FERC Chairman Richard Glick last week argued that the “reasonably foreseen” carbon emissions from natural gas infrastructure should be included in every certificate review, but not everybody agrees with him.

The Federal Energy Regulatory Commission held a day-long technical conference on Nov. 19 concerning natural gas projects proposed under section 3 or 7 of the Natural Gas Act (NGA). Experts testified, and commissioners weighed in, on how to determine the quantity of the potential greenhouse gas (GHG) emissions for projects under scrutiny. Types of mitigation measures a project sponsor could employ to reduce emissions also were discussed, and experts explored ways to verify the measures.

The Commission is facing a treacherous path as it navigates future gas infrastructure expansions, including for liquefied natural gas (LNG) export projects. Estimating emissions isn’t easy, but it’s necessary, Glick argued.

“I think what we’re doing here is creating greater certainty for industry,” he told the participants. Recent court decisions, the Chairman noted, have vacated or remanded natural gas certificates approved by FERC because of a lack of GHG data. 

Avoiding Court Action

The “numerous court decisions” for gas infrastructure and LNG projects, “whether it’s been on greenhouse gas emissions or need or whatever else, it’s very clear that when we don’t do our job when we pursue the certification process or the LNG process, the courts are going to send it back to us.”

The court decisions are piling up. For example, last August the U.S. Court of Appeals for the District of Columbia Circuit remanded 2019 authorizations for two proposed LNG export projects in South Texas. The appeals court said FERC had not adequately explained its approach in evaluating the potential climate and environmental justice impacts for NextDecade Corp.’s Rio Grande LNG and the privately owned Texas LNG development. Each was authorized by FERC in 2019.

In 2018, the Commission voted 3-2 to reinstate the certificate for the Southeast Markets Pipelines (SMP) project. That vote came after a federal appeals court said FERC had failed to adequately consider the impact of GHG emissions. SMP includes the Sabal Trail, Hillabee Expansion and Florida Southeast Connection gas systems. Democrats Glick and former Commissioner Cheryl LaFleur voted against reinstatement, citing the GHG issues. 

Revising decisions following court orders delays projects and increases costs, Glick noted. 

“I think the issue of mitigation, and how we’re going to pursue mitigation, just like we do with every other environmental impact, is going to be a big part of this Commission’s agenda going forward.”

Infringing On EPA Authority?

Still, dissension on the Commission regarding how to tabulate GHG emissions was evident again last week.

Republican Commissioner James Danly, who in May had tangled with Glick regarding pipeline GHG emissions, once again questioned whether FERC had the legal authority to consider carbon emissions under the NGA. 

FERC doesn’t regulate environmental issues, Danly said. That’s the job of the Environmental Protection Agency (EPA).

“We are an economic regulator,” Danly said. “We are not an environmental regulator…EPA has in the first instance the authority to conduct this sort of analysis.”

Panelist Joseph Kelliher, who chaired FERC under President George W. Bush, also questioned whether the Commission was overstepping its authority by attempting to regulate upstream and downstream emissions. FERC may be infringing on the role of other federal agencies, such as EPA, he said.

Kelliher noted that FERC now approves projects with stipulations, which may have adverse impacts on the environment, such as wetlands and forestland. FERC could do the same regarding carbon emissions, which would balance a project’s costs against the benefits. “I don’t think any mitigation level is appropriate” for GHG emissions, he said.

Adopt ‘Comprehensive Policy’

Executives of two of the country’s largest natural gas midstream companies, Williams and Enbridge Inc., also weighed in with testimony. 

Williams’ Scott Hallam, senior vice president for Transmission and the Gulf of Mexico, said congressional action to adopt a “comprehensive  policy” regarding how to reduce GHG emissions was imperative.

Actions to “address  how greenhouse gas emissions are treated within the siting and permitting process would both greatly improve the permitting certainty of energy and transportation infrastructure and set the  nation  on  a  course  to  simultaneously  address  climate  change  concerns,” Hallam said.

 “As  leaders across the  globe work  to  address  our  pressing  energy and climate challenges, Williams urges the Commission to acknowledge that the infrastructure necessary to deliver natural gas to markets should be allowed to move forward without undue delay, both where new energy needs are required and where higher carbon and higher cost fuels can be displaced with cleaner natural gas.”

Enbridge’s Caitlin Tessin also testified. She directs Market Innovation for the Calgary-based pipeline giant. She leads the team responsible for identifying commercial opportunities in natural gas transmission associated with new technologies, among other things. 

“Enbridge  urges  the  Commission  to  ensure  that  it  takes  into account the  full  range  of  relevant  legal  and  policy  questions  as  it  considers  whether  to modify  its  current  practices  with  regard  to  potential  mitigation  of GHG  emissions associated with natural gas infrastructure that is subject to the Commission’s jurisdiction” under the NGA, Tessin said in her testimony.  

“Disregarding or  exceeding  the limits  that  Congress  has  established  on  its  authority  is  neither  lawful  nor  good  policy.”

Respecting Statutory Limits

Some of the questions and policy topics in the technical conference “go well beyond anything the Commission has ever proposed or required in the 80-plus year history of the NGA,” Tessin said. “Enbridge respectfully urges the Commission to respect limits on its statutory authority and not to adopt policies that rest on implausible,  unprecedented, and novel interpretations of the NGA.”

Enbridge urged FERC “not to lose sight of limits on its statutory authority, which prohibit the Commission from supplanting Congress and the states as the entities with legal authority to establish national energy and climate policy for the upstream and downstream natural gas sectors.”

The pipeline company supports “appropriate legislative proposals to encourage investments in the energy transition,” Tessin said. However, “those  broader  questions  about  national energy and climate policy are distinct from, and outside, the purpose for which Congress enacted  the NGA and  charged  the  Commission  with  its  administration —namely,  the economic regulation   of   interstate   natural   gas   markets   “to   encourage   the   orderly  development of plentiful supplies of… natural gas at reasonable prices.”

Eliminating emissions is less costly as projects are being built, but it can be financially burdensome to install technology on older infrastructure, Tessin said. “The Commission will need to establish clear guidelines for the inclusion of later mitigation in pipeline rates in order to encourage widespread adoption.”