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A pair of industry organizations said a provision within President Trump's executive order (EO) that calls for sweeping changes in the energy sector could help companies looking to build interstate natural gas pipelines or liquefied natural gas (LNG) projects.
Last August, the Obama administration unveiled final guidance, through the White House Council on Environmental Quality (CEQ), designed to help federal agencies quantify the effects of greenhouse gas (GHG) emissions. But the EO Trump signed Tuesday officially rescinded the guidance.
In a joint statement, the Natural Gas Supply Association (NGSA) and the Center for LNG (CLNG) praised the rescission, arguing that the guidance was too broad and overly speculative of upstream GHG emissions.
"We applaud the administration for reversing the CEQ's guidance, which attempted to broaden the way federal agencies interpreted NEPA [the National Environmental Policy Act] in a way that did not serve the act's goals or purpose," said Dena Wiggins, CEO of the NGSA.
"The existing NEPA project review process is already stringent, extensive and thorough. By attempting to include unquantifiable and speculative upstream impacts in an expanded guidance, CEQ risked hindering development of the very infrastructure that has enabled natural gas to reduce emissions."
CLNG Executive Director Charlie Riedl added that his organization is "pleased to hear that CEQ's guidance on NEPA requirements has been rescinded. It would have been impossible to derive meaningful information about proposed projects using the CEQ's expanded approach."
Christi Tezak, managing director at ClearView Energy Partners LLC, said "we believe agencies may continue to find that the impact of such potential emissions is speculative (difficult to predict and therefore unhelpful to decision making)," Tezak said in a note to clients Tuesday. "The rescission of the GHG guidance for federal agency reviews would appear to undermine, if not altogether obviate, aspects of some of the legal challenges currently pending against pipeline and LNG export approvals..."
In January 2016, the Environmental Protection Agency (EPA) urged FERC to require applicants seeking approval under the Natural Gas Act to provide more information on a project’s indirect effects, including GHG emissions. But when the Federal Energy Regulatory Commission updated its Guidance Manual for Environmental Report Preparation last month, it excluded the EPA’s request to consider GHG emissions.
FERC has generally held that evaluating a particular project's effects on future gas production falls outside its purview under NEPA, and several courts have upheld that determination.
CEQ had recommended that federal agencies quantify a proposed action's projected direct and indirect GHG emissions, and that they use projected GHG emissions as a proxy for assessing potential climate change effects when preparing a NEPA analysis. CEQ also recommended that whenever agencies do not perform such a quantification, that they include a qualitative analysis in their NEPA documents explaining why it was not reasonably available.
CEQ also called for, among other things, federal agencies to discuss ways to accurately measure direct, indirect and cumulative GHG emissions and climate effects, and to consider reasonable alternatives that could provide short- and long-term benefits to the environment. Federal agencies were also advised to use available information when assessing the potential future state of the affected environment in a NEPA analysis, rather than conduct new research.