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Environmental Group Appeals FERC's New Market Project Decision for Ignoring NEPA Obligations

Arguing that FERC "arbitrarily and capriciously" ignored its obligations under the National Environmental Policy Act (NEPA) in deciding the fate of Dominion Transmission Inc.'s New Market project earlier this year, the environmental group Otsego 2000 has challenged the order in the U.S. Court of Appeals for the District of Columbia (DC) Circuit.

In mid-May the Federal Energy Regulatory Commission by a 3-2 vote denied a request for rehearing of its April 2016 decision to issue a certificate of public convenience and necessity for the New Market project, with the majority declaring that it would continue to take into account proposed pipelines' potential greenhouse gas (GHG) emissions, but not their impacts on natural gas production and consumption [CP14-497].

NEPA requires federal agencies to consider indirect impacts of projects. Since a 2017 decision by the DC appeals court found that downstream GHG emissions from burning natural gas are indirect impacts, FERC has taken that requirement a step further. That practice is coming to an end, the majority said.

But, according to Otsego 2000, the court's 2017 ruling "left no ground for the Commission to shirk its obligations under NEPA, and yet that is precisely what the Commission majority has done..." with its May 18 decision.

The environmental group, joined by landowners John and Maryann Valentine, asked the court to set aside FERC's decision in May and its 2016 approval of the project, and to compel Commission to comply with the court's 2017 decision.

The two Democrats at FERC -- Cheryl LaFleur and Richard Glick -- voted against the May 18 order. LaFleur supported the original authorization of the New Market Project and both she and Glick said they might have voted for the order denying rehearing if not for the policy shift attached to it. A project's upstream and downstream natural gas production and consumption are indirect impacts that should be considered when reviewing applications, they said.

The majority opinion reversed FERC's recent approach to environmental reviews, according to LaFleur.

The majority said its decision does not change FERC's public interest and environmental review. "Our decision does not in any way indicate that the Commission does not consider, or is not cognizant of the potentially severe consequences of climate change," FERC said.

In the wake of the May decision, the Sierra Club warned that it would likely face court challenges.

"The people demanded that FERC do its job, and FERC refused,” the Sierra Club said at the time. “Then, the courts ordered FERC to do its job, but instead, it just keeps trying to evade the court's order and shirk its responsibilities.”

Dominion first asked for FERC approval of the New Market project in 2014. FERC staff issued an environmental assessment for the project in 2015, and gave Dominion permission to begin construction in upstate New York in March 2017, with a target in-service date eight months later. The $159 million project is designed to provide 112,000 Dth/d of firm transportation service, improve access for two National Grid subsidiaries, and add more than 33,000 hp of compression.

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