FERC orders halt to work on pipelines, clears path for others

In response to recent appeals court decisions, the Federal Energy Regulatory Commission recently directed developers to stop work on two natural gas pipeline projects – the Mountain Valley Pipeline and the Atlantic Coast Pipeline.

Meanwhile, the Commission on Aug. 10 issued orders denying rehearing of prior decisions that gave the green light to pipeline projects in the Southeast and Northeast parts of the U.S.

Details on Mountain Valley, Atlantic Coast Pipeline projects

The Mountain Valley Pipeline project is a natural gas pipeline system that will span approximately 300 miles from northwestern West Virginia to southern Virginia. The pipeline is expected to provide at least two Bcf per day of firm transmission capacity to markets in the Mid- and South Atlantic regions of the U.S.

The Atlantic Coast Pipeline, or ACP, is a 600-mile underground natural gas transmission pipeline that will deliver natural gas to utilities in Virginia and North Carolina. The $6 billion project is a partnership between four regional energy companies — Dominion Energy, Duke Energy, Piedmont Natural Gas and Southern Company Gas. The ACP will originate in West Virginia, travel through Virginia with a lateral extending to Chesapeake, Va., and then continue south into eastern North Carolina.

FERC issued certificates for projects in 2017

FERC in late 2017 issued certificates of public convenience and necessity for the Mountain Valley and ACP projects.

More recently, this summer, the U.S. Court of Appeals for the Fourth Circuit issued orders affecting both projects.

First, in late July, the appeals court vacated decisions issued by the Department of the Interior’s Bureau of Land Management and the Department of Agriculture’s Forest Service authorizing the construction of the Mountain Valley project across federal lands and remanding to those agencies for further proceedings to address issues identified in the opinion. 

Then, on Aug. 6, the appeals court issued an order vacating a right-of-way permit issued by Interior’s National Park Service authorizing construction of the ACP across the Blue Ridge Parkway and providing detailed reasoning for its order vacating an Incidental Take Statement issue by Interior’s U.S. Fish and Wildlife Service with respect to the project.

In response to the court’s decisions, the Commission sent stop work orders to the developers of the Mountain Valley and ACP projects and directed them to file plans for review and written approval by FERC’s Director of the Office of Energy Projects.

Orders denying rehearing

Meanwhile, the Commission on Aug. 10 issued a series of orders that denied rehearing of prior FERC decisions authorizing construction of pipeline projects in the Southeast and Northeast parts of the U.S.

In one order, FERC denied rehearing of an order authorizing the construction and operation of the PennEast Project, a natural gas pipeline from Luzerne County, Pennsylvania to Mercer County, New Jersey.

In a second order, the Commission denied rehearing on its March 14, 2018 order on remand issued by the U.S. Court of Appeals for the District of Columbia Circuit that reinstated certificate and abandonment authorization for the Southeast Market Pipelines Project, which comprises three natural-gas pipelines under construction in Alabama, Georgia, and Florida.

In another order, FERC denied rehearing of its October 2017 order that authorized the construction and operation of the ACP.

In an Aug. 10 statement, Commissioner Richard Glick noted that he chose not to participate in the order denying rehearing of the Commission’s October 13, 2017 ACP order “solely to enable those parties challenging the certificate to have their day in court.”

Glick said that if he had voted, the rehearing order would have failed on a 2-2 vote, noting that FERC Chairman Kevin McIntyre also did not participate in the proceeding, and the appellate courts would not have had jurisdiction to review the Commission’s decision to grant the certificate.

He also said he shares many of the concerns articulated in Commissioner Cheryl LaFleur’s dissenting opinion, and he does not believe that the ACP project has been shown to be in the public interest.

“Accordingly, if I had voted today, I would have voted to grant rehearing. Further, I do not believe there would have been the opportunity to vote on this rehearing order after Commissioner Powelson departs leaving only three commissioners to participate in this proceeding for the foreseeable future,” Glick wrote. Robert Powelson’s last day as a commissioner at FERC was Aug. 10.

In a fourth order, FERC denied rehearing of its January 23, 2018 order authorizing Dominion Energy Cove Point LNG/LP to construct, install, operate, and maintain natural gas compression facilities in Charles County, Maryland, and Loudoun and Fairfax Counties, Va., to provide up to 294,000 dekatherms per day (Dth/d) of firm transportation service.

Glick, Lafleur react to orders denying rehearing

Glick and LaFleur offered full or partial dissents to the orders denying rehearing involving the Dominion Energy Cove Point, the PennEast Project and the Southeast Market Pipelines Project.

With respect to the Southeast Market Pipelines Project, Glick in his dissent said that far from complying with the U.S. Court of Appeals for the District of Columbia Circuit’s remand, “today’s order doubles down on the deficiencies that led the court to vacate the order in the first place.”

He added that although the Commission “pays lip service to climate change, it structures its environmental review in a way that precludes the harms of climate change from playing a role in the Commission’s assessment of the public interest pursuant to the NGA and its examination of the environmental impacts of a proposed project pursuant to the National Environmental Policy Act.”

For her part, LaFleur noted that she dissented in part on the FERC remand order because she could not support the Commission’s responses to the U.S. Court of Appeals for the D.C. Circuit on downstream greenhouse gas emissions and the Social Cost of Carbon.

She said she was dissenting from the order denying rehearing for several reasons. Among other things, LaFleur said she can’t “support the majority’s assertion that by providing ‘context’ to a volume of GHG emissions it complied with the Commission’s obligations under the National Environmental Policy Act to assess the significance of downstream GHG emissions.”

LaFleur and Glick raise similar environmental concerns in their partial and full dissents in response to the Dominion Energy Cove Point and PennEast Project orders denying rehearing, as well as in responses to an Aug. 10 FERC order that granted a Transcontinental Gas Pipeline Company (Transco) request for authorization to construct and operate the Rivervale South to Market Project.

In response to the Transco order, LaFleur submitted a concurrence, while Glick offered a partial dissent to the order.

FERC recently launched inquiry into natural gas pipeline certificate policies

FERC on April 19 launched an inquiry that seeks information and stakeholder perspectives to help the Commission explore whether, and if so, how, to revise existing policies regarding its review and authorization of interstate natural gas transportation facilities under section 7 of the Natural Gas Act.

Specifically, FERC issued a Notice of Inquiry (Docket No. PL18-1-000) to examine its policies in light of changes in the natural gas industry and increased stakeholder interest in how it reviews natural gas pipeline proposals since the Commission adopted its current policy statement on pipeline certification.