New FERC pipeline policy a step towards fairer system

On Thursday the Senate Energy and Natural Resources Committee will discuss a recent Federal Energy Regulatory Commission (FERC) commitment to account for the climate and environmental justice impacts of new fracked gas pipeline proposals.

On a 3-2 vote at their Feb. 17 meeting, the commission approved a new policy statement on interstate gas pipelines, as well as an interim policy statement on policies for considering greenhouse gas emissions, which the public can comment on through April 4.

Given the overheated political rhetoric from politicians, you’d assume these policies are radical departures from what the law already requires of FERC. But the policy statements reaffirm that FERC will do what is required under the law - multiple court decisions in recent years have confirmed that this sort of analysis is a core part of the agency’s mission. Courts have repeatedly found that the agency hadn’t been meeting their existing legal obligations under the previous policy, the Natural Gas Act, and the National Environmental Policy Act.

In their policy statements, FERC promises to review proposed pipelines by:

• Requiring companies to demonstrate that the pipeline is actually serving a public need. FERC reaffirmed its commitment to consider “all relevant factors” bearing on the need for a project, rather than relying solely on precedent agreements - contracts between a pipeline developer and end user. A court recently invalidated a FERC permit for the Spire pipeline in St. Louis, because the agency relied on contracts that the developer signed with their own subsidiary companies to show there was a market for the gas. This kind of “self-dealing” has been criticized by environmental and consumer groups for years, but has served as justification for a number of major pipelines in recent years, risking unnecessarily higher energy costs for the public and decades of additional climate pollution.

• Considering the impact the project will have on environmental justice communities and people whose land is taken by eminent domain. The agency has never denied permits for a gas project on environmental justice grounds, despite growing evidence that pipelines and associated compressor stations are disproportionately located in marginalized communities.

• Considering the climate pollution that the project will cause, including foreseeable greenhouse gas emissions from combusting the gas that a pipeline transports, as well as the methane that is released when gas is transported. Gas is primarily composed of methane - a greenhouse gas 84 times as potent as carbon dioxide - and at least one-third of methane in the atmosphere comes from the oil and gas industry. Under the interim policy, FERC is encouraging developers to propose mitigation for the climate pollution caused by a proposed project.

Again, under existing law, FERC already must determine whether a proposed pipeline is actually needed, and already must properly consider a proposed pipeline’s environmental impacts – including climate impacts and environmental justice impacts. The extreme rhetoric coming from GOP politicians speaks to the fact that the fossil fuel industry is concerned that FERC might no longer be a reliable rubberstamp for gas expansion. FERC has denied a grand total of 2 pipeline projects in the last 20 years, while approving more than 500.

Sierra Club legal and policy experts are available to dive deeper into the meaning of this decision.

Kelly Sheehan, Senior Director of Energy Campaigns at the Sierra Club, issued the following statement:

“The science is crystal clear: we can’t avoid the worst impacts of the climate crisis if we keep building out fracked gas pipelines that will be with us for decades to come. FERC has approved thousands of miles of new pipeline in recent years without adequately taking into account the impacts to our climate, energy bills and the health of nearby communities - particularly communities of color. The agency’s recent commitment to do better is an important step towards a fairer system that works for everyone - not just pipeline company executives and investors.”