American Oil and Gas Reporter - March 2022 - 31

GHG Criteria May Block New Pipelines
FERC Guidance
By Del Torkelson
WASHINGTON-With a party-line vote in which its three
Democrats edged out its two Republicans, the Federal Energy
Regulatory Commission on Feb. 17 decided to overhaul the
criteria by which it approves or denies interstate natural gas
projects. Critics assert the approach may toll the death knell for
new pipeline construction.
" Just when you thought it could not be more difficult to get
a natural gas pipeline approved, it did, " muses Energy Equipment
& Infrastructure Alliance President and Chief Executive Officer
Toby Mack. " The new policy effectively gives FERC's majority
a blank check to deny a project's certificate on subjective, ideological
or political grounds even if there is a clear market need
for the natural gas it would deliver. "
According to a National Law Review article by Steptoe &
Johnson attorneys Kurt L. Krieger and Kevin W. Hivick, FERC's
Feb. 17 update is made up of:
· An updated certificate policy statement (UPS) that revises
the considerations the commission will weigh as it evaluates
the specified factors that underlie its determination; and
· An interim greenhouse gas policy statement (IPS) that
offers technical guidance on how the commission will reach determinations
regarding proposed projects' GHG emissions,
which are included in the UPS factors.
" The UPS describes how FERC will evaluate and weigh
all factors bearing on the public interest in determining
whether a new interstate natural gas transportation project is
required by public convenience and necessity under the
Natural Gas Act, " Krieger and Hivick explain. " The UPS
adds updated and expanded considerations concerning a proposed
project's impacts on customers, landowners, climate,
environmental justice communities and other stakeholders.
FERC states that it will apply this new UPS to any currently
pending applications for certificates. "
Meanwhile, the authors continue, the UPS details how FERC
plans to evaluate an applicant's climate change impacts. " Under
the IPS, any project with 100,000 metric tons a year of GHG
emissions will be treated as having a significant impact on
climate change, " Krieger and Hivick detail. " Projects that break
the threshold will require an environmental impact statement.
As part of the GHG analysis, FERC will consider emissions
from the construction of the project and also may include those
originating from upstream production and downstream combustion.
Consequently, it is likely that a vast majority of interstate
pipeline projects will require an EIS. "
They also note that FERC is requesting public comment
before it finalizes its approach to assessing a project's climate
change impact. The IPS applies in the meantime.
According to the Texas Alliance of Energy Producers, Commissioner
Richard Glick claims the new criteria will help FERC
certifications withstand legal challenges associated with climate
actions. " We are actually reducing uncertainty by . . . providing
a more legally durable precedent (so) that you're not going to
be playing Russian roulette every time you go to court with a
particular opinion because the commission ignored what the
D.C. Circuit had to say, " press accounts quote Glick.
In a document explaining why he voted against the revision,
Commissioner Mark Christie predicts the policy will have the
opposite effect. " The new certificate policy is the mother of all
legal weapons. There is no question 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, " he charges.
Christie points out that preparing an EIS " is extremely costintensive
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 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. "
EEIA's Mack warns that the policy will be impossible to
apply objectively because it requires commissioners to make
assumptions about how the natural gas each pipeline transports
will be used. " It could be used in petrochemical manufacturing,
fertilizer, liquified natural gas, power generation, hydrogen production
or industrial heat-all of which have different GHG
emission profiles, " he observes. " Nor can it be known if its
carbon dioxide emissions will be captured and sequestered.
This totally subjective guesswork component renders the policy
ripe for application as a political tool. "
Death By A Thousand Cuts
Fossil fuel opponents such as the Natural Resources Defense
Council are among those praising the commission's decision to
revamp a policy in place since 1999. " FERC is bringing balance
to its review of new gas pipelines with today's historic decision, "
lauds NRDC senior attorney Gillian Giannetti. " These are
changes demanded by the courts and long overdue. FERC will
now need to follow through and permanently establish a meaningful
climate test for pipelines. "
Industry groups are less enthusiastic. " At a time of rising
energy costs and geopolitical tensions, policymakers should be
ensuring the permitting process for natural gas and LNG infrastructure
is streamlined, transparent and consistent, " reflects
API Vice President of Midstream Policy Robin Rorick. " FERC's
actions unfortunately insert more uncertainty into the process
Industry Group Warns FERC's Move
Could Increase Emissions
" At a time of rising energy costs and geopolitical
tensions, policymakers should be ensuring the permitting
process for natural gas and LNG infrastructure
is streamlined, transparent and consistent. FERC's
actions unfortunately insert more uncertainty into
the process and will only add more delays on top of
an already overly bureaucratic process that is hampering
the vital pipeline and other energy infrastructure
needed to deliver and export natural gas, which is
the leading reason the United States has reduced
emissions to generational lows. "
-API Vice President of Midstream Policy
Robin Rorick
MARCH 2022 31
American Oil and Gas Reporter - March 2022

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