Responding to a recent decision issued by the U.S. Court of Appeals for the District of Columbia Circuit, staff at the Federal Energy Regulatory Commission on Sept. 27 issued a draft supplemental environmental impact statement for a set of natural gas pipeline projects in the southeastern part of the country collectively known as the Southeast Market Pipelines Project.
In its Aug. 22 ruling (Sierra Club, et al. v. FERC), the appeals court said that FERC's environmental review of the Southeast Market Pipelines Project fell short because the assessment "did not contain enough information on the greenhouse-gas emissions that will result from burning the gas that the pipelines will carry."
While expanding its environmental analysis in response to the court’s ruling, FERC’s Sept. 27 supplemental environmental impact statement concludes that “with the applicants’ implementation of their respective impact avoidance, minimization, and mitigation measures, as well as their adherence to the measures we have required to further avoid, minimize, and mitigate these impacts,” operating the Southeast Market Pipelines Project would not result in a significant impact on the environment (Docket Nos. CP14-554-002, CP15-16-003, CP15-17-002).
FERC approved project in 2016
The Southeast Market Pipelines Project is comprised of three natural-gas pipelines in Alabama, Georgia, and Florida. The first phase of project has already gone into service, as authorized by FERC in July 2017, shortly before the court issued its opinion. The linchpin of the project is the Sabal Trail pipeline, which will work its way from Tallapoosa County in eastern Alabama, across southwestern Georgia, and down to Osceola County, Florida, just south of Orlando.
Three power plants have been specifically identified as end-use consumers of the project’s volumes: the new Florida Power and Light Company Okeechobee Clean Energy Center; the Duke Energy Citrus County Combined Cycle Plant and the existing FPL Martin County Power Plant. Service to these power plants was the primary purpose for which the Southeast Market Pipelines Project was constructed. In addition, approximately 100 million cubic feet per day of the project capacity is unsubscribed.
In February 2016, FERC issued an order that granted the requested Natural Gas Act Section 7 certificates and approved construction of all three project segments.
Several parties, including three environmental groups (Sierra Club, Flint Riverkeeper, and Chattahoochee Riverkeeper) subsequently sought rehearing of the order and a stay of construction. FERC agreed to consider the arguments put forth by the parties that sought rehearing, but declined to order a project stay. Construction on the pipelines began in August 2016 and on Sept. 7, 2016, FERC issued a rehearing order, denying rehearing and declining to rescind the pipelines' certificates.
In response, the environmental groups and landowners asked the appeals court to review FERC's certificate and rehearing orders. Among other things, the environmental groups argued that FERC's environmental impact statement failed to adequately consider the project's contribution to greenhouse-gas emissions and its impact on low-income and minority communities.
The landowner and environmental group petitions were consolidated before the appeals court.
Court remands to FERC on the issue of downstream GHG emissions
While denying most of the objections to FERC’s orders, the court sided with the challengers on the question of “whether, and to what extent, the EIS for this pipeline project needed to discuss these 'downstream' effects of the pipelines and their cargo,” concluding that “at a minimum, FERC should have estimated the amount of power-plant carbon emissions that the pipelines will make possible."
The court said that the EIS for the Southeast Market Pipelines 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.
The court vacated and remanded the pipeline certificates to FERC on the issue of downstream GHG emissions.
FERC issues draft supplemental EIS
Responding to the court’s decision, FERC staff on Sept. 27 issued a draft supplemental EIS for the Southeast Market Pipelines Project.
The draft supplemental EIS estimates the greenhouse gas emissions generated by the Southeast Market Pipelines Project’s customers’ downstream facilities, describes the methodology used to determine these estimates, discusses context for understanding the magnitude of these emissions and also addresses the value of using the social cost of carbon tool in assessing the project’s GHG-related environmental impacts.
“As described in the executive summary of the FEIS [Final Environmental Impact Statement], and based on the environmental analysis section of the FEIS and this draft SEIS, we conclude that constructing and operating” the Southeast Market Pipelines Project would result in temporary and permanent impacts on the environment, FERC said.
“We also conclude that with the applicants’ implementation of their respective impact avoidance, minimization, and mitigation measures, as well as their adherence to the measures we have required to further avoid, minimize, and mitigate these impacts, operating the SMP [Southeast Market Pipelines] Project would not result in a significant impact on the environment,” FERC went on to say.
Social cost of carbon
Although attempting to quantify downstream GHG emissions attributable to the project, FERC concluded that it could not find a suitable method to attribute discrete environmental effects to GHG emissions from a specific project. As for the social cost of carbon, FERC staff said that while it recognizes the availability of this tool, “it is not appropriate for use in any project-level NEPA review” for several reasons.
Among other things, FERC staff said that the tool does not measure the actual incremental impacts of a project on the environment.
The social cost of carbon tool “may be useful for rulemakings or comparing regulatory alternatives using cost-benefit analyses where the same discount rate is consistently applied; however, it is not appropriate for estimating a specific project’s impacts or informing our analysis under NEPA,” FERC staff said.
The commission is accepting comments on the draft supplemental EIS, which is available here, which are due by Nov. 20, 2017. FERC will not consider comments on the final EIS or the orders it issued in the proceeding.
N.Y. agency recently cited appeals court opinion
The New York State Department of Environmental Conservation recently argued that FERC’s prior approval of a pipeline project that will feed natural gas to a new power plant was flawed because the commission “failed to consider or quantify” the indirect effect of downstream greenhouse gas emissions that will result from burning the natural gas that the project will transport to the power plant.
At issue is a Millennium Pipeline Company LLC project that includes approximately 7.8 miles of new natural gas pipeline that will extend from Millennium Pipeline’s existing main line pipeline north to the new 680-megawatt CPV Valley Energy Center in the Town of Wawayanda in Orange County, N.Y., which is currently under construction, and for ancillary aboveground facilities.
The New York DEC said that the recent U.S. Court of Appeals for the District of Columbia Circuit decision comes into play as it relates to FERC and the Millennium project.
“In conducting its environmental review, just as in Sierra Club, the Commission failed to consider or quantify the indirect effect of downstream GHG emissions that will result from burning the natural gas that the project will transport to CPV Valley Energy Center,” the DEC argued in a FERC filing. “Nor did the Commission include any explanation as to why such downstream GHG emissions were not quantified or considered,” the New York agency said.