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FERC Should Review Indirect Impacts, GHG Emissions From NatGas Projects, EPA Says

The Environmental Protection Agency (EPA) said this week that FERC should require applicants seeking approval under the Natural Gas Act to provide more information on a project’s indirect impacts, including potential increases in gas production and greenhouse gas (GHG) emissions.

EPA submitted comments Tuesday on the Federal Energy Regulatory Commission’s Draft Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act. FERC released a revised version of its guidance manual, which had not been updated since 2002, last month (see Daily GPI, Dec. 29, 2015).

The manual is meant to help project applicants determine what information to provide FERC in conducting its environmental reviews under the National Environmental Policy Act (NEPA).

In its comments this week, EPA recommended that FERC’s guidance manual “request applicants provide information regarding the potential for increased natural gas production and the potential for environmental impacts associated with the potential increase.”

“In previous NEPA analyses, FERC has concluded that the nature of natural gas supply and the pipeline system in the U.S. make it difficult to predict accurately where additional gas development activity will occur and thus, that it is not feasible to specifically evaluate the localized environmental impacts in a project-level NEPA document,” EPA wrote. “However, both FERC and the Department of Energy (DOE) have recognized that an increase in natural gas exports will result in increased production.”

EPA further said that DOE has conducted a study on the impact of U.S. natural gas exports that “provides the kind of conceptual level analysis of the types of impacts that are likely to occur from increased production” and urged FERC to require applicants to use the study “to inform their analysis” of their project’s impacts.

The recommendation echoes calls from environmentalists for FERC to review cumulative regional impacts of the multiple transmission projects that have been proposed in response to the rapid growth of production from unconventional shale development (see Shale Daily, Nov. 2, 2015).

FERC has generally held that evaluating a particular project’s impacts on future gas production falls outside its responsibilities under NEPA. In a recent court filing defending its approval of the Dominion Cove Point LNG Liquefaction Project, FERC wrote that it is not required “to consider all potential impacts no matter how attenuated or speculative,” adding that “future natural gas development production activities...are not a causally related effect of the construction and operation of this particular liquefaction facility” (see Daily GPI, Jan. 7).

EPA also took issue with the language in FERC’s guidance manual concerning GHG emissions. The manual “includes, in our view, an incorrect determination that no methodology exists to determine how an individual project’s incremental contribution to GHG would translate into physical effects on the global environment and a recommendation to address the contribution of the project emissions as a percentage of total estimated GHG emissions worldwide,” EPA said.

EPA urged FERC to include a separate detailed section advising applicants on reporting a range of information related to climate change impacts and GHG emissions, including mitigation measures and a discussion of both “emissions from the construction and operation of the project” as well as “emissions associated with the production, transport, and combustion of the natural gas.”

EPA pointed to both the DOE report and a report from the National Energy Technology Laboratory on the “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas [LNG] from the United States” as helpful for applicants to consider in evaluating their projects.

“The environmental impacts are best described by using emissions as a proxy when comparing the project, alternatives and potential mitigation,” EPA said. “We recommend FERC request the applicant provide an existing frame of reference in their resource report, such as an applicable Federal, state, tribal or local goal for GHG emission reductions, and discuss whether the emission levels are consistent with such goals.”

Amid environmental opposition to hydraulic fracturing and concerns about the impact of fossil fuel development on climate change, FERC’s environmental reviews of pipelines and LNG projects have come under greater scrutiny recently, even as the agency contends with an uptick in pipeline applications (see Daily GPI, Dec. 10, 2015; Dec. 1, 2015).

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