Watching FERC and Watching the Courts

A pipeline in front of a court house.

With the recent con­fir­ma­tion of Willie Phillips to serve as the fifth com­mis­sion­er on the Fed­er­al Ener­gy Reg­u­la­to­ry Com­mis­sion (FERC), util­i­ties, advo­cates, and oth­er stake­hold­ers are wait­ing to see how FERC pro­ceeds. High on the list for many are poten­tial revi­sions to FERC’s 1999 pol­i­cy state­ment that it uses to eval­u­ate appli­ca­tions for new nat­ur­al gas pipelines, as well as how FERC’s deci­sions fare in court.

FERC opened a pro­ceed­ing to con­sid­er revis­ing this pol­i­cy state­ment in 2018, rec­og­niz­ing the many changes in the ener­gy sec­tor over near­ly 20 years. At that time, attor­neys gen­er­al com­ment­ed that FERC need­ed to think more broad­ly about the eco­nom­ic risk of approv­ing more infra­struc­ture, as well as the envi­ron­men­tal impacts. Under the new lead­er­ship of Chair­man Richard Glick in 2021, FERC sought addi­tion­al com­ments. AGs again com­ment­ed, empha­siz­ing the need to con­sid­er a project’s green­house gas emis­sions and the envi­ron­men­tal and racial injus­tices that may be asso­ci­at­ed with a pro­posed pipeline.

In the mean­time, FERC has recent­ly endured sev­er­al court loss­es, includ­ing in two nat­ur­al gas pipeline cas­es that we’ve writ­ten about before. Between the cas­es, the U.S. Court of Appeals for the D.C. Cir­cuit crit­i­cized FERC’s analy­sis of the need for a pipeline, its con­sid­er­a­tion of green­house gas emis­sions, and its eval­u­a­tion of envi­ron­men­tal jus­tice impacts. And this is not the first time that FERC has been rebuked for fail­ing to ade­quate­ly con­sid­er cli­mate impacts from its pipeline autho­riza­tions; how­ev­er, the sit­ting com­mis­sion­ers do not agree about how to pro­ceed in light of this grow­ing body of case law.

At a recent tech­ni­cal con­fer­ence to con­sid­er green­house gas mit­i­ga­tion in nat­ur­al gas infra­struc­ture autho­riza­tions, con­tin­u­ing debate on these issues was on dis­play. Chair­man Glick point­ed out the legal vul­ner­a­bil­i­ties asso­ci­at­ed with the Commission’s his­tor­i­cal prac­tice of treat[ing] green­house gas emis­sions dif­fer­ent­ly than every oth­er envi­ron­men­tal impact asso­ci­at­ed with the pro­posed pipeline.” Com­mis­sion­er James Dan­ly argued that FERC tak­ing on this issue would cause reg­u­la­to­ry uncer­tain­ty, rais­ing ques­tions about FERC’s legal author­i­ty. Com­mis­sion­er Alli­son Clements summed up that, as a result of court deci­sions and the fact that we’re in a dif­fer­ent place than we were in 1999” the agency should do a bet­ter job.”

In some cas­es, FERC chal­lenges do not make it to a deci­sion on the mer­its. The D.C. Cir­cuit recent­ly heard argu­ments over FERC’s autho­riza­tion of the Jor­dan Cove Ener­gy Project and the Pacif­ic Con­nec­tor Gas Pipeline, a liq­ue­fied nat­ur­al gas export project and pipeline in Ore­gon that has been paused by its devel­op­ers due to state per­mit denials. The court sent the case back to FERC to con­sid­er whether to pause the autho­riza­tions, and just yes­ter­day, the project devel­op­ers asked FERC to vacate the authorizations.

To fol­low FERC’s progress in address­ing all these issues, the State Impact Cen­ter launched a new track­er look­ing at how FERC does in court. The data so far show that in 2021, FERC saw an increase in its loss­es, with peti­tions for review denied in full in 56% of cas­es; in the oth­er 44% of cas­es, the court agreed, at least in part, with the peti­tion­er. In 2020, courts denied peti­tions for review in full in 80% of cas­es. The track­er will be updat­ed to include cas­es from ear­li­er years as well as with any new cas­es. Stay tuned to see what the new five-mem­ber FERC can do and how it fares in court.