FERC on Thursday turned back a rehearing on a 2-1 vote regarding its prior approval for Appalachian natural gas takeaway Mountain Valley Pipeline LLC (MVP) to extend the system.

MVP southgate

The environmental impacts for the Southgate extension are acceptable, the Federal Energy Regulatory Commission ruled in its regular meeting. Chairman Neil Chatterjee and James P. Danly in ruling against the rehearing said the environmental impacts would be acceptable (No. CP19-14-001). Commissioner Richard Glick was in dissent.

Since receiving a FERC certificate in late 2017, MVP has run into numerous legal and regulatory snags, including a ruling by the U.S. Court of Appeals for the Fourth Circuit last year to stay crucial Endangered Species Act approvals for the project. The North Carolina Department of Environmental Quality last month rejected a water permit required for the extension. 

Glick said FERC’s order violated both the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA). 

“The Commission once again refuses to consider the consequences its actions have for climate change,” Glick said. “Although neither the NGA nor NEPA permit the Commission to ignore the climate change implications of constructing and operating this project, that is precisely what the Commission is doing here.”

FERC, he said, “continues to treat climate change differently than all other environmental impacts.” The Commission has refused to consider whether Southgate’s contribution to climate change from greenhouse (GHG) emissions “would be significant, even though it quantifies the project’s direct GHG emissions from construction and operation.

“That failure is an integral part of the Commission’s decision making,” said Glick. “The refusal to assess the significance of the project’s contribution to the harm caused by climate change is what allows the Commission to determine that the environmental impacts associated with the project are ‘acceptable’ and, as a result, conclude that the project is required by the public convenience and necessity.”

Claiming Southgate would have no significant environmental impacts but refusing to assess the impact “on the most important environmental issue of our time is not reasoned decision making,” Glick said. “The Commission’s failure to meaningfully consider climate change is once again forcing me to dissent from a certificate order that I might otherwise support…No matter what I might otherwise think of a project, I will not join an order that functionally excludes climate change from the Commission’s analysis.”

Glick also disagreed with FERC’s approval of MVP’s 14% return on equity (ROE) for Southgate. He argued that there is FERC precedent for a 14% ROE “for a new pipeline, but not an expansion of an existing one.”

FERC in June issued the Southgate certificate and authorized MVP to build and operate Southgate, a 75.1 mile-long system with associated aboveground facilities in Pittsylvania County, VA, and North Carolina’s Rockingham and Alamance counties. 

Requests for rehearing were filed by several environmental groups known collectively as the Appalachian Mountain Advocates, as well as the North Carolina Utilities Commission and the Monacan Indian Nation and the Sappony Indian Tribe.