U.S. 662, 669–70 (1976)); id. at 8–9 (asserting that the proper place to consider GHG emissions (direct only) is under the Commission’s balancing test, where a project sponsor may choose to voluntarily offset emissions); TC Energy Technical Conference Comments at 8; INGAA 2021 Comments at 74–76. 235 See, e.g., Boardwalk Technical Conference Comments at 11–13 (arguing that Transco does not authorize the Commission to indirectly regulate upstream and downstream emissions); Enbridge Technical Conference Comments at 5, 16, 21; Hon. Joseph T. Kelliher Technical Conference Comments at 4; INGAA 2021 Comments at 76–77. 236 See, e.g., API Technical Conference Comments at 2, 4; Edison Electric Institute (EEI) Technical Conference Comments at 9–10; Enbridge Technical Conference Comments at 18–19, 23–24; Hon. Joseph T. Kelliher Technical Conference Comments at 5; Attorneys General of Missouri et al. Technical Conference Comments at 3 (citing S. Coast Air Quality Mgmt. Dist. v. FERC, 621 F.3d 1085, 1092 (9th Cir, 2010)); TC Energy Technical Conference Comments at 6–7; Boardwalk 2021 Comments at 10. Commenters further argue that the NGA was not enacted to comprehensively regulate the natural gas industry, but instead to fill a regulatory gap over interstate gas transportation and sales; therefore, Congress left the regulation of upstream production and downstream consumption to the states. Enbridge Technical Conference Comments at 16–17; Hon. Joseph T. Kelliher Technical Conference Comments at 2 (citing NAACP v. FPC, 425 U.S. at VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 Specifically, commenters state that any attempt by the Commission to mitigate upstream or downstream GHG emissions would interfere with state resource decisions and usurp issues of national energy and environmental policy that Congress vested in other federal authorities.237 For example, commenters argue that Congress has delegated authority to the EPA and state agencies to regulate GHGs under the CAA.238 Even if the Commission had the authority to impose mitigation measures for upstream or downstream GHG emissions, commenters argue that the Commission must first establish that those GHG emissions are reasonably foreseeable and have a sufficiently close causal connection (akin to proximate causation under tort law) 239 to the authorization of a project under NEPA, and if not, should not be considered for mitigation purposes.240 Lastly, commenters question reliance on Sabal Trail to support the Commission’s authority to impose mitigation.241 103. We disagree with contentions that the Commission does not have the authority under the NGA or NEPA to 669–70; State of Cal. v. Southland Royalty Co., 436 U.S. 519, 523 (1989); ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378, 384–85 (2015); ANR Pipeline Co. v. FERC, 876 F.2d 124, 132–33 (D.C. Cir. 1989)). 237 INGAA Technical Conference Comments at 8; Boardwalk 2021 Comments at 107; Con Edison Technical Conference Comments at 6–7 (stating that the state regulators are the best positioned to determine and impose mitigation measures for upstream and downstream GHG emissions); INGAA 2021 Comments at 77–79. 238 American Public Gas Association (APGA) Technical Conference Comments at 5–6; EEI Technical Conference Comments at 9–10; Enbridge Technical Conference Comments at 23–24; TC Energy Technical Conference Comments at 9–10. 239 Specifically, commenters argue that the Commission should rely on Center for Biological Diversity, which states that ‘‘the legal analysis in Sabal Trail is questionable at best’’ and that ‘‘[i]t fails to take seriously the rule of reason announced in Public Citizen or to account for the untenable consequences of its decision.’’ Center for Biological Diversity, 941 F.3d at 1300; see also AGA Technical Conference Comments at 13–14; Boardwalk Technical Conference Comments at 16–17; Hon. Joseph T. Kelliher Technical Conference Comments at 3; INGAA Technical Conference Comments at 12–13; TC Energy Technical Conference Comments at 13–14. 240 API Technical Conference Comments at 4; EEI Technical Conference Comments at 6; INGAA Technical Conference Comments at 14; Williams Technical Conference Comments at 5. 241 See AGA Technical Conference Comments at 12–13 (arguing that the Commission should not rely on this statement of dicta because the issue of mandatory mitigation was not at issue in this case; rather, the court only addressed whether the Commission is, in some circumstances, required by NEPA to include a discussion of downstream GHG emissions when conducting its environmental review); Boardwalk Technical Conference Comments at 16 (same); Enbridge Technical Conference Comments at 20 (same); Hon. Joseph T. Kelliher Technical Conference Comments at 3–4 (same); TC Energy Technical Conference Comments at 12 (same). PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 14119 require mitigation of GHG emissions by a project sponsor. The D.C. Circuit stated in Sabal Trail, that ‘‘the [Commission] has legal authority to mitigate’’ greenhouse-gas emissions that are an indirect effect of authorizing a pipeline project.242 And, as early as 1961, the Supreme Court recognized that the Commission’s predecessor, the Federal Power Commission, had the authority to consider downstream uses, and specifically, the impact of end-users combusting transported gas on air quality, as part of its public convenience and necessity determination under the NGA.243 Both NGA sections 3 and 7 authorize the Commission to attach ‘‘such reasonable terms and conditions as the public convenience and necessity may require.’’ 244 Pursuant to this authority, the Commission has conditioned NGA section 7 certificates and section 3 authorizations on mitigation of impacts of the proposed project.245 Moreover, courts have interpreted this provision broadly and given the Commission latitude in deciding what types of mitigation to require.246 104. Regarding claims that the Commission cannot mandate mitigation of downstream emissions because those emissions are outside the Commission’s jurisdiction, we recognize, as many commenters assert, that the Commission does not have the statutory authority to impose conditions on downstream users or other entities outside the Commission’s jurisdiction, such as production, gathering, and local distribution entities.247 Rather, the Commission encourages each project sponsor to propose measures to mitigate the impacts of reasonably foreseeable 242 Sabal Trail, 867 F.3d at 1374. 365 U.S. at 17; see also NAACP v. FPC, 425 U.S. at n.6 (stating that the Commission has the authority to consider conservation and environmental issues under the NGA’s public interest determination). See Certification of New Interstate Natural Gas Pipeline Facilities, 178 FERC ¶ 61,107 at PP 71–72. 244 15 U.S.C. 717f(e); see also id. 717b(e)(3)(A) (providing the authority to approve an application for an LNG Terminal, ‘‘in whole or part, with such modifications and upon such terms and conditions as the Commission find[s] necessary or appropriate.’’). 245 For examples where the Commission has conditioned approval of natural gas projects on mitigation of adverse impacts, see supra note 69. 246 See Twp. of Bordentown v. FERC, 903 F.3d at 261 n.15 (concluding that the Commission’s authority to enforce any required remediation is amply supported by provisions of the NGA); Sabal Trail, 867 F.3d at 1374 (holding that the Commission has legal authority to mitigate reasonably foreseeable indirect effects). 247 See generally Tex. Pipeline Ass’n v. FERC, 661 F.3d 258, 260 (5th Cir. 2011) (holding that the Commission lacked authority to require ‘‘major non-interstate pipelines’’ to post certain flow information). 243 Transco, E:\FR\FM\11MRN2.SGM 11MRN2 14120 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 GHG emissions associated with its proposed project, and will consider such mitigation proposals in assessing the extent of a project’s adverse impacts.248 105. We note that the Supreme Court’s ruling in Public Citizen does not preclude the Commission from requiring project sponsors to mitigate reasonably foreseeable upstream or downstream emissions. As discussed previously,249 the Commission may consider downstream GHG emissions under Public Citizen, which states that ‘‘NEPA requires ‘a reasonably close causal relationship’ between [an] environmental effect and the alleged cause,’’ analogous to the ‘‘familiar doctrine of proximate cause from tort law’’ and does not require an agency to gather or consider information regarding environmental harms if it lacks authority to act on that information.250 As directed by Public Citizen, decisionmakers should ‘‘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.’’ 251 Here, the NGA ‘‘broadly instruct[s]’’ the Commission to consider ‘‘the public convenience and necessity’’ when evaluating proposed interstate pipeline applications, balancing public benefits against adverse effects, including adverse environmental effects,252 and we have noted that the Commission has consistently exercised its broad conditioning authority under the NGA to attach environmental conditions that mitigate the adverse environmental impacts of a proposed project.253 NEPA requires an agency to consider the environmental impacts of its actions, including steps that could be taken to mitigate adverse environmental consequences,254 although it does not 248 As described supra in section III.A.2.b, the Commission will consider GHG emission mitigation and reduction efforts taken by non-jurisdictional entities, including downstream users, when quantifying the reasonably foreseeable project GHG emissions. However, the project sponsor’s GHG mitigation plan should only include its own proposed mitigation efforts. 249 See supra section III.A.1.b. 250 Pub. Citizen, 541 U.S. at 767, 770 (quoting Metro. Edison Co., 460 U.S. at 774); see Sabal Trail, 867 F.3d at 1372. 251 Pub. Citizen, 541 U.S. at 767 (quoting Metro. Edison Co., 460 U.S. at 774 n.7). 252 Sabal Trail, 867 F.3d at 1373 (citing Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101–02 (D.C. Cir. 2014); Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C. Cir. 2015)). 253 See supra P 97. 254 Robertson v. Methow Valley Citizens Council, 490 U.S. at 351 (‘‘To be sure, one important ingredient of an EIS is the discussion of steps that VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 require a federal agency to take action to mitigate those adverse effects.255 As CEQ recognizes, an agency may, however, require mitigation of impacts under its authority as a condition of its permitting or approval.256 Thus, as the D.C. Circuit held in Sabal Trail, the Commission can deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment, because the agency is the ‘‘legally relevant cause’’ of the direct and reasonably foreseeable environmental effects of the pipelines it approves.257 Accordingly, the Commission may consider the end use of gas and the impact of natural gas combustion on air pollution as a factor in assessing the public interest.258 However, as detailed below, the Commission’s priority is for project sponsors to mitigate, to the greatest extent possible, a project’s direct GHG emissions. The Commission also encourages project sponsors to propose mitigation of reasonably foreseeable indirect emissions, and will take such proposals into account in assessing the extent of a project’s adverse impacts. 3. Mitigation Measures 106. The Commission encourages the project sponsor to propose measures to mitigate the direct GHG emissions of its proposed project to the extent these emissions have a significant adverse environmental impact.259 INGAA can be taken to mitigate adverse environmental consequences.’’). 255 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.’’); S. Fork Band Couns. of W. Shoshone of Nev. v. U.S. Dep’t of Interior, 588 F.3d at 727 (NEPA does not require that agencies mitigate significant environmental harms). 256 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. 257 Sabal Trail, 867 F.3d at 1373 (distinguishing Public Citizen). 258 See supra P 80. 259 The Attorneys General of Massachusetts, Delaware, Maryland, Michigan, Minnesota, New Jersey, Rhode Island, and the District of Columbia (Attorneys General of Massachusetts et al.) recommends that the Commission include reasonable, binding mitigation measures that incorporate any applicable state or federal regulations or permit conditions. Attorneys General of Massachusetts et al. Technical Conference Comments at 6. The technical conference commenters are made up of a slightly different group of state attorneys general than those filing comments in 2018 or 2021. As explained below, the Commission is only considering mitigation measures that reduce emissions beyond those associated with regulatory requirements in this policy statement. PO 00000 Frm 00018 Fmt 4701 Sfmt 4703 describes three possible levels of mitigation—to zero, to a level of below significance, and to an amount to be determined by use of the SCC—but dismisses each as unworkable, improperly adopting broad policy judgements, and reliant on a one-sided and imprecise methodology, respectively.260 The Commission plans to evaluate proposed mitigation plans on a case-by-case basis and is not mandating a standard level of mitigation. We also encourage project sponsors to proposed measures to mitigate the reasonably foreseeable upstream or downstream emissions associated with their projects. 107. The Commission will consider the project’s impact on climate change, including the project sponsor’s mitigation proposal, as part of its public interest determination under NGA section 3 or 7.261 When making the public interest determination, the Commission will assess the adequacy of the project sponsor’s proposed mitigation on a case-by-case basis and will consider the project’s impact on climate change as one of many factors.262 Further, the Commission may require additional mitigation of a project’s direct GHG emissions as a condition of the authorization, should the Commission deem a project sponsor’s proposed mitigation inadequate to support the public interest determination. 108. Also we note that NEPA does not preclude the Commission from approving a project with significant adverse impacts.263 If a project’s emissions equal or exceed the 100,000 260 INGAA Technical Conference Comments at 21–27; see also Enbridge Technical Conference Comments at 12–13, 35–38 (recommending the Commission await direction from Congress in choosing a mitigation level, especially if requiring project sponsors to mitigate to less than significant levels and noting that mitigation to zero is not practicable if downstream or upstream emissions are included). 261 Attorneys General of Massachusetts et al. urges the Commission to consider the impacts of any mitigation measures on environmental justice communities. Attorneys General of Massachusetts et al. Technical Conference Comments at 5–6. 262 Jennifer Danis, Senior Fellow with the Sabin Center for Climate Change Law and a panelist at the GHG Technical Conference on Panel 1, recommends that the Commission should not consider the effect of any mitigation measures in its public interest determination but should only consider mitigation measures once the Commission has determined that public convenience and necessity absolutely requires the project. Jennifer Danis Technical Conference Statement at 8–11. As explained in the Certificate Policy Statement, the Commission considers all factors, including the extent to which adverse impacts are mitigated, to determine whether a project is in the public convenience and necessity. Certification of New Interstate Natural Gas Pipeline Facilities, 178 FERC ¶ 61,107 at PP 70, 93–95. 263 See supra section II.B. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices metric tons per year significance threshold and the project sponsor’s proposed mitigation will reduce the project’s GHG emissions below that threshold, the Commission will consider that mitigation in determining whether it can make a finding of no significant impact. 109. While the Commission has broad authority to require mitigation of GHG emissions by a project sponsor, we are not mandating here any particular form of mitigation.264 A project sponsor is free to propose any mechanism to mitigate the project’s GHG emissions.265 However, in order to ensure that any GHG emissions reduction mechanisms achieve real, verifiable, and measurable reductions, any proposed mechanisms should: lotter on DSK11XQN23PROD with NOTICES2 a. Be both real and additional—the emissions reductions would not have otherwise happened unless the proposed reduction mechanism was implemented, and the associated reductions occur beyond regulatory requirements; 266 264 Commenters emphasize the need for flexibility in assessing mitigation measures. See, e.g., Enbridge Pre-Conference Comments at 9; Enbridge Technical Conference Comments at 46–47 (suggesting that, depending on a variety of factors, the applicant may or may not be able to propose appropriate mitigation at the time of the project application); Hon. Joseph T. Kelliher Technical Conference Comments at 11 (recommending alternatives to imposing mitigation requirements such as revising the Commission’s 2015 Modernization Policy Statement, issuing a new GHG policy statement that either allows limited section 4 rate filings to recover costs or clarifies the level of shipper support required to support establishment of a tracker surcharge and recommending that such a policy address lost and unaccounted-for fuel, or implementing a fast track certificate process for project sponsors that voluntarily commit to mitigate direct GHG emissions); INGAA Technical Conference Comments at 30; Magnolia LNG LLC Technical Conference Comments at 2; TC Energy Technical Conference Comments at 5, 21 (arguing against the Commission requiring marked-based mitigation measures). A few commenters either oppose use of the SCC in determining a required level of mitigation for project emissions, Enbridge Technical Conference Comments at 6, 38–39, or urge the Commission to use the SCC to monetize the impacts of any GHGs that are not able to be mitigated, Attorneys General of Massachusetts et al. Technical Conference Comments at 7. As described above, the Commission does not propose to mandate any particular level or type of mitigation. 265 For example, Mountain Valley Pipeline, LLC, proposed to offset the operational emissions of the Mountain Valley Pipeline Project by purchasing carbon offset credits equivalent to 90% of GHG emissions associated with the project’s operations in its first 10 years of service from a new methane abatement project located at a mine in southwest Virginia. Mountain Valley Pipeline, LLC, Carbon Offset Commitment for Mountain Valley Pipeline Project Operations, Docket No. CP21–57–000 (filed July 12, 2021). 266 Regulatory requirements include those imposed by the Commission and other federal and state regulatory agencies. However, project sponsors may include participation in voluntary regulatory programs that reduce GHG emissions. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 b. be quantifiable—any emissions reductions must be calculated using a transparent and replicable methodology; c. be unencumbered—seller has clear ownership of or exclusive rights to the benefits of the GHG reduction; and d. be trackable—the project sponsor must also propose means for the Commission to monitor and track compliance with the proposed mitigation measures for the life of the project. 110. Commenters express concerns with how the Commission will determine whether mitigation measures are verifiable or how the Commission will monitor or track compliance with mitigation measures in a way that avoids double counting emissions reductions.267 Commenters point out that other federal agencies and states are already monitoring GHG emissions from certificated projects, such as EPA’s GHG Reporting Rule, so a Commissiondesigned monitoring scheme would be duplicative and unnecessary.268 EEI recommends that the Commission explore interagency agreements or memorandums of understanding (MOU) with agencies like EPA and PHMSA to avoid redundancies and clarify mitigation responsibilities,269 while INGAA states that such agreements or MOUs would be insufficient.270 111. We believe it best not to mandate mitigation based on a specific volume or proportion of emissions. Encouraging project sponsors to submit proposed mitigation measures as opposed to 267 See, e.g., INGAA Technical Conference Comments at 38–39. Dr. Carl Pechman, Director of the National Regulatory Research Institute and a panelist at the GHG Technical Conference on Panel 3, provides extensive comments on how the Commission could establish accounting protocols and offset tracking. Dr. Carl Pechman Technical Conference Statement at 1–15. 268 APGA Technical Conference Comments at 8– 9; Enbridge Technical Conference Comments at 48– 49; INGAA Technical Conference Comments at 40– 41; TC Energy Technical Conference Comments at 5–6, 22–23. Similarly, commenters state that the Commission should defer to other agencies, such as the EPA and state environmental agencies, that are already taking regulatory action regarding emissions, express concern over the potential for inconsistent mitigation requirements between agencies, and/or point to EPA’s methane regulation proposal to reduce GHG emissions from new, reconstructed, modified, and existing facilities in the oil and gas source category under section 111 of the Clean Air Act. APGA Technical Conference Comments at 5; EEI Technical Conference Comments at 10–11; INGAA Technical Conference Comments at 30–32; NGSA Technical Conference Comments at 6–7. Conversely, one commenter encourages the Commission to use resources from the EPA’s pending rulemaking. Attorneys General of Massachusetts et al. Technical Conference Comments at 6–7 (referencing Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021)). 269 EEI Technical Conference Comments at 12–14. 270 INGAA Technical Conference Comments at 40–41. PO 00000 Frm 00019 Fmt 4701 Sfmt 4703 14121 mandating a certain level of mitigation for all projects allows the Commission to consider a project sponsor’s proposed mitigation plan in comparison to the project’s benefits, such as fuel switching or providing reliable gas service, when making a public interest determination and allows project sponsors the flexibility to choose what mitigation measures work best for their individual project. Moreover, we recognize that determining an appropriate amount of mitigation, particularly for downstream uses, depends on a variety of complex factors, some of which may not be known at the time of an application, such as state and local climate change policies, the interconnected nature of the natural gas pipeline system, longterm changes in natural gas supply sources, changes in demand for natural gas over time, individual companies’ long-term goals to reduce GHG emissions, the availability of renewable energy credits or other carbon offsets, and the potential for future action by other federal agencies.271 112. Similarly, we believe it best to allow project sponsors to demonstrate that their proposed mitigation measures are verifiable and propose means for the Commission to monitor or track the proposed measures through the life of the project. This approach allows project sponsors to take advantage of existing monitoring programs and tailor verification and tracking to their chosen mitigation proposals and prevents the Commission from needing to establish a new monitoring program. 4. Opportunities for Mitigation 113. While project sponsors are free to propose any type of mitigation mechanism, the following are examples of mitigation mechanisms project sponsors may consider. a. Market-Based Mitigation 114. Project sponsors may mitigate the GHG emissions of a proposed project through participation in one (or more) of the various types of carbon offset markets. Sponsors could, for example, purchase renewable energy credits, participate in a mandatory compliance market (if located in a state that requires participation in such a market), or participate in a voluntary carbon market. i. Renewable Energy Credits 115. Renewable energy credits (REC) are tradeable, market-based 271 See, e.g., Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2020). E:\FR\FM\11MRN2.SGM 11MRN2 14122 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices commodities that provide proof that one megawatt hour of electricity was generated from a renewable source and delivered to the grid. RECs legally convey the attributes of renewable electricity generation to their owner. While state or regional RECs may be traded on financial exchanges that typically meet state or regional guidelines, they are not limited by geographic boundaries—RECs can be purchased independently from electricity and can be matched with energy consumption.272 116. Commenters argue that the Commission may not require RECs because unlike offsets, RECs pertain only to the use of electric power and are therefore not appropriate for upstream or downstream mitigation, do not mitigate or compensate for GHG emissions, and are not denominated in carbon dioxide (CO2) or CO2e, thus, they cannot represent any specific amount of avoided or reduced emissions.273 Enbridge also states that in most instances, project sponsors will not qualify to purchase RECs under existing state programs.274 While RECs may not represent a 100% offset per unit of GHG emitted, RECs do represent a decrease in GHG emissions from overall energy use and production, and we will consider them. ii. Mandatory Compliance Market Participation lotter on DSK11XQN23PROD with NOTICES2 117. The compliance market is a mandatory offset program regulated by national, regional, or provincial law and mandates CO2 and GHG emission reduction requirements. Under this framework an allowance, which is an authorization for an entity to emit GHG emissions, is created. Allowances are generated and traded for regulatory compliance and are priced as a commodity based on supply and demand, regardless of project type. 118. A prime example of an existing, domestic compliance market is the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cooperative effort by eleven Northeast and Mid-Atlantic 272 For more information, see EPA Green Power Partnership, Offsets and RECs: What’s the Difference (Feb. 2018), https://www.epa.gov/sites/ default/files/2018-03/documents/gpp_guide_recs_ offsets.pdf. 273 Enbridge Pre-Conference Comments at 6–7; Enbridge Technical Conference Comments at 42–46; Enbridge 2021 Comments at 145–148; INGAA Technical Conference Comments at 33. 274 Enbridge 2021 Comments at 23, 148 n. 406 (stating that the lack of a federal REC program coupled with the patchwork of state and regional, as well as voluntary and mandatory, REC programs brings into question whether project sponsors could participate in these existing programs). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 states 275 to limit CO2 emissions at certain electric power generators. Each region involved in RGGI has an established emissions budget (cap) and each electric power generator holds allowances covering their GHG emissions. If a generator is below its established cap, it may trade an allowance to other entities 276 that exceed their cap. RGGI has an established emissions-based auction and trading system where allowances are bought, sold, and traded.277 In addition to allowances, offsets may be used for compliance purposes, which requires a third-party certification of that offset for use. RGGI strictly regulates the quantity and types of offsets. There are five predetermined types of RGGI offsets: a. Landfill gas (methane) capture/burning; b. sulfur hexafluoride capture/recycling; c. afforestation (the establishment of a forest in an area where there was no previous tree cover); d. energy efficiency (end use); and e. agricultural manure management operations (avoided emissions). 119. In addition to RGGI, California participates in the Western Climate Initiative with Quebec and Nova Scotia,278 covering industrial production, electricity generation, residential, commercial, and small industrial combustion, and transportation fuel combustion. 120. If an applicant proposes any method of market-based mitigation of GHG emissions, such as those described in this section, we encourage the applicant to inform the Commission of any state or regional compliance goals or initiatives that may be relevant to our consideration of such mitigation proposal. iii. Voluntary Carbon Market Participation 121. If a project sponsor is not located in a state that participates in a mandatory compliance market, the voluntary carbon market offers an opportunity to mitigate project 275 RGGI includes: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia. 276 Any entity is eligible to participate in CO 2 allowance auctions including, but not limited, to corporations, individuals, non-profit corporations, environmental organizations, brokers, and other interested parties. The Regional Greenhouse Gas Initiative, CO2 Allowance Auctions, Frequently Asked Questions 1 (Apr. 6, 2021), https:// www.rggi.org/sites/default/files/Uploads/AuctionMaterials/54/FAQS_Apr_6_2021.pdf. 277 23.5 million CO allowances (short tons) sold 2 at RGGI auction in March 2021 at clearing price of $7.60/allowance. 278 54.7 million CO allowances (metric tons) sold 2 at settlement price of $17.8/allowance during a February 2021 auction. PO 00000 Frm 00020 Fmt 4701 Sfmt 4703 emissions. The voluntary carbon market transacts with offsets, which are the instrument representing the reduction, avoidance, or sequestration of one metric ton of GHG.279 The voluntary market funds additional, external projects that avoid or reduce GHG emissions.280 The voluntary carbon market is open to project sponsors regardless of location and is more flexible than compliance markets, although each market has its own standards, registries, and project types. Offset allowances are issued to project sponsors of qualifying CO2 emissions offset projects. 122. Typically, an independent third party qualifies offset projects and establishes standards to verify offsets; however, not all offsets available in the voluntary market are certified by a third party. In order to ensure the additionality and permanence of offsets, the use of unverified offsets is discouraged. If a project sponsor proposes to mitigate project emissions through participation in a voluntary carbon market, the sponsor is encouraged to seek Commission approval of the third party that would verify the offsets prior to participation. Examples of existing, acceptable thirdparty certifiers include: a. Climate Action Reserve; 281 b. Verified Carbon Standard; 282 and c. American Carbon Registry.283 123. Some commenters support allowing project sponsors to purchase emissions offsets while others oppose it as a mitigation method. For example, Policy Integrity recommends that the 279 EPA Green Power Partnership, supra note 272. 2019, 104 million metric tons of CO2e offsets were sold and the price per metric ton CO2e was $1.40 to $4.30, depending on type of project (renewable energy and forestry/land use, respectively). S&P Global Platts, Voluntary Carbon Market Grows 6% on Year in 2019: Ecosystem Marketplace (Sep. 22, 2020), https:// www.spglobal.com/platts/en/market-insights/latestnews/coal/092220-voluntary-carbon-market-grows6-on-year-in-2019-ecosystem-marketplace. 281 Typical offset projects include ozone depleting substances destruction, landfill gas capture/ combustion, livestock gas capture/combustion, improved forest management, avoided grassland conversion, and improved forest management, among others. For more information, see generally https://www.climateactionreserve.org/. 282 Typical offset projects include renewable energy, forest and wetland conservation and restoration, transport efficiency improvement, nitrous oxide abatement, clean cookstoves, methane capture and use/combustion, and waste heat recovery. For more information, see generally https://verra.org/. 283 Typical offset projects include ozone depleting substances destruction, industrial process emissions, fuel switching, livestock waste management, transport fleet efficiency, landfill gas capture and combustion, wetland restoration, forest management, and coal mine methane capture. For more information, see generally https:// americancarbonregistry.org/. 280 In E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices Commission require certificate holders to purchase emission offsets from a third party.284 Policy Integrity states that carbon offsets are: (1) Consistent with compensatory mitigation requirements employed by other federal agencies, such as the Bureau of Land Management, U.S. Fish and Wildlife Service, and EPA; and (2) included and supported in CEQ’s NEPA regulations and guidance.285 Policy Integrity also recommends that the Commission develop a carbon offset program as opposed to relying on third-party programs; 286 however, the Commission lacks statutory authority to create such a program and believes that the existing programs and certifiers mentioned above are sufficient. 124. Conversely, some commenters oppose the Commission requiring project sponsors to purchase offsets from third parties because it is difficult to ensure that carbon offsets have the necessary traits of additionality (the reduction would not have happened but for the purchased offset), permanence (the reduction persists for the entire certification period of the offset), absence of leakage (the offset does not trigger some other activity elsewhere that adds GHG emissions), and rigorous third-party verification.287 INGAA further comments that it would be difficult or impossible for the Commission to choose an appropriate level of offsetting because of the variability in emissions over the life of a project and the risk of over-counting for a given quantity of gas that might move over multiple jurisdictional transportation projects, and that not enough high-qualify offsets are available.288 Commissioner Kelliher cautions that the Commission would have to verify offsets given concerns about fraud and environmental and accounting integrity.289 As previously stated, the Commission is not requiring project sponsors to purchase offsets or mandating a certain level of offsetting, and while the Commission acknowledges the challenges with thirdparty offsets, we believe the certifiers 284 Policy Integrity 2021 Comments at 14–15, 19. Integrity 2021 Comments at 23–26 (citing 40 CFR 1508.1(s)(5)). 286 Policy Integrity 2021 Comments at 20. 287 Enbridge Pre-Conference Comments at 7–8; INGAA 2021 Comments at 79–82. 288 INGAA Technical Conference Comments at 34–36; INGAA 2021 Comments at 79–82; see also Enbridge Pre-Conference Comments at 8–9; Enbridge Technical Conference Comments at 46–47. 289 Hon. Joseph T. Kelliher Technical Conference Comments at 7; see also id. (asserting that this process would be complicated because credits could originate outside the U.S. and the Commission has no verification expertise). lotter on DSK11XQN23PROD with NOTICES2 285 Policy VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 mentioned above will sufficiently account for them. b. Physical Mitigation 125. In addition to purchasing RECs or emissions offsets, project sponsors could also propose to mitigate and/or offset GHG emissions through the use of physical, on- or off-site mitigation measures. Physical mitigation measures could include smaller-scale efforts including reducing a project’s fugitive methane emissions or incorporating renewable energy or other energy efficient technologies to reduce a project’s GHG emissions from compressor stations, or larger-scale undertakings such as carbon capture and storage, or direct air CO2 capture. Project sponsors could also propose environmentally based measures, such as planting trees along the right-of-way or in other locations to offset carbon emissions or restoring wetlands to provide additional carbon storage; however, the scale needed for such measures to meaningfully mitigate GHG emissions may render them impractical. In addition, project sponsors could propose to reduce GHG emissions from their existing facilities, including those with no direct connection to the proposed project, as mitigation for project-related emissions. 126. Commenters detail a host of mitigation measures they are currently undertaking or propose to implement to reduce direct project emissions, such as: Installing vent gas recovery systems and optimizing operations to reduce venting and blowdowns, replacing cast iron/ unprotected steel pipes with polyethylene or protected steel pipes to minimize leaks, employing a variety of technologies and methods to identify and reduce leaks, and replacing natural gas-fired horsepower at compressor stations.290 Other commenters echo 290 E.g., AGA Technical Conference Comments at 28–30; API Technical Conference Comments at 6– 8; Boardwalk Technical Conference Comments at 5– 6; Con Edison Technical Conference Comments at 7–10 (detailing other efforts reduce emissions using renewable natural gas, certified natural gas, and hydrogen); Enbridge Pre-Conference Comments at 5; Enbridge Technical Conference Comments at 13–14, 39–41; INGAA Technical Conference Comments at 28–30 (citing its 2021 Climate Report); Magnolia LNG LLC Technical Conference Comments at 2 (describing its proprietary technology to reduce emissions during the liquefaction process); Scott A. Hallam Technical Conference Statement at 2 (Scott A. Hallam, Senior Vice President of Transmission and Gulf of Mexico at Williams, was a panelist at the GHG Technical Conference on Panel 1.); Stephen Mayfield Technical Conference Statement at 1–2 (Stephen Mayfield, AGM of Gas Operations at City of Tallahassee, was a panelist at the GHG Technical Conference on Panel 3.); Texas LNG Brownsville LLC Technical Conference Comments at 6; William F. Donahue Technical Conference Statement at 3 (William F. Donahue, Manager of PO 00000 Frm 00021 Fmt 4701 Sfmt 4703 14123 some of those suggestions 291 and recommend operational limits on construction equipment, such as limited idle time when engines are not in use.292 Other commenters criticize any mitigation measures, especially carbon capture and sequestration and offsets, and recommend that the Commission achieve ‘‘real zero’’ emissions that accounts for air and water pollution and focuses on environmental justice communities and workers impacted by the negative externalities associated with project operation and jobs that are being phased out.293 Some commenters assert that direct emissions are already substantially mitigated pursuant to the regulatory authority exercised by other agencies.294 With regard to methane leaks, Dr. Anna Scott explains that its independent certification and measurement program verifies that a company’s operations meet regulatory standards and incentivize companies to go beyond the standards by using an engineering-based review process that assesses development through to operations, as well as continuous monitoring of emissions along the supply chain.295 On a policy level, Gary Natural Gas Resources at Puget Sound Energy, was a panelist at the GHG Technical Conference on Panel 2.); INGAA 2021 Comments at 79–82. Some commenters note, however, that use of electric compressors may increase indirect emissions depending on the generation mix and existing infrastructure or cite concerns about the impact to the reliability of gas service during power outages. E.g., American Forest Technical Conference Comments at 13; Enbridge Pre-Conference Comments at 5–6; Enbridge Technical Conference Comments at 41; Kinder Morgan Technical Conference Comments at 22–23. 291 Delaware Riverkeeper 2021 Comments at 66; Kirk Frost 2021 Comments at 11. 292 Delaware Riverkeeper 2021 Comments at 66. 293 Rachel Dawn Davis, the Public Policy and Justice Organizer at Waterspirit, was a panelist at the GHG Technical Conference on Panel 3. Rachel Dawn Davis Technical Conference Statement at 1; Waterspirit Technical Conference Comments at 1– 2; see also Technical Conference Transcript at 106– 107 (transcribing remarks made by Dr. Nicky Sheats, Director of the Center for Urban Environment at the John S. Watson Institute for Public Policy and panelist on Panel 2). 294 E.g., TC Energy Technical Conference Comments at 20. 295 Dr. Anna Scott, Co-Founder and Chief Science Officer of Project Canary, was a panelist at the GHG Technical Conference on Panel 2. Dr. Anna Scott Technical Conference Statement at 1–2, 5 (mentioning key engineering components such as operational venting or flaring, electrification of facilities and equipment, low bleed and/or zero bleed process controls, leak detection and repair programs, produced water treatment and reuse, and infrastructure and facility efficiency investments and describing how the company uses on-site sensors and algorithm technology to provide continuous monitoring). Along with pursuing carbon capture and storage solutions, Ivan Van der Walt, Chief Operating Officer at NextDecade Corporation and a panelist at the GHG Technical Conference on Panel 2, describes the joint pilot E:\FR\FM\11MRN2.SGM Continued 11MRN2 14124 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices Choquette of Pipeline Research Council International (PRCI) argues for a centralized funding mechanism for pipeline research to establish gas quality requirements with the aim of maximizing supply and reducing emissions and notes that PRCI has developed a tool that provides a method for prioritizing alternatives to reduce emissions based on effectiveness and associated capital and operating costs.296 127. Commenters also recommend that the Commission consider a project sponsor’s participation in programs that help shippers voluntarily reduce emissions and other voluntary emissions reductions programs when evaluating mitigation measures, such as the ONE Future Coalition, Oil and Gas Climate Initiative, Climate and Clean Air Coalition Oil and Gas Methane Partnership, EPA Natural Gas STAR Program and Natural Gas STAR Methane Challenge Program, Methane Guiding Principles, the Natural Gas Sustainability Initiative, and The Environmental Partnership.297 The Commission encourages project sponsors to detail their participation in such programs and any other voluntary measures as part of their mitigation plan for the Commission to consider as part of its public interest determination. lotter on DSK11XQN23PROD with NOTICES2 c. Cost Recovery 128. Commenters request that the Commission allow full cost recovery for any GHG mitigation measures through either the section 7 process or a general section 4 rate case for capitalized mitigation costs but caution the Commission to ensure that mitigation efforts are verified and the consumer’s interest in low prices are balanced with a project sponsor’s right to recover costs and earn a fair rate of return under the NGA.298 Alternatively, for periodic project NextDecade has formed with Project Canary for measuring and certifying the GHG intensity of LNG sold from the Rio Grande LNG Project export facility. Ivan Van der Walt Technical Conference Statement at 2–3. 296 Gary Choquette, Executive Director of Research and IT at PRCI, was a panelist at the GHG Technical Conference on Panel 2. Gary Choquette Technical Conference Statement at 3–4. 297 See, e.g., AGA Technical Conference Comments at 17–20; API Technical Conference Comments at 7–8; Boardwalk Technical Conference Comments at 5–6; NGSA Technical Conference Comments at 5; Scott A. Hallam Technical Conference Statement at 2–3; Stephen Mayfield Technical Conference Statement at 1; William F. Donahue Technical Conference Statement at 3–4; BHE Pipeline Group 2021 Comments at 12–14; Cheniere Energy Inc. 2021 Comments at 17. 298 Boardwalk Technical Conference Comments at 3; Enbridge Technical Conference Comments at 15, 49; INGAA Technical Conference Comments at 42– 45; TC Energy Technical Conference Comments at 6. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 purchases of market-based mitigation measures specifically, commenters state that pipelines could propose a tracker through a limited section 4 filing.299 Conversely, other commenters oppose passing mitigation costs along to shippers, especially if it would increase rates for end-users, particularly lowincome communities, who may not directly reap any local environmental benefits.300 In the event mitigation costs are passed to shippers, American Forest supports establishing a baseline from which to judge emissions reductions and supports having an independent entity monitor and measure those reductions.301 The Commission has previously considered and approved a proposal by a pipeline proponent to recover the costs of purchasing carbon offsets. In 2010, Ruby Pipeline, L.L.C., proposed to voluntarily purchase GHG offsets for the direct emissions associated with its compressor units (approximately 523,000 metric tons of GHG per year).302 Going forward, project sponsors wishing to purchase offsets or proposing other measures to mitigate their project’s GHG emissions may propose to recover the costs of these measures through their proposed rates. Applicants are encouraged to submit detailed cost estimates of GHG mitigation in their application and to clearly state how they propose to recover those costs. 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 299 Enbridge Technical Conference Comments at 15, 49; INGAA Technical Conference Comments at 45 (noting that the Commission should be clear that ‘‘recovery of costs related to an ongoing obligation to purchase market-based mitigation is akin to a fuel tracker and would not be subject to the modernization cost recovery tracker policy or the Commission’s policy against cost recovery trackers for regulatory compliance costs,’’ and incremental operating costs to reduce GHG emissions should also be recoverable through a tracker); see also Hon. Joseph T. Kelliher Technical Conference Comments at 7 (suggesting that, while burdensome to stakeholders, the Commission could adopt a trueup mechanism requiring project sponsors to deposit offsets, which would later be compared to actual emissions). 300 American Forest Technical Conference Comments at 15–16; APGA Technical Conference Comments at 6–8 (urging the Commission to consider the effects of cost-recovery on end-users, particularly low-income communities, who may not directly reap any local environmental benefits); American Forest and Paper Association et al. 2021 Comments at 26. 301 American Forest Technical Conference Comments at 14 (asserting that there is little transparency for customers with respect to Lost and Unaccounted for Fuel Charges, which are recoverable by shippers). 302 Ruby Pipeline, LLC, 131 FERC ¶ 61,007, at P 34 (2010). PO 00000 Frm 00022 Fmt 4701 Sfmt 4703 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. D. Application of Policy Statement 129. We will apply this interim policy statement to both pending and new NGA section 3 and 7 applications.303 As noted above, doing so will allow the Commission to evaluate and act on such applications without undue delay. Applicants with pending applications will be given the opportunity to supplement the record and explain how their proposals are consistent with this policy statement, and stakeholders will have an opportunity to respond to any such filings. A project sponsor for any new natural gas infrastructure project is encouraged to include the following in its NGA section 3 or 7 application: • The project’s projected utilization rate and supporting information; • an estimate of reasonably foreseeable project GHG emissions; • if upstream and downstream emissions are not quantified, evidence to support why those emissions are not reasonably foreseeable project emissions; • evidence, if any, that impacts the quantification of the project’s reasonably foreseeable GHG emissions; • a description of its proposed GHG mitigation measures, including the percent of the project’s direct and indirect GHG emissions that will be mitigated and, if applicable, a tracking mechanism for tracking mitigation of GHG emissions; and • a detailed cost estimate of its proposed GHG mitigation and a proposal for recovering those costs. 130. As explained above, the Commission will then consider the project’s impact on climate change, including the project sponsor’s mitigation proposal to reduce direct GHG emissions and, to the extent practicable, to reduce any reasonably foreseeable project emissions, as part of its determination under NEPA and its public interest determination under NGA section 3 or 7.304 303 Unless required by law or regulation, the Commission will not apply a presumptive significance threshold below 100,000 metric tons of CO2e to applications filed prior to issuance of a final policy statement. If the Commission adopts a new lower threshold in a final policy statement, that threshold will only apply to applications filed after issuance of that statement. 304 Certification of New Interstate Natural Gas Pipeline Facilities, 178 FERC ¶ 61,107 at PP 70–72, 93–95. E:\FR\FM\11MRN2.SGM 11MRN2 14125 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices V. Information Collection Statement 131. The collection of information discussed in the 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 305 and OMB’s implementing regulations.306 OMB must approve information collection requirements imposed by agency rules.307 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. 132. 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 10, 2022. The burden estimates are focused on implementing the voluntary information collection pursuant to this Policy Statement. The Commission asks that any revised burden estimates submitted by commenters include the details and assumptions used to generate the estimates. 133. The following estimate of reporting burden is related only to this Policy Statement. 134. Public Reporting Burden: The collection of information related to this Policy Statement falls under FERC–577 and impacts the burden estimates associated with the ‘‘Gas Pipeline Certificates’’ component of FERC–577. The Policy Statement will not impact the burden estimates related to any other component of FERC–577. The estimated annual burden 308 and cost 309 follow. FERC–577 (NATURAL GAS FACILITIES: ENVIRONMENTAL REVIEW AND COMPLIANCE) AS A RESULT OF PL21–3–000 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) lotter on DSK11XQN23PROD with NOTICES2 Gas Pipeline Certificates .......... 40 1 135. Title: FERC–577, Natural Gas Facilities: Environmental Review and Compliance 136. Action: Proposed revisions to an existing information collection. 137. OMB Control No.: 1902–0128 138. Respondents: Entities proposing natural gas projects. 139. Frequency of Information Collection: On occasion. 140. Necessity of Voluntary Information Collection: The Commission’s existing FERC–577 information collection pertains to regulations implementing NEPA and reporting requirements for landowner notifications. The information collected pursuant to this Policy Statement should help the Commission in assessing natural gas infrastructure projects. 141. 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. 305 44 U.S.C. 3507(d). CFR 1320. 307 This 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. 306 5 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 40 1,520 hrs; $132,240 Increase. 142. Interested persons may provide comments on this informationcollection 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. VI. Comment Procedures 143. The Commission invites comments on the interim policy statement by April 4, 2022. Comments must refer to Docket No. PL21–3–000 and must include the commenter’s name, the organization they represent, if applicable, and their address in their comments. 144. The Commission encourages comments to be filed electronically via the eFiling link on the Commission’s website at https://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word 308 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. PO 00000 Frm 00023 Fmt 4701 Sfmt 4703 60,800 hrs; $5,289,600 Increase. $132,240 Increase. processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing. 145. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426. 146. All comments will be placed in the Commission’s public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters. VII. Document Availability 147. 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 309 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. E:\FR\FM\11MRN2.SGM 11MRN2 14126 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices Emergency concerning the Novel Coronavirus Disease (COVID–19). 148. 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. 149. 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 Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews lotter on DSK11XQN23PROD with NOTICES2 Docket No. PL21–3–000 DANLY, Commissioner, dissenting: 1. I dissent in full from today’s Interim Greenhouse Gas (GHG) Policy Statement which purports to set forth the Commission’s procedures to evaluate the climate change impacts of proposed natural gas projects under the National Environmental Policy Act (NEPA) and to incorporate climate change considerations into the Commission’s determinations under sections 3 and 7 of the Natural Gas Act (NGA).1 2. This policy statement is irredeemably flawed. It is practically unworkable because it establishes a standardless standard. Its universal application to all projects, both new and pending (some for over two years), is an affront to basic fairness and is unjustifiable, especially in light of the many unnecessary delays already suffered by applicants. It is unlawful because it is illogical, it arrogates to the Commission power it does not have, and it violates the NGA, NEPA and the 1 Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (Interim Policy Statement). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 Commission’s and the Council on Environmental Quality’s (CEQ) regulations. It is also deliberately drafted so as to evade judicial review. Lastly, it will sow confusion throughout an industry that already suffers profound uncertainty. This issuance does not know what it is and neither will affected entities: It is immediately applicable, but also seeks comments, and it is allegedly not a draft policy statement, but an ‘‘interim’’ one. How can stakeholders have any confidence in its contents at all? 2 3. When reading this policy statement, it is nearly impossible to credit the majority with actually believing that ‘‘minimiz[ing] our litigation risk,’’ making Commission decisions ‘‘legally durable,’’ and ‘‘increas[ing], not reduc[ing], customer and investor confidence,’’ are truly the goals of this proceeding.3 Rather, the purpose of this Interim Policy Statement, like several of the Commission’s other recent Natural Gas Act issuances, appears to be to actively discourage the submission of section 3 or section 7 applications by intentionally making the process more expensive, more time-consuming, and riskier.4 2 But see Chairman Glick September 24, 2021 Response to Senator Barrasso September 15, 2021 Letter, Docket Nos. CP17–40–000, et al., at 1 (‘‘When courts find flaws in the Commission’s analysis, it can lead to lengthy delays and cost developers substantially more than they originally forecasted.’’) (Accession No. 20210927–4003); id. at 9 (‘‘Ultimately, I believe that performing thorough permitting reviews and providing developers with legally durable certificates on which they can rely will do more than just about anything else to satisfy the purposes of the Natural Gas Act.’’); Chairman Glick May 21, 2021 Response to Senator Hoeven April 29, 2021 Letter, Docket No. PL18–1–000, at 1 (‘‘I believe we can make changes to the Certificate Process that enhance our efficiency in processing applications and better address various directives we have received from the appellate courts.’’) (Accession No. 20210524–4014). 3 Chairman Glick February 2, 2022 Response to Senator Barrasso December 15, 2021 Letter at 4 (Accession No. 20220202–4003); see also Commissioner Clements February 2, 2022 Response to Senator Barrasso December 15, 2021 Letter at 2 (Accession No. 20220202–4000) (‘‘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.’’). 4 See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ¶ 61,126 (2021) (Danly and Christie, Comm’rs, dissenting) (Briefing Order), terminated, 178 FERC ¶ 61,029 (2022) (Danly and Christie, Comm’rs, concurring in part and dissenting in part); see also Commission Staff May 27, 2021 Notice in Tenn. Gas Pipeline Co., L.L.C., Docket No. CP20–493–000 (Accession No. 20210527–3054) (announcing schedule for Environmental Impact Statement (EIS) for project with previously prepared Environmental Assessment (EA)); Commission Staff May 27, 2021 Notice in North Baja Pipeline, LLC, Docket No. CP20–27–000 (Accession No. 20210527–3052) (same); Commission Staff May 27, 2021 Notice in PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 I. Overview of the Interim Policy Statement’s Contents 4. The Interim Policy Statement begins by explaining it will apply upon issuance while at the same time being subject to comment and revision.5 The majority explains this is necessary to ‘‘act on pending applications under sections 3 and 7 of the NGA without undue delay and with an eye toward greater certainty and predictability for all stakeholders.’’ 6 5. Next, it provides a historical background on past court, Commission, and CEQ issuances. For the sake of brevity, I will not describe this background discussion other than to note it is frequently misleading.7 6. Then the Interim Policy Statement announces that ‘‘the Commission will quantify a project’s GHG emissions that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action.’’ 8 This, it seems, will be fairly broad: the majority goes on to say that ‘‘[t]his will include GHG emissions resulting from construction and operation of the project as well as, in most cases, GHG emissions resulting from the downstream combustion of transported natural gas.’’ 9 7. The majority also states that it will continue to consider whether upstream emissions are a reasonably foreseeable effect for NGA section 7 projects on a case-by-case basis.10 Notably missing, though, is any discussion of how upstream emissions could have a reasonably close causal relationship to an NGA section 7 project.11 Columbia Gulf Transmission, LLC, Docket No. CP20–527–000 (Accession No. 20210527–3049) (same); Commission Staff May 27, 2021 Notice in Iroquois Gas Transmission System, L.P., Docket No. CP20–48–000 (Accession No. 20210527–3047) (same). 5 Interim Policy Statement, 178 FERC ¶ 61,108 at P 1. 6 Id. 7 For example, the D.C. Circuit in Vecinos para Bienestar de la Comunidad Costera v. FERC (Vecinos) found that the Commission failed to ‘‘respond to significant opposing viewpoints’’ regarding its analysis of GHG emissions. Vecinos, 6 F.4th 1321, 1329 (D.C. Cir. 2021). It did not find ‘‘that the Commission failed to appropriately analyze the significance of three natural gas projects’ contribution to climate change . . . .’’ Interim Policy Statement, 178 FERC ¶ 61,108 at P 14. 8 Interim Policy Statement, 178 FERC ¶ 61,108 at P 28. 9 Id. (emphasis added) (footnotes omitted). I interpret ‘‘in most cases’’ as meaning the Commission will quantify and consider downstream emissions for NGA section 7 projects unless it is shown that the gas will not be burned. See id. P 28 n.72. 10 See id. P 43. 11 It should be noted that the majority cites Sierra Club v. FERC (Sabal Trail) to argue downstream emissions have a reasonably close causal relationship to NGA section 7 projects. Id. P 39 & E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 8. The Interim Policy Statement then describes how the quantity of project’s emissions will be determined: By using a projected utilization rate for the project and considering ‘‘other factors that might impact a project’s net emissions.’’ 12 This raises more questions than it answers. Do these other factors include consideration of whether the natural gas being transported will actually reduce overall emissions or simply replace existing emissions; for example by powering natural gas generation that permits the retirement of higher-emitting generation or by serving an end use need that will turn to a different—and perhaps higher emitting—energy source if the pipeline is not constructed? 13 What does this mean for projects where the end use is unknown? Does the Commission have the expertise to evaluate a project sponsor’s evidence and resolve any factual disputes? Will the majority send these issues to an Administrative Law Judge as it recently did to resolve a dispute over what constituted appropriate post-construction right-ofway restoration (a subject matter with which the Commission presumably has some expertise)? 14 9. I would suspect most attentive readers would have been interested to then learn how, having determined the means by which to arrive at these numbers, the Commission plans to weigh emissions among all of the other factors to be considered in its NGA determination. But the majority does not say. 10. Next, the Interim Policy Statement explains ‘‘the Commission is establishing a significance threshold of 100,000 metric tons or more per year [(tpy)] of CO2e’’ 15 and will presume that the impact of a proposed project exceeding that threshold is significant unless refuted by record evidence.16 According to Commission staff, of the 214 projects with direct 17 and n.103 (citing 867 F.3d 1357, 1372–73 (D.C. Cir. 2017) (Brown, J., concurring in part and dissenting in part)). Below I explain how Sabal Trail must not be given too much weight. 12 Id. P 45. 13 See id. P 52. 14 See Midship Pipeline Co., LLC (Midship), 177 FERC ¶ 61,186 (2021) (Danly, Comm’r, dissenting at P 5) (‘‘I, for one, am willing to consider the parties’ arguments and make a decision.’’). 15 Interim Policy Statement, 178 FERC ¶ 61,108 at P 79. 16 See id. P 81. 17 Despite the fact that CEQ’s regulations no longer distinguish between ‘‘direct’’ and ‘‘indirect’’ effects, in order to reduce confusion I use the term ‘‘direct’’ to be consistent with the Interim Policy Statement. See Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act, 85 FR 43304, 43343 (Jul. 16, 2020). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 downstream emissions authorized from January 2017 through June 2021, this policy would have applied to 72% of them. This means that, as of the issuance of this Interim Policy Statement, the EIS is now our default environmental document.18 11. The Interim Policy Statement says the Commission has authority to impose GHG mitigation for both direct emissions and downstream emissions.19 This is a sweeping claim of jurisdiction and one that drastically departs from the Commission’s historic employment of its conditioning authority. But right on the heels of that jurisdictional declaration, instead of ordering mitigation, the majority ‘‘encourages’’ project sponsors to ‘‘propose measures to mitigate the direct GHG emissions of its proposed project to the extent these emissions have a significant adverse environmental impact’’ and ‘‘to mitigate the reasonably foreseeable upstream or downstream emissions associated with their projects.’’ 20 The majority states the Commission will consider these mitigation measures in its public interest determinations.21 This whole maneuver is odd—how often does one declare hitherto unasserted jurisdiction and then not employ it? Be warned: this is not restraint, it is foreshadowing.22 12. The majority tells project sponsors they are ‘‘free to propose any mechanism to mitigate the project’s GHG emissions’’ 23 and offers some suggestions. Plant trees.24 Incorporate renewable energy or other energy efficiency technologies.25 And, with the faint echo of Johann Tetzel, the majority also suggests purchasing 26 renewable energy offsets.27 13. The majority’s guidance ends there, leaving the project sponsor to figure out how much they should 18 But see 18 CFR. §§ 380.5–380.6 (setting forth when the Commission will prepare an EIS). 19 See Interim Policy Statement, 178 FERC ¶ 61,108 at PP 104–06. 20 Id. P 107; see also id. (‘‘The Commission plans to evaluate proposed mitigation plans on a case-bycase basis . . . .’’). 21 See id. P 108. 22 See id. P 106 (‘‘However, as detailed below, the Commission’s priority is for project sponsors to mitigate, to the greatest extent possible, a project’s direct GHG emissions.’’). 23 Id. P 110. 24 See id. P 126. 25 See id. 26 See id. PP 115–26; see also id. P 129 (‘‘project sponsors wishing to purchase offsets’’) (emphasis added). 27 ‘‘As soon as the coin in the coffer rings, the soul from purgatory springs.’’ See Robert King, Only in America: Tax Patents and the New Sale of Indulgences, 60 Tax Law 761, 761 (2007) (citing Ronald H. Bainton, Here I Stand: A Life of Martin Luther 60 (1950)). PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 14127 mitigate by these measures,28 some of which, it ought be pointed out, do not appear to have a discernable connection to the reduction of carbon emissions.29 Nor does the majority explain how the Commission can verify and track any such mitigation throughout the life of the project.30 The majority offers no general framework but says only that it wants project sponsors to mitigate ‘‘to the greatest extent possible.’’ 31 One wonders why no mechanism is set forth. Could it be that we learned nothing of value from soliciting comments on GHG mitigation,32 holding a technical conference on the subject,33 and soliciting a second round of comments following that technical conference? 34 And think of where this leaves project sponsors. Often, they seek guidance from Commission staff. But for the 30 applications that are currently pending, such communication is potentially barred by the Commission’s ex parte rules.35 And even for those who are not so disadvantaged, absent direction from the Commission, staff can offer no more than this: You must roll the dice and cross your fingers that the Commission will act on, and maybe even grant, the requested authorization.36 28 See Interim Policy Statement, 178 FERC ¶ 61,108 at P 107 (‘‘The Commission plans to evaluate proposed mitigation plans on a case-bycase basis and is not mandating a standard level of mitigation.’’). 29 For example, the Commission does not explain how the construction of a renewable energy or energy efficiency project reduces carbon emissions unless it could be shown that such construction will cause the retirement of, or prevent the construction of, a specific carbon emitting generation facility. Nor does the Commission describe how, in the absence of the identification of a specific facility to be displaced, it would be possible to determine the amount of mitigation provided by renewable energy or energy efficiency projects. 30 See Interim Policy Statement, 178 FERC ¶ 61,108 at P 113 (‘‘[W]e believe it best to allow project sponsors to demonstrate that their proposed mitigation measures are verifiable and propose means for the Commission to monitor or track the proposed measures through the life of the project.’’). 31 Id. P 106. 32 See Certification of New Interstate Nat. Gas Facilities, 174 FERC ¶ 61,125, at P 17 (2021) (‘‘C10. How could the Commission impose GHG emission limits or mitigation to reduce the significance of impacts from a proposed project on climate change? . . . If the Commission decides to impose GHG emission limits, how would the Commission determine what limit, if any, is appropriate?’’). 33 See Greenhouse Gas Mitigation, Technical Conference Transcript, Docket No. PL21–3–000 (Nov. 19, 2021). 34 See Commission Staff November 16, 2021 Notice Inviting Technical Conference Comments, Docket No. PL21–3–000. 35 18 CFR. § 385.2201. 36 I have anticipated a couple possible questions and will hazard answers that may be of interest: Will an EIS assess the adequacy of GHG mitigation or recommend GHG mitigation measures? My understanding is no. The Commission will E:\FR\FM\11MRN2.SGM Continued 11MRN2 14128 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 14. But the mitigation requirements may not end there. The majority states it ‘‘may require additional mitigation as a condition of an NGA section 3 authorization or section 7 certificate.’’ 37 Using what standard? Not stated. Perhaps, it will become a good-behavior approach akin to how the Commission has considered landowner impacts, stating: ‘‘We are satisfied that [project sponsor] has taken appropriate steps to minimize [GHG emissions].’’ 38 And this encumbrance is perpetual: Mitigation, the majority says, will span ‘‘the life of the project.’’ 39 That is long time. Ample opportunity for invasive oversight, enforcement actions, and novel, as yet unpredictable, employments of the Commission’s authority.40 15. Next, we reach the majority’s guidance on cost recovery. The majority states ‘‘[p]ipelines may seek to recover mitigation costs through their rates,’’ and are ‘‘encouraged to submit detailed cost estimates of GHG mitigation in their application and to clearly state how they propose to recover those costs.’’ 41 Pipelines may recover costs? On what possible basis could the Commission deny recovery? The majority declines to say. Then, presumably in response to comments about increasing rates for low-income communities and requests to balance the cost of mitigation with its environmental benefit, the majority states that ‘‘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.’’ 42 How can that be true when the Commission determine the adequacy of mitigation on a case-bycase basis in its orders. Will mitigation that was not considered in an environmental document require the Commission to supplement its environmental review? A clear answer was not provided. It is worth noting that section 1502.9(d)(1)(i) of CEQ’s regulations state ‘‘Agencies . . . [s]hall prepare supplements to either draft or final environmental impact statements if a major Federal action remains to occur, and . . . [t]he agency makes substantial changes to the proposed action that are relevant to environmental concerns . . . .’’ 40 CFR. § 1502.9(d)(1)(i). 37 Interim Policy Statement, 178 FERC ¶ 61,108 at P 99. 38 Double E Pipeline, LLC, 173 FERC ¶ 61,074, at P 32 (2020). 39 Interim Policy Statement, 178 FERC ¶ 61,108 at P 110. 40 See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ¶ 61,126 (2021) (Danly and Christie, Comm’rs, dissenting) (order establishing briefing to reopen final, non-appealable certificate order); Algonquin Gas Transmission, LLC, 178 FERC ¶ 61,029 (2022) (Danly and Christie, Comm’rs, concurring in part and dissenting in part) (order terminating briefing order but suggesting can reopen certificates to impose new terms). 41 Id. P 129. 42 Id. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 will issue a certificate only when it determines that proposed mitigation measures are required for a pipeline project to be deemed in the public convenience and necessity? Is the Commission really suggesting that it will deny the recovery of costs that it determines are necessary to satisfy the public interest? 16. The Interim Policy Statement concludes by informing project sponsors with pending applications that they ‘‘will be given the opportunity to supplement the record and explain how their proposals are consistent with this policy statement’’ and that those filings will be subject to a reply comment period.43 Future applicants are also ‘‘encouraged’’ to include a list of information in their filings.44 What happens if a project sponsor supplements its record and the Commission revises the Interim Policy Statement once again before acting on that project sponsor’s application? I can imagine that occurring as the comment deadline is six weeks away. And how can future applicants reasonably rely on interim guidance that may or may not change? What ‘‘certainty and predictability’’ 45 does this policy provide? 17. In sum, the Commission will weigh direct GHG emissions and, in most cases, downstream emissions in its NGA determinations. It will not tell you how these emissions will be assessed other than to say that project sponsors are encouraged to mitigate them. It will not tell you how project shippers will be protected from imprudently incurred costs. This is the tyranny of vagueness. It is also a threat. Imagine the fear that will animate the mitigation ‘‘voluntarily’’ proposed by those project sponsors with pending applications who are facing millions of dollars in sunk costs and with shippers that have relied on projects being placed into service and now only have higher cost and less reliable options available. This policy statement cannot rightly be described as ‘‘encouraging’’ anything.46 II. Interim Policy Statement Proposes, and Takes, Unlawful Actions A. The Interim Policy Statement, in Its Entirety, Is Based on the Wrong Premise 18. It is worth pausing to consider the underlying premise of the majority’s policy for considering GHG emissions, establishing a GHG emission threshold 43 Id. for preparing EISs, and requiring GHG emission mitigation. All are based on the presumption that GHG emissions are an ‘‘effect’’ of the proposed action. 19. In order to constitute an ‘‘effect,’’ three elements must be met: (1) There is a ‘‘change[ ] in the human environment,’’ that change (2) is ‘‘reasonably foreseeable,’’ and (3) it ‘‘has a reasonably close causal relationship to the proposed action or alternatives.’’ 47 The majority, however, does not allege that the change in the human environment at issue is the release of GHG emissions themselves. That makes sense, given that it would be like the Commission saying, in the hydropower context, that the flow of water from the powerhouse is a change in the human environment. While this would be an effect, it is not the kind of effect that is at issue in an environmental review. Instead, the effect we would care about would be the change to the quality or quantity of the body of water through which the water flows and any resultant further changes caused to species, vegetation, etc. 20. No, the majority is concerned about the changes in the human environment caused, not by the existence of GHG emissions themselves, but by climate change. The Interim Policy Statement is absolutely clear that this is its animating purpose: ‘‘The Commission is issuing this interim policy statement to explain how the Commission will assess the impacts of natural gas infrastructure projects on climate change’’; 48 ‘‘Climate change is the variation in the Earth’s climate (including temperature, humidity, wind, and other meteorological variables) over time’’; 49 ‘‘[C]limate change has resulted in a wide range of impacts across every region of the country and the globe. Those impacts extend beyond atmospheric climate change and include changes to water resources, agriculture, ecosystems, human health, and ocean systems.’’ 50 21. The question therefore is not whether GHG emissions are reasonably foreseeable but whether climate change and its resulting effects are reasonably foreseeable and have a reasonably close causal relationship to the proposed action. And if so, whether those effects are significant and can be mitigated by the Commission. 22. While determining the environmental impacts of a project is done on a case-by-case basis, the P 130. 44 Id. 47 40 45 Id. 48 Interim P 1. 46 But see Voltaire, Candide 125 (J.H. Brumfitt ed., Oxford Univ. Press 1968) (1759) (‘‘. . . pour encourager les autres.’’). PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 CFR. § 1508.1(g). Policy Statement, 178 FERC ¶ 61,108 at P 1. 49 Id. 50 Id. E:\FR\FM\11MRN2.SGM P 6. P 7 (citation omitted). 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 construction of a natural gas pipeline and transportation of natural gas in that pipeline are unlikely, on a project-byproject basis, to have a reasonably foreseeable (which is to say traceable and calculable) effect on climate change ‘‘in most cases.’’ 51 Were climate change a reasonably foreseeable effect (as this term is used in environmental reviews) of a particular project, we would be able to examine the cause (here, the construction and the transportation of gas) and then determine some articulable and quantifiable effect (here, the amount of additional climate change) for which the project itself is causally responsible. We have never been able to do that. And while it is not acknowledged at all in the Interim Policy Statement’s procedural history, the Commission has repeatedly stated that ‘‘it cannot determine a project’s incremental physical impacts on the environment caused by GHG emissions,’’ 52 and CEQ has made similar statements.53 Nothing in the Interim Policy Statement suggests this has changed nor has any new reasoning been offered to explain how we can better determine a quantifiable connection between the two. 23. The chain of causation is too attenuated for the cause and effect in this case to be considered to have a ‘‘reasonably close causal relationship.’’ The reasoning goes as follows: ‘‘Changes to water resources, agriculture, ecosystems, human health, and ocean systems’’ occurring throughout the world result from global atmospheric changes that themselves result from the warming that itself results from increases in the world-wide concentration of GHGs that enter the atmosphere as the emissions released by using natural gas, that in the case of end uses (that is, not pipeline operational uses), results from the transportation of 51 Id. P 28. It is worth recalling that the Court has likened NEPA’s ‘‘reasonably close causal relationship’’ requirement to the ‘‘familiar doctrine of proximate cause from tort law,’’ Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Public Citizen), and that a federal district court has found effects of climate change too attenuated for tort liability under state law. See Comer v. Murphy Oil USA, Inc., 839 F. Supp. 2d 849, 868 (S.D. Miss. 2012) (‘‘The assertion that the defendants’ emissions combined over a period of decades or centuries with other natural and man-made gases to cause or strengthen a hurricane and damage personal property is precisely the type of remote, improbable, and extraordinary occurrence that is excluded from liability.’’). 52 See, e.g., Trans-Foreland Pipeline Co. LLC, 173 FERC ¶ 61,253, at P 31 (2020). 53 See CEQ, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, at P 3 (2010), https:// obamawhitehouse.archives.gov/sites/default/files/ microsites/ceq/20100218-nepa-considerationeffects-ghg-draft-guidance.pdf. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 natural gas. The logical sequence is clear, but the causation is quite attenuated. And this attenuation cannot be shortened through the ploy of employing GHG emissions as a proxy for climate change. B. Consideration of Effects on Climate Change From Non-Jurisdictional Entities Violates the NGA and CEQ Regulations 24. The consideration of effects resulting from the upstream production or downstream use of natural gas violates the NGA and CEQ’s regulations. 25. The NGA authorizes the Commission to consider only those factors bearing on the ‘‘public convenience and necessity.’’ 54 The phrase ‘‘public convenience and necessity’’ is not ‘‘a broad license to promote the general public welfare.’’ 55 It does not permit the majority to conjure up its own meanings. As a ‘‘‘creature of statute,’ ’’ 56 the Commission must ‘‘look to the purposes for which the [Natural Gas Act] was adopted’’ to give it content and meaning.57 26. As the Court explained in NAACP v. FPC, ‘‘public convenience and necessity’’ means ‘‘a charge to promote the orderly production of plentiful supplies of electric energy and natural gas at just and reasonable rates.’’ 58 Simply put, the production and use of natural gas were not only presumed but were presumed to be in the public interest. Congress put its thumb on the scale in favor of gas and charged the Commission with ensuring that there would be adequate infrastructure in place to provide an abundant supply of natural gas available at reasonable prices for all Americans to use. The purpose of the NGA is narrow and clear. And it is a mousehole through which the elephant of addressing the climate change impacts of the entire natural-gas industry cannot pass.59 27. And while there were ‘‘subsidiary purposes’’ for the passage of the Natural 54 15 U.S.C. 717f(e). v. FPC, 425 U.S. 662, 669 (1976). 56 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)). 57 NAACP v. FPC, 425 U.S. at 669; see also FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 17 (1961) (Transco) (‘‘[I]t must be realized that the Commission’s powers under § 7 are, by definition, limited.’’) (citing H.T. Koplin, Conservation and Regulation: The Natural Gas Allocation Policy of the Federal Power Commission, 64 Yale L.J. 840, 862 (1955)). 58 NAACP v. FPC, 425 U.S. at 670 (emphasis added) (footnote omitted). As noted by Former Commissioner Bernard L. McNamee, this purpose was affirmed by later acts of Congress. See Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019) (McNamee, Comm’r, concurring at PP 32–40). 59 See Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001). 55 NAACP PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 14129 Gas Act,60 addressing the effects of climate change caused by using natural gas could not have been one of them. And even if it were, it is obvious that something that is ‘‘subsidiary’’ cannot, definitionally, override that which is primary. The majority cannot flip the NGA’s presumptions and consider the use of natural gas as intrinsically harmful, thus requiring mitigation. And it certainly cannot abandon our charge under the NGA to ‘‘promote the orderly production of plentiful supplies of . . . natural gas at just and reasonable rates’’ 61 by then weighing their determination that natural gas is harmful against the public interest when adjudicating section 3 and section 7 applications. This is directly contrary to the purpose Congress established the Commission to serve and supplants the judgment of Congress with that of the Commission. If that were not reason enough, it also invades jurisdictional territory that the courts have repeatedly held that Congress has reserved to the States.62 28. The majority cannot turn to the Supreme Court’s holding in Transco as authority.63 In that case, the Court held that the Federal Power Commission lawfully denied a certificate based on two factors: First, that using natural gas to alleviate air pollution from burning coal was an inferior use, and second, the 60 NAACP v. FPC, 425 U.S. at 670 (‘‘While there are undoubtedly other subsidiary purposes contained in these Acts . . . .’’) (footnote omitted); see also id. at 670 n.6. 61 NAACP v. FPC, 425 U.S. at 670 (emphasis added). 62 See Transco, 365 U.S. at 8 (‘‘However, respondents correctly point out that 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. Therefore, it is necessary to consider with care whether, despite the accepted meaning of the term ‘public convenience and necessity,’ the Commission has trod on forbidden ground in making its decision.’’) (citation omitted); FPC v. Panhandle E. Pipe Line Co., 337 U.S. 498, 503 (1949) (‘‘Congress . . . not only prescribed the intended reach of the Commission’s power, but also specified the areas into which this power was not to extend.’’), accord ExxonMobil Gas Mktg. Co. v. FERC, 297 F.3d 1071, 1076 (D.C. Cir. 2002); S. Coast Air Quality Mgmt. Dist. v. FERC, 621 F.3d 1085, 1092 (9th Cir. 2010) (‘‘In sum, the history and judicial construction of the Natural Gas Act suggest that all aspects related to the direct consumption of gas—such as passing tariffs that set the quality of gas to be burned by direct end-users—remain within the exclusive purview of the states.’’); Pub. Utils. Comm’n. of Cal. v. FERC, 900 F.2d 269, 277 (D.C. Cir. 1990) (‘‘[T]he state . . . has authority over the gas once it moves beyond the high-pressure mains into the hands of an end user.’’). 63 See Interim Policy Statement, 178 FERC ¶ 61,108 at P 104 n.243 (discussing Transco, 365 U.S. at 17). E:\FR\FM\11MRN2.SGM 11MRN2 14130 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices proposal would increase future prices.64 It does not stand for the proposition that the Commission can consider adverse effects of air pollution, and thus climate change impacts, of using natural gas as the majority implies.65 29. Nor is the D.C. Circuit’s outlier opinion, Sabal Trail, as instructive as the majority seems to believe. It is very much in tension with prevailing Supreme Court precedent in Public Citizen, which held that agencies are only obligated to consider environmental effects to which their actions are the proximate cause.66 Public Citizen explained that courts must look to the ‘‘underlying policies or legislative intent’’ of an agency’s organic statute to determine whether an agency is obligated to consider environmental effects.67 The D.C. Circuit has also characterized Public Citizen as ‘‘explicit’’ that an agency is ‘‘not obligated to consider those effects . . . that could only occur after intervening action’’ by some other actor ‘‘and that only [that] actor[ ] . . . had the authority to prevent.’’ 68 In other words, when any potential effects are the result of the actions of third parties such as retail consumers, upstream production companies, and power generators, who may be several degrees of separation removed from the jurisdictional pipeline, those effects are outside the scope of what the agency must consider. 30. Thus, we should not rest too much weight upon Sabal Trail. Not only is the holding narrower than the majority seems to believe and was roundly criticized by the accompanying dissent,69 its reasoning has since been called into question by another appellate court and I expect it will soon be challenged in the Supreme Court.70 lotter on DSK11XQN23PROD with NOTICES2 64 Transco, 365 U.S. at 4–7. In discussing whether consideration of end use was proper in the context of conservation, the Court also noted, ‘‘[t]he Commission said that it had not been given ‘comprehensive’ authority to deal with ‘the end uses for which natural gas is consumed’ and that it would not deny certification on that ground alone.’’ Id. at 15–16 (discussing F.P.C., The First Five Years Under the Natural Gas Act). 65 Interim Policy Statement, 178 FERC ¶ 61,108 at P 104. Nor does the Federal Power Commission precedent, which the majority cites, support this proposition. See Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (McNamee, Comm’r, concurring at P 29 n.64). 66 541 U.S. 752, 767–69. 67 Id. at 767. 68 Sierra Club v. FERC, 827 F.3d 36, 49 (D.C. Cir. 2016). 69 See 867 F.3d at 1380 (Brown, J., concurring in part and dissenting in part) (‘‘More significantly, today’s opinion completely omits any discussion of the role Florida’s state agencies play in the construction and expansion of power plans within the state—a question that should be dispositive.’’). 70 See Ctr. for Biological Diversity v. U.S. Army Corps of Eng’s, 941 F.3d 1288, 1299–1300 (11th Cir. 2019). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 31. In sum, environmental effects resulting from the upstream production and downstream use of gas are not factors bearing on the public convenience and necessity under the Natural Gas Act. Further, the CEQ’s regulations affirmatively prohibit those effects from being considered in an agency’s compliance with NEPA.71 C. The Significance Threshold Is Illogical and Violates Regulations 32. In addition, the majority’s presumption that project emissions exceeding 100,000 tpy of CO2e will have a significant effect on the human environment is illogical and inconsistent with CEQ and Commission regulations. 33. The majority offers three irrelevant rationales for this presumption: 72 first, the threshold is administratively workable; 73 second, other agencies have established thresholds under different statutory schemes that are not based on a project’s effect on the climate; 74 and third, the threshold will ‘‘capture’’ 75 ‘‘99% of GHG emissions from Commissionregulated natural gas projects.’’ 76 It is worth noting that according to Commission staff, a 1 million tpy threshold would have covered 98.909% of emissions from natural gas projects authorized from 2017 through 2021, making the unsupported selection of the lower threshold both arbitrary and capricious. 34. The majority also states ‘‘even relatively minor GHG emissions pose a significant threat’’ ‘‘[b]ecause of the dire effects at stake.’’ 77 This rationale, however, is not supported by the evidence offered. The Commission does not explain how minor GHG emissions 71 40 CFR. § 1508.1(g)(3) (‘‘An agency’s analysis of effects shall be consistent with this paragraph (g).’’); id. § 1508.1(g)(2) (‘‘A ‘but for’ causal relationship is insufficient to make an agency responsible for a particular effect under NEPA. Effects should generally not be considered if they are remote in time, geographically remote, or the product of a lengthy causal chain. 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.’’). 72 The relevant question on whether the Commission should prepare an EIS is whether the proposed action ‘‘[i]s likely to have significant effects.’’ 40 CFR. § 1501.3(a)(3). 73 Interim Policy Statement, 178 FERC ¶ 61,108 at P 87 (‘‘Establishing such a threshold will provide the Commission a workable and consistent path forward to analyze proposed projects. Further, a numerical threshold is a clear, consistent standard that can be easily understood and applied by the regulated community and interested stakeholders.’’). 74 Id. PP 90–95. 75 Id. P 80. 76 Id. P 95. 77 Id. P 88. PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 could lead to ‘‘dire effects.’’ We cannot just assume—this is administrative law—we must show evidence. More importantly, the rationale does not link a proposed project to effects on climate change. And for good reason. As CEQ declared: ‘‘it is not currently useful for the NEPA analysis to attempt to link specific climatological changes, or the environmental impacts thereof, to the particular project or emissions, as such direct linkage is difficult to isolate and to understand.’’ 78 The Commission has repeatedly agreed.79 35. On top of being illogical, the Interim Policy Statement effectively amends the Commission’s NEPA regulations without undergoing noticeand-comment procedures as required by the Administrative Procedure Act.80 The Interim Policy Statement provides that an EIS will be prepared when the threshold is exceeded at full burn.81 The Commission’s NEPA regulations, however, set forth specific categories of projects where an EA and EIS ‘‘will normally be prepared,’’ 82 with no mention of GHG emissions. And in a case where an EA is normally prepared, the Commission ‘‘may in specific circumstances’’—meaning a case-bycase determination—decide whether to prepare an EIS ‘‘depending on the location or scope of the proposed action, or resources affected.’’ 83 36. Given these fatal flaws, it is no wonder the majority seeks comment ‘‘in particular, on the approach to assessing the significance of the proposed project’s contribution to climate change.’’ 84 D. GHG Mitigation 1. Claims of Authority To Mitigate 37. Next, the majority states that the Commission’s conditioning power gives it authority to require a pipeline to mitigate GHGs emitted by its operations 78 CEQ, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, at P 3 (2010), https:// obamawhitehouse.archives.gov/sites/default/files/ microsites/ceq/20100218-nepa-considerationeffects-ghg-draft-guidance.pdf. 79 See supra P 22 n.52. 80 5 U.S.C. 553; see also Shell Offshore Inc. v. Babbitt, 238 F.3d 622, 629 (5th Cir. 2001) (‘‘[T]he APA requires an agency to provide an opportunity for notice and comment before substantially altering a well established regulatory interpretation.’’). 81 Interim Policy Statement, 178 FERC ¶ 61,108 at P 3. 82 18 CFR 380.5–380.6; see also Commissioner Danly November 29, 2021 Response to Senator Barrasso September 15, 2021 Letter, Docket Nos. CP20–27–000, et al., at 12, Fig. 2 (Accession No. 20211214–4001). 83 18 CFR. § 380.5(a) (emphasis added). 84 Interim Policy Statement, 178 FERC ¶ 61,108 at P 1; see also id. P 81. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices and reasonably foreseeable indirect effects.85 The majority is incorrect. 38. As commenters explain,86 without any response from the majority, the Supreme Court has held that ‘‘Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions’’ from stationary sources.87 By claiming the authority to mitigate these same emissions as part of the Natural Gas Act certification process, the majority are attempting to usurp the statutory authority the Court found Congress has delegated to EPA and which cannot be reassigned absent Congressional action.88 If the EPA were to regulate GHG emissions from pipeline facilities, which it is contemplating doing,89 the Commission could possibly require project sponsors to comply with those requirements. But one would not say that the Commission could on its own require project sponsors to mitigate, for example, sulfur dioxide because the EPA had chosen not to do so, or the Commission believed its regulations to be inadequate. 39. The Commission’s conditioning authority also does not allow the Commission to mitigate GHG emissions from upstream or downstream users. The commenters make the point,90 also sidestepped by the majority,91 that the Commission’s conditioning authority cannot be used to indirectly do what the Commission cannot do directly. That is, the Commission may not indirectly rely on the Natural Gas Act to impose 85 Id. P 106. P 103 (‘‘For example, commenters argue that Congress has delegated authority to the EPA and state agencies to regulate GHGs under the [Clean Air Act].’’) (citation omitted); see also id. P 103 n.238 (citing American Public Gas Association Technical Conference Comments at 5–6; EEI Technical Conference Comments at 9–10; Enbridge Technical Conference Comments at 23–24; TC Energy Technical Conference Comments at 9–10). 87 Am. Elec. Power Co., Inc. v. Connecticut, 564 U.S. 410, 426 (2011) (emphasis added) (discussing in the context of power plants but would apply equally here); see also Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019) (McNamee, Comm’r, concurring at PP 52–61). 88 Whether EPA or CEQ have raised ‘‘objections’’ is not relevant. See Interim Policy Statement, 178 FERC ¶ 61,108 at P 85. 89 Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021). Commenters make the point, to which the majority does not respond, that the Commission should defer to EPA’s rulemaking. See, e.g., EEI Technical Conference Comments at 11 n.29. 90 See id. P 102. 91 See id. P 105 (‘‘we recognize, as many commenters assert, that the Commission does not have the statutory authority to impose conditions on downstream users or other entities outside the Commission’s jurisdiction . . . rather, the Commission encourages each project sponsor to propose measures . . . .’’) (emphasis in original). lotter on DSK11XQN23PROD with NOTICES2 86 Id. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 conditions on non-jurisdictional entities.92 40. Further, the Commission’s conditioning authority cannot be used in ways that would be directly contrary to the purpose of the NGA—to promote the production of plentiful supplies of natural gas at reasonable rates. The majority may not rewrite the purpose of the NGA to instead charge the Commission with the mission of discouraging the production and use of natural gas. 2. Encouraging Project Sponsors To Mitigate GHG Emissions 41. The Interim Policy Statement’s encouragement that project sponsors mitigate GHG emissions is in practical effect a requirement,93 and is not in accordance with the NGA. The NGA only empowers the Commission to impose terms and conditions in two contexts: (1) Pursuant to NGA section 3 when it finds such terms ‘‘necessary or appropriate’’ 94 to ensure a proposed export or import facility is not inconsistent with the public interest, and (2) pursuant to NGA section 7, when it finds such terms are ‘‘reasonable’’ and ‘‘require[d]’’ by the ‘‘public convenience and necessity.’’ 95 Only after making these findings, can the Commission require mitigation. 42. The majority does not attempt to make either of these required findings. It simply leaps from stating that the Commission has the discretion to mitigate GHG emissions to ‘‘expecting’’ applicants to mitigate their emissions. This amounts to no more than ‘‘because I said so.’’ More is required.96 92 See Altamont Gas Transmission, Co. v. FERC, 92 F.3d 1239, 1248 (D.C. Cir. 1996) (‘‘Although the Commission ordinarily has the authority to consider a matter beyond its jurisdiction if the matter affects jurisdictional sales—at least if there would otherwise be a regulatory gap—here there is no such gap but, on the contrary, an express congressional reservation of jurisdiction to another body.’’); Am. Gas Ass’n v. FERC, 912 F.2d 1496, 1510 (‘‘[T]he Commission may not use its § 7 conditioning power to do indirectly . . . things that it cannot do at all.’’); see also Calpine Corp., 171 FERC ¶ 61,035 (2020) (Glick, Comm’r, dissenting at P 7) (‘‘In recent years, the Supreme Court has repeatedly admonished both the Commission and the states that the FPA prohibits actions that ‘aim at’ or ‘target’ the other sovereign’s exclusive jurisdiction.’’). 93 See Interim Policy Statement, 178 FERC ¶ 61,108 at P 107 (‘‘[T]he Commission plans to evaluate proposed mitigation plans on a case-bycase basis . . . .’’) (emphasis added); id. P 131 (‘‘the Commission will then consider the project’s impact on climate change, including the project sponsor’s mitigation proposal to reduce direct GHG emissions and, to the extent practicable, to reduce any reasonably foreseeable project emissions . . . .’’). 94 15 U.S.C. 717b(a). 95 Id. § 717f(e). 96 See also Michigan v. EPA, 576 U.S. 743, 752 (2015) (explaining that the phrase ‘‘appropriate and PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 14131 III. Intent of the Interim Policy Statement 43. One cannot help but notice the lengths to which the majority goes in order to make this policy statement ‘‘non-binding,’’ using words like ‘‘propose,’’ ‘‘wish,’’ ‘‘opportunity,’’ and even insisting, in response to this dissent, that it does not ‘‘impose[] an obligation, deny[y] a right, or fix[ ] some legal relationship,’’ 97 for what appears to have no purpose other than to avoid notice-and-comment procedures (that is, public participation) and judicial review. For without judicial review as a check, there is no need to engage in reasoned decision-making or be limited by the purposes of the statute. 44. In this way, the majority appears to believe it can do whatever it wants. Arrogate to the Commission authority it does not have. Disregard regulations that are currently in force. Flout prevailing Supreme Court precedent. Make threats to manipulate project sponsors into ‘‘voluntarily’’ subjecting themselves to unnecessary processes and proposing mitigation of the ‘‘harm’’ resulting from the proposed use or transportation of natural gas to provide a service that Congress declared to be in the public interest. 45. If an entity requests rehearing of today’s policy statement, the majority can simply reject it—either by notice or order (without any discussion of the merits)—stating that rehearing does not lie for policy statements. And if a petition for review follows, the Commission can argue that the Interim Policy Statement is not subject to review because it is not a substantive rule. And if some project sponsor suggests it is proposing mitigation under duress and it reserves the right to challenge the mitigation requirement in court, the Commission can argue the project sponsor cannot be aggrieved because it voluntarily proposed the mitigation and accepted the certificate and its terms.98 necessary’’ in the Clean Air Act ‘‘requires at least some attention to cost’’); id. (‘‘One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.’’); id. 752–53 (‘‘Agencies have long treated cost as a centrally relevant factor when deciding to regulate.’’). 97 See Interim Policy Statement, 178 FERC ¶ 61,108 at P 5, n.6. 98 I recognize that project sponsors have previously reserved their right to appeal when accepting a certificate, which the Commission has not opposed. However, in the context of hydropower cases, the Commission has taken a different approach. See Rivers Elec. Co., Inc., 178 FERC ¶ 61,027, P 9 n.25 (2022) (Danly, Comm’r, concurring in part and dissenting in part) (‘‘If the transferee accepts this order, it is thereby agreeing to the new condition. It may decline to do so if it does not wish to accept the condition.’’). E:\FR\FM\11MRN2.SGM 11MRN2 14132 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 46. This is not good governance. Nor do I think it likely the majority will be successful. In my view, the Interim Policy Statement is a substantive, binding rule that is subject to judicial review. Despite the Interim Policy Statement’s hortatory verbiage, ‘‘there are sinews of command beneath the velvet words.’’ 99 Perhaps the best illustration of this is the list of six items project sponsors are ‘‘encouraged’’ to include in their applications in light of the new policy statement.100 This list includes estimates of the proposal’s cumulative direct and indirect emissions and what mitigation measures the project sponsors propose, as well as a ‘‘detailed cost estimate’’ of the proposed mitigation and a ‘‘proposal for recovering those costs.’’ 101 47. This is not encouragement. This is command. The project sponsors will know that if they want to win approval for their projects this is what they must do 102 even if they must guess at what will ultimately satisfy the Commission’s new policies. Certainly, no project sponsor will believe that mitigation is optional or that submitting an application exceeding the Interim Policy Statement’s 100,000 tpy threshold without a mitigation proposal would be anything other than a waste of time and money. And what other reason could the majority have for delaying action on those projects that have effectively twice completed the NEPA process? 103 48. There is, however, no ambiguity in this: The Commission has changed the requirements for obtaining project 99 Am. Trucking Ass’n, Inc. v. I. C. C., 659 F.2d 452, 463 (5th Cir. 1981), opinion clarified on other grounds, 666 F.2d 167 (5th Cir. 1982) (Am. Trucking). 100 Interim Policy Statement, 178 FERC ¶ 61,108 at P 130. 101 Id. 102 Cf. Am. Trucking, 659 F.2d at 463–464 (‘‘The manner of dealing with applicants who do not follow what is declared to be the ‘normal’ course demonstrates graphically that the carrier who does not conform will incur both delay and potentially vast litigation expense’’). 103 For example, on August 24, 2020, Commission staff issued an EA for Tennessee Gas Pipeline Company, LLC et al.’s Evangeline Pass Expansion Project which concluded, ‘‘[w]e recommend that the Commission Order contain a finding of no significant impact.’’ Commission Staff, Environmental Assessment for Tenn. Gas Pipeline Co., LLC et al.’s Evangeline Pass Expansion Project, Docket Nos. CP20–50–000 et al., at 168 (Aug. 24, 2020). Despite this recommendation, which would have normally been adopted by the Commission, Commission staff, at the direction of the Chairman, issued supplemental Draft and Final Environmental Impact Statements. See Commission Staff, Final Environmental Impact Statement for Tenn. Gas Pipeline Co., LLC et al.’s Evangeline Pass Expansion Project, Docket Nos. CP20–50–000 et al. (Oct. 8, 2021); Commission Staff, Draft Environmental Impact Statement for Tenn. Gas Pipeline Co., LLC et al.’s Evangeline Pass Expansion Project, Docket Nos. CP20–50–000 et al. (July 16, 2021). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 approvals and applicants need to come before the Commission acknowledging that it is so.104 The effect of this change is immediate. Even applicants whose projects have been pending with the Commission for upwards of two years will be subjected to the Commission’s new rules. 49. The interim policy statement also determines that emissions over 100,000 tpy of CO2e are significant (and emissions which fall below, not significant), a determination from which legal consequences flow under NEPA.105 And it binds Commission staff.106 While I acknowledge the courts have given the Commission’s characterization of issuances deference in the past,107 whether a court will do so in in this instance is far from certain. For these reasons, I respectfully dissent. James P. Danly, Commissioner DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews Docket No. PL21–3–000 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.2 104 See Brown Exp., 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.’ ’’). 105 See Nat. Res. Def. Council, Inc. v. NRC, 539 F.2d 824 (2d Cir. 1976) (‘‘Further, it is clear that NEPA legal consequences flow from that decision since the order below sets forth rules concerning how the agency will comply with the environmental laws.’’), cert. granted, 430 U.S. 944 (1977), judgment vacated and case remanded for consideration of mootness, 434 U.S. 1030 (1978). 106 Interim Policy Statement, 178 FERC ¶ 61,108 at P 3 (‘‘For purposes of assessing the appropriate level of NEPA review, Commission staff will apply the 100% utilization or ‘full burn’ rate for the proposed project’s emissions to determine whether to prepare an Environmental Impact Statement (EIS) or an environmental assessment (EA). Commission staff will proceed with the preparation of an EIS, if the proposed project may result in 100,000 metric tons per year of CO2e or more.’’) (emphasis added); see also Tex. v. Equal Emp’t Opportunity Comm’n, 933 F.3d 433, 441–44 (5th Cir. 2019); id. at 442 (‘‘That the agency’s action binds its staff . . . demonstrates that legal consequences flow from it . . . .’’). 107 See, e.g., Interstate Nat. Gas Ass’n of Am. v. FERC, 285 F.3d 18, 59 (D.C. Cir. 2002). 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 PO 00000 Frm 00030 Fmt 4701 Sfmt 4703 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 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 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 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. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 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 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 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. 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 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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. 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 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 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. PO 00000 Frm 00031 Fmt 4701 Sfmt 4703 14133 (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 § 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. 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 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. 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 E:\FR\FM\11MRN2.SGM Continued 11MRN2 14134 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 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 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 adjudicated in state or federal court—not by this Commission. NGA § 7(h), 15 U.S.C. 717f(h). Bringing such extra-jurisdictional considerations into the Commission’s public convenience and necessity analyses under NGA § 7 is just another expansion of Commission power far beyond anything justified in law. 22 Sabal Trail, 867 F.3d 1357, 1382 (DC Cir. 2017) (Sabal Trail) (Brown, J., dissenting in part and concurring in part). 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). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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 25 NGA § 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). 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 PO 00000 Frm 00032 Fmt 4701 Sfmt 4703 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 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 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 ‘‘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). E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 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: 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 lotter on DSK11XQN23PROD with NOTICES2 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). 33 Office of Consumers’ Counsel v. FERC, 655 F.2d at 1147 (emphases added). 34 See, e.g., NGA §§ 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). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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. 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). 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). PO 00000 Frm 00033 Fmt 4701 Sfmt 4703 14135 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 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 39 NFIB, 142 S. Ct. at 667 (Gorsuch, J., concurring) (citations omitted). 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). E:\FR\FM\11MRN2.SGM 11MRN2 14136 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 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 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 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 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.’’). VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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 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. 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). PO 00000 Frm 00034 Fmt 4701 Sfmt 4703 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 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, 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.’’) E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 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. 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 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 (quoting Nevada v. Dep’t of Energy, 457 F.3d 78, 93 (D.C. Cir. 2006)). 55 NGA § 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.’’) 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). 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. 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 C. GHG Analysis Under NEPA explicitly rejected the idea that an ‘‘an agency’s action is considered a cause of 30. Is this Commission required or allowed by NEPA 54 to reject a certificate an environmental effect [under NEPA] even when the agency has no statutory for a natural gas facility—one that would otherwise be approved under the authority to prevent that effect.’’ 57 NGA—based on a GHG analysis Rather, NEPA ‘‘requires a reasonably conducted as part of the NEPA close causal relationship between the environmental review? And rejection environmental effect and the alleged includes attaching mitigation conditions cause,’’ that is analogous to ‘‘the so onerous (or coercing through familiar doctrine of proximate cause deficiency letters) that they render the from tort law.’’ 58 While this might leave project unfeasible.55 some difficult judgments at the margins, 31. Again, the short answer is no. estimates of the potential global impacts NEPA does not contain a shred of of possible non-jurisdictional upstream specific textual authority requiring or or downstream activity—as today’s allowing the Commission to reject based orders purport to require 59—is not a on a NEPA review of estimated GHG close call. impacts (indirect or direct) a certificate 33. First off, in determining how far 54 NEPA, 42 U.S.C. 4321 et seq., requires all an agency’s NEPA responsibilities run, federal agencies to undertake an ‘‘environmental one ‘‘must look to the underlying assessment’’ of their actions, typically including the policies or legislative intent in order to preparation of an ‘‘environmental impact draw a manageable line between those statement’’ of proposed ‘‘major federal actions.’’ As discussed below, the purpose of the EA and EIS is causal changes that may make an actor for the agency to be fully informed of the impact responsible for an effect and those that of its decisions. NEPA does not mandate any do not.’’ 60 As discussed at length above, specific action by the agency in response to an EA or EIS, other than to make an informed decision. there is no way of drawing a plausible See, e.g., Steven M. Siros, et al., Pipeline Projects— line, much less a manageable one, from The Evolving Role of Greenhouse Gas Emissions the Commission’s certificating Analyses under NEPA, 41 Energy L.J. 47 (May responsibilities under the NGA and the 2020); see also Sabal Trail, 867 F.3d at 1367–68 (describing NEPA as ‘‘primarily informationpossible consequences of global climate forcing’’ and noting that courts ‘‘should not change—consequences which, however ‘‘ ‘flyspeck’’ an agency’s environmental analysis, potentially grave, are remote from this looking for any deficiency no matter how minor.’ ’’) lotter on DSK11XQN23PROD with NOTICES2 14137 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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’’). 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). PO 00000 Frm 00035 Fmt 4701 Sfmt 4703 E:\FR\FM\11MRN2.SGM 11MRN2 14138 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 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 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 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). 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. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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.’’). PO 00000 Frm 00036 Fmt 4701 Sfmt 4703 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 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 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. 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’’). E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices review.76 Thus the effect is to ramp up dramatically the legal uncertainties and costs facing any certificate applicant. lotter on DSK11XQN23PROD 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 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 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. 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. & VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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. 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 § 3 as opposed to interstate 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 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). PO 00000 Frm 00037 Fmt 4701 Sfmt 4703 14139 transportation facilities under NGA § 7—the court in Sabal Trail concluded that, under NGA § 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, 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 87 Id. (citations omitted). 88 Id. 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). E:\FR\FM\11MRN2.SGM 11MRN2 14140 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 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 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 wellfunded interest groups working to reduce or eliminate natural gas usage.97 92 See supra, n. 83. 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. 97 See, e.g., Bloomberg Philanthropies, https:// www.bloomberg.org/environment/moving-beyondcarbon/ (‘‘Launched in 2019 with a $500 million investment from Mike Bloomberg and Bloomberg lotter on DSK11XQN23PROD with NOTICES2 93 NFIB, VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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). PO 00000 Frm 00038 Fmt 4701 Sfmt 4703 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. 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. 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 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 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). 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, § 1). 102 GHG Policy Statement at PP 27–28, 31, & n.97. See also, EPA Dec. 20, 2021 Letter. E:\FR\FM\11MRN2.SGM 11MRN2 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 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: 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 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 III. Conclusions 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 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 lotter on DSK11XQN23PROD with NOTICES2 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, 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. VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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 00039 Fmt 4701 Sfmt 4703 14141 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. 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\11MRN2.SGM 11MRN2 14142 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices lotter on DSK11XQN23PROD with NOTICES2 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 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 VerDate Sep<11>2014 20:02 Mar 10, 2022 Jkt 256001 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 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. 2022–04536 Filed 3–10–22; 8:45 am] BILLING CODE 6717–01–P Frm 00040 Fmt 4701 Sfmt 9990 E:\FR\FM\11MRN2.SGM 11MRN2

Agencies

[Federal Register Volume 87, Number 48 (Friday, March 11, 2022)]
[Notices]
[Pages 14104-14142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04536]



[[Page 14103]]

Vol. 87

Friday,

No. 48

March 11, 2022

Part II





Department of Energy





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Federal Energy Regulatory Commission





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Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure 
Project Reviewsotice of Decision; Notice

Federal Register / Vol. 87 , No. 48 / Friday, March 11, 2022 / 
Notices

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL21-3-000]


Consideration of Greenhouse Gas Emissions in Natural Gas 
Infrastructure Project Reviews

AGENCY: Federal Energy Regulatory Commission.

ACTION: Interim policy statement.

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SUMMARY: This interim policy statement describes Commission procedures 
for evaluating climate impacts under NEPA and describes how the 
Commission will integrate climate considerations into its public 
interest determinations under the NGA.

DATES: Public comments are due on or before April 4, 2022. Comments on 
the information collection are due May 10, 2022.

ADDRESSES: Comments, identified by docket number, may be filed 
electronically at https://www.ferc.gov in acceptable native applications 
and print-to-PDF, but not in Scanned or picture format. For those 
unable to file electronically, comments may be filed by mail or hand-
delivery to: Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street NE, Washington, DC 20426. The Comment 
Procedures section of this document contains more detailed filing 
procedures.

FOR FURTHER INFORMATION CONTACT: 
Karin Larson (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-8236, 
[email protected]
Eric Tomasi (Technical Information), Office of Energy Projects, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 
20426, (202) 502-8097, [email protected]

SUPPLEMENTARY INFORMATION: 
    1. The Commission is issuing this interim policy statement to 
explain how the Commission will assess the impacts of natural gas 
infrastructure projects on climate change in its reviews under the 
National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). 
We seek comment on all aspects of the interim policy statement, 
including, in particular, on the approach to assessing the significance 
of the proposed project's contribution to climate change. Although the 
guidance contained herein is subject to revision based on the record 
developed in this proceeding, we will begin applying the framework 
established in this policy statement in the interim. Doing so will 
allow the Commission to evaluate and act on pending applications under 
sections 3 and 7 of the NGA without undue delay and with an eye toward 
greater certainty and predictability for all stakeholders.

I. Introduction

    2. Climate change poses a severe threat to the nation's security, 
economy, environment, and to the health of individual citizens. Human-
made greenhouse gas (GHG) emissions, including carbon dioxide and 
methane, are the primary cause of climate change.\1\ GHG emissions are 
released in large quantities through the production, transportation, 
and consumption of natural gas. Accordingly, to fulfill its statutory 
responsibilities, it is critical that the Commission consider and 
document how its authorization of infrastructure projects under the 
NGA, particularly natural gas transportation facilities, will affect 
emissions of GHGs.\2\
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    \1\ Intergovernmental Panel on Climate Change, United Nations, 
Summary for Policymakers of Climate Change 2021: The Physical 
Science Basis SPM-5 (Valerie Masson-Delmotte et al. eds.) (2021), 
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM.pdf (IPCC Report).
    \2\ See Sierra Club v. FERC, 867 F.3d 1357, 1374 (D.C. Cir. 
2017) (Sabal Trail) (requiring the Commission to consider the 
reasonably foreseeable GHG emissions resulting from natural gas 
projects).
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    3. This policy statement describes Commission procedures for 
evaluating climate impacts under NEPA, both those caused by a project's 
contribution to climate change and the impacts of climate change on the 
project, and describes how the Commission will integrate climate 
considerations into its public interest determinations under the NGA. 
For purposes of assessing the appropriate level of NEPA review, 
Commission staff will apply the 100% utilization or ``full burn'' rate 
for the proposed project's emissions to determine whether to prepare an 
Environmental Impact Statement (EIS) or an environmental assessment 
(EA). Commission staff will proceed with the preparation of an EIS, if 
the proposed project may result in 100,000 metric tons per year of 
CO2e or more.\3\ As further described below, the Commission 
believes this estimate is appropriate because it captures Commission 
projects that may result in incremental GHG emissions that may have a 
significant effect upon the human environment.\4\ This approach is 
consistent with the overall goal of NEPA to require a ``hard look'' at 
adverse environmental impacts and assess whether those can be minimized 
or avoided.\5\ To appropriately assess possible mitigation, as further 
explained below, the Commission will determine a project's reasonably 
foreseeable GHG emissions based on a projection of the amount of 
capacity that will be actually used (projected utilization rate), as 
opposed to assuming 100% utilization, and any other factors impacting 
the quantification of project emissions. The Commission's NEPA analysis 
will examine any proposed measures to reduce reasonably foreseeable 
emissions.
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    \3\ Carbon dioxide equivalent is the combination of the 
emissions that contribute to climate change adjusted using each 
pollutant's global warming potential. This allows the Commission to 
aggregate all GHG emissions into a single value that accounts for 
each chemical's specific potential to trap heat in the atmosphere.
    \4\ See, e.g., Grand Canyon Trust v. FAA, 290 F.3d 339, 340 
(D.C. Cir. 2002) (``If any `significant' environmental impacts might 
result from the proposed agency action[,] then an EIS must be 
prepared before agency action is taken.'' (quoting Sierra Club v. 
Peterson, 717 F.2d 1409, 1415 (D.C. Cir. 1983))); Found. for N. Am. 
Wild Sheep v. U.S. Dep't of Agr., 681 F.2d 1172, 1178 (9th Cir. 
1982) (``If substantial questions are raised whether a project may 
have a significant effect upon the human environment, an EIS must be 
prepared.'').
    \5\ See 42 U.S.C. 4331(a); 4332(c).
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    4. When considering under the NGA whether a project is in the 
public interest, the Commission considers a project's impacts on 
climate change, and, accordingly, will consider proposals by the 
project sponsor to mitigate all or a portion of the project's climate 
change impacts, and the Commission may condition its authorization on 
the project sponsor further mitigating those impacts.
    5. This policy statement does not establish binding rules and is 
intended to explain how the Commission will consider these issues when 
they arise.\6\
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    \6\ Commissioner Danly's dissent claims that today's interim 
policy statement is ``a substantive, binding rule that is subject to 
judicial review.'' Danly Dissent at P 46. This interim document is 
intended to provide all interested entities with guidance as to how 
the Commission will approach application under NGA sections 3 and 7. 
It does not ``impose[] an obligation, den[y] a right, or fix[] some 
legal relationship.'' Reliable Automatic Sprinkler Co. v. Consumer 
Prod. Safety Comm'n, 324 F.3d 726, 731 (D.C. Cir. 2003). Parties 
that disagree with the approach outlined in the statement retain 
their full rights to litigate their concerns in any individual 
proceeding. Cf. id. (``Final agency action `marks the consummation 
of the agency's decisionmaking process' and is `one by which rights 
or obligations have been determined, or from which legal 
consequences will flow.') (quoting Bennett v. Spear, 520 U.S. 154, 
178 (1997)). In addition, Commissioner Danly speculates that ``no 
project sponsor will believe that mitigation is optional or that 
submitting an application exceeding the Interim Policy Statement's 
100,000 tpy threshold without a mitigation proposal would be 
anything other than a waste of time and money.'' Danly Dissent PP 
46-47. In response, we note only that the Commission will consider 
mitigation on a case-by-case basis and that we have not suggested 
that GHG emissions must be mitigated to insignificant levels in 
order for us to conclude that a proposed project is required by the 
public convenience and necessity or consistent with the public 
interest.

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II. Background

A. GHG Emissions and Climate Change

    6. Climate change is the variation in the Earth's climate 
(including temperature, precipitation, humidity, wind, and other 
meteorological variables) over time. Climate change is driven by 
accumulation of GHGs in the atmosphere due to the increased consumption 
of fossil fuels (e.g., coal, petroleum, and natural gas) since the 
early beginnings of the industrial age and accelerating in the mid- to 
late-20th century.\7\ The GHGs produced by fossil-fuel combustion are 
carbon dioxide, methane, and nitrous oxide.
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    \7\ IPCC Report at SPM-5. Other forces contribute to climate 
change, such as agriculture, forest clearing, and other 
anthropogenically driven sources.
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    7. In 2017 and 2018, the U.S. Global Change Research Program \8\ 
issued its Climate Science Special Report: Fourth National Climate 
Assessment, Volumes I and II.\9\ This report and the recently released 
report by the Intergovernmental Panel on Climate Change, Climate Change 
2021: The Physical Science Basis, state that climate change has 
resulted in a wide range of impacts across every region of the country 
and the globe. Those impacts extend beyond atmospheric climate change 
and include changes to water resources, agriculture, ecosystems, human 
health, and ocean systems.\10\ According to the Fourth Assessment 
Report, the United States and the world are warming, global sea level 
is rising and oceans are acidifying, and certain weather events are 
becoming more frequent and more severe.\11\ These impacts have 
accelerated throughout the end of the 20th century and into the 21st 
century.\12\
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    \8\ The U.S. Global Change Research Program is the leading U.S. 
scientific body on climate change. It comprises representatives from 
13 federal departments and agencies and issues reports every 4 years 
that describe the state of the science relating to climate change 
and the effects of climate change on different regions of the United 
States and on various societal and environmental sectors, such as 
water resources, agriculture, energy use, and human health.
    \9\ U.S. Global Change Research Program, Climate Science Special 
Report, Fourth National Climate Assessment [bond] Volume I (Donald 
J. Wuebbles et al. eds) (2017), https://science2017.globalchange.gov/downloads/CSSR2017_FullReport.pdf; U.S. 
Global Change Research Program, Fourth National Climate Assessment, 
Volume II Impacts, Risks, and Adaptation in the United States (David 
Reidmiller et al. eds.) (2018), https://nca2018.globalchange.gov/downloads/NCA4_2018_FullReport.pdf (USGCRP Report Volume II).
    \10\ IPCC Report at SPM-5 to SPM-10.
    \11\ USGCRP Report Volume II at 73-75.
    \12\ See, e.g., USGCRP Report Volume II at 99 (describing 
accelerating flooding rates in Atlantic and Gulf Coast cities).
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B. Council on Environmental Quality Guidance on Climate Change

    8. In 2010, the Council on Environmental Quality (CEQ) issued its 
first draft guidance on how federal agencies can consider the effects 
of GHG emissions and climate change under NEPA.\13\ CEQ revised the 
draft guidance in 2014,\14\ and issued final guidance in 2016.\15\ 
Throughout the guidance's evolution, CEQ advised agencies to quantify 
GHG emissions and to consider both the extent to which a proposed 
project's GHG emissions would contribute to climate change and how a 
changing climate may impact the proposed project. The 2016 guidance, 
however, explicitly declined to establish a quantity or threshold of 
GHGs for determining whether a proposed project will have a significant 
impact on climate.\16\
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    \13\ CEQ, Draft NEPA Guidance on Consideration of the Effects of 
Climate Change and Greenhouse Gas Emissions (Feb. 18, 2010), https://ceq.doe.gov/docs/ceq-regulations-and-guidance/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.
    \14\ Revised Draft Guidance for Federal Departments and Agencies 
on Consideration of Greenhouse Gas Emissions and the Effects of 
Climate Change in NEPA Reviews, 79 FR 77802 (Dec. 24, 2014).
    \15\ CEQ, Final Guidance for Federal Departments and Agencies on 
Consideration of Greenhouse Gas Emissions and the Effects of Climate 
Change in National Environmental Policy Act Reviews (Aug. 1, 2016), 
https://ceq.doe.gov/docs/ceq-regulations-and-guidance/nepa_final_ghg_guidance.pdf (2016 CEQ Guidance).
    \16\ 2016 CEQ Guidance at 9-10 (``This guidance does not 
establish any particular quantity of GHG emissions as 
`significantly' affecting the quality of the human environment or 
give greater consideration to the effects of GHG emissions and 
climate change over other effects on the human environment.'').
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    9. CEQ rescinded the 2016 guidance in April 2017, as directed by 
Executive Order 13783 Promoting Energy Independence and Economic 
Growth,\17\ and issued revised draft guidance in June 2019.\18\ In 
January 2021, Executive Order 13990 Protecting Public Health and the 
Environment and Restoring Science to Tackle the Climate Crisis revoked 
Executive Order 13783 and directed CEQ to rescind the 2019 draft 
guidance and to review, revise, and update the 2016 guidance.\19\ CEQ 
has not yet issued an update to the 2016 guidance, but, in the interim, 
has directed agencies to consider all available tools and resources, 
including the 2016 guidance, in assessing GHG emissions and the climate 
change effects of proposed actions.\20\
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    \17\ Exec. Order No. 13783, 82 FR 16576 (Apr. 5, 2017).
    \18\ Draft National Environmental Policy Act Guidance on 
Consideration of Greenhouse Gas Emissions, 84 FR 30097 (June 26, 
2019).
    \19\ Exec. Order No. 13990, 86 FR 7037 (Jan. 20, 2021).
    \20\ Notice of Rescission of Draft Guidance, 86 FR 10252 (Feb. 
19, 2021).
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C. Previous Commission Policy on Consideration of Climate Change Under 
NEPA

    10. Commission staff has addressed climate change in some fashion 
in its NEPA documents for at least a decade.\21\ Commission staff's 
NEPA documents have included direct GHG emission estimates from project 
construction (e.g., tailpipe emissions from construction equipment) 
and/or operation (e.g., fuel combustion at compressor stations and gas 
venting and leaks).\22\ Starting in late 2016, the Commission began to 
conservatively estimate indirect downstream GHG emissions by assuming 
full combustion of the maximum annual volume of gas that could be 
transported by the project.\23\ For indirect upstream, production-
related GHG emissions, Commission orders during that time period relied 
on Department of Energy studies to calculate broad estimates.\24\ For 
upstream impacts, the Commission generally indicated that these 
analyses were not required by NEPA because the Commission lacked 
detailed information about the precise source of the gas to be 
transported, but provided estimates for informational purposes.\25\
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    \21\ For details on GHG analysis in the Commission's NEPA 
documents through April 2018, see Certification of New Interstate 
Natural Gas Facilities, 83 FR 18020, 163 FERC ] 61,042, at PP 44-50 
(2018) (2018 NOI).
    \22\ 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).
    \23\ See, e.g., Columbia Gas Transmission, LLC, 158 FERC ] 
61,046, at P 120 (2017); Tex. E. Transmission, LP, 157 FERC ] 
61,223, at P 41 (2016), reh'g granted, 161 FERC ] 61,226 (2017).
    \24\ See, e.g., Columbia Gas Transmission, LLC, 158 FERC ] 
61,046 at PP 116-119.
    \25\ With respect to upstream emissions, the D.C. Circuit 
subsequently noted that the Commission does not violate NEPA in not 
considering upstream GHG emissions where there is no evidence to 
predict the number and location of additional wells that would be 
drilled as a result of a project. Birckhead v. FERC, 925 F.3d 510, 
518 (D.C. Cir. 2019) (Birckhead).
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    11. In 2017, the United States Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) in Sierra Club v. FERC (Sabal Trail) 
\26\ found that downstream GHG emissions were an indirect effect of the 
Sabal Trail pipeline project and required the Commission to give a 
quantitative estimate of the downstream GHG emissions resulting from 
the burning of the natural gas to be

[[Page 14106]]

transported by the pipeline or explain why the Commission could not do 
so, and to discuss the significance of these emissions.\27\ On remand, 
the Commission compared the estimated downstream GHG emissions from the 
project to state and national GHG emission inventories.\28\ However, 
the Commission concluded that it could not determine whether those 
downstream GHG emissions were significant and rejected the use of the 
Social Cost of Carbon (SCC) tool to inform the Commission's 
analysis.\29\
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    \26\ 867 F.3d 1357.
    \27\ Id. at 1374.
    \28\ Fla. Se. Connection, LLC, 164 FERC ] 61,099, at P 5 (2018).
    \29\ Id. No party petitioned for judicial review of the 
Commission's determination on remand.
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    12. In 2018, the Commission stated in Dominion Transmission, 
Inc.\30\ that end use consumption of gas and upstream production of gas 
were generally not reasonably foreseeable or causally related to the 
project (no party had identified the specific end use of the gas) and 
thus the Commission was not required to consider upstream or downstream 
emissions as indirect impacts under NEPA.\31\ The Commission stated it 
would continue to ``analyze upstream and downstream environmental 
effects when those effects are sufficiently causally connected to and 
are reasonably foreseeable effects of the proposed action.'' \32\ The 
Commission reiterated that without an accepted methodology it could not 
find whether a particular quantity of GHG emissions was 
significant.\33\
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    \30\ 163 FERC ] 61,128 (2018), pet. dismissed, Otsego 2000 v. 
FERC, 767 F.App'x 19 (D.C. Cir. 2019) (unpublished opinion).
    \31\ Id. PP 41-44, 61-62.
    \32\ Id. P 44; see also Tenn. Gas Pipeline Co., LLC, 163 FERC ] 
61,190, at PP 61-62 (2018).
    \33\ Dominion Transmission, Inc., 163 FERC ] 61,128 at PP 67-70.
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    13. However, in Birckhead, 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.\34\ 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.\35\
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    \34\ Birckhead, 925 F.3d at 518-19.
    \35\ Id. at 520.
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    14. In 2021, in Northern Natural Gas Co., the Commission explained 
that it had reconsidered its position that it was unable to assess the 
significance of a project's GHG emissions or those emissions' 
contribution to climate change.\36\ The Commission found that that 
project's reasonably foreseeable GHG emissions--construction and 
operation emissions only, as the project proposed no new capacity--
would not significantly contribute to climate change.\37\ Later in 
2021, the D.C. Circuit further criticized the Commission's stance prior 
to Northern Natural Gas Co. that it was unable to assess the 
significance of a project's GHG emissions or those emissions' 
contribution to climate change, holding that the Commission failed to 
appropriately analyze the significance of three natural gas projects' 
contribution to climate change using ``theoretical approaches or 
research methods generally accepted in the scientific community,'' such 
as the SCC tool.\38\
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    \36\ 174 FERC ] 61,189, at P 29 (2021).
    \37\ Id. PP 29-36.
    \38\ Vecinos para el Bienestar de la Comunidad Costera v. FERC, 
6 F.4th 1321, 1328 (D.C. Cir. 2021) (Vecinos) (citing 40 CFR 
1502.21(c), which requires an EIS to include an evaluation of 
impacts based upon theoretical approaches or research methods 
generally accepted in the scientific community where the information 
relevant to the reasonably foreseeable significant adverse impacts 
cannot be obtained because the means to obtain it are not known). 
The case is pending on remand with the Commission.
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D. Certificate Policy Statement Notices of Inquiry

    15. On April 19, 2018, the Commission issued a Notice of Inquiry 
(2018 NOI) \39\ seeking information and stakeholder perspectives to 
help the Commission explore whether, and if so how, it should revise 
its approach for determining whether proposed projects are consistent 
with the public convenience and necessity under the currently effective 
policy statement on the certification of new interstate natural gas 
transportation facilities (Certificate Policy Statement).\40\ The 2018 
NOI included a background section discussing how the legal standards 
and historical context informed the creation of the Certificate Policy 
Statement in 1999, how the Commission's evaluations under the 
Certificate Policy Statement and under NEPA have evolved, and how 
changed circumstances since 1999 have required the present review.\41\ 
Notably, the Commission sought input on whether, and if so how, the 
Commission should adjust its evaluation of the environmental impacts of 
a proposed project.
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    \39\ 2018 NOI, 163 FERC ] 61,042.
    \40\ 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). The Commission must 
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 NGA section 7. 15 U.S.C. 717f.
    \41\ 2018 NOI, 163 FERC ] 61,042 at PP 5-50.
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    16. In response to the 2018 NOI, the Commission received more than 
3,000 comments from stakeholders including landowners; tribal, federal, 
state, and local government officials; non-governmental organizations; 
consultants, academic institutions, and think tanks; natural gas 
producers, Commission-regulated companies, local distribution 
companies, and industry trade organizations; electricity generators and 
utilities; and others. Many comments addressed GHG emissions.
    17. On February 18, 2021, the Commission issued a new, refreshed 
Notice of Inquiry (2021 NOI),\42\ seeking comments to build upon the 
existing record established by the 2018 NOI. The Commission posed 
several updated questions relating to GHG emissions, including asking: 
How the Commission could consider upstream impacts from natural gas 
production and downstream end-use impacts; how the Commission should 
determine the significance of a project's GHG emissions' contribution 
to climate change; whether the NGA, NEPA, or another federal statute 
authorize or mandate the use of the SCC analysis by the Commission; how 
the Commission could determine whether a proposed project's GHG 
emissions could be offset by reduced GHG emissions resulting from the 
project's operations; and how the Commission could impose GHG emission 
limits or mitigation to reduce the significance of impacts from a 
proposed project on climate change.\43\
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    \42\ Certification of New Interstate Natural Gas Facilities, 174 
FERC ] 61,125 (2021).
    \43\ Id. P 17.
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    18. With respect to determining significance, the 2021 NOI sought 
comment on (1) what type of metrics and models the Commission should 
consider in determining significance, (2) whether any level of 
emissions should be considered de minimis, and (3) how the SCC tool or 
other tools could factor into determining significance.\44\
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    \44\ Id. (citations omitted).
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    19. The public comment period for the 2021 NOI closed on May 26, 
2021.\45\ The Commission received over 35,000 comments and 
approximately 150

[[Page 14107]]

unique comment letters from a wide range of stakeholders, as noted 
above.
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    \45\ See Notice Extending Time for Comments, Docket No. PL18-1-
000 (Mar. 31, 2021) (extending the original comment deadline from 
April 26, 2021, to May 26, 2021).
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    20. Comments relevant to this policy statement are addressed in 
Section III below.

III. Statutory Authority/Obligations

A. NGA

    21. 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.\46\ The Commission does not have authority to regulate 
intrastate transportation facilities or other facilities that affect 
interstate transportation, such as those used for the production, 
gathering, or local distribution of natural gas. Congress did not 
displace state authority over such subjects.\47\
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    \46\ 15 U.S.C. 717f.
    \47\ NGA section 1(b) states that Commission authority applies 
to interstate transportation of natural gas and sales for resale, 
``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.'' Id. 717(b).
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    22. Section 3(a) of the NGA provides for federal jurisdiction over 
the siting, construction, and operation of facilities used to import or 
export gas.\48\ To date, the Commission has exercised section 3 
authority to authorize: (1) LNG terminals located at the site of import 
or export and (2) the site and facilities at the place of import/export 
where a pipeline crosses an international border.\49\ Additionally, NGA 
section 3(e) states that ``[t]he Commission shall have the exclusive 
authority to approve or deny an application for the siting, 
construction, expansion, or operation of an LNG terminal.'' \50\
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    \48\ The 1977 Department of Energy Organization Act (42 U.S.C. 
7151(b)) placed all section 3 jurisdiction under the Department of 
Energy. The Secretary of Energy subsequently delegated authority to 
the Commission to ``[a]pprove or disapprove the construction and 
operation of particular facilities, the site at which such 
facilities shall be located, and with respect to natural gas that 
involves the construction of new domestic facilities, the place of 
entry for imports or exit for exports.'' Department of Energy 
Delegation Order No. 00-004.00A, section 1.21A (May 16, 2006).
    \49\ In addition to pipelines that cross the international 
border with Canada and Mexico, the Commission has also asserted 
authority over the portions of subsea pipelines planned to cross the 
``border'' of the Exclusive Economic Zone between the U.S. and the 
Bahamas. See, e.g., Tractebel Calypso Pipeline, LLC, 106 FERC ] 
61,273 (2004), vacated, Calypso U.S. Pipeline, LLC, 137 FERC ] 
61,098 (2011).
    \50\ 15 U.S.C. 717b(e)(1).
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    23. Both NGA sections 7 and 3 authorize the Commission to attach 
terms and conditions to its authorization.\51\ Courts have interpreted 
these provisions broadly and given the Commission latitude in deciding 
what types of mitigation to require.\52\ In issuing authorizations, the 
Commission has required project sponsors to comply with conditions to 
prevent or mitigate project impacts on environmental resources.\53\
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    \51\ Id. 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.''); see also id. 
717b(a) (stating that the Commission may ``grant such application, 
in whole or in part, with such modification and upon such terms and 
conditions as the Commission may find necessary or appropriate''); 
id. 717b(e)(3)(A) (providing the authority to approve an application 
for an LNG Terminal, ``in whole or part, with such modifications and 
upon such terms and conditions as the Commission find[s] necessary 
or appropriate'').
    \52\ See Twp. of Bordentown v. FERC, 903 F.3d 234, 261 n.15 (3d 
Cir. 2018) (concluding that the Commission's authority to enforce 
any required remediation is amply supported by provisions of the 
NGA); Sabal Trail, 867 F.3d at 1374 (holding that the Commission has 
legal authority to mitigate reasonably foreseeable indirect 
effects).
    \53\ See, e.g., Atl. Coast Pipeline, LLC, 161 FERC ] 61,042, at 
app. A (2017), on reh'g, 164 FERC ] 61,100 (2018).
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B. NEPA

    24. NEPA and its implementing regulations require agencies, before 
taking or authorizing a major federal action that may significantly 
affect the quality of the human environment, to take a ``hard look'' at 
the environmental consequences of the proposed action and disclose 
their analyses to the public by preparing an EIS.\54\ Alternatively, 
agencies can first prepare an Environmental Assessment (EA) for a 
proposed action that is not likely to have significant effects or when 
the significance is unknown, to determine whether an EIS is necessary 
for a particular action.\55\ Depending on the outcome of the EA, 
agencies can either prepare an EIS or issue a finding of no significant 
impact.\56\
---------------------------------------------------------------------------

    \54\ 42 U.S.C. 4332(2)(C); 40 CFR 1502.3; see Balt. Gas & Elec. 
Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) 
(discussing the twin aims of NEPA).
    \55\ 40 CFR 1501.5, 1508.1(h).
    \56\ 40 CFR 1508.1(l) (defining a finding of no significant 
impact as a document that briefly presents the reasons why an action 
that is not otherwise categorically excluded under Sec.  1501.4 will 
not have a significant effect on the human environment and for which 
an EIS will therefore not be prepared).
---------------------------------------------------------------------------

    25. Previous CEQ regulations and court cases have examined a 
proposed project's ``context'' and ``intensity'' or the severity of the 
impact as factors for determining what constitutes a significant 
effect.\57\ In assessing significance, Commission staff considers, for 
each resource, the duration of the impact as well as the geographic, 
biological, or social context in which the effects would occur, and the 
intensity (e.g. severity) of the impact.\58\ This analysis may draw on 
both qualitative and quantitative information.\59\ Using both types of 
data, the Commission routinely makes significance determinations for 
impacts to various resources from natural gas projects.\60\
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    \57\ Vieux Carre Prop. Owners, Residents & Assocs., Inc. v. 
Pierce, 719 F.2d 1272, 1279 (5th Cir. 1983) (stating there is ``no 
hard and fast definition of `significant' '' but considering the 
proposed project's context in assessing whether a finding of no 
significance impact was reasonable). The regulations implementing 
NEPA previously addressed the term ``significantly,'' but that 
provision was removed by amendments effective September 14, 2020 and 
replaced with 40 CFR 1501.3(b). ``Whether a project has significant 
environmental impacts, thus triggering the need to produce an EIS, 
depends on its `context' (region, locality) and `intensity' 
(`severity of impact').'' Nat'l Parks Conservation Ass'n v. 
Semonite, 916 F.3d 1075, 1082 (D.C. Cir.) (quoting 40 CFR 1508.27 
(2018)), amended in part by 925 F.3d 500 (D.C. Cir. 2019). The new 
40 CFR 1501.3(b) calls for agencies to consider the ``potentially 
affected environment and degree of the effects of the action'' and 
to consider the short-term, long-term, beneficial, and adverse 
effects, and effects on public safety and those that would violate 
laws.
    \58\ See, e.g. Final EIS for the Alaska LNG Project, Docket No. 
CP17-178-000, at 4-1.
    \59\ See Sabal Trail, 867 F.3d at 1371 (``The EIS also gave the 
public and agency decisionmakers the qualitative and quantitative 
tools they needed to make an informed choice for themselves. NEPA 
requires nothing more.'').
    \60\ See, e.g., Transcon. Gas Pipe Line Co., LLC, 158 FERC ] 
61,125, at P 79 (describing how the final EIS for the Atlantic 
Sunrise Project concluded that the project would result in adverse 
impacts that would be mitigated to less than significant levels), 
order on reh'g, 161 FERC ] 61,250 (2017), petition denied sub nom., 
Allegheny Def. Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020); see 
also infra note 61; see also Magnum Gas Storage, LLC, 134 FERC ] 
61,197, at P 115 (2011) (explaining that ```significantly,' as used 
in NEPA, requires considerations of both context and intensity, 
which varies with the setting of each proposed action.'').
---------------------------------------------------------------------------

    26. In evaluating whether an impact is significant, the Commission 
determines whether ``it would result in a substantial adverse change in 
the physical environment.'' \61\ In making that determination, the 
Commission considers available evidence, giving that evidence such 
weight as it deems appropriate using its experience, judgment, and 
expertise.\62\ Notably,

[[Page 14108]]

NEPA does not require that the studies, metrics, and models on which an 
agency relies be universally accepted or otherwise uncontested.\63\ 
Instead, NEPA permits agencies to rely on the best available evidence, 
quantitative and qualitative, even where that evidence has certain 
limitations when assessing the significance of their actions,\64\ and 
an agency's determination is entitled to deference.\65\
---------------------------------------------------------------------------

    \61\ N. Nat. Gas Co., 174 FERC ] 61,189, at P 32 (citing Magnum 
Gas Storage, LLC, 134 FERC ] 61,197 at P 114 (``[A]n impact was 
considered to be significant if it would result in a substantial 
adverse change in the physical environment or natural condition and 
could not be mitigated to less-than-significant level.'')).
    \62\ See, e.g., Tex. LNG Brownsville LLC, 169 FERC ] 61,130, at 
P 56 (2019) (``Due to the relatively undeveloped nature of the 
project area, the visual sensitivity of nearby recreation areas, and 
the lack of feasible visual screening measures, the Final EIS 
concluded that the project would result in a significant impact on 
visual resources when viewed from the adjacent Laguna Atascosa 
National Wildlife Refuge.''), order on reh'g, 170 FERC ] 61,139, at 
P 32 (2020), remanded on other grounds, Vecinos, 6 F.4th 1321; Final 
EIS for the Alaska LNG Project, Docket No. CP17-178-000, at ES-4 
(Mar. 2020) (explaining the significant, long-term to permanent 
project impacts from the loss of thousands of acres of permafrost 
from construction that would permanently alter hydrology and 
vegetation within and past the project footprint).
    \63\ Sierra Club v. U.S. Dep't of Transp., 753 F.2d 120, 128 
(D.C. Cir. 1985) (``It is clearly within the expertise and 
discretion of the agency to determine proper testing methods.''); 
see also Hughes River Watershed Conservancy v. Johnson, 165 F.3d 
283, 289 (4th Cir. 1999) (``Agencies are entitled to select their 
own methodology as long as that methodology is reasonable. The 
reviewing court must give deference to an agency's decision.'').
    \64\ See Spiller v. White, 352 F.3d 235, 244 n.5 (5th Cir. 2003) 
(rejecting petitioner's contention that the significance 
determination must be objective, factual, and quantitative and 
should not involve any qualitative judgment calls).
    \65\ See La. Crawfish Producers Ass'n-W. v. Rowan, 463 F.3d 352, 
355 (5th Cir. 2006) (NEPA-related decisions are accorded a 
considerable degree of deference); Spiller v. White, 352 F.3d at 244 
n.5 (``We should note that our deference to the [l]ead [a]gencies['] 
fact-finding and conclusions includes deference to their judgment as 
to whether any particular environmental impact of the proposed 
pipeline rises to the level of significance''); Powder River Basin 
Res. Council v. U.S. Bureau of Land Mgmt., 37 F.Supp. 3d 59, 74 
(D.D.C. 2014) (agencies are afforded discretion to use their 
expertise to determine the best method to evaluate the significance 
of an impact to a particular resource, so long as that method is 
reasonable).
---------------------------------------------------------------------------

    27. In addition to determining whether its actions may 
significantly affect the quality of the human environment, NEPA 
requires the Commission to consider whether there are steps that could 
be taken to mitigate any adverse environmental consequences.\66\ While 
NEPA is a procedural statute and does not require a federal agency to 
reject a proposed project with significant adverse effects or take 
action to mitigate adverse effects,\67\ an agency may require 
mitigation of impacts as a condition of its permitting or approval,\68\ 
and the Commission routinely does so.\69\
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    \66\ Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 
351 (1989) (``To be sure, one important ingredient of an EIS is the 
discussion of steps that can be taken to mitigate adverse 
environmental consequences.'').
    \67\ 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.'').
    \68\ 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).
    \69\ See, e.g., Columbia Gas Transmission, LLC, 170 FERC ] 
61,045, at P 66, app. (2020) (conditioning certificate authority on 
site-specific mitigation measures when crossing abandoned mine 
lands, including the management and disposal of contaminated 
groundwater, and mitigation measures for acid mine drainage); 
PennEast Pipeline Co., LLC, 170 FERC ] 61,198, at PP 29-30, app. A 
(2020) (conditioning certificate authority on mitigation of 
construction impacts on karst features); Atl. Coast Pipeline, LLC, 
161 FERC ] 61,042 at app. A (conditioning certificate authority on 
the mitigation of construction impacts on karst features and on a 
nearby inn and mitigation of impacts from the discovery of invasive 
aquatic species during construction); Port Arthur LNG, LP, 115 FERC 
] 61,344, at PP 68-71, app. A (conditioning sections 3 and 7 
authority on the mitigation of construction impacts on aquatic 
resources and wetlands), order on reh'g, 117 FERC ] 61,213 (2006), 
vacated, 136 FERC ] 61,196 (2011).
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IV. Discussion

A. Quantifying GHG Emissions and Determining Significance

    28. Consistent with CEQ regulations,\70\ the Commission will 
quantify a project's GHG emissions that are reasonably foreseeable and 
have a reasonably close causal relationship to the proposed action, 
including those effects that occur at the same time and place as the 
proposed action and effects that are later in time or farther removed 
in distance from the proposed action. This will include GHG emissions 
resulting from construction and operation of the project \71\ as well 
as, in most cases, GHG emissions resulting from the downstream 
combustion of transported gas.\72\
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    \70\ 40 CFR 1508.1(g) (defining the effects or impacts that must 
be considered when conducting a review under NEPA).
    \71\ Emissions quantification also includes loss of carbon 
storage/sinks through land use conversions, forest clearing, wetland 
conversions, etc.
    \72\ As discussed below, the vast majority of all natural gas 
consumed in the United States is combusted. See infra note 101.
---------------------------------------------------------------------------

    29. The Commission will consider all evidence in the record 
relating to a project's estimated GHG emissions,\73\ utilization rate, 
or offsets: Estimates presented by project sponsors, as well as 
opposing evidence from other parties. Going forward, in determining the 
level of GHG emissions attributed to a project, the Commission will 
estimate a project's GHG emissions based on a projection of what amount 
of project capacity will be actually used (projected utilization rate), 
as opposed to assuming 100% utilization.\74\ The Commission will also 
consider evidence of factors expected to reduce or offset the estimated 
direct or reasonably foreseeable downstream emissions of the project.
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    \73\ Additionally, the Commission will consider evidence 
regarding whether certain emissions associated with a proposed 
project, such as upstream and downstream emissions, are reasonably 
foreseeable.
    \74\ See Certification of New Interstate Natural Gas Pipeline 
Facilities, 178 FERC ] 61,107, at P 55 (2022) (explaining that 
project sponsors are encouraged to provide the Commission with 
information on estimated utilization rates and the intended end use 
of gas to demonstrate project need).
---------------------------------------------------------------------------

1. Categories of Emissions
    30. CEQ regulations implementing NEPA require agencies to consider 
effects or impacts that ``are reasonably foreseeable and have a 
reasonably close causal relationship to the proposed action . . . 
including those effects that occur at the same time and place as the 
proposed action . . . and may include effects that are later in time or 
farther removed in distance for the proposed action . . . .'' \75\ A 
``but for'' causal relationship is insufficient to make an agency 
responsible for a particular effect,\76\ and effects should not be 
considered if they are the ``product of a lengthy causal chain.'' \77\ 
Further, effects to be considered do not include those that the agency 
has no ability to prevent due to its limited statutory authority or 
would occur regardless of the proposed action.\78\ Regarding reasonable 
foreseeability, courts have found that an impact is reasonably 
foreseeable if it is ``sufficiently likely to occur that a person of 
ordinary prudence would take it into account in reaching a decision.'' 
\79\ Although courts have held that NEPA requires ``reasonable 
forecasting,'' \80\ an agency ``is not required to engage in 
speculative analysis'' \81\ or ``to do the impractical, if

[[Page 14109]]

not enough information is available to permit meaningful 
consideration.'' \82\
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    \75\ 40 CFR 1508.1(g).
    \76\ Id. Sec.  1508.1(g)(2); see also U.S. Dep't of Transp. v. 
Pub. Citizen, 541 U.S. 752, 767 (2004) (Pub. Citizen) (finding that 
``NEPA requires `a reasonably close causal relationship' between the 
environmental effect and the alleged cause'' in order ``to make an 
agency responsible for a particular effect under NEPA'' (quoting 
Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 
774 (1983) (Metro. Edison Co.))).
    \77\ 40 CFR 1508.1(g)(2); see also Metro. Edison Co., 460 U.S. 
at 774 (finding that ``[s]ome effects that are `caused by' a change 
in the physical environment in the sense of `but for' causation,'' 
will not fall within NEPA if ``the causal chain is too 
attenuated'').
    \78\ 40 CFR 1508.1(g)(2); see also Pub. Citizen, 541 U.S. at 770 
(``[W]here an agency has no ability to prevent a certain effect due 
to its limited statutory authority over the relevant actions, the 
agency cannot be considered a legally relevant `cause' of the 
effect.'').
    \79\ EarthReports, Inc. v. FERC, 828 F.3d 949, 955 (DC Cir. 
2016) (citations omitted); see also Sierra Club v. Marsh, 976 F.2d 
763, 767 (1st Cir. 1992).
    \80\ N. Plains Res. Council, Inc. v. Surface Transp. Bd., 668 
F.3d 1067, 1079 (9th Cir. 2011) (quoting Selkirk Conservation All. 
v. Forsgren, 336 F.3d 944, 962 (9th Cir. 2003)).
    \81\ Id. at 1078.
    \82\ Id. (quoting Envtl. Prot. Info. Ctr. v. U.S. Forest Serv., 
451 F.3d 1005, 1014 (9th Cir. 2006)).
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    31. As discussed below, the Commission proposes to:
     Consider direct emissions of a project a reasonably 
foreseeable effect;
     Find that an NGA section 3 export facility project is not 
the legally relevant cause of upstream and downstream emissions; \83\
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    \83\ EarthReports, Inc. v. FERC, 828 F.3d at 955 (citing Sierra 
Club v. FERC, 827 F.3d 36, 47, 59, 68 (D.C. Cir. 2016) (Freeport).
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     Consider on a case-by-case basis whether downstream 
emissions are a reasonably foreseeable effect of an NGA section 7 
interstate project; and
     Consider on a case-by-case basis whether upstream 
emissions are a reasonably foreseeable effect of an NGA 7 project.
a. Direct Emissions
    32. Several commenters assert that the Commission must consider 
fugitive emissions from the transportation of gas.\84\ New Jersey 
Conservation Foundation, Sabin Center for Climate Change Law (Sabin 
Center), The Watershed Institute, Clean Air Council, PennFuture, and 
New Jersey League of Conservation Voters (collectively, New Jersey 
Conservation Foundation) argue that natural gas leakage from both 
pipeline operation and natural gas production is worse than combustion 
because methane has a higher global warming potential than carbon 
dioxide.\85\
---------------------------------------------------------------------------

    \84\ See, e.g., Egan Millard 2021 Comments at 3; New Jersey 
Conservation Foundation 2021 Comments at 21; Shayna Gleason 2021 
Comments at 2.
    \85\ New Jersey Conservation Foundation 2021 Comments at 21.
---------------------------------------------------------------------------

    33. As the Commission has long held, direct GHG emissions from the 
project's short-term construction \86\ and long-term operational 
activities \87\ are an effect of the proposed project. Under current 
Commission regulations, the project sponsor provides an estimate of 
construction emissions and an estimate of the project's potential 
operational emissions, including fugitive emissions from both pipeline 
and aboveground facilities, in its application for Commission 
authorization.\88\
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    \86\ Construction emissions include emissions from gasoline- and 
diesel-powered construction equipment.
    \87\ Operational emissions include emissions from combustion 
units at compressor stations and fugitive leaks from compressor 
stations, meter/valve stations, and the pipeline.
    \88\ The project sponsor provides emissions information in 
Resource Report No. 9. 18 CFR 380.12(k). Operational emissions are 
also estimated in the project's air permit application, which is 
typically submitted to the state agency with delegated Clean Air Act 
authority. Further, the Commission's guidance manual for NGA 
certificate applications instructs project sponsors to provide the 
GHGs in tons per year for the construction and operation of the 
proposed project. See Guidance Manual for Environmental Report 
Preparation for Applications Filed under the NGA, Volume I, at 4-
123, 4-125 to 4-127 (Guidance Manual).
---------------------------------------------------------------------------

b. Downstream Emissions
    34. Some commenters argue that the Commission must consider the 
downstream emissions of natural gas projects,\89\ including fugitive 
emissions.\90\ In contrast, other commenters generally assert that the 
Commission should not consider downstream emissions, or at most, should 
only do a qualitative assessment of downstream emissions, because they 
are not reasonably foreseeable impacts or do not have a close causal 
relationship under NEPA to gas transportation.\91\
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    \89\ See, e.g., Food and Water Watch 2021 Comments at 1; New 
Jersey Conservation Foundation 2021 Comments at 19; Attorneys 
General of Massachusetts, Illinois, Maryland, New Jersey, Rhode 
Island, Washington, and the District of Columbia (Attorneys General 
of Massachusetts et al.) 2018 Comments at 12-17.
    \90\ For example, the Massachusetts PipeLine Awareness Network 
states that the Commission should consider fugitive emissions from 
the distribution and burning of transported gas. Massachusetts 
PipeLine Awareness Network 2021 Comments at 2; see also, e.g., Egan 
Millard 2021 Comments at 3; Shayna Gleason 2021 Comments at 2.
    \91\ See, e.g., American Petroleum Institute (API) Technical 
Conference Comments at 3-5 (stating the Commission and developers 
cannot accurately forecast downstream emissions due to lack of 
knowledge of the end use of the gas, variability in utilization 
rates and regulatory requirements, and unpredictable changes in 
supply and demand, among other factors); Boardwalk Pipeline Partners 
LP (Boardwalk) Technical Conference Comments at 21; Enbridge Gas 
Pipelines (Enbridge) Technical Conference Comments at 11, 25-26; 
Interstate Natural Gas Association of America (INGAA) 2021 Comments 
at 58-60; The Williams Companies, Inc. (Williams) 2021 Comments at 
37-38; Natural Gas Supply Association (NGSA) 2018 Comments at 15-16.
---------------------------------------------------------------------------

    35. As discussed above, in August 2017, the D.C. Circuit issued 
Sabal Trail, which involved a greenfield pipeline project that would 
deliver all gas transported by the project to specific gas-fired 
generating plants. The D.C. Circuit found that downstream emissions 
from the use of the transported natural gas were an indirect, 
reasonably foreseeable effect of the proposed pipeline and that in the 
circumstances of that case--where the vast majority of throughput on 
the proposed project was destined for a limited number of specifically 
identified electric generation facilities--the downstream GHG emissions 
could be reasonably quantified by the Commission.\92\
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    \92\ The court concluded ``that the EIS for the Southeast Market 
Project should have either given a quantitative estimate of the 
downstream greenhouse emissions that will result from burning the 
natural gas that the pipelines will transport or explained more 
specifically why it could not have done so.'' Sabal Trail, 867 F.3d 
at 1374.
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    36. The D.C. Circuit reiterated this determination in two 
subsequent cases. First, in Birckhead, the court rejected the claim 
that downstream emissions are only a foreseeable effect in factual 
circumstances akin to Sabal Trail, i.e., where all transported gas will 
be burned at specifically identified destinations, but also rejected 
the argument that downstream emissions are always a foreseeable effect 
of a natural gas certificate project.\93\ Then, in Allegheny Defense 
Project v. FERC,\94\ the court stated that the downstream emissions of 
a project designed to deliver gas into large interstate pipeline 
systems, which in turn deliver gas to 16 states, are an indirect effect 
of the project.\95\
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    \93\ Birckhead, 925 F.3d at 518-20 (criticizing the Commission 
for not attempting to obtain data on downstream uses).
    \94\ 932 F.3d 940 (DC Cir. 2019).
    \95\ Id. at 945-46.
---------------------------------------------------------------------------

    37. INGAA and others read the Supreme Court's Public Citizen 
decision as requiring an agency to consider an environmental effect 
only when the agency has the authority to control the outcome and note 
that the Commission has no authority to regulate the end use (or 
production) of natural gas.\96\ INGAA states that attempting to 
regulate downstream (or upstream) activities would invade the 
jurisdiction of other regulators, that most projects will not result in 
reasonably foreseeable downstream GHG emissions like those in Sabal 
Trail, and thus, downstream emissions should only be considered on a 
case-by-case basis.\97\ INGAA suggests the Commission look for guidance 
to Center for Biological Diversity v. U.S. Army Corps of Engineers,\98\ 
which criticizes Sabal Trail as ``breezing past . . . statutory limits 
and precedents . . . clarifying what effects are cognizable under 
NEPA.'' \99\
---------------------------------------------------------------------------

    \96\ See, e.g., INGAA 2021 Comments at 50-51.
    \97\ INGAA 2021 Comments at 49-51, 57; see also INGAA Technical 
Conference Comments at 14 (adding that NEPA's requirements would 
exclude downstream emissions occurring after a ``long and attenuated 
chain of intermediate causal factors, as when natural gas is 
transported to an interconnect for further shipment on the 
interstate grid, eventually reaching end-use consumers only through 
a long intermediate path'').
    \98\ 941 F.3d 1288 (11th Cir. 2019) (Center for Biological 
Diversity).
    \99\ Id. at 1300 (citing Pub. Citizen, 541 U.S. 752 and Metro. 
Edison Co., 460 U.S. 766).
---------------------------------------------------------------------------

    38. Given that data show that the vast majority of consumed gas is 
ultimately combusted,\100\ there appears to be a

[[Page 14110]]

substantial likelihood of GHG emissions from the end-use combustion of 
transported gas as a result of a natural gas project proposed under NGA 
section 7.\101\ However, as contemplated by the court in Birckhead, 
there may be circumstances where downstream emissions are not a 
foreseeable effect of an authorized project, and the court stated that 
each project must be analyzed on a case-by-case basis.\102\ 
Accordingly, project sponsors may submit any evidence they believe 
indicates that downstream emissions are not a reasonably foreseeable 
effect of a proposed project.
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    \100\ U.S. Energy Info. Admin., December 2021 Monthly Energy 
Review 24, 101 (2021) (reporting that, in 2020, 1,036 Bcf of natural 
gas had a non-combustion use compared to 30,476 Bcf of total 
consumption), https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf; see also Jayni Hein et al., Institute for Policy Integrity, 
Pipeline Approvals and Greenhouse Gas Emissions 25 (2019) 
(explaining that, in 2017, 97% of all natural gas consumed was 
combusted).
    \101\ See Birckhead, 925 F.3d at 518; Sabal Trail, 867 F.3d at 
1371-72.
    \102\ Birckhead, 925 F.3d at 518-19 (rejecting, in dicta, that 
downstream emissions are always a foreseeable effect of a proposed 
certificate project).
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    39. We disagree with commenters' assertions that Public Citizen 
prohibits the Commission from considering downstream GHG emissions. The 
question is not whether the Commission has regulatory authority over 
downstream emissions. Rather, as the Sabal Trail court reasoned in 
applying Public Citizen, the Commission ``has no obligation to gather 
or consider environmental information [only] if it has no statutory 
authority to act on that information.'' \103\ Because the Commission 
can reject a section 7 certificate based on the project's environmental 
impacts, including GHG emissions, the court held that the Commission 
was required to consider downstream emissions resulting from the Sabal 
Trail project's construction.\104\ For section 7 projects--unlike 
section 3 projects, described below--there is no independent decision, 
such as the DOE authorization critical in Freeport, to ``break the NEPA 
causal'' chain.\105\ Accordingly, the Commission's authorization for 
section 7 projects is a ``legally relevant cause'' of the emissions, 
meeting Public Citizen's direction that ``NEPA requires `a reasonably 
close causal relationship' between the environmental effect and the 
alleged cause,'' analogous to the ``familiar doctrine of proximate 
cause from tort law.'' \106\
---------------------------------------------------------------------------

    \103\ Sabal Trail, 867 F.3d at 1372-73 (emphasis in original) 
(explaining Pub. Citizen, 541 U.S. 752).
    \104\ See id. at 1373 (``Because FERC could deny a pipeline 
certificate on the ground that the pipeline would be too harmful to 
the environment, the agency is a `legally relevant cause' of the 
direct and indirect environmental effects of pipelines it 
approves.'' (quoting Freeport, 827 F.3d at 47).
    \105\ Freeport, 827 F.3d at 47.
    \106\ Pub. Citizen, 541 U.S. at 767 (quoting Metro. Edison Co., 
460 U.S. at 774).
---------------------------------------------------------------------------

    40. The Commission finds this and subsequent direction from the 
D.C. Circuit more instructive than Center for Biological Diversity, 
which determined that a specific effect was too tenuous to be 
considered in analysis of a U.S. Army Corps of Engineers discharge 
permit for mining activities under the Clean Water Act.\107\
---------------------------------------------------------------------------

    \107\ See Center for Biological Diversity, 941 F.3d at 1292 
(describing whether the U.S. Army Corps of Engineers legally 
declined to address, in issuing discharge permits for phosphate 
mining, the effects of a radioactive byproduct of fertilizer 
production (phosphogypsum), where the phosphogypsum is neither a 
byproduct of dredging and filling or phosphate mining or 
beneficiation). The court criticized the reasoning in Sabal Trail 
but also observed that the ``causal relationship between the agency 
action and the putative downstream effect was much closer [in Sabal 
Trail] than it is here'' and that the Commission's scope of 
statutory authority is ``much broader'' than that of the U.S. Army 
Corps of Engineers. Id. at 1299-1300.
---------------------------------------------------------------------------

    41. However, for proposed export projects under NGA section 3, the 
Commission will not consider downstream GHG emissions an effect 
requiring analysis under NEPA regulations. The Department of Energy, 
not the Commission, has sole authority to license and consider the 
environmental impacts of the export of any natural gas.\108\ As courts 
have explained, the Commission need not consider the effects of 
downstream transportation, consumption, or combustion of exported gas 
because the Department of Energy's ``independent decision to allow 
exports . . . breaks the NEPA causal chain and absolves the Commission 
of responsibility to include [these considerations] in its NEPA 
analysis.'' \109\
---------------------------------------------------------------------------

    \108\ Freeport, 827 F.3d at 47 (holding that the Commission does 
not have to address the indirect effects of the anticipated export 
of natural gas because the Department of Energy, not the Commission, 
has sole authority to license and consider the environmental impacts 
of the export of any natural gas going through LNG facilities); 
Freeport, 827 F.3d at 62-63 (same); EarthReports, Inc. v. FERC, 828 
F.3d at 956 (same); Sabal Trail, 867 F.3d at 1372 (explaining 
Freeport).
    \109\ Freeport, 827 F.3d at 48.
---------------------------------------------------------------------------

c. Upstream Emissions
    42. Some commenters state that the Commission must consider the 
upstream GHG emissions of natural gas projects, including fugitive 
emissions from production,\110\ to assess the project's total impact on 
climate change.\111\ Other commenters argue that upstream emissions are 
not a reasonably foreseeable effect of a natural gas transportation 
project, and therefore should not be considered by the Commission.\112\ 
Some commenters focus on how to obtain sufficient information to 
account for upstream GHG emissions. For example, EPA recommends that 
the Commission require project sponsors to provide available 
information on reasonably foreseeable induced production demand. EPA 
states that environmental documents under NEPA should disclose this 
information as well as items such as the proposal's regionally known 
hydrocarbon accumulations and a decline curve analysis to allow for 
appropriate regional and local impact analysis.\113\
---------------------------------------------------------------------------

    \110\ See, e.g., Egan Millard 2021 Comments at 3; Shayna Gleason 
2021 Comments at 2.
    \111\ See, e.g., Institute for Policy Integrity at New York 
University School of Law (Policy Integrity) Technical Conference 
Comments at 17; Food and Water Watch 2021 Comments at 1; New Jersey 
Conservation Foundation 2021 Comments at 19.
    \112\ See, e.g., Boardwalk Technical Conference Comments at 21; 
Enbridge Technical Conference Comments at 11, 25-26; TC Energy 
Corporation (TC Energy) Technical Conference Comments at 5; Williams 
Technical Conference Comments at 4; INGAA 2021 Comments at 56-57; 
Williams 2021 Comments at 37-38.
    \113\ EPA 2021 Comments at 5.
---------------------------------------------------------------------------

    43. In various NGA section 7 proceedings, the Commission has 
considered upstream emissions on a case-by-case basis--sometimes 
acknowledging it is difficult to quantify upstream emissions due to 
several unknown factors, including the location of the supply source 
and whether transported gas will come from new or existing 
production.\114\ The Commission will continue to consider on a case-by-
case basis whether the environmental effects resulting from natural gas 
production are either likely caused by a proposed NGA section 7 project 
or reasonably foreseeable consequences of our approval of such 
projects. To the extent known, project sponsors are encouraged to 
submit information on the reasonably foreseeable upstream impacts 
caused by the project or an explanation as to why there are none for 
Commission consideration.
---------------------------------------------------------------------------

    \114\ See Birckhead, 925 F.3d at 516-18. See, e.g., Double E 
Pipeline, LLC, 173 FERC ] 61,074, at P 97 (2020); Cent. N.Y. Oil & 
Gas Co., LLC, 137 FERC ] 61,121, at PP 81-101 (2011), order on 
reh'g, 138 FERC ] 61,104, at PP 33-49 (2012), petition for review 
dismissed sub nom., Coal. for Responsible Growth v. FERC, 485 
F.App'x 472, 474-75 (2d Cir. 2012) (unpublished opinion); see also 
Adelphia Gateway, LLC, 169 FERC ] 61,220, at P 243 (2019), order on 
reh'g, 171 FERC ] 61,049, at P 89 (2020).
---------------------------------------------------------------------------

2. Calculating GHG Emissions
    44. To calculate operational emissions, project sponsors should 
continue to follow the existing guidance outlined in section 4.9.1.3 of 
the Commission's Guidance Manual for Environmental Report Preparation 
for

[[Page 14111]]

Applications Filed under the NGA.\115\ However, under this policy 
statement, for purposes of assessing the impact of a project's GHG 
emissions on climate change, the Commission will consider operational 
GHG emissions calculated based on a projected utilization rate for the 
project, as described below.\116\
---------------------------------------------------------------------------

    \115\ We note that thresholds for Clean Air Act and state air 
permits are typically based on the regulated source's potential to 
emit, or the maximum capacity of a stationary source to emit any air 
pollutant under its physical and operational design, rather than its 
actual emissions, and that air permits themselves are expressed in 
potential to emit. See 40 CFR 70.2. This policy statement does not 
apply to any other air pollutants than GHGs. For all other air 
pollutants, we will continue to evaluate a project's air quality 
impacts based on its potential to emit.
    \116\ See infra section III.A.2.a.
---------------------------------------------------------------------------

    45. Additionally, the Commission recognizes that there may be other 
factors that might serve to reduce a proposed project's climate 
impacts. For example, the installation of emission-reduction technology 
or purchase of offsets by downstream users would reduce the impacts. 
Thus, to enable the Commission's use of the best estimate of a 
project's GHG emissions, project sponsors are encouraged to calculate 
project GHG emissions using a projected utilization rate and submit 
evidence of any other factors that might impact a project's net 
emissions such as the factors identified by commenters below.
    46. Commenters recommend that the Commission consider factors that 
might impact a project's net emissions, such as (1) whether the 
transported gas will phase out use of a more carbon-intensive energy 
source, like coal or fuel oil, and will prevent the use of more carbon-
intensive energy sources in the future; (2) whether the pipeline will 
transport gas that would otherwise be transported by vehicles, thereby 
reducing the emissions from transporting the gas; (3) whether the 
proposed project will transport gas volumes that would have otherwise 
been delivered to the same consumers through a different pipeline or 
may ultimately end up transporting fuel blends including renewable 
natural gas or hydrogen; (4) whether the project sponsor will purchase 
offsets to counter project emissions; or (5) whether the project may be 
backed by a local distribution company serving customer demand in 
states with established emissions caps.\117\ INGAA states that in the 
absence of reliable and verifiable predictive models to the contrary, 
the requirement of reasonable foreseeability arguably dictates that the 
Commission cannot adopt any default assumption that a natural gas 
infrastructure project will increase (rather than decrease, or leave 
unchanged) net global GHG emissions, and that at minimum, the 
Commission would have to provide a rational justification for any such 
assumption.\118\ By contrast, New Jersey Conservation Foundation and 
others contend that the Commission should consider whether the project 
may be displacing renewable energy sources, thereby increasing GHG 
emissions.\119\
---------------------------------------------------------------------------

    \117\ See, e.g., American Gas Association (AGA) Technical 
Conference Comments at 28, 40; API Technical Conference Comments at 
3; Boardwalk Technical Conference Comments at 23 (stating that the 
Commission should rely on local distribution companies' air permits 
to determine GHG emissions); Enbridge Technical Conference Comments 
at 31-34; Hon. Joseph T. Kelliher Technical Conference Comments at 
5-6 (Commissioner Kelliher, Principal at Three Acorns, was a 
panelist at the GHG Technical Conference on Panel 1.); INGAA 
Technical Conference Comments at 17-18 (suggesting the net emissions 
analysis must be undertaken on a global level); Kinder Morgan 
Entities (Kinder Morgan) Technical Conference Comments at 12-15; 
National Grid Gas Companies Technical Conference Comments at 3-7 
(describing the Distributed Infrastructure Solution that it has 
developed in coordination with the State of New York); Williams 
Technical Conference Comments at 7-8; Charles River Associates 2021 
Comments at 4-5; Ohio Environmental Council 2021 Comments at 3. See 
Environmental Assessment for the Iroquois Gas Transmission System, 
L.P. (Iroquois) Enhancement by Compression Project, Docket No. CP20-
48-000, at B-110 (Sept. 30, 2020) (citing Iroquois' end-use GHG 
analysis that projected greater GHG emissions if the project was not 
built under scenarios where the energy needs of all new buildings 
are met by fuel oil as opposed to gas supplied by the project). One 
industrial end user expresses concern about the potential of 
integrating renewable natural gas due to concerns about pipeline 
integrity or increased costs. American Forest and Paper Association 
and Process Gas Consumers Group (collectively, American Forest) 
Technical Conference Comments at 13-14.
    \118\ INGAA Technical Conference Comments at 19.
    \119\ See, e.g., New Jersey Conservation Foundation 2021 
Comments at 23.
---------------------------------------------------------------------------

    47. INGAA and other commenters strongly urge the Commission to 
calculate a project's downstream emissions, if at all, based on the 
likely utilization rate of the proposed project, instead of relying on 
a full-burn estimate.\120\
---------------------------------------------------------------------------

    \120\ See, e.g., Enbridge Technical Conference Comments at 12, 
29-30; Hon. Joseph T. Kelliher Technical Conference Comments at 5-6; 
INGAA Technical Conference Comments at 15-16 (describing an analysis 
it commissioned concluding that in 2020, the maximum utilization on 
an average annual basis for any of the pipeline ``corridors'' 
between different regions is not higher than 65% and it is over 50% 
only for 7 of the 30 regional corridors); TC Energy Technical 
Conference Comments at 18; Charles River Associates 2021 Comments at 
6; INGAA 2021 Comments at 58; see also Boardwalk Technical 
Conference Comments at 3, 23; Williams Technical Conference Comments 
at 7. API, on the other hand, asserts that use of utilization 
estimates or emissions data forces the Commission to pick winners 
among competing pipeline projects and asserts that such decisions 
are best made by market forces after the Commission authorizes a 
project. API Technical Conference Comments at 3-4.
---------------------------------------------------------------------------

    48. Conversely, New Jersey Conservation Foundation and others argue 
the Commission must calculate direct, downstream, and upstream GHG 
emissions by assuming the maximum authorized operating conditions, 
unless, some add, the project sponsor can demonstrate otherwise.\121\ 
Further, other commenters propose their own methods of how to calculate 
the downstream emissions of a proposed project.\122\ New Jersey 
Conservation Foundation urges the Commission to recommend or require 
the use of specified emissions factors to calculate project 
emissions.\123\ Some commenters argue that the Commission must, beyond 
asking project sponsors, require certain information to be provided, 
conduct independent research, or otherwise compile missing 
information.\124\ Dr. Susan F. Tierney states that the Commission 
should articulate a default methodology, set of assumptions, and 
sources of data (suggesting multiple sources including data from the 
U.S. Department of Energy's National Energy Technology Laboratory's 
2019 life-cycle estimates of GHG emissions for the natural gas supply 
chain) to establish a default maximum emissions rate, which could then 
be supplemented by an applicant's own estimate or an intervenor's 
alternative estimate.\125\
---------------------------------------------------------------------------

    \121\ See, e.g., New Jersey Conservation Foundation 2021 
Comments at 21-22; Public Interest Organizations 2018 Comments at 
91; Washington State Department of Commerce and Washington State 
Department of Ecology 2018 Comments at 6. Public Interest 
Organizations' 2018 comments represent 63 entities including Natural 
Resources Defense Council.
    \122\ See, e.g., Charles River Associates 2021 Comments at 6-8 
(proposing a regional analysis to estimate downstream emissions of a 
gas project).
    \123\ New Jersey Conservation Foundation 2021 Comments at 22.
    \124\ See, e.g., Berkshire Environmental Action Team 2021 
Comments at 3; North Carolina Department of Environmental Quality 
2018 Comments at 5-8.
    \125\ Dr. Susan F. Tierney, Senior Advisor with the Analysis 
Group, Inc., was a panelist at the GHG Technical Conference on Panel 
1. Dr. Susan F. Tierney Technical Conference Statement at 4-10. The 
applicant could supplement its estimate with an alternative 
estimate, and intervenors could also submit estimates.
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a. Projected Utilization Rate
    49. In previous environmental documents and certificate orders, the 
Commission has disclosed a project's operational emissions \126\ and 
estimates

[[Page 14112]]

of downstream emissions \127\ by assuming a 100% utilization rate 
estimate of the project (e.g., the maximum capacity is transported 365 
days per year, 24 hours a day and fully combusted downstream). This 
represents the maximum potential downstream GHG emissions. However, 
most projects do not operate at 100% utilization at all times. In fact, 
many projects are designed to address peak demand. For example, 
traditionally, in the Northeast, demand for gas is highest in the 
winter months, resulting in high utilization rates during those months 
due to heating needs, but lower in the summer, resulting in low annual 
utilization rates.\128\
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    \126\ See Environmental Assessment for the Lake City 1st Branch 
Line Abandonment and Capacity Replacement Project, Docket No. CP20-
504-000, at 51-53 (Feb. 2021); see also 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).
    \127\ See Atl. Coast Pipeline, LLC, 161 FERC ] 61,042 at P 305.
    \128\ Some commenters point out that daily pipeline load factors 
vary significantly based on seasonal trends. See, e.g., Charles 
River Associates 2021 Comments at 3; Williams 2021 Comments at 46.
---------------------------------------------------------------------------

    50. Because in most instances a 100% utilization rate estimate does 
not accurately capture the project's climate impacts, estimated 
emissions that reflect a projected utilization rate will provide more 
useful information. The project's projected utilization rate may be 
calculated using, for example:
     Expected utilization data from project shippers;
     Historical usage data; \129\
---------------------------------------------------------------------------

    \129\ We note that for a greenfield pipeline project, historic 
data will not be available. In those cases, the project sponsor 
could use data from other similar projects or regional data.
---------------------------------------------------------------------------

     Demand projections;
     An estimate of how much capacity will be used on an 
interruptible basis.
    51. The project sponsor is encouraged to file its projected 
utilization rate, as well as its justification for the rate and any 
supporting evidence, in its application for authorization under NGA 
section 3 or 7. The Commission will also consider evidence submitted by 
commenters and protesters in support of or opposition to the projected 
utilization rate.
b. Other Evidence Considered
    52. Further, the Commission will consider any other evidence in the 
record that impacts the quantification of the project's reasonably 
foreseeable emissions. For example, the Commission will consider: 
Evidence of a net-reduction in GHG emissions where the use of 
transported gas displaces the use of a higher emitting alternative 
fuel; \130\ evidence of anticipated changes in downstream usage rates 
over time; evidence of any real, verifiable, and measurable reduction 
efforts taken by the pipeline or downstream users to reduce their GHG 
emissions or offset their impacts; \131\ and evidence that a project 
would displace zero-emissions electric generation. Further, other 
agencies, notably the EPA, have proposed regulations that may impact 
the emission of methane from Commission-regulated facilities.\132\ If 
such regulations are adopted, the Commission will consider them when 
examining project GHG emissions. Similarly, the Commission will 
consider evidence from commenters and protestors supporting or 
challenging such estimates and assumptions.
---------------------------------------------------------------------------

    \130\ For instance, in a downstream end-use analysis, Iroquois 
projected that its Enhancement by Compression project could result 
in net GHG reductions when considering the alternative fuel that may 
be used (e.g., fuel oil for heating) by the end use customer in the 
event that gas is not available. Iroquois Gas Transmission, LP, 
Downstream GHG Report, Docket No. CP20-48-000 (filed May 19, 2020).
    \131\ For example, the Commission may consider evidence that a 
downstream user purchases credits to offset its GHG emissions from 
the consumption of transported gas. The Commission will consider 
downstream user's mitigation measures according to the criteria 
outlined in infra section III.C.3 for applicant-proposed mitigation 
measures. With regards to construction and operational emissions, 
project sponsors should continue to provide evidence of measures 
that minimize emissions, such as using low-sulfur diesel fuel and 
limiting equipment idling during construction, as outlined in the 
Guidance Manual. Guidance Manual at 4-124. However, as described 
supra section III.A.2.a, operational emissions should now be 
calculated based on the project's projected utilization rate.
    \132\ See, e.g., Standards of Performance for New, 
Reconstructed, and Modified Sources and Emissions Guidelines for 
Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 
63,110 (Nov. 15, 2020).
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B. Level of Review and Significance

    53. Under NEPA, an agency must prepare an EIS for every ``major 
[f]ederal action[ ] significantly affecting the quality of the human 
environment.'' \133\ To determine whether an EIS is necessary for a 
particular action, the agency may prepare an EA,\134\ described as a 
``concise public document'' providing ``sufficient evidence and 
analysis,'' to determine whether to prepare an EIS or issue a finding 
of no significant impact.\135\
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    \133\ 42 U.S.C. 4332(C); 40 CFR 1502.3.
    \134\ 40 CFR 1501.5, 1508.1(h).
    \135\ See 40 CFR 1501.3, 1501.5, 1501.6, 1508.1(h), (l).
---------------------------------------------------------------------------

    54. To assess significance, the Commission determines whether the 
impact ``would result in a substantial adverse change in the physical 
environment,'' \136\ which, as discussed, is based on considerations of 
the severity of adverse environmental impacts. In making that 
determination, the Commission uses its experience, judgment, and 
expertise to give record evidence appropriate weight.\137\ The 
Commission found that ``there is nothing about GHG emissions or their 
resulting contribution to climate change that prevents us from making 
that same type of significance determination.'' \138\
---------------------------------------------------------------------------

    \136\ See Magnum Gas Storage, LLC, 134 FERC ] 61,197 at P 114 
(``[A]n impact was considered to be significant if it would result 
in a substantial adverse change in the physical environment or 
natural condition and could not be mitigated to less-than-
significant level.'').
    \137\ For example, for an impact where there are no established 
federal standards, the Commission makes qualitative assessments to 
determine whether a proposed project would have a significant impact 
on a particular resource. See, e.g., Tex. LNG Brownsville LLC, 169 
FERC ] 61,130 at P 56 (``Due to the relatively undeveloped nature of 
the project area, the visual sensitivity of nearby recreation areas, 
and the lack of feasible visual screening measures, the Final EIS 
concluded that the project would result in a significant impact on 
visual resources when viewed from the adjacent Laguna Atascosa 
National Wildlife Refuge.''); Alaska Gasline Dev. Corp., 171 FERC ] 
61,134, at PP 25, 89 (describing how the final EIS for the Alaska 
LNG Project found that construction and operation of the project 
would have significant impacts on resources such as permafrost, 
wetlands, forests, and caribou, but less than significant impacts on 
resources such as scrub and herbaceous plant communities), order on 
reh'g, 172 FERC ] 61,214 (2020); Transcon. Gas Pipe Line Co., LLC, 
158 FERC ] 61,125 at P 79 (describing how the final EIS for the 
Atlantic Sunrise Project concluded that the project would result in 
adverse impacts that would be mitigated to less than significant 
levels).
    \138\ N. Nat. Gas Co., 174 FERC ] 61,189 at P 32.
---------------------------------------------------------------------------

    55. Specifically, in Northern Natural Gas Co., the Commission 
explained that:

    The U.S. Court of Appeals for the District of Columbia Circuit 
has explained that a proposed interstate natural gas pipeline's 
reasonably foreseeable GHG emissions are relevant to whether the 
pipeline is required by the public convenience and necessity. A 
rigorous review of a project's reasonably foreseeable GHG emissions 
is also an essential part of the Commission's responsibility under 
NEPA to take a ``hard look'' at a project's environmental impacts. 
Determining the significance of the impacts from a proposed 
project's GHG emissions informs the Commission's review in a number 
of important respects, including its decision whether to prepare an 
environmental impact statement.\139\
---------------------------------------------------------------------------

    \139\ 174 FERC ] 61,189 at P 30 (citations omitted).

    56. To date, no federal agency, including the Commission, has 
established a threshold for determining what level of project-induced 
GHG emissions is significant. The Commission received a number of 
comments, discussed below, offering perspectives on whether and at what 
level it should assess the significance of a proposed project's GHG 
emissions.
1. Comments
    57. The Commission received relevant comments in response to both 
the 2018 and 2021 NOIs on whether the Commission should: Determine

[[Page 14113]]

significance at all; set a specific significance threshold and at what 
level; and/or use various inventories, goals, and tools to set the 
threshold.
a. Whether the Commission Should Determine Significance
    58. Numerous commenters (Delaware Riverkeeper, Food and Water 
Watch, North Carolina Department of Environmental Quality, Sabin 
Center, and others) argue that the Commission should make a significant 
impact determination based on a project's GHG emissions, which they 
argue would include the project's associated upstream and downstream 
emissions. Some commenters, for example the Sabin Center in 2018, 
direct the Commission to the NEPA regulation at 40 CFR 1508.27 (that 
was removed by amendments effective September 14, 2020), which provides 
that ``significantly'' as used in NEPA requires considerations of both 
the context of the action and the intensity of the impacts associated 
with any proposal.\140\
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    \140\ See, e.g., Sabin Center 2018 Comments at 8-9.
---------------------------------------------------------------------------

    59. In contrast, some regulated entities and other commenters 
express concern about the Commission determining the significance of a 
project's impacts on the basis of GHG emissions, especially upstream 
and downstream emissions. For example, INGAA and others (Energy 
Infrastructure Council, Williams, etc.) argue that the Commission 
should, at most, engage in a qualitative discussion of downstream GHG 
emissions because net GHG emissions are not reasonably foreseeable, and 
that the Commission should not assess the significance of upstream or 
downstream emissions.\141\ Commenters such as Boardwalk state that the 
Commission cannot reject a project because of downstream GHG emissions 
or consider upstream GHG emissions, may only include a general 
disclosure of downstream emissions in limited circumstances (such as 
where all end use is known), and should generally decline to assess 
significance and only engage in a qualitative discussion.\142\
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    \141\ See, e.g., INGAA 2021 Comments at 58-64. INGAA's 2021 
comments update its 2018 position that the Commission should not 
presume that all GHG emissions are significant and should instead 
make a reasoned judgment whether: (1) A meaningful assessment can be 
made with reasonable effort based upon available information and (2) 
if so, whether a meaningful judgment can be formed regarding if the 
contribution of GHGs is likely to have a significant impact on the 
resource as a whole. INGAA 2018 Comments at 81-84.
    \142\ Boardwalk 2021 Comments at 77-78, 86-90, 92-93. These 
comments are generally echoed by the Energy Infrastructure Council. 
Energy Infrastructure Council 2021 Comments at 15-16, 22-27.
---------------------------------------------------------------------------

    60. Commenters argue that the Commission lacks the ability to make 
a significance determination and has no objective basis upon which to 
evaluate the impacts of GHG emissions associated with any specific 
proposed project.\143\ Other commenters state that setting any 
significance threshold would be arbitrary \144\ and potentially outside 
of the Commission's authority or jurisdiction.\145\
---------------------------------------------------------------------------

    \143\ See, e.g., Enbridge 2021 Comments at 103.
    \144\ See, e.g., U.S. Chamber of Commerce 2021 Comments at 9.
    \145\ See, e.g., API 2021 Comments at 29-32; NGSA 2021 Comments 
at 21-22; TC Energy 2021 Comments at 52-56; U.S. Chamber of Commerce 
2021 Comments at 9.
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    61. Finally, commenters state that the Commission should defer to 
other agencies, such as CEQ or EPA, in setting a significance 
threshold, citing: The lack of a national energy policy or federal GHG 
limits; the EPA's existing authority to regulate GHG emissions under 
the Clean Air Act; the direction of Executive Orders 13990 and 14008, 
which commenters say direct EPA to examine its own GHG emissions 
standards; and the ongoing Interagency Work Group efforts on the 
SCC.\146\ A few industry commenters also caution against creating 
uncertainty or a moving target for industry while waiting for a 
significance threshold to be established.\147\
---------------------------------------------------------------------------

    \146\ See, e.g., Cheniere Energy Inc. 2021 Comments at 14-16; 
Enbridge 2021 Comments at 104; Williams 2021 Comments at 35-38. 
Energy Transfer LP and the NGSA also cite CEQ's recent NEPA 
regulatory update and direction to agencies to propose revisions to 
their NEPA procedures by September 14, 2023. Energy Transfer LP 2021 
Comments at 14; NGSA 2021 Comments at 19-20. The Commission's 
current regulations provide that the Commission will comply with 
CEQ's regulations except where those regulations are inconsistent 
with the statutory requirements of the Commission. 18 CFR 380.1. 
Therefore, any action taken by the Commission in a future rulemaking 
pursuant to CEQ's regulatory update does not prevent the Commission 
from issuing this policy statement.
    \147\ See, e.g., BHE Pipeline Group 2021 Comments at 8-10; 
Cheniere Energy Inc. 2021 Comments at 17-18.
---------------------------------------------------------------------------

b. What the Threshold Should Be
    62. Some commenters argue that the Commission should consider any 
net increase in GHG emissions as significant.\148\ Attorneys General of 
Massachusetts, Connecticut, Maryland, Minnesota, New Jersey, New York, 
Oregon, Rhode Island, and the District of Columbia (Attorneys General 
of Massachusetts et al.) argues that any investment in pipeline 
infrastructure is inconsistent with new national emissions reductions 
targets and thus, project emissions can be significant on that basis 
alone, even if they represent a small share of national emissions, or 
that emissions are significant if they impede the ability of a state to 
meet its clean energy goals.\149\
---------------------------------------------------------------------------

    \148\ Ohio Environmental Council 2021 Comments at 3.
    \149\ Attorneys General of Massachusetts et al. 2021 Comments at 
6-11. The 2021 commenters are made up of a slightly different group 
of state attorneys general than those filing comments in 2018.
---------------------------------------------------------------------------

    63. A few commenters suggest specific numerical thresholds. The 
Sabin Center recommends that the Commission assess the magnitude of GHG 
emissions impacts using EPA's quantification threshold of 25,000 tons 
per year of CO2e to identify major emitters under the Clean 
Air Act, social cost of GHG tools to assign a dollar value to the 
potential impacts of the emissions, and EPA's GHG Equivalencies 
Calculator as a comparison tool.\150\ One commenter cites to EIS 
examples where the Commission stated that monetized benefits of $8 
million and $28 million would be ``significant'' for local economies 
and suggests that gross climate damages between roughly $8 and $20 
million should be considered significant.\151\
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    \150\ Sabin Center 2018 Comments at 8-9.
    \151\ Environmental Defense Fund, Food & Water Watch, Policy 
Integrity, Montana Environmental Information Center, Natural 
Resources Defense Council, Sierra Club, Union of Concerned 
Scientists, and Western Environmental Law Center (EDF) 2021 Comments 
at 14-15.
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    64. Conversely, a few commenters state that emissions from all 
individual projects could be considered de minimis and individually too 
small to impact climate change.\152\ Others urge the Commission away 
from taking a bright line approach to determining significance,\153\ 
while Driftwood Pipeline LLC urges that significance, if appropriate, 
requires the Commission to disclose a clear threshold.\154\
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    \152\ See, e.g., Competitive Enterprise Institute 2021 Comments 
at 4, 6.
    \153\ See, e.g., Enbridge 2021 Comments at 108; Russo on Energy 
2021 Comments at 17-18.
    \154\ Driftwood Pipeline LLC 2021 Comments at 3.
---------------------------------------------------------------------------

    65. CEQ points the Commission to its 2016 guidance as an existing 
resource to help agencies assess GHG emissions and the effects of 
climate change in NEPA reviews.\155\
---------------------------------------------------------------------------

    \155\ CEQ 2021 Comments at 1.
---------------------------------------------------------------------------

c. Use of Inventories, Climate Goals, Programmatic Analyses, Etc. in 
Determining Significance
    66. Some commenters recommend that the Commission use state, 
regional, and global GHG reduction goals to provide context and/or 
define

[[Page 14114]]

significance of GHG emissions.\156\ For example, Attorneys General of 
Massachusetts et al. comments that the Commission already analyzes 
whether a proposed pipeline project is consistent with various energy 
and climate policies and goals and that this can be used as a metric 
for evaluating significance.\157\ Others argue that the Commission's 
analysis of a proposed project's public benefits should weigh the 
effect of project GHG emissions on states' and the nation's abilities 
to comply with climate and clean energy laws and policies, such as 
specific energy and climate change action plans and policies.\158\ The 
Ohio Environmental Council recommends that the Commission consider the 
total proposed upstream and downstream GHG emissions of all gas 
projects pending in any given year, giving weight to the total possible 
GHG emissions that could be locked in by those projects and comparing 
this total with international goals.\159\
---------------------------------------------------------------------------

    \156\ See, e.g., Delaware Riverkeeper Network & Berks Gas Truth 
2021 Comments at 62; Ron Schaaf and Deb Evans 2021 Comments at 8; 
California Public Utilities Commission 2018 Comments at 11-12.
    \157\ Attorneys General of Massachusetts et al. 2018 Comments at 
17-20.
    \158\ See, e.g., Attorneys General of Massachusetts et al. 2018 
Comments at 17-20; Franklin Governments 2018 Comments at 2.
    \159\ Ohio Environment Council 2018 Comments at 12-13.
---------------------------------------------------------------------------

    67. Other commenters suggest alternative means or tools for 
assessing significance. For example, commenters suggest that the 
Commission should use a ``Climate Test.'' \160\ Patricia Weber comments 
that the Commission should use such a test to determine if a project is 
viable in a scenario where the climate goals of the Paris agreement are 
met using climate and global energy market models. One commenter urges 
the Commission to examine acres of wetlands that will be lost due to 
climate impacts of proposed projects as a proxy for significance.\161\ 
Some commenters suggest the Commission consider a programmatic or 
regional analysis of pipelines.\162\
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    \160\ Natural Resources Defense Council (NRDC) also suggests the 
Commission use its forthcoming ``Climate Test,'' which is a tool 
being developed by NRDC to quantify the consistency of individual 
infrastructure projects with climate goals. NRDC 2021 Comments at 6. 
However, NRDC has not filed additional information on its ``Climate 
Test.''
    \161\ Healthy Gulf 2021 Comments at 14.
    \162\ E.g., Attorneys General of Massachusetts et al. 2021 
Comments at 8-11; EPA 2021 Comments at 1; Attorneys General of 
Massachusetts et al. 2018 Comments at 12-17.
---------------------------------------------------------------------------

    68. EDF comments that a comparison of a project's emissions to 
international, state, or regional carbon budgets, or assessing 
geophysical impacts such as increases in carbon dioxide levels, global 
temperatures, or sea levels can be misleading and trivialize the 
project's impacts.\163\
---------------------------------------------------------------------------

    \163\ EDF 2021 Comments at 9-12, 16.
---------------------------------------------------------------------------

    69. Some industry commenters state that any comparison of direct or 
indirect emissions should be made to global GHG inventories, not 
national or state inventories.\164\ However, Williams states that, 
while the Commission should consider only direct construction and 
operation emissions, the Commission should compare those emissions 
against national GHG inventories and not against international 
agreements or regional targets.\165\ Others oppose use of a regional 
analysis of GHG emissions from pipeline projects.\166\
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    \164\ See, e.g., Boardwalk 2021 Comments at 82-83; NGSA 2021 
Comments at 15. Enbridge states that comparison to these inventories 
would be arbitrary, but that such an approach could help 
contextualize the GHG emissions for the Commission and the public. 
Enbridge 2021 Comments at 105, 108-109.
    \165\ Williams 2021 Comments at 38.
    \166\ See, e.g., Competitive Enterprise Institute 2021 Comments 
at 3-4.
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d. Use of the Social Cost of Greenhouse Gases
    70. Several commenters generally argue for a monetization of 
climate damages using the Social Cost of Greenhouse Gas (SC-GHG) tools 
\167\ to determine significance.\168\ EDF recommends that the approach 
should be consistent with the Commission's practices for determining 
the significance of other monetized effects, such as economic 
impacts.\169\ Public Interest Organizations comment that an established 
numerical significance threshold is not necessary, but if one is 
established, it should be used in tandem with the SCC tool and should 
not be based solely on one metric, especially not on a comparison to 
global emissions. Rather, they urge a holistic review of how a proposed 
project's impacts weigh against any benefits.\170\ EDF states that if 
the climate damages exceeded monetized project benefits, the Commission 
could reject the project.\171\
---------------------------------------------------------------------------

    \167\ The SC-GHG collectively includes the values for the SCC, 
the social cost of methane (SCM), and social cost of nitrous oxide 
(SCN).
    \168\ See, e.g., Policy Integrity Technical Conference Comments 
at 22-26; EPA 2021 Comments at 6; Ohio Environmental Council 2021 
Comments at 2; Public Interest Organizations 2021 Comments at 43-45; 
Attorneys General of Massachusetts et al. 2018 Comments at 17-22; 
EDF 2018 Comments at 8-11. The 2018 EDF comments were filed by a 
slightly different set of entities than in 2021. Public Interest 
Organizations' 2021 comments represent 53 entities including Natural 
Resources Defense Council.
    \169\ EDF 2021 Comments at 14-16.
    \170\ Public Interest Organizations 2021 Comments at 43-45, 50-
53, 60.
    \171\ EDF 2021 Comments at 9.
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    71. Conversely, other commenters oppose use of the SCC tool in 
determining significance \172\ or of using the SCC tool at all.\173\ 
The Attorneys General of Missouri, Alabama, Alaska, Arizona, Arkansas, 
Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, 
Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, 
Texas, Utah, and West Virginia (Attorneys General of Missouri et al.) 
contends that the NGA does not allow use of the SCC tool to calculate 
speculative damages and that its use is contrary to the Commission's 
public interest responsibilities. Further, they argue that NEPA does 
not permit the use of the SCC because NEPA does not allow agencies to 
rely on conclusions that are speculative or reflect substandard or 
outdated science.\174\
---------------------------------------------------------------------------

    \172\ See, e.g., Kinder Morgan 2021 Comments at 32-40 (stating 
the Commission should use the SCC tool only as a qualitative 
comparison tool).
    \173\ See, e.g., American Forest Technical Conference Comments 
at 9; Competitive Enterprise Institute Technical Conference Comments 
at 1-2, 7-35; Enbridge 2021 Comments at 111; Energy Infrastructure 
Council 2021 Comments at 24-25; Williams 2021 Comments 41-43.
    \174\ Attorneys General of Missouri et al. 2021 Comments at 2-7. 
A similar group, consisting of the Attorneys General of Missouri, 
Alabama, Alaska, Arizona, Arkansas, Georgia, Indiana, Kansas, 
Kentucky, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South 
Carolina, Texas, Utah, West Virginia, and Wyoming (Attorneys General 
of Missouri et al.), also submitted comments in response to the 
Commission's technical conference, see infra section III.C.1, 
extensively critiquing potential use of the SCC. Attorneys General 
of Missouri et al. Technical Conference Comments at 3-15. Mr. Kirk 
Frost also provided comments on use of the SCC, urging the 
Commission to use the tool to assess GHG emissions impacts. Kirk 
Frost December 23, 2021 Technical Conference Comments at 4.
---------------------------------------------------------------------------

    72. Public Interest Organizations state that, while neither the NGA 
nor NEPA explicitly reference the SCC tool, there is nothing in these 
or other federal statutes that would prohibit its use.\175\ New Jersey 
Conservation Foundation notes that President Biden's Executive Order 
13990 supports the use of the SC-GHG tools by agencies to capture the 
full costs of GHG emissions as accurately as possible.\176\ New Jersey 
Conservation Foundation states that following issuance of Executive 
Order 13990, the Interagency Working Group on the Social Cost of 
Greenhouse Gases (GHG IWG) published interim SC-GHG values, which the 
Commission should use.\177\
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    \175\ Public Interest Organizations 2021 Comments at 58.
    \176\ New Jersey Conservation Foundation 2021 Comments at 23-24 
(citing Exec. Order No. 13990, 86 FR 7037, 7040 (Jan. 25, 2021)).
    \177\ New Jersey Conservation Foundation 2021 Comments at 24.

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[[Page 14115]]

    73. CEQ notes that it was working with representatives on the GHG 
IWG to develop additional guidance regarding the application of the SC-
GHG tools in decision-making processes, including NEPA analysis.\178\ 
NGSA and API urge the Commission to wait for this review to be 
completed.\179\ NGSA further states that it would be inappropriate for 
the Commission to develop a likely conflicting approach for utilizing 
the SCC tool.\180\ API states that it would violate principles of 
consistency for the Commission to apply the interim SC-GHG values to 
current proposals (i.e., for the remainder of this year), knowing that 
these values may change and lead to different treatment for future 
proposals.\181\ EPA states that in cases where the Commission 
determines that a monetary comparison between benefits and costs is 
appropriate, the Commission should take into account established 
practices for benefit-cost analyses (e.g., the Office of Management and 
Budget's Circular A-4 and references therein). If the Commission 
chooses to use the SC-GHG tools, EPA states that it should disclose all 
assumptions and levels of uncertainty associated with the 
analysis.\182\
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    \178\ CEQ 2021 Comments at 2. C.f. Louisiana v. Biden, No. 21-
cv-1074-JDC-KK (W.D. La.) Order Granting Preliminary Injunction 
(Feb. 11, 2022).
    \179\ API 2021 Comment at 24-25; NGSA 2021 Comments at 20-21.
    \180\ NGSA 2021 Comments at 20-21.
    \181\ API 2021 Comment at 25, 27-28.
    \182\ EPA 2021 Comments at 2-3.
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    74. The Public Interest Organizations state that monetizing impacts 
using the SCC tool provides the public and decisionmakers with 
accessible figures useful in determining whether a project is in the 
public interest and allows the Commission to easily compare project 
harms and economic benefits, whereas other metrics can misleadingly 
minimize climate impacts due to inadequate contextualization.\183\
---------------------------------------------------------------------------

    \183\ Public Interest Organizations 2021 Comments at 58.
---------------------------------------------------------------------------

    75. Kinder Morgan asserts that the SCC tool relies on inputs or 
assumptions that introduce too much uncertainty.\184\ Similarly, 
Attorneys General of Missouri et al. contends that the SCC tool is too 
speculative and arbitrary to hold up to the hard-look requirement under 
NEPA.\185\ Rebutting this, EDF emphasizes that the GHG IWG's 
methodology is rigorous and based on the best available data and 
economic practices, such as utilizing a 300-year time horizon.\186\ 
INGAA states that the significant variation in output among GHG IWG's 
interim values shows that discount rates reflect a high level of 
uncertainty in the models and that an agency's chosen discount rate 
wields an outsized influence on the end result.\187\ INGAA states that 
the Commission should: (1) Only use the SCC tool within the NEPA 
evaluation, not the NGA evaluation; (2) use the SCC tool as a relative, 
but not absolute, measure; (3) use the SCC tool only as a threshold 
indicator; and (4) place any SCC estimates in the proper context.\188\
---------------------------------------------------------------------------

    \184\ Kinder Morgan 2021 Comments at 34-35.
    \185\ Attorneys General of Missouri et al. 2021 Comments at 9.
    \186\ EDF 2021 Comments at 21.
    \187\ INGAA 2021 Comments at 67.
    \188\ INGAA 2021 Comments at 70-73.
---------------------------------------------------------------------------

    76. New Jersey Conservation Foundation recommends that the 
Commission use all of the GHG IWG's interim values provided for the SC-
GHG tools (GHG IWG recommends using a discount rate of 3%, but also 
provides values associated with discount rates of 2.5% and 5%).\189\
---------------------------------------------------------------------------

    \189\ New Jersey Conservation Foundation 2021 Comments at 24; 
see also EDF 2021 Comments at 6-7.
---------------------------------------------------------------------------

    77. Boardwalk and Kinder Morgan argue that the Commission should 
only use the SCC tool as a qualitative tool.\190\ Boardwalk further 
asserts that there should not be any triggering levels that would 
result in adverse action by the Commission or a significance 
determination. Boardwalk contends that the use of trigger levels would 
create substantial regulatory uncertainty. Kinder Morgan and Williams 
also express concern that the SCC tool yields inherently one-sided GHG 
data if it is applied to a project in a manner that monetizes only the 
project's GHG costs and not the corresponding project benefits.\191\ 
Energy Infrastructure Council asserts that the SCC tool is meaningless 
without a standard or threshold for significance and its use requires a 
monetized cost-benefit analysis of an entire project.\192\
---------------------------------------------------------------------------

    \190\ Boardwalk 2021 Comments at 103; Kinder Morgan 2021 
Comments at 32-33.
    \191\ Kinder Morgan 2021 Comments at 32-33; Williams 2021 
Comments at 44-45.
    \192\ Energy Infrastructure Council 2021 Comments at 26-27.
---------------------------------------------------------------------------

    78. Kinder Morgan states that the SCC tool was not designed for 
project-specific analysis but could be used as a screening tool in a 
qualitative analysis. If the Commission uses the SCC tool, Kinder 
Morgan recommends that it should explain why and how it was used.\193\ 
This explanation should include information about the SCC's function, 
its mechanism, its embedded limitations and assumptions, and the 
specific reason for its application in a given circumstance. Kinder 
Morgan states that this type of explanation is vital to avoid 
misleading the public about the purpose of the SCC calculation and the 
meaning of its results.\194\ Spectra Energy Partners, LP and Seneca 
Resources Corporation contend that the Commission has no basis to 
designate a particular SCC dollar amount as significant, and any such 
designation would be arbitrary and could not meaningfully inform the 
Commission's decision making or the public.\195\ Additionally, Kinder 
Morgan states that the Commission should not use the SCC tool to 
determine mitigation measures or conditions because no statute requires 
that the Commission implement mitigation based on calculations from 
such a tool.\196\
---------------------------------------------------------------------------

    \193\ Kinder Morgan 2021 Comments at 42.
    \194\ Id.
    \195\ Seneca Resources Corp. 2018 Comments at 9; Spectra Energy 
Partners, LP 2018 Comments at 87.
    \196\ Kinder Morgan 2021 Comments at 42.
---------------------------------------------------------------------------

2. Appropriate Level of NEPA Review and Significance Determination
    79. To determine the appropriate level of NEPA review, the 
Commission is establishing a significance threshold of 100,000 metric 
tons or more per year of CO2e. In calculating this emissions 
estimate, Commission staff will apply the 100% utilization or ``full 
burn'' rate for natural gas supplies delivered by the proposed project 
and will prepare an EIS if the estimated emissions from the proposed 
project may exceed the 100,000 metric tons per year threshold.
    80. An emissions threshold of 100,000 metric tons per year of 
CO2e captures the majority of annual emissions generated by 
Commission authorized projects, including those that may result in 
incremental GHG emissions over a long duration that may have a 
significant effect upon the human environment. Establishing a threshold 
for NEPA purposes also provides Commission staff, industry, and other 
stakeholders clarity regarding whether a particular project will result 
in the preparation of either an EA or an EIS. We believe that such 
clarity ultimately benefits both the regulated community and public by 
ensuring certainty regarding the Commission's process for reviewing 
applications for natural gas infrastructure.
    81. In its NEPA document, staff will estimate the proposed 
project's GHG emissions based on all relevant evidence submitted in the 
record--including the project's utilization rate, offsets, and 
mitigation. A project with estimated emissions of 100,000 metric tons 
per year of CO2e or greater will be presumed to have a 
significant effect, unless record evidence refutes that

[[Page 14116]]

presumption.\197\ While the 100,000 metric ton presumption will serve 
as a guidepost, facilitating transparent, predictable analysis of a 
proposed project's contribution to climate change, our analysis will 
continue to consider all evidence in the record on a case-by-case 
basis. As part of that analysis, the Commission will continue to 
consider any emerging tools as well as any forthcoming frameworks or 
analysis issued by CEQ or other agencies on this issue. Finally, as 
noted at the outset, we encourage commenters to address this approach 
to assessing significance--including the 100,000 metric ton 
CO2e threshold.
---------------------------------------------------------------------------

    \197\ When examining a project's GHG emissions, the Commission 
will consider record evidence of the construction, operational, and, 
where determined to be reasonably foreseeable, downstream and 
upstream GHG emissions that reoccur annually over the life of the 
project.
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a. Commission Authority To Establish a Threshold
    82. Section 3 of the NGA requires the Commission to approve an 
application for the exportation or importation of natural gas unless 
the proposal ``will not be consistent with the public interest.'' \198\ 
Similarly, under section 7, the Commission must find a proposed project 
is or will be required by the present or future public convenience and 
necessity.\199\ The Commission has long regarded section 3's ``public 
interest'' standard and section 7's ``public convenience and 
necessity'' standard as substantially equivalent.\200\ In considering 
applications under section 3 or section 7, the Commission must 
``evaluate all factors bearing on the public interest.'' \201\ The 
Commission has recognized from its earliest decisions that it may 
consider the end use of gas as a factor in assessing the public 
interest \202\ and has long considered the impact of natural gas 
combustion on air pollution.\203\
---------------------------------------------------------------------------

    \198\ 15 U.S.C. 717b(a).
    \199\ Id. 717f(c), (e).
    \200\ Distrigas Corp. v. FPC, 495 F.2d 1057, 1065 (D.C. Cir.).
    \201\ Atl. Ref. Co. v. Pub. Serv. Comm'n of State of N.Y., 360 
U.S. 378, 391 (1959).
    \202\ See, e.g., Hope Nat. Gas Co., 4 FPC 59, 59, 66-67 (1944) 
(stating that ``considerations of conservation are material to the 
issuance of certificates of public convenience and necessity under 
section 7'' and authorizing a project in large part because of the 
particular end use of the gas); see N. Nat. Gas Co., 15 FPC 1634, 
1641 (1956) (Connole, Comm'r, dissenting) (contending that the 
Commission has ``long held that considerations of conservation, 
inferior and superior uses, and related matters are relevant to 
determining whether the public convenience and necessity require the 
issuance of a certificate'').
    \203\ Transwestern Pipeline Co., 36 FPC 176, 185-186, 189-191 
(1966) (citing FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1 
(1961) (Transco), for the proposition that the ``end use of gas was 
properly of concern to [the Commission], and made it clear that air 
pollution was a relevant consideration''). Cf. Am. La. Pipe Line 
Co., 16 FPC 897, 899-900 (1956) (``[T]here is a public need for and 
will be a public benefit from [the proposed] natural-gas service . . 
. . This need and benefit arise from the facts, among others, . . . 
that natural gas is a clean, convenient and efficient fuel.'').
---------------------------------------------------------------------------

    83. As discussed above, the courts have interpreted the 
Commission's obligations under NEPA to require analysis of downstream 
GHG emissions for NGA section 7 certificate projects, but do not 
require an analysis of either downstream or upstream GHG emissions for 
section 3 export projects.\204\ As also discussed above, the Commission 
has previously acknowledged that upstream emissions for NGA section 7 
certificate projects may be difficult to quantify. However, as noted, 
the Commission will continue to consider on a case-by-case basis 
whether GHG emissions from upstream production activities are a 
reasonably foreseeable and causally connected result of a proposed 
project.\205\
---------------------------------------------------------------------------

    \204\ See supra PP 34-37.
    \205\ See supra P 42.
---------------------------------------------------------------------------

    84. Contrary to the suggestion of some commenters, the Commission 
would not intrude into another agency's domain by establishing a 
significance threshold. The Commission does not propose to set an 
emissions standard that projects will be expected to meet; rather, the 
threshold would be an indication of potential significance for purposes 
of the Commission's review of a project's environmental impacts under 
NEPA and trigger the preparation of an EIS.\206\
---------------------------------------------------------------------------

    \206\ The Commission notes that CEQ and EPA are undertaking 
initiatives that may culminate in the establishment of a 
significance threshold for GHG emissions or that may further impact 
the Commission's determination of GHG significance in its NEPA 
analysis. If CEQ or EPA issues any future guidance regarding the 
evaluation of GHG emissions, the Commission may adjust its methods 
for determining the significance of GHG emissions consistent with 
that guidance.
---------------------------------------------------------------------------

    85. As discussed above, NEPA requires the Commission to take a 
``hard look'' at the environmental consequences of a proposed action 
and to prepare an EIS disclosing its analysis to the public where its 
action may significantly affect the quality of the human environment, 
or to prepare an EA for a proposed action that is not likely to have 
significant effects or when the significance is unknown to determine if 
an EIS is necessary. We note that neither EPA nor CEQ raise objections 
to the Commission determining the significance of GHG emissions; in 
fact, EPA points to Executive Order 14008, which directs the federal 
government to prioritize assessment, disclosure, and mitigation of 
climate pollution and climate-related risks, in response to the 
Commission's query on how it could determine the significance of a 
project's GHG emissions.\207\
---------------------------------------------------------------------------

    \207\ EPA 2021 Comments at 6.
---------------------------------------------------------------------------

    86. As discussed above, NEPA requires the Commission to determine 
whether a project would have any significant effects on the 
environment, including the effects of GHG emissions on the 
climate.\208\ Moreover, courts have rejected the claim that under the 
NEPA framework, the determination of whether an impact is significant 
must not involve any subjective judgment calls.\209\
---------------------------------------------------------------------------

    \208\ See supra PP 23-25.
    \209\ Spiller v. White, 352 F.3d at 244 n.5.
---------------------------------------------------------------------------

    87. We are establishing a uniform GHG emissions threshold because 
GHG emissions affect climate to the same degree, regardless of the 
location or specifics of a particular project. Establishing such a 
threshold will provide the Commission a workable and consistent path 
forward to analyze proposed projects. Further, a numerical threshold is 
a clear, consistent standard that can be easily understood and applied 
by the regulated community and interested stakeholders.
b. Rationale for an Emissions Threshold of 100,000 Metric Tons per Year
    88. Human impact on the warming of the global climate system is 
unequivocal.\210\ Even 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.\211\ This level of warming will present major 
global consequences. For example, extreme temperature events that may 
have occurred once in 10 years on average in a climate without human 
influence will occur 4.1 times as frequently and be 1.9 [deg]C 
hotter.\212\ Agricultural and ecological drought events that may have 
occurred once in 10 years on average across drying regions in a climate 
without human influence will occur twice as frequently.\213\ Warming 
beyond 1.5 [deg]C presents even more severe consequences. The 
Intergovernmental Panel on Climate Change states that ``[w]ith every 
additional increment of global warming, changes in extremes continue to 
become larger.'' \214\ For example, every subsequent 0.5 [deg]C of 
warming ``causes clearly discernible increases in the intensity and 
frequency of hot extremes, including heatwaves (very likely), and heavy 
precipitation

[[Page 14117]]

(high confidence), as well as agricultural and ecological droughts in 
some regions (high confidence).'' \215\ Because of the dire effects at 
stake, even relatively minor GHG emissions pose a significant threat, 
100,000 metric tons per year of project GHG emissions will capture all 
natural gas projects that have what we believe to be the potential for 
causing significant impacts on climate, given the typical lifespans of 
authorized projects. For a single natural gas project with a lifespan 
of 30 years, this threshold represents a total of three million metric 
tons of GHG emissions.
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    \210\ IPCC Report at SPM-5.
    \211\ See IPCC Report at SPM-17.
    \212\ IPCC Report at SPM-23.
    \213\ IPCC Report at SPM-23.
    \214\ IPCC Report at SPM-19.
    \215\ IPCC Report at SPM-19 (emphasis in original).
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    89. Based on an internal review of natural gas projects from 2008 
to 2021, a 100,000 metric tons per year threshold will cover the vast 
majority of potential GHG emissions from natural gas projects 
authorized by the Commission. For context, projects that likely have 
100,000 metric tons per year or more of GHG emissions include projects 
transporting an average of 5,200 dekatherms per day and projects 
involving the operation of one or more compressor stations or LNG 
facilities.
    90. Outside the NEPA context, other federal and state agencies that 
have established thresholds to evaluate or regulate GHG emissions from 
an analysis of the emissions from regulated sources. Most notably, in 
2012, EPA issued the Tailoring Rule to regulate GHG emissions from 
stationary sources of air pollution under the Prevention of Significant 
Deterioration (PSD) \216\ and Title V \217\ permitting programs \218\ 
and proposed to phase in the regulation of GHG emissions in two steps. 
Under Step 1, sources already subject to the PSD permitting program for 
at least one non-GHG pollutant (``anyway'' sources) were required to 
utilize best available control technology (BACT) for GHG emissions 
\219\ if they increased net GHG emissions by at least 75,000 tons per 
year of CO2e.
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    \216\ The PSD permitting program is part of the New Source 
Review program, which requires new stationary sources and major 
modifications to existing major sources to obtain preconstruction 
permits. PSD is designed to prevent air quality deterioration in 
regions that are attaining the National Ambient Air Quality 
Standards by requiring major sources or major modifications to 
install the Best Available Control Technology (BACT). Major sources 
under the PSD program are defined as facilities that emit or have 
the potential to emit 250 tons per year of any criteria air 
pollutant or 100 tons per year of any criteria air pollutant for 
specific types of facilities listed in the statute. 42 U.S.C. 
7479(1). The six criteria pollutants are carbon monoxide, ground-
level ozone, lead, nitrogen dioxide, particulate matter, and sulfur 
dioxide. 40 CFR pt. 50.
    \217\ The Title V program requires major stationary sources to 
obtain a single operating permit that consolidates all of the 
permitting requirements in the Clean Air Act into a single permit, 
including PSD, New Source Performance Standards, and National 
Emission Standards for Hazardous Air Pollutants. Major sources under 
the Title V program are defined as any stationary facility that 
emits or has the potential to emit 100 tons per year of any 
hazardous air pollutant, except GHGs. 42 U.S.C. 7602(j). The Clean 
Air Act Amendments of 1990 originally designated over 180 chemicals 
as hazardous air pollutants, and EPA has the authority to modify the 
list through rulemaking. 42 U.S.C. 7412(b)-(c).
    \218\ Prevention of Significant Deterioration and the Title V 
Greenhouse Gas Tailoring Rule, 75 FR 31514 (June 3, 2010) (Tailoring 
Rule).
    \219\ BACT is used to minimize emissions based on the maximum 
degree of control that the facility can achieve as determined by the 
permitting authority on a case-by-case basis. BACT may be a design, 
equipment, work practice, or operational standard, such as add-on 
control equipment, fuel cleaning or treatment, or innovative fuel 
combustion techniques. Note that BACT for minimizing GHG emissions 
at natural gas facilities is limited.
---------------------------------------------------------------------------

    91. Under Step 2, EPA expanded the Tailoring Rule by requiring a 
new source or a major modification to an existing source to obtain PSD 
and/or Title V permits based on GHG emissions alone. Sources that had 
the potential to emit at least 100,000 tons per year of CO2e 
would become newly subject to the PSD and/or Title V requirements, even 
if they did not exceed the statutory threshold for any other pollutant. 
Additionally, modifications to an existing source already subject to 
PSD and/or Title V that increased net GHG emissions by at least 75,000 
tons per year of CO2e would be subject to PSD requirements 
regardless of whether there was an increase in the emissions of any 
other pollutant.\220\
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    \220\ EPA also planned a Step 3 to further reduce the threshold, 
although not below 50,000 tons per year of CO2e. The 
Supreme Court struck down relevant portions of the Tailoring Rule 
before EPA finalized Step 3.
---------------------------------------------------------------------------

    92. In setting the 75,000 tons and 100,000 tons per year of GHGs 
thresholds, EPA considered the administrative burden of permitting the 
estimated number of additional facilities under each threshold and the 
percentage of total national stationary source GHG emissions that would 
be covered under the threshold.\221\ For example, under Step 1, EPA 
estimated a 5% increase in the total annual cost to run the permitting 
programs and that approximately 65% of GHG emissions would be covered. 
Under Step 2, EPA estimated that approximately 550 new sources would 
become subject to the PSD and Title V programs, increasing total annual 
costs to run the programs by 42% and covering 67% of GHG emissions. EPA 
further found that lowering the threshold to 50,000 or 25,000 tons per 
year of CO2e would drastically increase both the number of 
new facilities requiring permits and the cost of administering the 
programs but would only marginally increase the percentage of GHG 
emissions covered to 70% and 75%, respectively.
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    \221\ Tailoring Rule, 75 FR at 31533-80.
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    93. In 2014, the Supreme Court invalidated portions of the 
Tailoring Rule, holding that EPA may not use GHG emissions as the sole 
basis for determining whether a source is subject to a PSD or Title V 
permitting requirements.\222\ While the Supreme Court's ruling struck 
down Step 2 of the Tailoring Rule, it upheld Step 1 and allowed EPA to 
continue to regulate GHG emissions from ``anyway'' sources. Notably, 
the decision did not discuss EPA's methodology for establishing the 
thresholds; it only ruled that deviating from the 100 and 250 tons per 
year statutory thresholds in the Clean Air Act when requiring sources 
to newly obtain PSD or Title V permits based solely on GHG emissions 
under Step 2 was impermissible.
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    \222\ Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 320 (2014).
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    94. Further, at least two agencies in California that are directed 
to determine the significance of GHG emissions and climate impacts of 
proposed projects under the California Environmental Quality Act have 
also proposed or established thresholds of significance based on an 
analysis of regulated sources. First, in 2008, the California Air 
Resources Board (California ARB) proposed finding a less than 
significant impact for a proposed industrial project that, with 
mitigation, emits no more than 7,000 metric tons per year of 
CO2e from non-transportation sources, including combustion 
and fugitive emissions.\223\ Second, the South Coast Air Quality 
Management District (South Coast AQMD) adopted an interim GHG 
significance threshold of 10,000 metric tons of CO2e per 
year for stationary

[[Page 14118]]

sources of air pollution in 2008.\224\ Both California ARB and South 
Coast AQMD found that their thresholds would capture approximately 90% 
of emissions from their respective regulated sources.\225\
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    \223\ California ARB, Preliminary Draft Staff Proposal, 
Recommended Approaches for Setting Interim Thresholds for Greenhouse 
Gases under the California Environmental Quality Act (Oct. 24, 2008) 
(CEQA Proposed Interim Thresholds). In addition, California ARB 
proposed to require these projects to meet performance standards for 
construction-related emissions and transportation to support a 
finding of less than significant impacts. CEQA Proposed Interim 
Thresholds at attach. A.
    \224\ South Coast AQMD, Interim CEQA GHG Significance Threshold 
for Stationary Sources, Rules and Plans (Dec. 5, 2008), https://www.aqmd.gov/docs/default-source/ceqa/handbook/greenhouse-gases-
(ghg)-ceqa-significance-thresholds/ghgboardsynopsis.pdf?sfvrsn=2.
    \225\ Id. at 4; CEQA Proposed Interim Thresholds at attach. A.
---------------------------------------------------------------------------

    95. Like EPA and the California agencies, we are basing our 
threshold on an analysis of regulated sources. Although we are adopting 
a conceptually similar methodology in establishing our threshold, we 
note that our approach will cover a larger number of emissions than the 
threshold established by EPA in the Tailoring Rule. EPA's thresholds of 
75,000 and 100,000 tons per year accounted for only 65% and 67% of 
emissions from EPA-regulated sources, respectively, whereas our 
proposed threshold of 100,000 metric tons per year would deem nearly 
three-quarters of Commission-regulated natural gas project, which 
collectively account for roughly 99% of GHG emissions from Commission-
regulated natural gas projects, to have a significant impact on climate 
change.
3. Other Metrics
    96. As noted above, commenters argue for and against the use of 
various existing GHG inventories or goals as a comparison tool to 
determine significance. Comparison to an existing GHG inventory or goal 
presents substantially different percentages based on the chosen goal 
(international, state, regional, or local). Because different projects 
may have different potential purposes and the purpose of a project may 
be characterized to support or oppose a particular viewpoint, we do not 
believe that tying the Commission's significance determination for a 
proposed project's GHG emissions to a particular inventory or goal is 
appropriate. However, we recognize that this type of comparison can be 
helpful to inform the Commission's analysis and the public, especially 
when presented using a consistent metric across proposed projects under 
consideration by the Commission. We note that many commenters reference 
the SC-GHG as one tool. To the extent permitted by law,\226\ the 
Commission could consider the SC-GHG in the future.
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    \226\ Currently, two pending court cases challenge use of the 
IWG's interim values by federal agencies. Mo. v. Biden, ---- F. 
Supp. 3d ----, 2021 WL 3885590 (E.D. Mo. Aug. 31, 2021), appeal 
filed, No. 21-3013 (8th Cir.); La. v. Biden, No. 21-cv-1074-JDC-KK 
(W.D. La).
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C. Mitigation

    97. Federal agencies can use mitigation to minimize the potential 
adverse environmental effects of their actions,\227\ and mitigation is 
used by the Commission in reviewing NGA sections 3 and 7 
proposals.\228\
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    \227\ Mitigation is measures that avoid, minimize, or 
counterbalance effects caused by a proposed action by: (1) Avoiding 
the impact altogether by not taking a certain action or parts of an 
action; (2) minimizing impacts by limiting the degree or magnitude 
of the action and its implementation; (3) rectifying the impact by 
repairing, rehabilitating, or restoring the affected environment; 
(4) reducing or eliminating the impact over time by preservation and 
maintenance operations during the life of the action; and/or (5) 
compensating for the impact by replacing or providing substitute 
resources or environments. 40 CFR 1508.1.
    \228\ As discussed supra P 26, NEPA contains no substantive 
requirement that environmental impacts be mitigated or avoided, 
however, the environmental document must include a mitigation 
discussion that provides ``sufficient detail'' to indicate that 
environmental impacts have been fairly evaluated. S. Fork Band 
Couns. of W. Shoshone of Nev. v. U.S. Dep't of Interior, 588 F.3d 
718, 727 (9th Cir. 2009); see also Nat'l Parks & Conservation Ass'n 
v. U.S. Dep't of Transp., 222 F.3d 677, 681 n.5 (9th Cir. 2000) 
(stating that mitigation measures proposed in an EIS ``need not be 
legally enforceable, funded, or even in final form to comply with 
NEPA's procedural requirements'').
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    98. The NGA grants the Commission broad authority to attach 
reasonable terms and conditions to NGA section 7 certificates of public 
convenience and necessity and NGA section 3 authorizations.\229\ The 
Commission has consistently exercised this authority to attach 
environmental conditions that mitigate the adverse environmental 
impacts of a proposed project, and the Commission is not precluded from 
utilizing this authority to require a project sponsor to mitigate all, 
or a portion of, the impacts related to a proposed project's GHG 
emissions. Therefore, consistent with the discussion provided herein, 
going forward project proponents are encouraged to propose mitigation 
that will minimize climate impacts. The Commission will consider any 
mitigation measures proposed by the project sponsor on a case-by-case 
basis when balancing the need for a project against its adverse 
environmental impacts and may require additional mitigation as a 
condition of an NGA section 3 authorization or section 7 certificate.
---------------------------------------------------------------------------

    \229\ See supra P 22; see also 15 U.S.C. 717b(e)(3)(A) 
(providing the authority to approve an application for an LNG 
Terminal, ``in whole or part, with such modifications and upon such 
terms and conditions as the Commission find[s] necessary or 
appropriate'').
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1. Technical Conference on GHG Mitigation
    99. On November 19, 2021, the Commission held a Commission staff-
led technical conference to discuss methods project sponsors may use to 
mitigate the effects of direct and indirect greenhouse gas emissions 
resulting from Natural Gas Act sections 3 and 7 authorizations.\230\ 
Representatives from industry, academia, non-governmental 
organizations, and state regulatory commissions participated as 
panelists, with discussion topics including: How the Commission could 
determine the quantity of reasonably foreseeable GHG emissions 
resulting from a project proposed under section 3 or 7 of the NGA and 
the appropriate level of mitigation for such emissions; types of 
mitigation measures a project sponsor could employ to reduce the amount 
of GHG emissions associated with a proposed project; and methods for 
the continued verification and accounting of GHG mitigation during 
project operation, as well as cost impacts to the industry from 
implementing GHG mitigation measures and how project sponsors might 
recover those costs.
---------------------------------------------------------------------------

    \230\ See Transcript of Greenhouse Gas Mitigation: Natural Gas 
Act Sections 3 and 7 Authorizations, Docket No. PL21-3-000 (issued 
Dec. 22, 2021) (Technical Conference Transcript).
---------------------------------------------------------------------------

    100. In addition to the panelists' written statements, the 
Commission received over 20 comments in response to the technical 
conference. The Commission considered these statements and comments in 
developing the mitigation policy described below.
2. Authority To Require Mitigation
    101. Some commenters state that the Commission has broad authority 
under the NGA to place conditions in certificate authorizations 
requiring pipeline companies to mitigate GHG impacts,\231\ while others 
argue that the Commission does not have authority under the NGA or NEPA 
to impose mitigation measures,\232\ especially

[[Page 14119]]

measures to mitigate upstream or downstream GHG emissions.\233\ 
Specifically, commenters argue that the Commission's authority under 
NGA section 7(e) to place conditions on a certificate is limited by the 
statutory purpose to regulate interstate transportation to ensure 
reliable access to plentiful natural gas at reasonable prices.\234\ 
Commenters further assert that the Commission has no authority to 
establish environmental policy and that the Commission cannot use its 
conditioning authority to indirectly mitigate an effect that it has no 
authority to directly mitigate.\235\
---------------------------------------------------------------------------

    \231\ See, e.g., Policy Integrity Technical Conference Comments 
at 2; Policy Integrity 2021 Comments at 14-15, 21; Public Interest 
Organizations 2021 Comments at 71-72; see also American Forest 
Technical Conference Comments at 4-5, 7-10 (stating that to the 
extent the courts have clarified the Commission's duty to consider 
GHG emissions and require mitigation for such impacts, that it 
supports the Commission considering mitigation on a case-by-case 
basis to avoid the uncertainty posed by the threat of litigation and 
the possibility of a court vacating the project's certificate).
    \232\ See, e.g., Boardwalk Technical Conference Comments at 7; 
Dr. Jason Scott Johnston Technical Conference Comments at 1; TC 
Energy Technical Conference Comments at 4; API 2021 Comments at 29-
30; see also Williams Technical Conference Comments at 17 (claiming 
that there is no reasonable basis for the Commission to require 
project sponsors to submit mitigation proposals with their 
applications because the technical conference demonstrated a lack of 
evidentiary support for any specific mitigation methods, offered no 
specific proposals regarding the levels of fees, offsets, or caps, 
and proposed no concrete and cost-effective means to mitigate 
emissions).
    \233\ API Technical Conference Comments at 5; Boardwalk 
Technical Conference Comments at 10; Consolidated Edison Company of 
New York, Inc. and Orange and Rockland Utilities, Inc. 
(collectively, Con Edison) Technical Conference Comments at 5; Hon. 
Joseph T. Kelliher Technical Conference Comments at 1; INGAA 
Technical Conference Comments at 6-7; TC Energy Technical Conference 
Comments at 8; API 2021 Comments at 31; INGAA 2021 Comments at 74-
83; TC Energy 2021 Comments at 56-58.
    \234\ See, e.g., Hon. Joseph T. Kelliher Technical Conference 
Comments at 1 (citing NAACP v. FPC, 425 U.S. 662, 669-70 (1976)); 
id. at 8-9 (asserting that the proper place to consider GHG 
emissions (direct only) is under the Commission's balancing test, 
where a project sponsor may choose to voluntarily offset emissions); 
TC Energy Technical Conference Comments at 8; INGAA 2021 Comments at 
74-76.
    \235\ See, e.g., Boardwalk Technical Conference Comments at 11-
13 (arguing that Transco does not authorize the Commission to 
indirectly regulate upstream and downstream emissions); Enbridge 
Technical Conference Comments at 5, 16, 21; Hon. Joseph T. Kelliher 
Technical Conference Comments at 4; INGAA 2021 Comments at 76-77.
---------------------------------------------------------------------------

    102. Commenters also claim that any attempt to mitigate indirect 
GHG emissions would infringe on the regulatory authority of other 
federal and state agencies and result in back-door regulation of energy 
policy.\236\ Specifically, commenters state that any attempt by the 
Commission to mitigate upstream or downstream GHG emissions would 
interfere with state resource decisions and usurp issues of national 
energy and environmental policy that Congress vested in other federal 
authorities.\237\ For example, commenters argue that Congress has 
delegated authority to the EPA and state agencies to regulate GHGs 
under the CAA.\238\ Even if the Commission had the authority to impose 
mitigation measures for upstream or downstream GHG emissions, 
commenters argue that the Commission must first establish that those 
GHG emissions are reasonably foreseeable and have a sufficiently close 
causal connection (akin to proximate causation under tort law) \239\ to 
the authorization of a project under NEPA, and if not, should not be 
considered for mitigation purposes.\240\ Lastly, commenters question 
reliance on Sabal Trail to support the Commission's authority to impose 
mitigation.\241\
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    \236\ See, e.g., API Technical Conference Comments at 2, 4; 
Edison Electric Institute (EEI) Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 18-19, 23-24; Hon. 
Joseph T. Kelliher Technical Conference Comments at 5; Attorneys 
General of Missouri et al. Technical Conference Comments at 3 
(citing S. Coast Air Quality Mgmt. Dist. v. FERC, 621 F.3d 1085, 
1092 (9th Cir, 2010)); TC Energy Technical Conference Comments at 6-
7; Boardwalk 2021 Comments at 10. Commenters further argue that the 
NGA was not enacted to comprehensively regulate the natural gas 
industry, but instead to fill a regulatory gap over interstate gas 
transportation and sales; therefore, Congress left the regulation of 
upstream production and downstream consumption to the states. 
Enbridge Technical Conference Comments at 16-17; Hon. Joseph T. 
Kelliher Technical Conference Comments at 2 (citing NAACP v. FPC, 
425 U.S. at 669-70; State of Cal. v. Southland Royalty Co., 436 U.S. 
519, 523 (1989); ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378, 
384-85 (2015); ANR Pipeline Co. v. FERC, 876 F.2d 124, 132-33 (D.C. 
Cir. 1989)).
    \237\ INGAA Technical Conference Comments at 8; Boardwalk 2021 
Comments at 107; Con Edison Technical Conference Comments at 6-7 
(stating that the state regulators are the best positioned to 
determine and impose mitigation measures for upstream and downstream 
GHG emissions); INGAA 2021 Comments at 77-79.
    \238\ American Public Gas Association (APGA) Technical 
Conference Comments at 5-6; EEI Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 23-24; TC Energy 
Technical Conference Comments at 9-10.
    \239\ Specifically, commenters argue that the Commission should 
rely on Center for Biological Diversity, which states that ``the 
legal analysis in Sabal Trail is questionable at best'' and that 
``[i]t fails to take seriously the rule of reason announced in 
Public Citizen or to account for the untenable consequences of its 
decision.'' Center for Biological Diversity, 941 F.3d at 1300; see 
also AGA Technical Conference Comments at 13-14; Boardwalk Technical 
Conference Comments at 16-17; Hon. Joseph T. Kelliher Technical 
Conference Comments at 3; INGAA Technical Conference Comments at 12-
13; TC Energy Technical Conference Comments at 13-14.
    \240\ API Technical Conference Comments at 4; EEI Technical 
Conference Comments at 6; INGAA Technical Conference Comments at 14; 
Williams Technical Conference Comments at 5.
    \241\ See AGA Technical Conference Comments at 12-13 (arguing 
that the Commission should not rely on this statement of dicta 
because the issue of mandatory mitigation was not at issue in this 
case; rather, the court only addressed whether the Commission is, in 
some circumstances, required by NEPA to include a discussion of 
downstream GHG emissions when conducting its environmental review); 
Boardwalk Technical Conference Comments at 16 (same); Enbridge 
Technical Conference Comments at 20 (same); Hon. Joseph T. Kelliher 
Technical Conference Comments at 3-4 (same); TC Energy Technical 
Conference Comments at 12 (same).
---------------------------------------------------------------------------

    103. We disagree with contentions that the Commission does not have 
the authority under the NGA or NEPA to require mitigation of GHG 
emissions by a project sponsor. The D.C. Circuit stated in Sabal Trail, 
that ``the [Commission] has legal authority to mitigate'' greenhouse-
gas emissions that are an indirect effect of authorizing a pipeline 
project.\242\ And, as early as 1961, the Supreme Court recognized that 
the Commission's predecessor, the Federal Power Commission, had the 
authority to consider downstream uses, and specifically, the impact of 
end-users combusting transported gas on air quality, as part of its 
public convenience and necessity determination under the NGA.\243\ Both 
NGA sections 3 and 7 authorize the Commission to attach ``such 
reasonable terms and conditions as the public convenience and necessity 
may require.'' \244\ Pursuant to this authority, the Commission has 
conditioned NGA section 7 certificates and section 3 authorizations on 
mitigation of impacts of the proposed project.\245\ Moreover, courts 
have interpreted this provision broadly and given the Commission 
latitude in deciding what types of mitigation to require.\246\
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    \242\ Sabal Trail, 867 F.3d at 1374.
    \243\ Transco, 365 U.S. at 17; see also NAACP v. FPC, 425 U.S. 
at n.6 (stating that the Commission has the authority to consider 
conservation and environmental issues under the NGA's public 
interest determination). See Certification of New Interstate Natural 
Gas Pipeline Facilities, 178 FERC ] 61,107 at PP 71-72.
    \244\ 15 U.S.C. 717f(e); see also id. 717b(e)(3)(A) (providing 
the authority to approve an application for an LNG Terminal, ``in 
whole or part, with such modifications and upon such terms and 
conditions as the Commission find[s] necessary or appropriate.'').
    \245\ For examples where the Commission has conditioned approval 
of natural gas projects on mitigation of adverse impacts, see supra 
note 69.
    \246\ See Twp. of Bordentown v. FERC, 903 F.3d at 261 n.15 
(concluding that the Commission's authority to enforce any required 
remediation is amply supported by provisions of the NGA); Sabal 
Trail, 867 F.3d at 1374 (holding that the Commission has legal 
authority to mitigate reasonably foreseeable indirect effects).
---------------------------------------------------------------------------

    104. Regarding claims that the Commission cannot mandate mitigation 
of downstream emissions because those emissions are outside the 
Commission's jurisdiction, we recognize, as many commenters assert, 
that the Commission does not have the statutory authority to impose 
conditions on downstream users or other entities outside the 
Commission's jurisdiction, such as production, gathering, and local 
distribution entities.\247\ Rather, the Commission encourages each 
project sponsor to propose measures to mitigate the impacts of 
reasonably foreseeable

[[Page 14120]]

GHG emissions associated with its proposed project, and will consider 
such mitigation proposals in assessing the extent of a project's 
adverse impacts.\248\
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    \247\ See generally Tex. Pipeline Ass'n v. FERC, 661 F.3d 258, 
260 (5th Cir. 2011) (holding that the Commission lacked authority to 
require ``major non-interstate pipelines'' to post certain flow 
information).
    \248\ As described supra in section III.A.2.b, the Commission 
will consider GHG emission mitigation and reduction efforts taken by 
non-jurisdictional entities, including downstream users, when 
quantifying the reasonably foreseeable project GHG emissions. 
However, the project sponsor's GHG mitigation plan should only 
include its own proposed mitigation efforts.
---------------------------------------------------------------------------

    105. We note that the Supreme Court's ruling in Public Citizen does 
not preclude the Commission from requiring project sponsors to mitigate 
reasonably foreseeable upstream or downstream emissions. As discussed 
previously,\249\ the Commission may consider downstream GHG emissions 
under Public Citizen, which states that ``NEPA requires `a reasonably 
close causal relationship' between [an] environmental effect and the 
alleged cause,'' analogous to the ``familiar doctrine of proximate 
cause from tort law'' and does not require an agency to gather or 
consider information regarding environmental harms if it lacks 
authority to act on that information.\250\ As directed by Public 
Citizen, decisionmakers should ``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.'' \251\ Here, the NGA ``broadly instruct[s]'' the 
Commission to consider ``the public convenience and necessity'' when 
evaluating proposed interstate pipeline applications, balancing public 
benefits against adverse effects, including adverse environmental 
effects,\252\ and we have noted that the Commission has consistently 
exercised its broad conditioning authority under the NGA to attach 
environmental conditions that mitigate the adverse environmental 
impacts of a proposed project.\253\ NEPA requires an agency to consider 
the environmental impacts of its actions, including steps that could be 
taken to mitigate adverse environmental consequences,\254\ although it 
does not require a federal agency to take action to mitigate those 
adverse effects.\255\ As CEQ recognizes, an agency may, however, 
require mitigation of impacts under its authority as a condition of its 
permitting or approval.\256\ Thus, as the D.C. Circuit held in Sabal 
Trail, the Commission can deny a pipeline certificate on the ground 
that the pipeline would be too harmful to the environment, because the 
agency is the ``legally relevant cause'' of the direct and reasonably 
foreseeable environmental effects of the pipelines it approves.\257\ 
Accordingly, the Commission may consider the end use of gas and the 
impact of natural gas combustion on air pollution as a factor in 
assessing the public interest.\258\ However, as detailed below, the 
Commission's priority is for project sponsors to mitigate, to the 
greatest extent possible, a project's direct GHG emissions. The 
Commission also encourages project sponsors to propose mitigation of 
reasonably foreseeable indirect emissions, and will take such proposals 
into account in assessing the extent of a project's adverse impacts.
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    \249\ See supra section III.A.1.b.
    \250\ Pub. Citizen, 541 U.S. at 767, 770 (quoting Metro. Edison 
Co., 460 U.S. at 774); see Sabal Trail, 867 F.3d at 1372.
    \251\ Pub. Citizen, 541 U.S. at 767 (quoting Metro. Edison Co., 
460 U.S. at 774 n.7).
    \252\ Sabal Trail, 867 F.3d at 1373 (citing Minisink Residents 
for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101-02 (D.C. Cir. 
2014); Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 
1309 (D.C. Cir. 2015)).
    \253\ See supra P 97.
    \254\ Robertson v. Methow Valley Citizens Council, 490 U.S. at 
351 (``To be sure, one important ingredient of an EIS is the 
discussion of steps that can be taken to mitigate adverse 
environmental consequences.'').
    \255\ 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.''); S. Fork Band Couns. of W. Shoshone of Nev. v. U.S. Dep't 
of Interior, 588 F.3d at 727 (NEPA does not require that agencies 
mitigate significant environmental harms).
    \256\ 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.
    \257\ Sabal Trail, 867 F.3d at 1373 (distinguishing Public 
Citizen).
    \258\ See supra P 80.
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3. Mitigation Measures
    106. The Commission encourages the project sponsor to propose 
measures to mitigate the direct GHG emissions of its proposed project 
to the extent these emissions have a significant adverse environmental 
impact.\259\ INGAA describes three possible levels of mitigation--to 
zero, to a level of below significance, and to an amount to be 
determined by use of the SCC--but dismisses each as unworkable, 
improperly adopting broad policy judgements, and reliant on a one-sided 
and imprecise methodology, respectively.\260\ The Commission plans to 
evaluate proposed mitigation plans on a case-by-case basis and is not 
mandating a standard level of mitigation. We also encourage project 
sponsors to proposed measures to mitigate the reasonably foreseeable 
upstream or downstream emissions associated with their projects.
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    \259\ The Attorneys General of Massachusetts, Delaware, 
Maryland, Michigan, Minnesota, New Jersey, Rhode Island, and the 
District of Columbia (Attorneys General of Massachusetts et al.) 
recommends that the Commission include reasonable, binding 
mitigation measures that incorporate any applicable state or federal 
regulations or permit conditions. Attorneys General of Massachusetts 
et al. Technical Conference Comments at 6. The technical conference 
commenters are made up of a slightly different group of state 
attorneys general than those filing comments in 2018 or 2021. As 
explained below, the Commission is only considering mitigation 
measures that reduce emissions beyond those associated with 
regulatory requirements in this policy statement.
    \260\ INGAA Technical Conference Comments at 21-27; see also 
Enbridge Technical Conference Comments at 12-13, 35-38 (recommending 
the Commission await direction from Congress in choosing a 
mitigation level, especially if requiring project sponsors to 
mitigate to less than significant levels and noting that mitigation 
to zero is not practicable if downstream or upstream emissions are 
included).
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    107. The Commission will consider the project's impact on climate 
change, including the project sponsor's mitigation proposal, as part of 
its public interest determination under NGA section 3 or 7.\261\ When 
making the public interest determination, the Commission will assess 
the adequacy of the project sponsor's proposed mitigation on a case-by-
case basis and will consider the project's impact on climate change as 
one of many factors.\262\ Further, the Commission may require 
additional mitigation of a project's direct GHG emissions as a 
condition of the authorization, should the Commission deem a project 
sponsor's proposed mitigation inadequate to support the public interest 
determination.
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    \261\ Attorneys General of Massachusetts et al. urges the 
Commission to consider the impacts of any mitigation measures on 
environmental justice communities. Attorneys General of 
Massachusetts et al. Technical Conference Comments at 5-6.
    \262\ Jennifer Danis, Senior Fellow with the Sabin Center for 
Climate Change Law and a panelist at the GHG Technical Conference on 
Panel 1, recommends that the Commission should not consider the 
effect of any mitigation measures in its public interest 
determination but should only consider mitigation measures once the 
Commission has determined that public convenience and necessity 
absolutely requires the project. Jennifer Danis Technical Conference 
Statement at 8-11. As explained in the Certificate Policy Statement, 
the Commission considers all factors, including the extent to which 
adverse impacts are mitigated, to determine whether a project is in 
the public convenience and necessity. Certification of New 
Interstate Natural Gas Pipeline Facilities, 178 FERC ] 61,107 at PP 
70, 93-95.
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    108. Also we note that NEPA does not preclude the Commission from 
approving a project with significant adverse impacts.\263\ If a 
project's emissions equal or exceed the 100,000

[[Page 14121]]

metric tons per year significance threshold and the project sponsor's 
proposed mitigation will reduce the project's GHG emissions below that 
threshold, the Commission will consider that mitigation in determining 
whether it can make a finding of no significant impact.
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    \263\ See supra section II.B.
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    109. While the Commission has broad authority to require mitigation 
of GHG emissions by a project sponsor, we are not mandating here any 
particular form of mitigation.\264\ A project sponsor is free to 
propose any mechanism to mitigate the project's GHG emissions.\265\ 
However, in order to ensure that any GHG emissions reduction mechanisms 
achieve real, verifiable, and measurable reductions, any proposed 
mechanisms should:
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    \264\ Commenters emphasize the need for flexibility in assessing 
mitigation measures. See, e.g., Enbridge Pre-Conference Comments at 
9; Enbridge Technical Conference Comments at 46-47 (suggesting that, 
depending on a variety of factors, the applicant may or may not be 
able to propose appropriate mitigation at the time of the project 
application); Hon. Joseph T. Kelliher Technical Conference Comments 
at 11 (recommending alternatives to imposing mitigation requirements 
such as revising the Commission's 2015 Modernization Policy 
Statement, issuing a new GHG policy statement that either allows 
limited section 4 rate filings to recover costs or clarifies the 
level of shipper support required to support establishment of a 
tracker surcharge and recommending that such a policy address lost 
and unaccounted-for fuel, or implementing a fast track certificate 
process for project sponsors that voluntarily commit to mitigate 
direct GHG emissions); INGAA Technical Conference Comments at 30; 
Magnolia LNG LLC Technical Conference Comments at 2; TC Energy 
Technical Conference Comments at 5, 21 (arguing against the 
Commission requiring marked-based mitigation measures). A few 
commenters either oppose use of the SCC in determining a required 
level of mitigation for project emissions, Enbridge Technical 
Conference Comments at 6, 38-39, or urge the Commission to use the 
SCC to monetize the impacts of any GHGs that are not able to be 
mitigated, Attorneys General of Massachusetts et al. Technical 
Conference Comments at 7. As described above, the Commission does 
not propose to mandate any particular level or type of mitigation.
    \265\ For example, Mountain Valley Pipeline, LLC, proposed to 
offset the operational emissions of the Mountain Valley Pipeline 
Project by purchasing carbon offset credits equivalent to 90% of GHG 
emissions associated with the project's operations in its first 10 
years of service from a new methane abatement project located at a 
mine in southwest Virginia. Mountain Valley Pipeline, LLC, Carbon 
Offset Commitment for Mountain Valley Pipeline Project Operations, 
Docket No. CP21-57-000 (filed July 12, 2021).

    a. Be both real and additional--the emissions reductions would 
not have otherwise happened unless the proposed reduction mechanism 
was implemented, and the associated reductions occur beyond 
regulatory requirements; \266\
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    \266\ Regulatory requirements include those imposed by the 
Commission and other federal and state regulatory agencies. However, 
project sponsors may include participation in voluntary regulatory 
programs that reduce GHG emissions.
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    b. be quantifiable--any emissions reductions must be calculated 
using a transparent and replicable methodology;
    c. be unencumbered--seller has clear ownership of or exclusive 
rights to the benefits of the GHG reduction; and
    d. be trackable--the project sponsor must also propose means for 
the Commission to monitor and track compliance with the proposed 
mitigation measures for the life of the project.

    110. Commenters express concerns with how the Commission will 
determine whether mitigation measures are verifiable or how the 
Commission will monitor or track compliance with mitigation measures in 
a way that avoids double counting emissions reductions.\267\ Commenters 
point out that other federal agencies and states are already monitoring 
GHG emissions from certificated projects, such as EPA's GHG Reporting 
Rule, so a Commission-designed monitoring scheme would be duplicative 
and unnecessary.\268\ EEI recommends that the Commission explore 
interagency agreements or memorandums of understanding (MOU) with 
agencies like EPA and PHMSA to avoid redundancies and clarify 
mitigation responsibilities,\269\ while INGAA states that such 
agreements or MOUs would be insufficient.\270\
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    \267\ See, e.g., INGAA Technical Conference Comments at 38-39. 
Dr. Carl Pechman, Director of the National Regulatory Research 
Institute and a panelist at the GHG Technical Conference on Panel 3, 
provides extensive comments on how the Commission could establish 
accounting protocols and offset tracking. Dr. Carl Pechman Technical 
Conference Statement at 1-15.
    \268\ APGA Technical Conference Comments at 8-9; Enbridge 
Technical Conference Comments at 48-49; INGAA Technical Conference 
Comments at 40-41; TC Energy Technical Conference Comments at 5-6, 
22-23. Similarly, commenters state that the Commission should defer 
to other agencies, such as the EPA and state environmental agencies, 
that are already taking regulatory action regarding emissions, 
express concern over the potential for inconsistent mitigation 
requirements between agencies, and/or point to EPA's methane 
regulation proposal to reduce GHG emissions from new, reconstructed, 
modified, and existing facilities in the oil and gas source category 
under section 111 of the Clean Air Act. APGA Technical Conference 
Comments at 5; EEI Technical Conference Comments at 10-11; INGAA 
Technical Conference Comments at 30-32; NGSA Technical Conference 
Comments at 6-7. Conversely, one commenter encourages the Commission 
to use resources from the EPA's pending rulemaking. Attorneys 
General of Massachusetts et al. Technical Conference Comments at 6-7 
(referencing Standards of Performance for New, Reconstructed, and 
Modified Sources and Emissions Guidelines for Existing Sources: Oil 
and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021)).
    \269\ EEI Technical Conference Comments at 12-14.
    \270\ INGAA Technical Conference Comments at 40-41.
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    111. We believe it best not to mandate mitigation based on a 
specific volume or proportion of emissions. Encouraging project 
sponsors to submit proposed mitigation measures as opposed to mandating 
a certain level of mitigation for all projects allows the Commission to 
consider a project sponsor's proposed mitigation plan in comparison to 
the project's benefits, such as fuel switching or providing reliable 
gas service, when making a public interest determination and allows 
project sponsors the flexibility to choose what mitigation measures 
work best for their individual project. Moreover, we recognize that 
determining an appropriate amount of mitigation, particularly for 
downstream uses, depends on a variety of complex factors, some of which 
may not be known at the time of an application, such as state and local 
climate change policies, the interconnected nature of the natural gas 
pipeline system, long-term changes in natural gas supply sources, 
changes in demand for natural gas over time, individual companies' 
long-term goals to reduce GHG emissions, the availability of renewable 
energy credits or other carbon offsets, and the potential for future 
action by other federal agencies.\271\
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    \271\ See, e.g., Standards of Performance for New, 
Reconstructed, and Modified Sources and Emissions Guidelines for 
Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR 
63110 (Nov. 15, 2020).
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    112. Similarly, we believe it best to allow project sponsors to 
demonstrate that their proposed mitigation measures are verifiable and 
propose means for the Commission to monitor or track the proposed 
measures through the life of the project. This approach allows project 
sponsors to take advantage of existing monitoring programs and tailor 
verification and tracking to their chosen mitigation proposals and 
prevents the Commission from needing to establish a new monitoring 
program.
4. Opportunities for Mitigation
    113. While project sponsors are free to propose any type of 
mitigation mechanism, the following are examples of mitigation 
mechanisms project sponsors may consider.
a. Market-Based Mitigation
    114. Project sponsors may mitigate the GHG emissions of a proposed 
project through participation in one (or more) of the various types of 
carbon offset markets. Sponsors could, for example, purchase renewable 
energy credits, participate in a mandatory compliance market (if 
located in a state that requires participation in such a market), or 
participate in a voluntary carbon market.
i. Renewable Energy Credits
    115. Renewable energy credits (REC) are tradeable, market-based

[[Page 14122]]

commodities that provide proof that one megawatt hour of electricity 
was generated from a renewable source and delivered to the grid. RECs 
legally convey the attributes of renewable electricity generation to 
their owner. While state or regional RECs may be traded on financial 
exchanges that typically meet state or regional guidelines, they are 
not limited by geographic boundaries--RECs can be purchased 
independently from electricity and can be matched with energy 
consumption.\272\
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    \272\ For more information, see EPA Green Power Partnership, 
Offsets and RECs: What's the Difference (Feb. 2018), https://www.epa.gov/sites/default/files/2018-03/documents/gpp_guide_recs_offsets.pdf.
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    116. Commenters argue that the Commission may not require RECs 
because unlike offsets, RECs pertain only to the use of electric power 
and are therefore not appropriate for upstream or downstream 
mitigation, do not mitigate or compensate for GHG emissions, and are 
not denominated in carbon dioxide (CO2) or CO2e, 
thus, they cannot represent any specific amount of avoided or reduced 
emissions.\273\ Enbridge also states that in most instances, project 
sponsors will not qualify to purchase RECs under existing state 
programs.\274\ While RECs may not represent a 100% offset per unit of 
GHG emitted, RECs do represent a decrease in GHG emissions from overall 
energy use and production, and we will consider them.
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    \273\ Enbridge Pre-Conference Comments at 6-7; Enbridge 
Technical Conference Comments at 42-46; Enbridge 2021 Comments at 
145-148; INGAA Technical Conference Comments at 33.
    \274\ Enbridge 2021 Comments at 23, 148 n. 406 (stating that the 
lack of a federal REC program coupled with the patchwork of state 
and regional, as well as voluntary and mandatory, REC programs 
brings into question whether project sponsors could participate in 
these existing programs).
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ii. Mandatory Compliance Market Participation
    117. The compliance market is a mandatory offset program regulated 
by national, regional, or provincial law and mandates CO2 
and GHG emission reduction requirements. Under this framework an 
allowance, which is an authorization for an entity to emit GHG 
emissions, is created. Allowances are generated and traded for 
regulatory compliance and are priced as a commodity based on supply and 
demand, regardless of project type.
    118. A prime example of an existing, domestic compliance market is 
the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cooperative 
effort by eleven Northeast and Mid-Atlantic states \275\ to limit 
CO2 emissions at certain electric power generators. Each 
region involved in RGGI has an established emissions budget (cap) and 
each electric power generator holds allowances covering their GHG 
emissions. If a generator is below its established cap, it may trade an 
allowance to other entities \276\ that exceed their cap. RGGI has an 
established emissions-based auction and trading system where allowances 
are bought, sold, and traded.\277\ In addition to allowances, offsets 
may be used for compliance purposes, which requires a third-party 
certification of that offset for use. RGGI strictly regulates the 
quantity and types of offsets. There are five pre-determined types of 
RGGI offsets:
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    \275\ RGGI includes: Connecticut, Delaware, Maine, Maryland, 
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, 
Vermont, and Virginia.
    \276\ Any entity is eligible to participate in CO2 
allowance auctions including, but not limited, to corporations, 
individuals, non-profit corporations, environmental organizations, 
brokers, and other interested parties. The Regional Greenhouse Gas 
Initiative, CO2 Allowance Auctions, Frequently Asked Questions 1 
(Apr. 6, 2021), https://www.rggi.org/sites/default/files/Uploads/Auction-Materials/54/FAQS_Apr_6_2021.pdf.
    \277\ 23.5 million CO2 allowances (short tons) sold 
at RGGI auction in March 2021 at clearing price of $7.60/allowance.

    a. Landfill gas (methane) capture/burning;
    b. sulfur hexafluoride capture/recycling;
    c. afforestation (the establishment of a forest in an area where 
there was no previous tree cover);
    d. energy efficiency (end use); and
    e. agricultural manure management operations (avoided 
emissions).

    119. In addition to RGGI, California participates in the Western 
Climate Initiative with Quebec and Nova Scotia,\278\ covering 
industrial production, electricity generation, residential, commercial, 
and small industrial combustion, and transportation fuel combustion.
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    \278\ 54.7 million CO2 allowances (metric tons) sold 
at settlement price of $17.8/allowance during a February 2021 
auction.
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    120. If an applicant proposes any method of market-based mitigation 
of GHG emissions, such as those described in this section, we encourage 
the applicant to inform the Commission of any state or regional 
compliance goals or initiatives that may be relevant to our 
consideration of such mitigation proposal.
iii. Voluntary Carbon Market Participation
    121. If a project sponsor is not located in a state that 
participates in a mandatory compliance market, the voluntary carbon 
market offers an opportunity to mitigate project emissions. The 
voluntary carbon market transacts with offsets, which are the 
instrument representing the reduction, avoidance, or sequestration of 
one metric ton of GHG.\279\ The voluntary market funds additional, 
external projects that avoid or reduce GHG emissions.\280\ The 
voluntary carbon market is open to project sponsors regardless of 
location and is more flexible than compliance markets, although each 
market has its own standards, registries, and project types. Offset 
allowances are issued to project sponsors of qualifying CO2 
emissions offset projects.
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    \279\ EPA Green Power Partnership, supra note 272.
    \280\ In 2019, 104 million metric tons of CO2e 
offsets were sold and the price per metric ton CO2e was 
$1.40 to $4.30, depending on type of project (renewable energy and 
forestry/land use, respectively). S&P Global Platts, Voluntary 
Carbon Market Grows 6% on Year in 2019: Ecosystem Marketplace (Sep. 
22, 2020), https://www.spglobal.com/platts/en/market-insights/latest-news/coal/092220-voluntary-carbon-market-grows-6-on-year-in-2019-ecosystem-marketplace.
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    122. Typically, an independent third party qualifies offset 
projects and establishes standards to verify offsets; however, not all 
offsets available in the voluntary market are certified by a third 
party. In order to ensure the additionality and permanence of offsets, 
the use of unverified offsets is discouraged. If a project sponsor 
proposes to mitigate project emissions through participation in a 
voluntary carbon market, the sponsor is encouraged to seek Commission 
approval of the third party that would verify the offsets prior to 
participation. Examples of existing, acceptable third-party certifiers 
include:
    a. Climate Action Reserve; \281\
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    \281\ Typical offset projects include ozone depleting substances 
destruction, landfill gas capture/combustion, livestock gas capture/
combustion, improved forest management, avoided grassland 
conversion, and improved forest management, among others. For more 
information, see generally https://www.climateactionreserve.org/.
---------------------------------------------------------------------------

    b. Verified Carbon Standard; \282\ and
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    \282\ Typical offset projects include renewable energy, forest 
and wetland conservation and restoration, transport efficiency 
improvement, nitrous oxide abatement, clean cookstoves, methane 
capture and use/combustion, and waste heat recovery. For more 
information, see generally https://verra.org/.
---------------------------------------------------------------------------

    c. American Carbon Registry.\283\
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    \283\ Typical offset projects include ozone depleting substances 
destruction, industrial process emissions, fuel switching, livestock 
waste management, transport fleet efficiency, landfill gas capture 
and combustion, wetland restoration, forest management, and coal 
mine methane capture. For more information, see generally https://americancarbonregistry.org/.
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    123. Some commenters support allowing project sponsors to purchase 
emissions offsets while others oppose it as a mitigation method. For 
example, Policy Integrity recommends that the

[[Page 14123]]

Commission require certificate holders to purchase emission offsets 
from a third party.\284\ Policy Integrity states that carbon offsets 
are: (1) Consistent with compensatory mitigation requirements employed 
by other federal agencies, such as the Bureau of Land Management, U.S. 
Fish and Wildlife Service, and EPA; and (2) included and supported in 
CEQ's NEPA regulations and guidance.\285\ Policy Integrity also 
recommends that the Commission develop a carbon offset program as 
opposed to relying on third-party programs; \286\ however, the 
Commission lacks statutory authority to create such a program and 
believes that the existing programs and certifiers mentioned above are 
sufficient.
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    \284\ Policy Integrity 2021 Comments at 14-15, 19.
    \285\ Policy Integrity 2021 Comments at 23-26 (citing 40 CFR 
1508.1(s)(5)).
    \286\ Policy Integrity 2021 Comments at 20.
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    124. Conversely, some commenters oppose the Commission requiring 
project sponsors to purchase offsets from third parties because it is 
difficult to ensure that carbon offsets have the necessary traits of 
additionality (the reduction would not have happened but for the 
purchased offset), permanence (the reduction persists for the entire 
certification period of the offset), absence of leakage (the offset 
does not trigger some other activity elsewhere that adds GHG 
emissions), and rigorous third-party verification.\287\ INGAA further 
comments that it would be difficult or impossible for the Commission to 
choose an appropriate level of offsetting because of the variability in 
emissions over the life of a project and the risk of over-counting for 
a given quantity of gas that might move over multiple jurisdictional 
transportation projects, and that not enough high-qualify offsets are 
available.\288\ Commissioner Kelliher cautions that the Commission 
would have to verify offsets given concerns about fraud and 
environmental and accounting integrity.\289\ As previously stated, the 
Commission is not requiring project sponsors to purchase offsets or 
mandating a certain level of offsetting, and while the Commission 
acknowledges the challenges with third-party offsets, we believe the 
certifiers mentioned above will sufficiently account for them.
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    \287\ Enbridge Pre-Conference Comments at 7-8; INGAA 2021 
Comments at 79-82.
    \288\ INGAA Technical Conference Comments at 34-36; INGAA 2021 
Comments at 79-82; see also Enbridge Pre-Conference Comments at 8-9; 
Enbridge Technical Conference Comments at 46-47.
    \289\ Hon. Joseph T. Kelliher Technical Conference Comments at 
7; see also id. (asserting that this process would be complicated 
because credits could originate outside the U.S. and the Commission 
has no verification expertise).
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b. Physical Mitigation
    125. In addition to purchasing RECs or emissions offsets, project 
sponsors could also propose to mitigate and/or offset GHG emissions 
through the use of physical, on- or off-site mitigation measures. 
Physical mitigation measures could include smaller-scale efforts 
including reducing a project's fugitive methane emissions or 
incorporating renewable energy or other energy efficient technologies 
to reduce a project's GHG emissions from compressor stations, or 
larger-scale undertakings such as carbon capture and storage, or direct 
air CO2 capture. Project sponsors could also propose 
environmentally based measures, such as planting trees along the right-
of-way or in other locations to offset carbon emissions or restoring 
wetlands to provide additional carbon storage; however, the scale 
needed for such measures to meaningfully mitigate GHG emissions may 
render them impractical. In addition, project sponsors could propose to 
reduce GHG emissions from their existing facilities, including those 
with no direct connection to the proposed project, as mitigation for 
project-related emissions.
    126. Commenters detail a host of mitigation measures they are 
currently undertaking or propose to implement to reduce direct project 
emissions, such as: Installing vent gas recovery systems and optimizing 
operations to reduce venting and blowdowns, replacing cast iron/
unprotected steel pipes with polyethylene or protected steel pipes to 
minimize leaks, employing a variety of technologies and methods to 
identify and reduce leaks, and replacing natural gas-fired horsepower 
at compressor stations.\290\ Other commenters echo some of those 
suggestions \291\ and recommend operational limits on construction 
equipment, such as limited idle time when engines are not in use.\292\ 
Other commenters criticize any mitigation measures, especially carbon 
capture and sequestration and offsets, and recommend that the 
Commission achieve ``real zero'' emissions that accounts for air and 
water pollution and focuses on environmental justice communities and 
workers impacted by the negative externalities associated with project 
operation and jobs that are being phased out.\293\ Some commenters 
assert that direct emissions are already substantially mitigated 
pursuant to the regulatory authority exercised by other agencies.\294\ 
With regard to methane leaks, Dr. Anna Scott explains that its 
independent certification and measurement program verifies that a 
company's operations meet regulatory standards and incentivize 
companies to go beyond the standards by using an engineering-based 
review process that assesses development through to operations, as well 
as continuous monitoring of emissions along the supply chain.\295\ On a 
policy level, Gary

[[Page 14124]]

Choquette of Pipeline Research Council International (PRCI) argues for 
a centralized funding mechanism for pipeline research to establish gas 
quality requirements with the aim of maximizing supply and reducing 
emissions and notes that PRCI has developed a tool that provides a 
method for prioritizing alternatives to reduce emissions based on 
effectiveness and associated capital and operating costs.\296\
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    \290\ E.g., AGA Technical Conference Comments at 28-30; API 
Technical Conference Comments at 6-8; Boardwalk Technical Conference 
Comments at 5-6; Con Edison Technical Conference Comments at 7-10 
(detailing other efforts reduce emissions using renewable natural 
gas, certified natural gas, and hydrogen); Enbridge Pre-Conference 
Comments at 5; Enbridge Technical Conference Comments at 13-14, 39-
41; INGAA Technical Conference Comments at 28-30 (citing its 2021 
Climate Report); Magnolia LNG LLC Technical Conference Comments at 2 
(describing its proprietary technology to reduce emissions during 
the liquefaction process); Scott A. Hallam Technical Conference 
Statement at 2 (Scott A. Hallam, Senior Vice President of 
Transmission and Gulf of Mexico at Williams, was a panelist at the 
GHG Technical Conference on Panel 1.); Stephen Mayfield Technical 
Conference Statement at 1-2 (Stephen Mayfield, AGM of Gas Operations 
at City of Tallahassee, was a panelist at the GHG Technical 
Conference on Panel 3.); Texas LNG Brownsville LLC Technical 
Conference Comments at 6; William F. Donahue Technical Conference 
Statement at 3 (William F. Donahue, Manager of Natural Gas Resources 
at Puget Sound Energy, was a panelist at the GHG Technical 
Conference on Panel 2.); INGAA 2021 Comments at 79-82. Some 
commenters note, however, that use of electric compressors may 
increase indirect emissions depending on the generation mix and 
existing infrastructure or cite concerns about the impact to the 
reliability of gas service during power outages. E.g., American 
Forest Technical Conference Comments at 13; Enbridge Pre-Conference 
Comments at 5-6; Enbridge Technical Conference Comments at 41; 
Kinder Morgan Technical Conference Comments at 22-23.
    \291\ Delaware Riverkeeper 2021 Comments at 66; Kirk Frost 2021 
Comments at 11.
    \292\ Delaware Riverkeeper 2021 Comments at 66.
    \293\ Rachel Dawn Davis, the Public Policy and Justice Organizer 
at Waterspirit, was a panelist at the GHG Technical Conference on 
Panel 3. Rachel Dawn Davis Technical Conference Statement at 1; 
Waterspirit Technical Conference Comments at 1-2; see also Technical 
Conference Transcript at 106-107 (transcribing remarks made by Dr. 
Nicky Sheats, Director of the Center for Urban Environment at the 
John S. Watson Institute for Public Policy and panelist on Panel 2).
    \294\ E.g., TC Energy Technical Conference Comments at 20.
    \295\ Dr. Anna Scott, Co-Founder and Chief Science Officer of 
Project Canary, was a panelist at the GHG Technical Conference on 
Panel 2. Dr. Anna Scott Technical Conference Statement at 1-2, 5 
(mentioning key engineering components such as operational venting 
or flaring, electrification of facilities and equipment, low bleed 
and/or zero bleed process controls, leak detection and repair 
programs, produced water treatment and reuse, and infrastructure and 
facility efficiency investments and describing how the company uses 
on-site sensors and algorithm technology to provide continuous 
monitoring). Along with pursuing carbon capture and storage 
solutions, Ivan Van der Walt, Chief Operating Officer at NextDecade 
Corporation and a panelist at the GHG Technical Conference on Panel 
2, describes the joint pilot project NextDecade has formed with 
Project Canary for measuring and certifying the GHG intensity of LNG 
sold from the Rio Grande LNG Project export facility. Ivan Van der 
Walt Technical Conference Statement at 2-3.
    \296\ Gary Choquette, Executive Director of Research and IT at 
PRCI, was a panelist at the GHG Technical Conference on Panel 2. 
Gary Choquette Technical Conference Statement at 3-4.
---------------------------------------------------------------------------

    127. Commenters also recommend that the Commission consider a 
project sponsor's participation in programs that help shippers 
voluntarily reduce emissions and other voluntary emissions reductions 
programs when evaluating mitigation measures, such as the ONE Future 
Coalition, Oil and Gas Climate Initiative, Climate and Clean Air 
Coalition Oil and Gas Methane Partnership, EPA Natural Gas STAR Program 
and Natural Gas STAR Methane Challenge Program, Methane Guiding 
Principles, the Natural Gas Sustainability Initiative, and The 
Environmental Partnership.\297\ The Commission encourages project 
sponsors to detail their participation in such programs and any other 
voluntary measures as part of their mitigation plan for the Commission 
to consider as part of its public interest determination.
---------------------------------------------------------------------------

    \297\ See, e.g., AGA Technical Conference Comments at 17-20; API 
Technical Conference Comments at 7-8; Boardwalk Technical Conference 
Comments at 5-6; NGSA Technical Conference Comments at 5; Scott A. 
Hallam Technical Conference Statement at 2-3; Stephen Mayfield 
Technical Conference Statement at 1; William F. Donahue Technical 
Conference Statement at 3-4; BHE Pipeline Group 2021 Comments at 12-
14; Cheniere Energy Inc. 2021 Comments at 17.
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c. Cost Recovery
    128. Commenters request that the Commission allow full cost 
recovery for any GHG mitigation measures through either the section 7 
process or a general section 4 rate case for capitalized mitigation 
costs but caution the Commission to ensure that mitigation efforts are 
verified and the consumer's interest in low prices are balanced with a 
project sponsor's right to recover costs and earn a fair rate of return 
under the NGA.\298\ Alternatively, for periodic purchases of market-
based mitigation measures specifically, commenters state that pipelines 
could propose a tracker through a limited section 4 filing.\299\ 
Conversely, other commenters oppose passing mitigation costs along to 
shippers, especially if it would increase rates for end-users, 
particularly low-income communities, who may not directly reap any 
local environmental benefits.\300\ In the event mitigation costs are 
passed to shippers, American Forest supports establishing a baseline 
from which to judge emissions reductions and supports having an 
independent entity monitor and measure those reductions.\301\ The 
Commission has previously considered and approved a proposal by a 
pipeline proponent to recover the costs of purchasing carbon offsets. 
In 2010, Ruby Pipeline, L.L.C., proposed to voluntarily purchase GHG 
offsets for the direct emissions associated with its compressor units 
(approximately 523,000 metric tons of GHG per year).\302\ Going 
forward, project sponsors wishing to purchase offsets or proposing 
other measures to mitigate their project's GHG emissions may propose to 
recover the costs of these measures through their proposed rates. 
Applicants are encouraged to submit detailed cost estimates of GHG 
mitigation in their application and to clearly state how they propose 
to recover those costs. 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.
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    \298\ Boardwalk Technical Conference Comments at 3; Enbridge 
Technical Conference Comments at 15, 49; INGAA Technical Conference 
Comments at 42-45; TC Energy Technical Conference Comments at 6.
    \299\ Enbridge Technical Conference Comments at 15, 49; INGAA 
Technical Conference Comments at 45 (noting that the Commission 
should be clear that ``recovery of costs related to an ongoing 
obligation to purchase market-based mitigation is akin to a fuel 
tracker and would not be subject to the modernization cost recovery 
tracker policy or the Commission's policy against cost recovery 
trackers for regulatory compliance costs,'' and incremental 
operating costs to reduce GHG emissions should also be recoverable 
through a tracker); see also Hon. Joseph T. Kelliher Technical 
Conference Comments at 7 (suggesting that, while burdensome to 
stakeholders, the Commission could adopt a true-up mechanism 
requiring project sponsors to deposit offsets, which would later be 
compared to actual emissions).
    \300\ American Forest Technical Conference Comments at 15-16; 
APGA Technical Conference Comments at 6-8 (urging the Commission to 
consider the effects of cost-recovery on end-users, particularly 
low-income communities, who may not directly reap any local 
environmental benefits); American Forest and Paper Association et 
al. 2021 Comments at 26.
    \301\ American Forest Technical Conference Comments at 14 
(asserting that there is little transparency for customers with 
respect to Lost and Unaccounted for Fuel Charges, which are 
recoverable by shippers).
    \302\ Ruby Pipeline, LLC, 131 FERC ] 61,007, at P 34 (2010).
---------------------------------------------------------------------------

D. Application of Policy Statement

    129. We will apply this interim policy statement to both pending 
and new NGA section 3 and 7 applications.\303\ As noted above, doing so 
will allow the Commission to evaluate and act on such applications 
without undue delay. Applicants with pending applications will be given 
the opportunity to supplement the record and explain how their 
proposals are consistent with this policy statement, and stakeholders 
will have an opportunity to respond to any such filings. A project 
sponsor for any new natural gas infrastructure project is encouraged to 
include the following in its NGA section 3 or 7 application:
---------------------------------------------------------------------------

    \303\ Unless required by law or regulation, the Commission will 
not apply a presumptive significance threshold below 100,000 metric 
tons of CO2e to applications filed prior to issuance of a final 
policy statement. If the Commission adopts a new lower threshold in 
a final policy statement, that threshold will only apply to 
applications filed after issuance of that statement.
---------------------------------------------------------------------------

     The project's projected utilization rate and supporting 
information;
     an estimate of reasonably foreseeable project GHG 
emissions;
     if upstream and downstream emissions are not quantified, 
evidence to support why those emissions are not reasonably foreseeable 
project emissions;
     evidence, if any, that impacts the quantification of the 
project's reasonably foreseeable GHG emissions;
     a description of its proposed GHG mitigation measures, 
including the percent of the project's direct and indirect GHG 
emissions that will be mitigated and, if applicable, a tracking 
mechanism for tracking mitigation of GHG emissions; and
     a detailed cost estimate of its proposed GHG mitigation 
and a proposal for recovering those costs.
    130. As explained above, the Commission will then consider the 
project's impact on climate change, including the project sponsor's 
mitigation proposal to reduce direct GHG emissions and, to the extent 
practicable, to reduce any reasonably foreseeable project emissions, as 
part of its determination under NEPA and its public interest 
determination under NGA section 3 or 7.\304\
---------------------------------------------------------------------------

    \304\ Certification of New Interstate Natural Gas Pipeline 
Facilities, 178 FERC ] 61,107 at PP 70-72, 93-95.

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[[Page 14125]]

V. Information Collection Statement

    131. The collection of information discussed in the 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 \305\ and OMB's implementing regulations.\306\ OMB must approve 
information collection requirements imposed by agency rules.\307\ 
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.
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    \305\ 44 U.S.C. 3507(d).
    \306\ 5 CFR 1320.
    \307\ This 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.
---------------------------------------------------------------------------

    132. 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 10, 2022. The burden estimates 
are focused on implementing the voluntary information collection 
pursuant to this Policy Statement. The Commission asks that any revised 
burden estimates submitted by commenters include the details and 
assumptions used to generate the estimates.
    133. The following estimate of reporting burden is related only to 
this Policy Statement.
    134. Public Reporting Burden: The collection of information related 
to this Policy Statement falls under FERC-577 and impacts the burden 
estimates associated with the ``Gas Pipeline Certificates'' component 
of FERC-577. The Policy Statement will not impact the burden estimates 
related to any other component of FERC-577. The estimated annual burden 
\308\ and cost \309\ follow.
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    \308\ 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.
    \309\ 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.

                            FERC-577 (Natural Gas Facilities: Environmental Review and Compliance) as a Result of PL21-3-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Annual number                                          Total annual burden
                                        Number of     of responses    Total number   Average burden & cost   hours & total annual   Cost per respondent
                                       respondents   per respondent   of responses      ($) per response           cost ($)                 ($)
                                                (1)             (2)     (1) * (2) =  (4)..................  (3) * (4) = (5)......  (5) / (1)
                                                                                (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Pipeline Certificates..........              40               1              40  1,520 hrs; $132,240    60,800 hrs;            $132,240 Increase.
                                                                                      Increase.              $5,289,600 Increase.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    135. Title: FERC-577, Natural Gas Facilities: Environmental Review 
and Compliance
    136. Action: Proposed revisions to an existing information 
collection.
    137. OMB Control No.: 1902-0128
    138. Respondents: Entities proposing natural gas projects.
    139. Frequency of Information Collection: On occasion.
    140. Necessity of Voluntary Information Collection: The 
Commission's existing FERC-577 information collection pertains to 
regulations implementing NEPA and reporting requirements for landowner 
notifications. The information collected pursuant to this Policy 
Statement should help the Commission in assessing natural gas 
infrastructure projects.
    141. 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.
    142. 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.

VI. Comment Procedures

    143. The Commission invites comments on the interim policy 
statement by April 4, 2022. Comments must refer to Docket No. PL21-3-
000 and must include the commenter's name, the organization they 
represent, if applicable, and their address in their comments.
    144. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's website at https://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    145. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    146. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    147. 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

[[Page 14126]]

Emergency concerning the Novel Coronavirus Disease (COVID-19).
    148. 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.
    149. 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

Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure 
Project Reviews

Docket No. PL21-3-000
    DANLY, Commissioner, dissenting:
    1. I dissent in full from today's Interim Greenhouse Gas (GHG) 
Policy Statement which purports to set forth the Commission's 
procedures to evaluate the climate change impacts of proposed natural 
gas projects under the National Environmental Policy Act (NEPA) and to 
incorporate climate change considerations into the Commission's 
determinations under sections 3 and 7 of the Natural Gas Act (NGA).\1\
---------------------------------------------------------------------------

    \1\ Consideration of Greenhouse Gas Emissions in Natural Gas 
Infrastructure Project Reviews, 178 FERC ] 61,108 (2022) (Interim 
Policy Statement).
---------------------------------------------------------------------------

    2. This policy statement is irredeemably flawed. It is practically 
unworkable because it establishes a standardless standard. Its 
universal application to all projects, both new and pending (some for 
over two years), is an affront to basic fairness and is unjustifiable, 
especially in light of the many unnecessary delays already suffered by 
applicants. It is unlawful because it is illogical, it arrogates to the 
Commission power it does not have, and it violates the NGA, NEPA and 
the Commission's and the Council on Environmental Quality's (CEQ) 
regulations. It is also deliberately drafted so as to evade judicial 
review. Lastly, it will sow confusion throughout an industry that 
already suffers profound uncertainty. This issuance does not know what 
it is and neither will affected entities: It is immediately applicable, 
but also seeks comments, and it is allegedly not a draft policy 
statement, but an ``interim'' one. How can stakeholders have any 
confidence in its contents at all? \2\
---------------------------------------------------------------------------

    \2\ But see Chairman Glick September 24, 2021 Response to 
Senator Barrasso September 15, 2021 Letter, Docket Nos. CP17-40-000, 
et al., at 1 (``When courts find flaws in the Commission's analysis, 
it can lead to lengthy delays and cost developers substantially more 
than they originally forecasted.'') (Accession No. 20210927-4003); 
id. at 9 (``Ultimately, I believe that performing thorough 
permitting reviews and providing developers with legally durable 
certificates on which they can rely will do more than just about 
anything else to satisfy the purposes of the Natural Gas Act.''); 
Chairman Glick May 21, 2021 Response to Senator Hoeven April 29, 
2021 Letter, Docket No. PL18-1-000, at 1 (``I believe we can make 
changes to the Certificate Process that enhance our efficiency in 
processing applications and better address various directives we 
have received from the appellate courts.'') (Accession No. 20210524-
4014).
---------------------------------------------------------------------------

    3. When reading this policy statement, it is nearly impossible to 
credit the majority with actually believing that ``minimiz[ing] our 
litigation risk,'' making Commission decisions ``legally durable,'' and 
``increas[ing], not reduc[ing], customer and investor confidence,'' are 
truly the goals of this proceeding.\3\ Rather, the purpose of this 
Interim Policy Statement, like several of the Commission's other recent 
Natural Gas Act issuances, appears to be to actively discourage the 
submission of section 3 or section 7 applications by intentionally 
making the process more expensive, more time-consuming, and riskier.\4\
---------------------------------------------------------------------------

    \3\ Chairman Glick February 2, 2022 Response to Senator Barrasso 
December 15, 2021 Letter at 4 (Accession No. 20220202-4003); see 
also Commissioner Clements February 2, 2022 Response to Senator 
Barrasso December 15, 2021 Letter at 2 (Accession No. 20220202-4000) 
(``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.'').
    \4\ See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ] 
61,126 (2021) (Danly and Christie, Comm'rs, dissenting) (Briefing 
Order), terminated, 178 FERC ] 61,029 (2022) (Danly and Christie, 
Comm'rs, concurring in part and dissenting in part); see also 
Commission Staff May 27, 2021 Notice in Tenn. Gas Pipeline Co., 
L.L.C., Docket No. CP20-493-000 (Accession No. 20210527-3054) 
(announcing schedule for Environmental Impact Statement (EIS) for 
project with previously prepared Environmental Assessment (EA)); 
Commission Staff May 27, 2021 Notice in North Baja Pipeline, LLC, 
Docket No. CP20-27-000 (Accession No. 20210527-3052) (same); 
Commission Staff May 27, 2021 Notice in Columbia Gulf Transmission, 
LLC, Docket No. CP20-527-000 (Accession No. 20210527-3049) (same); 
Commission Staff May 27, 2021 Notice in Iroquois Gas Transmission 
System, L.P., Docket No. CP20-48-000 (Accession No. 20210527-3047) 
(same).
---------------------------------------------------------------------------

I. Overview of the Interim Policy Statement's Contents

    4. The Interim Policy Statement begins by explaining it will apply 
upon issuance while at the same time being subject to comment and 
revision.\5\ The majority explains this is necessary to ``act on 
pending applications under sections 3 and 7 of the NGA without undue 
delay and with an eye toward greater certainty and predictability for 
all stakeholders.'' \6\
---------------------------------------------------------------------------

    \5\ Interim Policy Statement, 178 FERC ] 61,108 at P 1.
    \6\ Id.
---------------------------------------------------------------------------

    5. Next, it provides a historical background on past court, 
Commission, and CEQ issuances. For the sake of brevity, I will not 
describe this background discussion other than to note it is frequently 
misleading.\7\
---------------------------------------------------------------------------

    \7\ For example, the D.C. Circuit in Vecinos para Bienestar de 
la Comunidad Costera v. FERC (Vecinos) found that the Commission 
failed to ``respond to significant opposing viewpoints'' regarding 
its analysis of GHG emissions. Vecinos, 6 F.4th 1321, 1329 (D.C. 
Cir. 2021). It did not find ``that the Commission failed to 
appropriately analyze the significance of three natural gas 
projects' contribution to climate change . . . .'' Interim Policy 
Statement, 178 FERC ] 61,108 at P 14.
---------------------------------------------------------------------------

    6. Then the Interim Policy Statement announces that ``the 
Commission will quantify a project's GHG emissions that are reasonably 
foreseeable and have a reasonably close causal relationship to the 
proposed action.'' \8\ This, it seems, will be fairly broad: the 
majority goes on to say that ``[t]his will include GHG emissions 
resulting from construction and operation of the project as well as, in 
most cases, GHG emissions resulting from the downstream combustion of 
transported natural gas.'' \9\
---------------------------------------------------------------------------

    \8\ Interim Policy Statement, 178 FERC ] 61,108 at P 28.
    \9\ Id. (emphasis added) (footnotes omitted). I interpret ``in 
most cases'' as meaning the Commission will quantify and consider 
downstream emissions for NGA section 7 projects unless it is shown 
that the gas will not be burned. See id. P 28 n.72.
---------------------------------------------------------------------------

    7. The majority also states that it will continue to consider 
whether upstream emissions are a reasonably foreseeable effect for NGA 
section 7 projects on a case-by-case basis.\10\ Notably missing, 
though, is any discussion of how upstream emissions could have a 
reasonably close causal relationship to an NGA section 7 project.\11\
---------------------------------------------------------------------------

    \10\ See id. P 43.
    \11\ It should be noted that the majority cites Sierra Club v. 
FERC (Sabal Trail) to argue downstream emissions have a reasonably 
close causal relationship to NGA section 7 projects. Id. P 39 & 
n.103 (citing 867 F.3d 1357, 1372-73 (D.C. Cir. 2017) (Brown, J., 
concurring in part and dissenting in part)). Below I explain how 
Sabal Trail must not be given too much weight.

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

[[Page 14127]]

    8. The Interim Policy Statement then describes how the quantity of 
project's emissions will be determined: By using a projected 
utilization rate for the project and considering ``other factors that 
might impact a project's net emissions.'' \12\ This raises more 
questions than it answers. Do these other factors include consideration 
of whether the natural gas being transported will actually reduce 
overall emissions or simply replace existing emissions; for example by 
powering natural gas generation that permits the retirement of higher-
emitting generation or by serving an end use need that will turn to a 
different--and perhaps higher emitting--energy source if the pipeline 
is not constructed? \13\ What does this mean for projects where the end 
use is unknown? Does the Commission have the expertise to evaluate a 
project sponsor's evidence and resolve any factual disputes? Will the 
majority send these issues to an Administrative Law Judge as it 
recently did to resolve a dispute over what constituted appropriate 
post-construction right-of-way restoration (a subject matter with which 
the Commission presumably has some expertise)? \14\
---------------------------------------------------------------------------

    \12\ Id. P 45.
    \13\ See id. P 52.
    \14\ See Midship Pipeline Co., LLC (Midship), 177 FERC ] 61,186 
(2021) (Danly, Comm'r, dissenting at P 5) (``I, for one, am willing 
to consider the parties' arguments and make a decision.'').
---------------------------------------------------------------------------

    9. I would suspect most attentive readers would have been 
interested to then learn how, having determined the means by which to 
arrive at these numbers, the Commission plans to weigh emissions among 
all of the other factors to be considered in its NGA determination. But 
the majority does not say.
    10. Next, the Interim Policy Statement explains ``the Commission is 
establishing a significance threshold of 100,000 metric tons or more 
per year [(tpy)] of CO2e'' \15\ and will presume that the 
impact of a proposed project exceeding that threshold is significant 
unless refuted by record evidence.\16\ According to Commission staff, 
of the 214 projects with direct \17\ and downstream emissions 
authorized from January 2017 through June 2021, this policy would have 
applied to 72% of them. This means that, as of the issuance of this 
Interim Policy Statement, the EIS is now our default environmental 
document.\18\
---------------------------------------------------------------------------

    \15\ Interim Policy Statement, 178 FERC ] 61,108 at P 79.
    \16\ See id. P 81.
    \17\ Despite the fact that CEQ's regulations no longer 
distinguish between ``direct'' and ``indirect'' effects, in order to 
reduce confusion I use the term ``direct'' to be consistent with the 
Interim Policy Statement. See Update to the Regulations Implementing 
the Procedural Provisions of the National Environmental Policy Act, 
85 FR 43304, 43343 (Jul. 16, 2020).
    \18\ But see 18 CFR. Sec. Sec.  380.5-380.6 (setting forth when 
the Commission will prepare an EIS).
---------------------------------------------------------------------------

    11. The Interim Policy Statement says the Commission has authority 
to impose GHG mitigation for both direct emissions and downstream 
emissions.\19\ This is a sweeping claim of jurisdiction and one that 
drastically departs from the Commission's historic employment of its 
conditioning authority. But right on the heels of that jurisdictional 
declaration, instead of ordering mitigation, the majority 
``encourages'' project sponsors to ``propose measures to mitigate the 
direct GHG emissions of its proposed project to the extent these 
emissions have a significant adverse environmental impact'' and ``to 
mitigate the reasonably foreseeable upstream or downstream emissions 
associated with their projects.'' \20\ The majority states the 
Commission will consider these mitigation measures in its public 
interest determinations.\21\ This whole maneuver is odd--how often does 
one declare hitherto unasserted jurisdiction and then not employ it? Be 
warned: this is not restraint, it is foreshadowing.\22\
---------------------------------------------------------------------------

    \19\ See Interim Policy Statement, 178 FERC ] 61,108 at PP 104-
06.
    \20\ Id. P 107; see also id. (``The Commission plans to evaluate 
proposed mitigation plans on a case-by-case basis . . . .'').
    \21\ See id. P 108.
    \22\ See id. P 106 (``However, as detailed below, the 
Commission's priority is for project sponsors to mitigate, to the 
greatest extent possible, a project's direct GHG emissions.'').
---------------------------------------------------------------------------

    12. The majority tells project sponsors they are ``free to propose 
any mechanism to mitigate the project's GHG emissions'' \23\ and offers 
some suggestions. Plant trees.\24\ Incorporate renewable energy or 
other energy efficiency technologies.\25\ And, with the faint echo of 
Johann Tetzel, the majority also suggests purchasing \26\ renewable 
energy offsets.\27\
---------------------------------------------------------------------------

    \23\ Id. P 110.
    \24\ See id. P 126.
    \25\ See id.
    \26\ See id. PP 115-26; see also id. P 129 (``project sponsors 
wishing to purchase offsets'') (emphasis added).
    \27\ ``As soon as the coin in the coffer rings, the soul from 
purgatory springs.'' See Robert King, Only in America: Tax Patents 
and the New Sale of Indulgences, 60 Tax Law 761, 761 (2007) (citing 
Ronald H. Bainton, Here I Stand: A Life of Martin Luther 60 (1950)).
---------------------------------------------------------------------------

    13. The majority's guidance ends there, leaving the project sponsor 
to figure out how much they should mitigate by these measures,\28\ some 
of which, it ought be pointed out, do not appear to have a discernable 
connection to the reduction of carbon emissions.\29\ Nor does the 
majority explain how the Commission can verify and track any such 
mitigation throughout the life of the project.\30\ The majority offers 
no general framework but says only that it wants project sponsors to 
mitigate ``to the greatest extent possible.'' \31\ One wonders why no 
mechanism is set forth. Could it be that we learned nothing of value 
from soliciting comments on GHG mitigation,\32\ holding a technical 
conference on the subject,\33\ and soliciting a second round of 
comments following that technical conference? \34\ And think of where 
this leaves project sponsors. Often, they seek guidance from Commission 
staff. But for the 30 applications that are currently pending, such 
communication is potentially barred by the Commission's ex parte 
rules.\35\ And even for those who are not so disadvantaged, absent 
direction from the Commission, staff can offer no more than this: You 
must roll the dice and cross your fingers that the Commission will act 
on, and maybe even grant, the requested authorization.\36\
---------------------------------------------------------------------------

    \28\ See Interim Policy Statement, 178 FERC ] 61,108 at P 107 
(``The Commission plans to evaluate proposed mitigation plans on a 
case-by-case basis and is not mandating a standard level of 
mitigation.'').
    \29\ For example, the Commission does not explain how the 
construction of a renewable energy or energy efficiency project 
reduces carbon emissions unless it could be shown that such 
construction will cause the retirement of, or prevent the 
construction of, a specific carbon emitting generation facility. Nor 
does the Commission describe how, in the absence of the 
identification of a specific facility to be displaced, it would be 
possible to determine the amount of mitigation provided by renewable 
energy or energy efficiency projects.
    \30\ See Interim Policy Statement, 178 FERC ] 61,108 at P 113 
(``[W]e believe it best to allow project sponsors to demonstrate 
that their proposed mitigation measures are verifiable and propose 
means for the Commission to monitor or track the proposed measures 
through the life of the project.'').
    \31\ Id. P 106.
    \32\ See Certification of New Interstate Nat. Gas Facilities, 
174 FERC ] 61,125, at P 17 (2021) (``C10. How could the Commission 
impose GHG emission limits or mitigation to reduce the significance 
of impacts from a proposed project on climate change? . . . If the 
Commission decides to impose GHG emission limits, how would the 
Commission determine what limit, if any, is appropriate?'').
    \33\ See Greenhouse Gas Mitigation, Technical Conference 
Transcript, Docket No. PL21-3-000 (Nov. 19, 2021).
    \34\ See Commission Staff November 16, 2021 Notice Inviting 
Technical Conference Comments, Docket No. PL21-3-000.
    \35\ 18 CFR. Sec.  385.2201.
    \36\ I have anticipated a couple possible questions and will 
hazard answers that may be of interest: Will an EIS assess the 
adequacy of GHG mitigation or recommend GHG mitigation measures? My 
understanding is no. The Commission will determine the adequacy of 
mitigation on a case-by-case basis in its orders. Will mitigation 
that was not considered in an environmental document require the 
Commission to supplement its environmental review? A clear answer 
was not provided. It is worth noting that section 1502.9(d)(1)(i) of 
CEQ's regulations state ``Agencies . . . [s]hall prepare supplements 
to either draft or final environmental impact statements if a major 
Federal action remains to occur, and . . . [t]he agency makes 
substantial changes to the proposed action that are relevant to 
environmental concerns . . . .'' 40 CFR. Sec.  1502.9(d)(1)(i).

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[[Page 14128]]

    14. But the mitigation requirements may not end there. The majority 
states it ``may require additional mitigation as a condition of an NGA 
section 3 authorization or section 7 certificate.'' \37\ Using what 
standard? Not stated. Perhaps, it will become a good-behavior approach 
akin to how the Commission has considered landowner impacts, stating: 
``We are satisfied that [project sponsor] has taken appropriate steps 
to minimize [GHG emissions].'' \38\ And this encumbrance is perpetual: 
Mitigation, the majority says, will span ``the life of the project.'' 
\39\ That is long time. Ample opportunity for invasive oversight, 
enforcement actions, and novel, as yet unpredictable, employments of 
the Commission's authority.\40\
---------------------------------------------------------------------------

    \37\ Interim Policy Statement, 178 FERC ] 61,108 at P 99.
    \38\ Double E Pipeline, LLC, 173 FERC ] 61,074, at P 32 (2020).
    \39\ Interim Policy Statement, 178 FERC ] 61,108 at P 110.
    \40\ See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ] 
61,126 (2021) (Danly and Christie, Comm'rs, dissenting) (order 
establishing briefing to reopen final, non-appealable certificate 
order); Algonquin Gas Transmission, LLC, 178 FERC ] 61,029 (2022) 
(Danly and Christie, Comm'rs, concurring in part and dissenting in 
part) (order terminating briefing order but suggesting can reopen 
certificates to impose new terms).
---------------------------------------------------------------------------

    15. Next, we reach the majority's guidance on cost recovery. The 
majority states ``[p]ipelines may seek to recover mitigation costs 
through their rates,'' and are ``encouraged to submit detailed cost 
estimates of GHG mitigation in their application and to clearly state 
how they propose to recover those costs.'' \41\ Pipelines may recover 
costs? On what possible basis could the Commission deny recovery? The 
majority declines to say. Then, presumably in response to comments 
about increasing rates for low-income communities and requests to 
balance the cost of mitigation with its environmental benefit, the 
majority states that ``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.'' \42\ How can that be true 
when the Commission will issue a certificate only when it determines 
that proposed mitigation measures are required for a pipeline project 
to be deemed in the public convenience and necessity? Is the Commission 
really suggesting that it will deny the recovery of costs that it 
determines are necessary to satisfy the public interest?
---------------------------------------------------------------------------

    \41\ Id. P 129.
    \42\ Id.
---------------------------------------------------------------------------

    16. The Interim Policy Statement concludes by informing project 
sponsors with pending applications that they ``will be given the 
opportunity to supplement the record and explain how their proposals 
are consistent with this policy statement'' and that those filings will 
be subject to a reply comment period.\43\ Future applicants are also 
``encouraged'' to include a list of information in their filings.\44\ 
What happens if a project sponsor supplements its record and the 
Commission revises the Interim Policy Statement once again before 
acting on that project sponsor's application? I can imagine that 
occurring as the comment deadline is six weeks away. And how can future 
applicants reasonably rely on interim guidance that may or may not 
change? What ``certainty and predictability'' \45\ does this policy 
provide?
---------------------------------------------------------------------------

    \43\ Id. P 130.
    \44\ Id.
    \45\ Id. P 1.
---------------------------------------------------------------------------

    17. In sum, the Commission will weigh direct GHG emissions and, in 
most cases, downstream emissions in its NGA determinations. It will not 
tell you how these emissions will be assessed other than to say that 
project sponsors are encouraged to mitigate them. It will not tell you 
how project shippers will be protected from imprudently incurred costs. 
This is the tyranny of vagueness. It is also a threat. Imagine the fear 
that will animate the mitigation ``voluntarily'' proposed by those 
project sponsors with pending applications who are facing millions of 
dollars in sunk costs and with shippers that have relied on projects 
being placed into service and now only have higher cost and less 
reliable options available. This policy statement cannot rightly be 
described as ``encouraging'' anything.\46\
---------------------------------------------------------------------------

    \46\ But see Voltaire, Candide 125 (J.H. Brumfitt ed., Oxford 
Univ. Press 1968) (1759) (``. . . pour encourager les autres.'').
---------------------------------------------------------------------------

II. Interim Policy Statement Proposes, and Takes, Unlawful Actions

A. The Interim Policy Statement, in Its Entirety, Is Based on the Wrong 
Premise

    18. It is worth pausing to consider the underlying premise of the 
majority's policy for considering GHG emissions, establishing a GHG 
emission threshold for preparing EISs, and requiring GHG emission 
mitigation. All are based on the presumption that GHG emissions are an 
``effect'' of the proposed action.
    19. In order to constitute an ``effect,'' three elements must be 
met: (1) There is a ``change[ ] in the human environment,'' that change 
(2) is ``reasonably foreseeable,'' and (3) it ``has a reasonably close 
causal relationship to the proposed action or alternatives.'' \47\ The 
majority, however, does not allege that the change in the human 
environment at issue is the release of GHG emissions themselves. That 
makes sense, given that it would be like the Commission saying, in the 
hydropower context, that the flow of water from the powerhouse is a 
change in the human environment. While this would be an effect, it is 
not the kind of effect that is at issue in an environmental review. 
Instead, the effect we would care about would be the change to the 
quality or quantity of the body of water through which the water flows 
and any resultant further changes caused to species, vegetation, etc.
---------------------------------------------------------------------------

    \47\ 40 CFR. Sec.  1508.1(g).
---------------------------------------------------------------------------

    20. No, the majority is concerned about the changes in the human 
environment caused, not by the existence of GHG emissions themselves, 
but by climate change. The Interim Policy Statement is absolutely clear 
that this is its animating purpose: ``The Commission is issuing this 
interim policy statement to explain how the Commission will assess the 
impacts of natural gas infrastructure projects on climate change''; 
\48\ ``Climate change is the variation in the Earth's climate 
(including temperature, humidity, wind, and other meteorological 
variables) over time''; \49\ ``[C]limate change has resulted in a wide 
range of impacts across every region of the country and the globe. 
Those impacts extend beyond atmospheric climate change and include 
changes to water resources, agriculture, ecosystems, human health, and 
ocean systems.'' \50\
---------------------------------------------------------------------------

    \48\ Interim Policy Statement, 178 FERC ] 61,108 at P 1.
    \49\ Id. P 6.
    \50\ Id. P 7 (citation omitted).
---------------------------------------------------------------------------

    21. The question therefore is not whether GHG emissions are 
reasonably foreseeable but whether climate change and its resulting 
effects are reasonably foreseeable and have a reasonably close causal 
relationship to the proposed action. And if so, whether those effects 
are significant and can be mitigated by the Commission.
    22. While determining the environmental impacts of a project is 
done on a case-by-case basis, the

[[Page 14129]]

construction of a natural gas pipeline and transportation of natural 
gas in that pipeline are unlikely, on a project-by-project basis, to 
have a reasonably foreseeable (which is to say traceable and 
calculable) effect on climate change ``in most cases.'' \51\ Were 
climate change a reasonably foreseeable effect (as this term is used in 
environmental reviews) of a particular project, we would be able to 
examine the cause (here, the construction and the transportation of 
gas) and then determine some articulable and quantifiable effect (here, 
the amount of additional climate change) for which the project itself 
is causally responsible. We have never been able to do that. And while 
it is not acknowledged at all in the Interim Policy Statement's 
procedural history, the Commission has repeatedly stated that ``it 
cannot determine a project's incremental physical impacts on the 
environment caused by GHG emissions,'' \52\ and CEQ has made similar 
statements.\53\ Nothing in the Interim Policy Statement suggests this 
has changed nor has any new reasoning been offered to explain how we 
can better determine a quantifiable connection between the two.
---------------------------------------------------------------------------

    \51\ Id. P 28. It is worth recalling that the Court has likened 
NEPA's ``reasonably close causal relationship'' requirement to the 
``familiar doctrine of proximate cause from tort law,'' Dep't of 
Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Public Citizen), 
and that a federal district court has found effects of climate 
change too attenuated for tort liability under state law. See Comer 
v. Murphy Oil USA, Inc., 839 F. Supp. 2d 849, 868 (S.D. Miss. 2012) 
(``The assertion that the defendants' emissions combined over a 
period of decades or centuries with other natural and man-made gases 
to cause or strengthen a hurricane and damage personal property is 
precisely the type of remote, improbable, and extraordinary 
occurrence that is excluded from liability.'').
    \52\ See, e.g., Trans-Foreland Pipeline Co. LLC, 173 FERC ] 
61,253, at P 31 (2020).
    \53\ See CEQ, Draft NEPA Guidance on Consideration of the 
Effects of Climate Change and Greenhouse Gas Emissions, at P 3 
(2010), https://obamawhitehouse.archives.gov/sites/default/files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.
---------------------------------------------------------------------------

    23. The chain of causation is too attenuated for the cause and 
effect in this case to be considered to have a ``reasonably close 
causal relationship.'' The reasoning goes as follows: ``Changes to 
water resources, agriculture, ecosystems, human health, and ocean 
systems'' occurring throughout the world result from global atmospheric 
changes that themselves result from the warming that itself results 
from increases in the world-wide concentration of GHGs that enter the 
atmosphere as the emissions released by using natural gas, that in the 
case of end uses (that is, not pipeline operational uses), results from 
the transportation of natural gas. The logical sequence is clear, but 
the causation is quite attenuated. And this attenuation cannot be 
shortened through the ploy of employing GHG emissions as a proxy for 
climate change.

B. Consideration of Effects on Climate Change From Non-Jurisdictional 
Entities Violates the NGA and CEQ Regulations

    24. The consideration of effects resulting from the upstream 
production or downstream use of natural gas violates the NGA and CEQ's 
regulations.
    25. The NGA authorizes the Commission to consider only those 
factors bearing on the ``public convenience and necessity.'' \54\ The 
phrase ``public convenience and necessity'' is not ``a broad license to 
promote the general public welfare.'' \55\ It does not permit the 
majority to conjure up its own meanings. As a ```creature of statute,' 
'' \56\ the Commission must ``look to the purposes for which the 
[Natural Gas Act] was adopted'' to give it content and meaning.\57\
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 717f(e).
    \55\ NAACP v. FPC, 425 U.S. 662, 669 (1976).
    \56\ 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)).
    \57\ NAACP v. FPC, 425 U.S. at 669; see also FPC v. Transcon. 
Gas Pipe Line Corp., 365 U.S. 1, 17 (1961) (Transco) (``[I]t must be 
realized that the Commission's powers under Sec.  7 are, by 
definition, limited.'') (citing H.T. Koplin, Conservation and 
Regulation: The Natural Gas Allocation Policy of the Federal Power 
Commission, 64 Yale L.J. 840, 862 (1955)).
---------------------------------------------------------------------------

    26. As the Court explained in NAACP v. FPC, ``public convenience 
and necessity'' means ``a charge to promote the orderly production of 
plentiful supplies of electric energy and natural gas at just and 
reasonable rates.'' \58\ Simply put, the production and use of natural 
gas were not only presumed but were presumed to be in the public 
interest. Congress put its thumb on the scale in favor of gas and 
charged the Commission with ensuring that there would be adequate 
infrastructure in place to provide an abundant supply of natural gas 
available at reasonable prices for all Americans to use. The purpose of 
the NGA is narrow and clear. And it is a mousehole through which the 
elephant of addressing the climate change impacts of the entire 
natural-gas industry cannot pass.\59\
---------------------------------------------------------------------------

    \58\ NAACP v. FPC, 425 U.S. at 670 (emphasis added) (footnote 
omitted). As noted by Former Commissioner Bernard L. McNamee, this 
purpose was affirmed by later acts of Congress. See Adelphia 
Gateway, LLC, 169 FERC ] 61,220 (2019) (McNamee, Comm'r, concurring 
at PP 32-40).
    \59\ See Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 468 
(2001).
---------------------------------------------------------------------------

    27. And while there were ``subsidiary purposes'' for the passage of 
the Natural Gas Act,\60\ addressing the effects of climate change 
caused by using natural gas could not have been one of them. And even 
if it were, it is obvious that something that is ``subsidiary'' cannot, 
definitionally, override that which is primary. The majority cannot 
flip the NGA's presumptions and consider the use of natural gas as 
intrinsically harmful, thus requiring mitigation. And it certainly 
cannot abandon our charge under the NGA to ``promote the orderly 
production of plentiful supplies of . . . natural gas at just and 
reasonable rates'' \61\ by then weighing their determination that 
natural gas is harmful against the public interest when adjudicating 
section 3 and section 7 applications. This is directly contrary to the 
purpose Congress established the Commission to serve and supplants the 
judgment of Congress with that of the Commission. If that were not 
reason enough, it also invades jurisdictional territory that the courts 
have repeatedly held that Congress has reserved to the States.\62\
---------------------------------------------------------------------------

    \60\ NAACP v. FPC, 425 U.S. at 670 (``While there are 
undoubtedly other subsidiary purposes contained in these Acts . . . 
.'') (footnote omitted); see also id. at 670 n.6.
    \61\ NAACP v. FPC, 425 U.S. at 670 (emphasis added).
    \62\ See Transco, 365 U.S. at 8 (``However, respondents 
correctly point out that 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. Therefore, it is necessary to consider with care 
whether, despite the accepted meaning of the term `public 
convenience and necessity,' the Commission has trod on forbidden 
ground in making its decision.'') (citation omitted); FPC v. 
Panhandle E. Pipe Line Co., 337 U.S. 498, 503 (1949) (``Congress . . 
. not only prescribed the intended reach of the Commission's power, 
but also specified the areas into which this power was not to 
extend.''), accord ExxonMobil Gas Mktg. Co. v. FERC, 297 F.3d 1071, 
1076 (D.C. Cir. 2002); S. Coast Air Quality Mgmt. Dist. v. FERC, 621 
F.3d 1085, 1092 (9th Cir. 2010) (``In sum, the history and judicial 
construction of the Natural Gas Act suggest that all aspects related 
to the direct consumption of gas--such as passing tariffs that set 
the quality of gas to be burned by direct end-users--remain within 
the exclusive purview of the states.''); Pub. Utils. Comm'n. of Cal. 
v. FERC, 900 F.2d 269, 277 (D.C. Cir. 1990) (``[T]he state . . . has 
authority over the gas once it moves beyond the high-pressure mains 
into the hands of an end user.'').
---------------------------------------------------------------------------

    28. The majority cannot turn to the Supreme Court's holding in 
Transco as authority.\63\ In that case, the Court held that the Federal 
Power Commission lawfully denied a certificate based on two factors: 
First, that using natural gas to alleviate air pollution from burning 
coal was an inferior use, and second, the

[[Page 14130]]

proposal would increase future prices.\64\ It does not stand for the 
proposition that the Commission can consider adverse effects of air 
pollution, and thus climate change impacts, of using natural gas as the 
majority implies.\65\
---------------------------------------------------------------------------

    \63\ See Interim Policy Statement, 178 FERC ] 61,108 at P 104 
n.243 (discussing Transco, 365 U.S. at 17).
    \64\ Transco, 365 U.S. at 4-7. In discussing whether 
consideration of end use was proper in the context of conservation, 
the Court also noted, ``[t]he Commission said that it had not been 
given `comprehensive' authority to deal with `the end uses for which 
natural gas is consumed' and that it would not deny certification on 
that ground alone.'' Id. at 15-16 (discussing F.P.C., The First Five 
Years Under the Natural Gas Act).
    \65\ Interim Policy Statement, 178 FERC ] 61,108 at P 104. Nor 
does the Federal Power Commission precedent, which the majority 
cites, support this proposition. See Adelphia Gateway, LLC, 169 FERC 
] 61,220 (McNamee, Comm'r, concurring at P 29 n.64).
---------------------------------------------------------------------------

    29. Nor is the D.C. Circuit's outlier opinion, Sabal Trail, as 
instructive as the majority seems to believe. It is very much in 
tension with prevailing Supreme Court precedent in Public Citizen, 
which held that agencies are only obligated to consider environmental 
effects to which their actions are the proximate cause.\66\ Public 
Citizen explained that courts must look to the ``underlying policies or 
legislative intent'' of an agency's organic statute to determine 
whether an agency is obligated to consider environmental effects.\67\ 
The D.C. Circuit has also characterized Public Citizen as ``explicit'' 
that an agency is ``not obligated to consider those effects . . . that 
could only occur after intervening action'' by some other actor ``and 
that only [that] actor[ ] . . . had the authority to prevent.'' \68\ In 
other words, when any potential effects are the result of the actions 
of third parties such as retail consumers, upstream production 
companies, and power generators, who may be several degrees of 
separation removed from the jurisdictional pipeline, those effects are 
outside the scope of what the agency must consider.
---------------------------------------------------------------------------

    \66\ 541 U.S. 752, 767-69.
    \67\ Id. at 767.
    \68\ Sierra Club v. FERC, 827 F.3d 36, 49 (D.C. Cir. 2016).
---------------------------------------------------------------------------

    30. Thus, we should not rest too much weight upon Sabal Trail. Not 
only is the holding narrower than the majority seems to believe and was 
roundly criticized by the accompanying dissent,\69\ its reasoning has 
since been called into question by another appellate court and I expect 
it will soon be challenged in the Supreme Court.\70\
---------------------------------------------------------------------------

    \69\ See 867 F.3d at 1380 (Brown, J., concurring in part and 
dissenting in part) (``More significantly, today's opinion 
completely omits any discussion of the role Florida's state agencies 
play in the construction and expansion of power plans within the 
state--a question that should be dispositive.'').
    \70\ See Ctr. for Biological Diversity v. U.S. Army Corps of 
Eng's, 941 F.3d 1288, 1299-1300 (11th Cir. 2019).
---------------------------------------------------------------------------

    31. In sum, environmental effects resulting from the upstream 
production and downstream use of gas are not factors bearing on the 
public convenience and necessity under the Natural Gas Act. Further, 
the CEQ's regulations affirmatively prohibit those effects from being 
considered in an agency's compliance with NEPA.\71\
---------------------------------------------------------------------------

    \71\ 40 CFR. Sec.  1508.1(g)(3) (``An agency's analysis of 
effects shall be consistent with this paragraph (g).''); id. Sec.  
1508.1(g)(2) (``A `but for' causal relationship is insufficient to 
make an agency responsible for a particular effect under NEPA. 
Effects should generally not be considered if they are remote in 
time, geographically remote, or the product of a lengthy causal 
chain. 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.'').
---------------------------------------------------------------------------

C. The Significance Threshold Is Illogical and Violates Regulations

    32. In addition, the majority's presumption that project emissions 
exceeding 100,000 tpy of CO2e will have a significant effect 
on the human environment is illogical and inconsistent with CEQ and 
Commission regulations.
    33. The majority offers three irrelevant rationales for this 
presumption: \72\ first, the threshold is administratively workable; 
\73\ second, other agencies have established thresholds under different 
statutory schemes that are not based on a project's effect on the 
climate; \74\ and third, the threshold will ``capture'' \75\ ``99% of 
GHG emissions from Commission-regulated natural gas projects.'' \76\ It 
is worth noting that according to Commission staff, a 1 million tpy 
threshold would have covered 98.909% of emissions from natural gas 
projects authorized from 2017 through 2021, making the unsupported 
selection of the lower threshold both arbitrary and capricious.
---------------------------------------------------------------------------

    \72\ The relevant question on whether the Commission should 
prepare an EIS is whether the proposed action ``[i]s likely to have 
significant effects.'' 40 CFR. Sec.  1501.3(a)(3).
    \73\ Interim Policy Statement, 178 FERC ] 61,108 at P 87 
(``Establishing such a threshold will provide the Commission a 
workable and consistent path forward to analyze proposed projects. 
Further, a numerical threshold is a clear, consistent standard that 
can be easily understood and applied by the regulated community and 
interested stakeholders.'').
    \74\ Id. PP 90-95.
    \75\ Id. P 80.
    \76\ Id. P 95.
---------------------------------------------------------------------------

    34. The majority also states ``even relatively minor GHG emissions 
pose a significant threat'' ``[b]ecause of the dire effects at stake.'' 
\77\ This rationale, however, is not supported by the evidence offered. 
The Commission does not explain how minor GHG emissions could lead to 
``dire effects.'' We cannot just assume--this is administrative law--we 
must show evidence. More importantly, the rationale does not link a 
proposed project to effects on climate change. And for good reason. As 
CEQ declared: ``it is not currently useful for the NEPA analysis to 
attempt to link specific climatological changes, or the environmental 
impacts thereof, to the particular project or emissions, as such direct 
linkage is difficult to isolate and to understand.'' \78\ The 
Commission has repeatedly agreed.\79\
---------------------------------------------------------------------------

    \77\ Id. P 88.
    \78\ CEQ, Draft NEPA Guidance on Consideration of the Effects of 
Climate Change and Greenhouse Gas Emissions, at P 3 (2010), https://obamawhitehouse.archives.gov/sites/default/files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.
    \79\ See supra P 22 n.52.
---------------------------------------------------------------------------

    35. On top of being illogical, the Interim Policy Statement 
effectively amends the Commission's NEPA regulations without undergoing 
notice-and-comment procedures as required by the Administrative 
Procedure Act.\80\ The Interim Policy Statement provides that an EIS 
will be prepared when the threshold is exceeded at full burn.\81\ The 
Commission's NEPA regulations, however, set forth specific categories 
of projects where an EA and EIS ``will normally be prepared,'' \82\ 
with no mention of GHG emissions. And in a case where an EA is normally 
prepared, the Commission ``may in specific circumstances''--meaning a 
case-by-case determination--decide whether to prepare an EIS 
``depending on the location or scope of the proposed action, or 
resources affected.'' \83\
---------------------------------------------------------------------------

    \80\ 5 U.S.C. 553; see also Shell Offshore Inc. v. Babbitt, 238 
F.3d 622, 629 (5th Cir. 2001) (``[T]he APA requires an agency to 
provide an opportunity for notice and comment before substantially 
altering a well established regulatory interpretation.'').
    \81\ Interim Policy Statement, 178 FERC ] 61,108 at P 3.
    \82\ 18 CFR 380.5-380.6; see also Commissioner Danly November 
29, 2021 Response to Senator Barrasso September 15, 2021 Letter, 
Docket Nos. CP20-27-000, et al., at 12, Fig. 2 (Accession No. 
20211214-4001).
    \83\ 18 CFR. Sec.  380.5(a) (emphasis added).
---------------------------------------------------------------------------

    36. Given these fatal flaws, it is no wonder the majority seeks 
comment ``in particular, on the approach to assessing the significance 
of the proposed project's contribution to climate change.'' \84\
---------------------------------------------------------------------------

    \84\ Interim Policy Statement, 178 FERC ] 61,108 at P 1; see 
also id. P 81.
---------------------------------------------------------------------------

D. GHG Mitigation

1. Claims of Authority To Mitigate
    37. Next, the majority states that the Commission's conditioning 
power gives it authority to require a pipeline to mitigate GHGs emitted 
by its operations

[[Page 14131]]

and reasonably foreseeable indirect effects.\85\ The majority is 
incorrect.
---------------------------------------------------------------------------

    \85\ Id. P 106.
---------------------------------------------------------------------------

    38. As commenters explain,\86\ without any response from the 
majority, the Supreme Court has held that ``Congress delegated to EPA 
the decision whether and how to regulate carbon-dioxide emissions'' 
from stationary sources.\87\ By claiming the authority to mitigate 
these same emissions as part of the Natural Gas Act certification 
process, the majority are attempting to usurp the statutory authority 
the Court found Congress has delegated to EPA and which cannot be 
reassigned absent Congressional action.\88\ If the EPA were to regulate 
GHG emissions from pipeline facilities, which it is contemplating 
doing,\89\ the Commission could possibly require project sponsors to 
comply with those requirements. But one would not say that the 
Commission could on its own require project sponsors to mitigate, for 
example, sulfur dioxide because the EPA had chosen not to do so, or the 
Commission believed its regulations to be inadequate.
---------------------------------------------------------------------------

    \86\ Id. P 103 (``For example, commenters argue that Congress 
has delegated authority to the EPA and state agencies to regulate 
GHGs under the [Clean Air Act].'') (citation omitted); see also id. 
P 103 n.238 (citing American Public Gas Association Technical 
Conference Comments at 5-6; EEI Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 23-24; TC Energy 
Technical Conference Comments at 9-10).
    \87\ Am. Elec. Power Co., Inc. v. Connecticut, 564 U.S. 410, 426 
(2011) (emphasis added) (discussing in the context of power plants 
but would apply equally here); see also Adelphia Gateway, LLC, 169 
FERC ] 61,220 (2019) (McNamee, Comm'r, concurring at PP 52-61).
    \88\ Whether EPA or CEQ have raised ``objections'' is not 
relevant. See Interim Policy Statement, 178 FERC ] 61,108 at P 85.
    \89\ Standards of Performance for New, Reconstructed, and 
Modified Sources and Emissions Guidelines for Existing Sources: Oil 
and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021). 
Commenters make the point, to which the majority does not respond, 
that the Commission should defer to EPA's rulemaking. See, e.g., EEI 
Technical Conference Comments at 11 n.29.
---------------------------------------------------------------------------

    39. The Commission's conditioning authority also does not allow the 
Commission to mitigate GHG emissions from upstream or downstream users. 
The commenters make the point,\90\ also sidestepped by the 
majority,\91\ that the Commission's conditioning authority cannot be 
used to indirectly do what the Commission cannot do directly. That is, 
the Commission may not indirectly rely on the Natural Gas Act to impose 
conditions on non-jurisdictional entities.\92\
---------------------------------------------------------------------------

    \90\ See id. P 102.
    \91\ See id. P 105 (``we recognize, as many commenters assert, 
that the Commission does not have the statutory authority to impose 
conditions on downstream users or other entities outside the 
Commission's jurisdiction . . . rather, the Commission encourages 
each project sponsor to propose measures . . . .'') (emphasis in 
original).
    \92\ See Altamont Gas Transmission, Co. v. FERC, 92 F.3d 1239, 
1248 (D.C. Cir. 1996) (``Although the Commission ordinarily has the 
authority to consider a matter beyond its jurisdiction if the matter 
affects jurisdictional sales--at least if there would otherwise be a 
regulatory gap--here there is no such gap but, on the contrary, an 
express congressional reservation of jurisdiction to another 
body.''); Am. Gas Ass'n v. FERC, 912 F.2d 1496, 1510 (``[T]he 
Commission may not use its Sec.  7 conditioning power to do 
indirectly . . . things that it cannot do at all.''); see also 
Calpine Corp., 171 FERC ] 61,035 (2020) (Glick, Comm'r, dissenting 
at P 7) (``In recent years, the Supreme Court has repeatedly 
admonished both the Commission and the states that the FPA prohibits 
actions that `aim at' or `target' the other sovereign's exclusive 
jurisdiction.'').
---------------------------------------------------------------------------

    40. Further, the Commission's conditioning authority cannot be used 
in ways that would be directly contrary to the purpose of the NGA--to 
promote the production of plentiful supplies of natural gas at 
reasonable rates. The majority may not rewrite the purpose of the NGA 
to instead charge the Commission with the mission of discouraging the 
production and use of natural gas.
2. Encouraging Project Sponsors To Mitigate GHG Emissions
    41. The Interim Policy Statement's encouragement that project 
sponsors mitigate GHG emissions is in practical effect a 
requirement,\93\ and is not in accordance with the NGA. The NGA only 
empowers the Commission to impose terms and conditions in two contexts: 
(1) Pursuant to NGA section 3 when it finds such terms ``necessary or 
appropriate'' \94\ to ensure a proposed export or import facility is 
not inconsistent with the public interest, and (2) pursuant to NGA 
section 7, when it finds such terms are ``reasonable'' and 
``require[d]'' by the ``public convenience and necessity.'' \95\ Only 
after making these findings, can the Commission require mitigation.
---------------------------------------------------------------------------

    \93\ See Interim Policy Statement, 178 FERC ] 61,108 at P 107 
(``[T]he Commission plans to evaluate proposed mitigation plans on a 
case-by-case basis . . . .'') (emphasis added); id. P 131 (``the 
Commission will then consider the project's impact on climate 
change, including the project sponsor's mitigation proposal to 
reduce direct GHG emissions and, to the extent practicable, to 
reduce any reasonably foreseeable project emissions . . . .'').
    \94\ 15 U.S.C. 717b(a).
    \95\ Id. Sec.  717f(e).
---------------------------------------------------------------------------

    42. The majority does not attempt to make either of these required 
findings. It simply leaps from stating that the Commission has the 
discretion to mitigate GHG emissions to ``expecting'' applicants to 
mitigate their emissions. This amounts to no more than ``because I said 
so.'' More is required.\96\
---------------------------------------------------------------------------

    \96\ See also Michigan v. EPA, 576 U.S. 743, 752 (2015) 
(explaining that the phrase ``appropriate and necessary'' in the 
Clean Air Act ``requires at least some attention to cost''); id. 
(``One would not say that it is even rational, never mind 
`appropriate,' to impose billions of dollars in economic costs in 
return for a few dollars in health or environmental benefits.''); 
id. 752-53 (``Agencies have long treated cost as a centrally 
relevant factor when deciding to regulate.'').
---------------------------------------------------------------------------

III. Intent of the Interim Policy Statement

    43. One cannot help but notice the lengths to which the majority 
goes in order to make this policy statement ``non-binding,'' using 
words like ``propose,'' ``wish,'' ``opportunity,'' and even insisting, 
in response to this dissent, that it does not ``impose[] an obligation, 
deny[y] a right, or fix[ ] some legal relationship,'' \97\ for what 
appears to have no purpose other than to avoid notice-and-comment 
procedures (that is, public participation) and judicial review. For 
without judicial review as a check, there is no need to engage in 
reasoned decision-making or be limited by the purposes of the statute.
---------------------------------------------------------------------------

    \97\ See Interim Policy Statement, 178 FERC ] 61,108 at P 5, 
n.6.
---------------------------------------------------------------------------

    44. In this way, the majority appears to believe it can do whatever 
it wants. Arrogate to the Commission authority it does not have. 
Disregard regulations that are currently in force. Flout prevailing 
Supreme Court precedent. Make threats to manipulate project sponsors 
into ``voluntarily'' subjecting themselves to unnecessary processes and 
proposing mitigation of the ``harm'' resulting from the proposed use or 
transportation of natural gas to provide a service that Congress 
declared to be in the public interest.
    45. If an entity requests rehearing of today's policy statement, 
the majority can simply reject it--either by notice or order (without 
any discussion of the merits)--stating that rehearing does not lie for 
policy statements. And if a petition for review follows, the Commission 
can argue that the Interim Policy Statement is not subject to review 
because it is not a substantive rule. And if some project sponsor 
suggests it is proposing mitigation under duress and it reserves the 
right to challenge the mitigation requirement in court, the Commission 
can argue the project sponsor cannot be aggrieved because it 
voluntarily proposed the mitigation and accepted the certificate and 
its terms.\98\
---------------------------------------------------------------------------

    \98\ I recognize that project sponsors have previously reserved 
their right to appeal when accepting a certificate, which the 
Commission has not opposed. However, in the context of hydropower 
cases, the Commission has taken a different approach. See Rivers 
Elec. Co., Inc., 178 FERC ] 61,027, P 9 n.25 (2022) (Danly, Comm'r, 
concurring in part and dissenting in part) (``If the transferee 
accepts this order, it is thereby agreeing to the new condition. It 
may decline to do so if it does not wish to accept the 
condition.'').

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

[[Page 14132]]

    46. This is not good governance. Nor do I think it likely the 
majority will be successful. In my view, the Interim Policy Statement 
is a substantive, binding rule that is subject to judicial review. 
Despite the Interim Policy Statement's hortatory verbiage, ``there are 
sinews of command beneath the velvet words.'' \99\ Perhaps the best 
illustration of this is the list of six items project sponsors are 
``encouraged'' to include in their applications in light of the new 
policy statement.\100\ This list includes estimates of the proposal's 
cumulative direct and indirect emissions and what mitigation measures 
the project sponsors propose, as well as a ``detailed cost estimate'' 
of the proposed mitigation and a ``proposal for recovering those 
costs.'' \101\
---------------------------------------------------------------------------

    \99\ Am. Trucking Ass'n, Inc. v. I. C. C., 659 F.2d 452, 463 
(5th Cir. 1981), opinion clarified on other grounds, 666 F.2d 167 
(5th Cir. 1982) (Am. Trucking).
    \100\ Interim Policy Statement, 178 FERC ] 61,108 at P 130.
    \101\ Id.
---------------------------------------------------------------------------

    47. This is not encouragement. This is command. The project 
sponsors will know that if they want to win approval for their projects 
this is what they must do \102\ even if they must guess at what will 
ultimately satisfy the Commission's new policies. Certainly, no project 
sponsor will believe that mitigation is optional or that submitting an 
application exceeding the Interim Policy Statement's 100,000 tpy 
threshold without a mitigation proposal would be anything other than a 
waste of time and money. And what other reason could the majority have 
for delaying action on those projects that have effectively twice 
completed the NEPA process? \103\
---------------------------------------------------------------------------

    \102\ Cf. Am. Trucking, 659 F.2d at 463-464 (``The manner of 
dealing with applicants who do not follow what is declared to be the 
`normal' course demonstrates graphically that the carrier who does 
not conform will incur both delay and potentially vast litigation 
expense'').
    \103\ For example, on August 24, 2020, Commission staff issued 
an EA for Tennessee Gas Pipeline Company, LLC et al.'s Evangeline 
Pass Expansion Project which concluded, ``[w]e recommend that the 
Commission Order contain a finding of no significant impact.'' 
Commission Staff, Environmental Assessment for Tenn. Gas Pipeline 
Co., LLC et al.'s Evangeline Pass Expansion Project, Docket Nos. 
CP20-50-000 et al., at 168 (Aug. 24, 2020). Despite this 
recommendation, which would have normally been adopted by the 
Commission, Commission staff, at the direction of the Chairman, 
issued supplemental Draft and Final Environmental Impact Statements. 
See Commission Staff, Final Environmental Impact Statement for Tenn. 
Gas Pipeline Co., LLC et al.'s Evangeline Pass Expansion Project, 
Docket Nos. CP20-50-000 et al. (Oct. 8, 2021); Commission Staff, 
Draft Environmental Impact Statement for Tenn. Gas Pipeline Co., LLC 
et al.'s Evangeline Pass Expansion Project, Docket Nos. CP20-50-000 
et al. (July 16, 2021).
---------------------------------------------------------------------------

    48. There is, however, no ambiguity in this: The Commission has 
changed the requirements for obtaining project approvals and applicants 
need to come before the Commission acknowledging that it is so.\104\ 
The effect of this change is immediate. Even applicants whose projects 
have been pending with the Commission for upwards of two years will be 
subjected to the Commission's new rules.
---------------------------------------------------------------------------

    \104\ See Brown Exp., 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.' '').
---------------------------------------------------------------------------

    49. The interim policy statement also determines that emissions 
over 100,000 tpy of CO2e are significant (and emissions 
which fall below, not significant), a determination from which legal 
consequences flow under NEPA.\105\ And it binds Commission staff.\106\ 
While I acknowledge the courts have given the Commission's 
characterization of issuances deference in the past,\107\ whether a 
court will do so in in this instance is far from certain.
---------------------------------------------------------------------------

    \105\ See Nat. Res. Def. Council, Inc. v. NRC, 539 F.2d 824 (2d 
Cir. 1976) (``Further, it is clear that NEPA legal consequences flow 
from that decision since the order below sets forth rules concerning 
how the agency will comply with the environmental laws.''), cert. 
granted, 430 U.S. 944 (1977), judgment vacated and case remanded for 
consideration of mootness, 434 U.S. 1030 (1978).
    \106\ Interim Policy Statement, 178 FERC ] 61,108 at P 3 (``For 
purposes of assessing the appropriate level of NEPA review, 
Commission staff will apply the 100% utilization or `full burn' rate 
for the proposed project's emissions to determine whether to prepare 
an Environmental Impact Statement (EIS) or an environmental 
assessment (EA). Commission staff will proceed with the preparation 
of an EIS, if the proposed project may result in 100,000 metric tons 
per year of CO2e or more.'') (emphasis added); see also 
Tex. v. Equal Emp't Opportunity Comm'n, 933 F.3d 433, 441-44 (5th 
Cir. 2019); id. at 442 (``That the agency's action binds its staff . 
. . demonstrates that legal consequences flow from it . . . .'').
    \107\ See, e.g., Interstate Nat. Gas Ass'n of Am. v. FERC, 285 
F.3d 18, 59 (D.C. Cir. 2002).
---------------------------------------------------------------------------

    For these reasons, I respectfully dissent.
    James P. Danly, Commissioner

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure 
Project Reviews

Docket No. PL21-3-000
    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\ 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.

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[[Page 14133]]

    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 Sec.  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.

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

[[Page 14134]]

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 Sec.  7(h), 15 U.S.C. 
717f(h). Bringing such extra-jurisdictional considerations into the 
Commission's public convenience and necessity analyses under NGA 
Sec.  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 (DC 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 Sec.  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 
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

[[Page 14135]]

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 Sec. Sec.  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 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

[[Page 14136]]

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 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,

[[Page 14137]]

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 Sec.  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. Sec.  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 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

[[Page 14138]]

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.
---------------------------------------------------------------------------

    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

[[Page 14139]]

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 Sec.  3 as opposed to interstate transportation 
facilities under NGA Sec.  7--the court in Sabal Trail concluded that, 
under NGA Sec.  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, 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. Sec.  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

[[Page 14140]]

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. Sec.  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 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, 
Sec.  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

[[Page 14141]]

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.

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

[[Page 14142]]

    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 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. 2022-04536 Filed 3-10-22; 8:45 am]
 BILLING CODE 6717-01-P

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