October 8, 2021

FERC Chairman Signals Enhanced Environmental Review

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips | Brendan H. Connors
Energy and Natural Resources Blog

In a recently published letter, Federal Energy Regulatory Commission (FERC) Chairman Richard Glick indicated that the commission would strengthen its scrutiny of greenhouse gas emissions when evaluating certificate applications for interstate natural gas projects.

The letter, dated Sept. 24, 2021, responded to certain questions posed to Chairman Glick from Sen. John Barrasso (R-Wyo.), the Senate Energy and Natural Resources Committee's ranking member, regarding FERC's handling of its responsibilities under the Natural Gas Act (NGA) and National Environmental Policy Act (NEPA). In his response to Sen. Barrasso, Chairman Glick defended FERC's process for assessing certificate applications for authorization of natural gas projects, and he reiterated his long-held position that the commission in recent years had inadequately satisfied its obligations under the NGA and NEPA to evaluate the "reasonably foreseeable" upstream and downstream greenhouse gas emissions of such projects when determining whether to authorize them.

Citing two recent decisions by the U.S. Court of Appeals for the District of Columbia Circuit in which the court either vacated or remanded FERC's authorization of natural gas projects due to insufficient analysis of greenhouse gas emissions and environmental justice impacts, Chairman Glick noted that he had directed commission staff to conduct additional analysis of the environmental documents submitted along with certificate applications to ensure that FERC orders on them are "legally durable documents" on which natural gas developers could rely. Conceding that these developers had a justified interest in receiving a prompt decision from FERC on their certificate applications, Chairman Glick observed that he had joined the majority of his fellow commissioners in approving certificates to gas projects that presented relatively little legal risk, even where he had individual reservations about the environmental analysis underlying the projects. He opined that this approach appropriately balanced FERC's statutory obligations with developers' interest in receiving a prompt decision.

As Chairman Glick notes in his letter, these discrete adjudications are occurring while FERC is simultaneously exploring a more generalized – and definitive – policy change in this arena. In February 2021, FERC issued a notice of inquiry (NOI) seeking information and comments from stakeholders on whether it should revise its 1999 policy statement on certifying new interstate natural gas transportation facilities. Although the 1999 policy statement had identified a project's environmental effects as one of several factors that FERC would consider when assessing certificate applications, the February 2021 NOI asks whether the commission should broaden the scope of that analysis, including the possible effect that a given project would have on historically marginalized "environmental justice communities." Although the comment period on the NOI closed on May 26, 2021, FERC has yet to act further on it.

Chairman Glick's letter to Sen. Barrasso suggests strongly that he will continue to prioritize this issue during his tenure. With the commission's membership currently divided evenly between two Democrats (Glick and Allison Clements) and two Republicans (James Danly and Mark Christie), how proactive FERC will be in this area will likely depend on whether President Joe Biden's recent nominee to the commission, Willie L. Phillips Jr., is approved by the Senate and, if so, whether he will be as forceful on this issue as Chairman Glick is.

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