FERC must fix its broken approach to pipelines

Democrats have the opportunity to reshape the pipeline approval process to account for climate impacts.

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Sarah Ladin is an attorney and Max Sarinsky is a senior attorney at the Institute for Policy Integrity at NYU School of Law. This contributed content represents the views of the authors, not those of Canary Media or of NYU School of Law.

Experts worldwide agree that avoiding the most devastating impacts of climate change will require a speedy transition away from fossil fuels. Yet in recent years, the U.S. federal government has rubber-stamped nearly every proposal advanced to construct natural-gas pipelines. This practice locks in fossil fuel infrastructure for decades and forces consumers to pay for pipelines that are not needed now or in the future.

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It’s time to change course and take an approach that avoids bad investments and climate pollution. The Federal Energy Regulatory Commission, the government agency that oversees interstate pipelines, has broad authority to act in the public interest in assessing pipeline applications. The commission should use its authority to meaningfully consider climate impacts and reject proposals that are inconsistent with national energy needs. While an ongoing proceeding offers FERC the opportunity to revise its policies, it will likely require a change in the commission’s membership later this year to allow these crucially important reforms to occur.

The debate over FERC’s pipeline approval policy erupted into public view late last month at a tense meeting during which two pipeline extension projects were approved in a 3 – 2 vote along party lines. Despite the well-recognized link between pipelines and climate change, FERC’s three Republican commissioners dismissed the proposals’ climate-change impacts as insignificant and approved both applications over calls for further study from the two dissenting Democratic commissioners.

The emissions impacts from the two proposals are hardly trivial. One of the projects, located in eastern Minnesota, will be the source of up to 925,000 metric tons of greenhouse gas emissions per year, which translates to roughly $50 million in annual climate-change costs, according to calculations based on widely used, conservative climate-damage valuations from the federal government. The total direct construction costs of the project are approximately $57 million — an amount vastly exceeded by the approximately $500 million in climate-change costs expected to accrue over the life of the initial contracts.

Yet immediately after calculating the project’s emissions, the majority abruptly concluded that the project’s climate impacts are insignificant and do not merit further attention.

The commission’s dismissive approach to the climate impacts of these projects is its latest evasion of its responsibility to fully consider whether a pipeline would serve the public interest. In 2017, the U.S. Court of Appeals for the D.C. Circuit found that FERC’s practice of ignoring the greenhouse gas emissions resulting from the combustion of natural gas is unlawful.

FERC disregarded that ruling in the years that followed, offering an array of excuses for its failure to quantify combustion emissions and drawing further rebuke from the D.C. Circuit for its less-than-dogged” assessments. At a February oral argument, a D.C. Circuit panel harshly criticized the commission for dodging its prior rulings and continuing to disregard greenhouse gas emissions.

While the two approvals last week attempt to sidestep these court rulings by quantifying greenhouse gas emissions from combustion, FERC now falsely claims those emissions are trivial and irrelevant to its decision-making.

At the same time, the commission has prioritized often questionable evidence from project applicants purporting to show market demand for proposed pipelines. FERC has repeatedly approved applications, regardless of their environmental impacts or evidence that the projects are unnecessary, so long as there is a private contract to transport some gas through the pipeline. In fact, FERC has approved all but two of more than 400 pipeline proposals it has received since 1999. The result is an overbuilt pipeline network that is causing extensive pollution, harming landowners and local communities, hindering efforts to transition away from fossil fuels, and placing unnecessary costs and risk on consumers for infrastructure that will be underutilized or even stranded.

Richard Glick was appointed as FERC chair by President Biden in January. Since joining the commission in 2017, he has laid out a different path, repeatedly raising alarms about the dismissal of climate-change impacts and urging FERC to take a more balanced approach to considering pipeline applications. One of Glick’s first actions after being named as chair was to release a notice of inquiry seeking public input on reforming the pipeline approval process from the ground up. The comment period closed on Wednesday.

As we explain in our comments, there are numerous steps FERC can take to restore balance to the pipeline approval process and accord environmental and climate concerns their due weight. To start, the commission should cease its practice of relying exclusively on private contracts as a proxy for the public interest. Instead, it should perform a holistic assessment in which it weighs all costs and benefits of the proposed pipeline, including environmental and public health externalities. As part of that assessment, FERC should use all available tools to quantify and monetize greenhouse gas emissions. And when FERC does opt to approve a pipeline, it should impose stringent environmental and greenhouse gas mitigation measures such as limiting pipeline transport and operation hours, or requiring developers to offset greenhouse gas emissions.

But any changes to FERC’s policies require three votes, and for now Chairman Glick and fellow Democrat Allison Clements remain in the minority. With the term of Republican Commissioner Neil Chatterjee expiring at the end of June, this could change soon. The impending vacancy provides an important opportunity for the Biden administration to advance its climate ambitions and promote an efficient, clean and just transition from fossil fuels to renewable energy. The White House and U.S. Senate must prioritize filling this vacancy quickly with a candidate who will further Glick’s efforts to restore balance to the pipeline approval process.

Our nation’s energy transition depends on a federal regulator that recognizes the role of fossil-fuel pipelines in exacerbating climate change and is ready to push back against industry demands to build unnecessary infrastructure. The next few months will reveal whether FERC is up to that task.

(Article image courtesy of Roman Pentin) 

Max Sarinsky is a senior attorney at the Institute for Policy Integrity at NYU School of Law.

Sarah Ladin is an attorney at the Institute for Policy Integrity at NYU School of Law.