Federal Energy Regulatory Commission Takes Critical Step on Natural Gas Infrastructure Reviews

New York, N.Y. — The Federal Energy Regulatory Commission (FERC) issued an Updated Certificate Policy Statement and an Interim Greenhouse Gas (GHG) Policy Statement at today’s open meeting, marking an important step towards long-awaited updates to its process for reviewing and authorizing natural gas pipeline projects. The Updated Certificate Policy Statement sets out the relevant factors for FERC to consider when an application for a new natural gas project is before it. As Commissioner Allison Clements stated at the meeting, the question of project need is a “gating question.” The four major interests to be evaluated are: “(1) the interests of the applicant’s existing customers; (2) the interests of existing pipelines and their captive customers; (3) environmental interests; and (4) the interests of landowners and surrounding communities, including environmental justice communities.” The Interim GHG Policy Statement outlines a process for quantifying a proposed project’s GHG emissions and determining if the emissions are significant.

FERC adopted both policy statements in a 3-2 split along party lines. The policy statements apply to pending and new projects. FERC is seeking comment on the Interim GHG Policy Statement through April 4. The two statements were not available in full as of the time of this press release.

“We are hopeful that projects will be subject to a truly robust public interest determination that takes seriously the adverse effects of projects on environmental justice communities and climate impacts,” said Jessica Bell, Deputy Director of the State Energy & Environmental Impact Center. “FERC has had some recent court losses thanks to its refusal to give environmental justice and climate impacts adequate attention, and it will be crucial to watch how these policies play out on a case-by-case basis.”

Background — In April 2018, FERC released a Notice of Inquiry (NOI) seeking public comment on potentially updating the 1999 policy statement that it uses to determine whether new interstate natural gas pipeline projects should qualify for a certificate of public convenience and necessity under the Natural Gas Act – a crucial step needed before a pipeline becomes operational. Massachusetts Attorney General Maura Healey led a coalition of seven AGs in filing comments on the 2018 NOI advising FERC that its policy statement has led to approval of natural gas pipelines beyond what was actually needed and results in deficient environmental analyses, and then-New York Attorney General Barbara Underwood also filed comments, noting the harms to landowners.

In February 2021, FERC issued another NOI, seeking supplemental comments and adding environmental justice considerations to its inquiry. AG Healey led a coalition of nine AGs in comments. The AGs highlighted the greenhouse gas emissions reduction goals in many states, which are closely examining the role of gas in their states and raising questions about the public need for new pipelines. The AGs pointed to FERC’s 2018 approval of a natural gas liquefaction project in Rhode Island that did not look at state climate goals and local environmental impacts as an example; the mayor of Providence had characterized the approval as “adding yet another environmental burden to the already overburdened communities of color in Providence” and called the facility “an affront to our city’s climate, energy and racial equity goals.” Nevada Attorney General Aaron Ford also filed comments, emphasizing that the construction of a pipeline that is not needed is not in the public interest. A separate coalition of AGs from 22 states filed comments in opposition to using the social cost of carbon in certificate evaluations. All comments in this proceeding are available in Docket No. PL18-1 in FERC’s eLibrary.

In a related docket, in November 2021, FERC held a technical conference to specifically gather information on options for greenhouse gas mitigation in the context of Natural Gas Act sections 3 and 7 authorizations. AG Healey led a coalition of eight AGs in comments urging FERC to assess the climate impacts of projects and to consider the effects of the projects as well as possible mitigation measures on environmental justice communities. A separate coalition of 19 states filed comments arguing that FERC lacks authority to include greenhouse gas mitigation in its certificate decisions. All comments in this proceeding are available in Docket No. PL21-3 in FERC’s eLibrary.

The Center’s resource documenting FERC’s recent win-loss record in court is available here.

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About the State Energy & Environmental Impact Center:
The State Energy & Environmental Impact Center at NYU School of Law is a nonpartisan academic center at NYU School of Law. The Center is dedicated to working towards a healthy and safe environment, guided by inclusive and equitable principles. The Center studies and supports the work of state attorneys general (AGs) in defending, enforcing, and promoting strong laws and policies in the areas of climate, environmental justice, environmental protection, and clean energy.