Legal Updates

The potential impacts from the climate policy changes to the Federal Energy Regulatory Commission (FERC) regulations continue to evolve. Public comments have been submitted by environmental groups, industry groups and states in response to the FERC's proposed climate policy changes to the gas infrastructure approval process. The proposed policies, voted on by FERC in February, include a revision of FERC’s pipeline approval policy to require consideration of the potential effects of proposed pipelines on landowners, environmental justice communities, and the environment. FERC also issued an interim policy statement for gauging the impacts of gas projects’ greenhouse gas (GHG) emissions; this policy alone would subject nearly all new projects to stricter, more comprehensive reviews. Due to public backlash regarding these more stringent reviews, FERC voted last month to revert the revised pipeline certificate policy statement and an interim statement for gauging greenhouse gas emission impacts to draft status. This decision allowed for additional public comment regarding the proposed changes.

Industry groups argue that the proposed policies exceed FERC’s authority under the Natural Gas Act and National Environmental Policy Act and will delay or even stall new gas infrastructure development. Such delays and uncertainty regarding gas infrastructure development could also impact utilities’ ability to switch from coal and other fuels in the electric sector’s ongoing clean energy transitions.

FERC’s response to comments is due on May 25. While submitted comments will be considered, the FERC will likely adopt changes that will create additional requirements for future gas project applications, including consideration of a proposed project’s:

• Impacts on existing pipelines, including whether customers will pay for unsubscribed capacity resulting from overbuilding of new lines;
• Impacts on landowners, including minimization of the use of eminent domain to acquire lands;
• Impacts on the environment, including effects on climate change and the project’s reasonably foreseeable GHG emissions, including from construction, operation and downstream combustion of transported gas (proposed projects with 100,000 metric tons per year of CO2e emissions will be presumed to have a significant impact on climate change); and
• Impacts on environmental justice communities, including tailoring mitigation options to meet the needs of different communities.

Connell Foley will continue to monitor the development of these FERC policies and their impact on the gas and utility industry. For any questions regarding the scope of these proposed policies and their potential effect on prospective or pending gas projects, please contact our Environmental Law Group.