CEI Submits Comments on Federal Energy Regulatory Commission Consideration of Greenhouse Gases in Natural Gas Facility Permitting

CEI submitted comments yesterday addressing seven questions posed by the Federal Energy Regulatory Commission (FERC) on how the Commission should consider environmental impacts in public convenience and necessity determinations for interstate natural gas facilities. CEI’s comment letter argues that facility-level greenhouse gas (GHG) emissions have no significant impact on the human environment, and hence should be given no weight in determining whether a proposed interstate natural gas facility serves the public convenience and necessity.

Quick background. The Commission reviews applications to build interstate natural gas facilities (pipelines, storage fields, liquefied natural gas export facilities) under the National Gas Act (NGA) pursuant to the National Environmental Policy Act (NEPA). NEPA requires agencies to consider alternatives to the proposed action. In the case of interstate natural gas facilities, the action is the grant or denial of a Certificate of Public Convenience and Necessity under 15 U.S.C. § 717f(c)(1)(e). That section limits the alternatives the Commission must consider to (1) granting the Certificate, (2) denying the Certificate, or (3) granting the certificate with “such reasonable terms and conditions as the public convenience and necessity may require.”

The issue is fairly wonky but of interest to all who appreciate the critical importance of affordable energy to human survival and flourishing. There are forces abroad and in the land who oppose hydraulic fracturing and all new construction of fossil fuel-fuel infrastructure. Congress is unlikely to ban fracking or new construction. However, similar results could be accomplished if the Commission concludes that facility-level GHG emissions damage the public convenience. Over time, there would be less infrastructure to move gas to market. Energy companies will not frack what they cannot sell.

Whether or not any current or future Commissioners are sympathetic to the “Keep It in the Ground” agenda, making facility-level GHG emissions a factor in approvals of natural gas pipelines and liquefied natural gas (LNG) export facilities would incite more litigation and pressure campaigns against infrastructure projects with economic benefits vastly outweighing the hypothetical climate impacts.

What follows is a summary of CEI’s answers to seven questions posed by the Commission.

Q1. Should the Commission broaden its environmental analysis to consider alternatives beyond those that are currently included?

A1. CEI encourages the Commission to restrict, rather than broaden, its consideration of alternatives to those the Commission is required to assess by the NGA and NEPA. The Commission should avoid conflating the purpose of the action with the purpose of the project, as agencies routinely do in environmental impact statements. And it should not expand its alternatives analysis beyond current practice.

Q2. Are there any environmental impacts the Commission does not currently consider in its cumulative impact analysis that could be captured with a broader regional evaluation?

A2. The Commission should not bother estimating cumulative project-level GHG emissions, whether on a global or regional basis. The result in either case is the same: The facility’s emissions have no significant or even knowable effect on the human environment. The only value of estimating cumulative regional emissions would be political. It would provide larger, scarier-sounding emission totals to incite opposition to the project.

Q3. In conducting an analysis of a project, how could the Commission consider upstream impacts (for example, from the drilling of natural gas wells) and downstream end-use impacts?

A3. The Commission should not bother estimating upstream and downstream project-level GHG emissions. Long-term upstream and downstream emissions depend on energy-market and macroeconomic developments that are hard to foresee. Even the largest project’s direct and indirect GHG emissions have no significant effect on the human environment. An attempt to reduce upstream emissions would conflict with the Commission’s statutory mandate to increase energy production and the associated economic activity, job creation, and tax revenue. Controlling upstream and downstream emissions would require an impolitic and unauthorized encroachment on the power of states and foreign governments to regulate energy markets within their respective jurisdictions.

Q4. How could the Commission determine the significance of a project’s contribution to climate change? Is there any level of GHG emissions that would constitute a de minimis impact?

A4. There is no level of project-related GHG emissions that would not be de minimis. The Obama administration Council on Environmental Quality (CEQ) struggled for six years to explain how project-level GHG emissions that have no significant effect on the human environment could still be “meaningful” for purposes of NEPA review. It eventually gave up trying.

Q5. How would the Commission weigh a proposed project’s adverse impacts against favorable impacts to determine whether the proposed project is required by the public convenience and necessity?

A5. Project-level GHG emissions should carry no weight because such emissions have no significant impact on the human environment. If, under traditional criteria, a proposed natural gas facility is deemed to serve the public convenience and necessity, its economic and energy market benefits will far outweigh the unknowably small and remote impacts of its GHG emissions.

Q6. Does the NGA, NEPA, or other federal statute authorize or mandate the use of Social Cost of Carbon (SCC) analysis by the Commission in its consideration of certificate applications?

A6. The NGA and NEPA do not mandate the use of SCC analysis in public convenience and necessity determinations. Both statutes were enacted decades before agencies starting using SCC analysis, and neither statute has been amended to require its use. Even if SCC analysis were a useful tool in regulatory benefit-cost analysis (it is not), it would still not provide useful information for project authorizations, as the Commission argued, and the D.C. Circuit affirmed, in EarthReports, Inc. v. FERC (2016).

Q7. If the Commission chooses to use the SCC tool, how could it be used to determine whether a proposed project is required by the public convenience and necessity?

A7. Using SCC analysis to determine the public convenience and necessity of proposed projects would fatally compromise the objectivity of the Commission’s deliberations. The Commission’s SCC estimates would almost certainly be those of the Biden administration’s Interagency Working Group, which are egregiously biased. The IWG averages the results of three SCC estimation models, two of which effectively assign a dollar value of zero to the immense agricultural and ecological benefits of CO2 atmospheric enrichment. The IWG also uses four “reference” emission baselines that assume atmospheric concentrations over the coming centuries that could not be achieved even if the world adopted a collective goal of burning all economically recoverable fossil fuel reserves. Official SCC estimates are junk science. The Commission should leave their use to advocacy groups and more politicized agencies.