“FERC Unanimously Dumps GHG Policy for Evaluating Pipeline Projects”, By JIM WILLIS

“The commissioners, in their order to ditch the GHG guidelines, say that they don’t need a one-size-fits-all set of guidelines and have been successful with their case-by-case approach….”

FERC Unanimously Dumps GHG Policy for Evaluating Pipeline Projects

INDUSTRYWIDE ISSUES | PIPELINES | REGULATION

In February 2022, three Democrat Federal Energy Regulatory Commission (FERC) commissioners voted to adopt and immediately begin using new guidelines for approving pipeline projects by taking into account mythical global warming (GHG) factors (see FERC Democrats Ram Thru Global Warming Policy for Pipe Decisions). Barely a month later, in March, all five FERC commissioners, including then-Chairman Richard “Dick” Glick, voted to convert those new policies back into draft mode, meaning they don’t officially apply (see FERC’s Glick Does “Abrupt About-Face” on New Global Warming Regs). Since that time, the agency has used the guidelines in an unofficial capacity when evaluating pipeline projects. No more. Last Friday, all five FERC commissioners (three Democrats and two Republicans) voted to ditch the draft GHG guidelines for good. As Lord Obama famously said, “Elections have consequences!”

The commissioners, in their order to ditch the GHG guidelines, say that they don’t need a one-size-fits-all set of guidelines and have been successful with their case-by-case approach to evaluating whether or not a given project will unduly toast Mom Earth.

FERC’s action on Friday definitively closes the door on one of the commission’s most contentious proceedings under former Chairman Dick Glick, who had long called for the agency to weigh the climate impacts of new fossil fuel infrastructure in assessing the need for pipelines and LNG terminals. It also marks the first major policy move by new Chairman Mark Christie, who fiercely opposed the policy statement and was selected to lead the agency by President Donald Trump last week. It portends good things to come under Christie’s chairmanship.

The news from RTO Insider:

FERC on Jan. 24 issued an order terminating its proceeding on the consideration of greenhouse gas emissions in natural gas infrastructure project reviews (PL21-3).

“Having thoroughly reviewed that record, we are now withdrawing the draft GHG policy statement and closing that proceeding,” FERC said. “We find, based on the record that has been developed, that the issues addressed in that proceeding are, in general, better considered on a case-by-case basis, when raised by parties to those proceedings, as the commission has done following the issuance of the draft.”

The proposed policy statement dates back to former Chair Richard Glick’s tenure, and opposition to it from former Sen. Joe Manchin (I-W.Va.) helped sink his re-nomination. FERC did not move forward on the draft for the rest of President Joe Biden’s term, during which Commissioner Willie Phillips served as chair. (See Glick’s FERC Tenure in Peril as Manchin Balks at Renomination Hearing.)

FERC had issued the policy statement in February 2022, explaining that it would presume that projects with estimated GHG emissions of at least 100,000 metric tons of carbon dioxide equivalent per year will have a significant impact on climate change — requiring that the commission conduct an environmental impact statement — unless the developer can rebut that presumption with evidence. The policy was strongly opposed by Republican Commissioners James Danly and Mark Christie (the latter of whom became chair Jan. 20).

But a month later, FERC walked back the policy, labeling the statement as a draft and inviting comments on it, on top of the tens of thousands of comments it had already received when it issued its Notice of Inquiry the year before. (See FERC Backtracks on Gas Policy Updates.) The commission simultaneously did the same thing with a separate statement that updated its 1999 policy on granting gas pipelines certificates of public convenience and necessity. That docket began with an NOI issued in 2018 and was only mentioned in last week’s brief order (PL18-1).

All three Democratic commissioners — Phillips, David Rosner and Judy Chang — wrote a joint concurrence, saying that since they have been on FERC, they have followed the law when evaluating applications for natural gas infrastructure.

“The consideration of greenhouse gas emissions in our review of natural gas infrastructure projects has been one of the most challenging issues before the commission for several years,” they said. “The extent to which the commission must account for the project’s GHG emissions and in turn the impacts on global climate change has been debated and litigated at length before the commission and the courts.”

The courts have continued to hand down rulings on cases that implicate FERC’s environmental reviews of gas infrastructure, including remanding cases in which they find its analysis lacking, the Democrats said.

While the policy statement is being dropped, the three commissioners said it has provided information that has proven useful for FERC as it developed its current, bipartisan case-by-case approaching to reviewing the climate impacts of natural gas infrastructure.

FERC’s approach to GHGs has evolved, and in complying with the National Environmental Policy Act, it estimates reasonably foreseeable emissions attributable to a proposed project; provides a qualitative discussion on potential adverse impacts from those emissions; compares them to state or national levels; and calculates monetized values, the commissioners said. FERC also expects developers to evaluate technically and economically feasible strategies to cut emissions during construction and operation.

“All of our colleagues have joined us on orders using this approach to comply with our NGA and NEPA obligations,” the Democrats said. “Critically, the courts have upheld it. If this approach is continued, it will provide more certainty for all parties and stakeholders, fulfill the commission’s obligations to consider environmental impacts in its decisions and inform the public regarding the basis for those decisions.” (1)

Copy of the FERC order terminating the GHG draft guidelines:

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The Institute for Energy Research praised the quick action by Mark Christie and the full commission in ditching the GHG guidelines:

Under the leadership of newly installed Chairman Mark Christie, the Federal Energy Regulatory Commission (FERC) officially ended its misguided effort to revise its greenhouse gas policy statements on Friday.

This decision ends one of the commission’s most disruptive initiatives under former Chair Richard Glick. Glick had long advocated for the agency to subject new natural gas infrastructure to increased regulatory hurdles under the guise of mitigating the impacts of climate change. The policy would have impacted natural gas pipelines and LNG terminals in particular.

Prompted by these actions under then Chairman Glick, the Institute for Energy Research (IER) launched the FERC Transparency Project. IER criticized these policies for intentionally increasing litigation and delays in pipeline development, conflicting with FERC’s mission to ensure reliable gas supplies at a reasonable cost. IER also pursued several Freedom of Information Act (FOIA) requests to investigate the details behind the policy shift, particularly whether external political pressures from the White House influenced FERC’s decision-making process. IER was repeatedly stonewalled in our requests for transparency, having had to sue the agency on multiple requests. It was revealed, however, that Chairman Glick had multiple meetings with White House officials, especially in and around the time the policy statements were proposed.

Tom Pyle, President of the Institute for Energy Research, issued the following statement:

“I’m very glad to see that Chairman Christie’s leadership is immediately having a positive impact. During Chairman Glick’s tenure, FERC tried to impose an impossible standard on the approval of natural gas pipelines, which would have marked a clear departure from the agency’s statutory mission.

“We are very pleased that Chairman Christie’s first major action is to steer FERC back toward its statutory mandate, which is to ensure reliable gas supplies at a reasonable cost to consumers. Let’s hope he takes another important step of improving transparency at the agency, especially when it comes to the Freedom of Information Act.”

The decision announced on Friday is the first major policy action by Chair Mark Christie, who strongly opposed the proposed policy statement. Christie was appointed to lead FERC by President Donald Trump last week. (2)

(1) RTO Insider/James Downing (Jan 27, 2025) – FERC Drops Consideration of GHG Policy Statement for Gas Infrastructure

(2) Institute for Energy Research (Jan 28, 2025) – FERC Ditches Disastrous Pipeline Policy Stance