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Comment Letters on FERC’s Proposed Policy Statements for Natural Gas Infrastructure

In February, the Federal Energy Regulatory Commission released two policy statements that acknowledged the Commission’s role in shaping the nation’s transition to a low-carbon future and called for the consideration of climate impacts in pipeline certificate proceedings. Today, the Institute for Policy Integrity filed two comment letters to these proposed policy statements.

In one of our comment letters—filed jointly with over two dozen legal scholars from institutes across the country—we rebut arguments from opponents of the policies that the Commission lacks authority to consider climate effects in its oversight of natural gas infrastructure under the Natural Gas Act. This letter provides extensive evidence from the past 80 years to establish that the Commission’s consideration of climate impacts in pipeline certificate proceedings is consistent with legislative design, regulatory precedent, and Supreme Court case law. It also rejects opponents’ argument that the consideration of climate impacts in certificate proceedings presents a major question of law that Congress has not delegated to the Commission, explaining how these policy statements do not remotely resemble the types of regulatory expansions to which the doctrine has previously been applied. 

In our other comment letter, we explain that the policy statements serve as an important step toward ensuring that upstream and downstream emissions are properly considered in line with the Commission’s statutory obligations, but provide several suggestions for improvements. First, the Commission should presume that upstream emissions are reasonably foreseeable and develop a default method for estimating emissions using national or regional information in the absence of project-specific information from the applicant or other stakeholders. Second, the Commission should ensure that any project-specific information on climate impacts align with information provided to justify project need. Third, the Commission should use the social cost of greenhouse gases when assessing climate impacts of a proposed project. Fourth, the Commission should ensure that it has a way to verify that mitigation efforts are additional and real, and should recognize that renewable energy credits (as they exist today) are not a good option for offsets as they do not necessarily result in a decrease in GHG emissions from overall energy use and production.

This comment letter also provides further support for the Draft Updated Certificate Policy Statement’s decision to move away from reliance on precedent agreements. The comments explain that even non-affiliate precedent agreements may be insufficient evidence of market need because these arrangements do not reflect social costs and benefits, and contracting decisions are not influenced by a robust objective indication of need for new investment. As such, the comments recommend that FERC generally require other market studies be presented to demonstrate market need.