FERC, Programmatic Analysis and the Shale Gas Boom Going Bust

Several newly proposed pipelines have many in the environmental community worried that no one is minding the bigger picture. FERC confirms that they should worry.

The Federal Energy Regulatory Commission (FERC) is the successor-agency to one of the National Environmental Policy Act’s (NEPA) principal catalysts, the now-defunct Federal Power Commission (FPC).  The FPC was renowned for its ham-handed exclusion of environmentalists and other intervenors as it was licensing dams and other hydro projects in the 1960s.  So recalcitrant and cozy with its clientele had FPC become that not only did Congress enact NEPA to reform its decision-making (and that of similar agencies).  The Supreme Court once vacated FPC licenses and sternly ordered the agency to actually study the resources in question and develop its own alternatives to the licensees’ plans after FPC had just rubber-stamped the applicants’ contentions.  See Udall v. Federal Power Comm’n, 387 U.S. 428 (1967); see also Scenic Hudson Preserv. Conf. v. FPC, 354 F.2d 608 (2d Cir. 1965).

Congress eventually disbanded the FPC and distributed the pieces into different agencies. The FERC of today would do well to recall that history, if not because Congress will disband it anytime soon then because FERC’s very origins stem from a public demand to put energy infrastructure choices in the public eye and to have them made with the fullest balancing of all the relevant factors.

So the news of a coalition forming against FERC and its business-as-usual rush to approve a slew of pipeline applications pursuant to the Natural Gas Act feels a little familiar.

As we at the Lab have noted before, FERC’s record on ferc_sealtaking an adequate “hard look” at its actions under NEPA is something less than it could (and should) be.  When questioned about the possibility of a “programmatic” environmental impact statement (PEIS) examining the three—soon to be four—related pipeline proposals before the agency in tandem, the agency let out an audible guffaw.   Indeed, a FERC spokesperson responded to that inquiry by noting that the commission “does not engage in regional planning exercises that would result in the selection of one project over another,” and that the agency typically prefers to “allow market forces to influence where projects would be situated.”

Section 7 of the Natural Gas Act requires FERC to decide if any pipeline like this is in the “public convenience and necessity.”  That may be a vague standard, but one thing it does not excuse is complete deference to the contentions (or profit margins) of applicants.  So how does NEPA intersect this discretion at FERC?

Nothing in the applicable regulations specifically require the preparation of PEISs.  The Council on Environmental Quality’s rules—which probably bind FERC—say only that “agencies may find it useful” to prepare broadly applicable analyses where multiple actions share a common region, common timing, impacts, alternatives, methods of implementation, media or subject matter.  40 C.F.R. § 1502.4(c)(2).

Should FERC prepare one omnibus EIS for these pipelines?

Pipelines Will Make Tapping the Marcellus Easier, Cheaper, and More Profitable

The four projects all have this in common: they’re designed to get natural gas from the places where it is produced by shale fracking—the Appalachians from southwestern Virginia north to New York’s southern tier—to more densely populated regions to the east and the south.

Combined, they will have the capacity to move 3.5B cubic feet of gas per day—a hefty conduit indeed.  In fact, when the folks from Natural Gas Intel queried FERC about the two major pipelines being proposed (known as Mountain Valley and Atlantic Coast), FERC allowed that these two were being weighed in tandem with one another, given their obvious overlaps.

Of course, if that’s the case then the agency may have a concrete “proposal” before it that merits consideration as a whole.  The few cases that have gone against agencies on the need for a programmatic EIS have done so because an actual, unifying proposal was formed and considered.  See, e.g., Environmental Defense Fund, Inc. v. Adams, 434 F. Supp. 403 (D.D.C. 1977); Scientists’ Inst. For Pub. Info. v. Atomic Energy Comm’n, 481 F.2d 1079 (D.C. Cir. 1973).Atlantic-Coast-Mountain-Valley-Potential-Collocation-Routing-Options-20150731

The new pipelines certainly are unpopular with many locals.  Many get the feeling that it’s a rush to build at a time of historically low prices:

The Atlantic Coast and Mountain Valley pipeline proposals have met with strong public opposition from the Virginia communities in their paths. A third project expanding Columbia’s transport capabilities would use even more of the region’s lands, and a fourth, the Appalachian Connector, is coming behind them.

Yet a much bigger issue—one far more important than that FERC coordinate with the Forest Service or the Corps of Engineers to minimize the surface damage these installations will cause—is the commitment they will make to still more domestic fossil fuel development.  Pipelines of this kind mean sunk costs. These investments in further, deeper Marcellus development will anchor us to future natural gas consumption in a way that, without a directed and detailed analysis, we simply won’t appreciate before the corner is turned.  Pipelines enhance gas’s “grid competitiveness,” to say nothing of the retail market in sources of BTUs.  Lots of thoughtful people talk about gas as a “bridge” fuel between coal and whatever comes after fossil fuels.  See, e.g., Daniel Yergin, The Quest: Energy, Security, and the Remaking of the Modern World 327-344 (2012).  But how massive a bridge should we build?

Regional, National, Other?

So is FERC legally obliged to prepare a PEIS for these pipelines?  The answer is almost certainly “no.”  Only once did the Supreme Court hear a claim like this and it firmly (if also gently) declined to read NEPA § 102(2)(C) to require that whole policies be analyzed instead of the component actions comprising them.  See Kleppe v. Sierra Club, 427 U.S. 390, 409-12 (1976).

But a different tack in these pipeline applications and FERC’s approach could make a big difference, perhaps in a lawsuit should one be filed.  Rather than arguing that the Piedmont corridor being planned for the pipelines is entitled to some broader-scaled review of the several installations combined, the opponents might do well to argue that FERC’s refusal to examine its applications in the broader socio-economic and political context is failing us all—failing America.  For NEPA implores

all agencies of the Federal Government [to] . . . study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.

42 U.S.C. § 4332(2)(E). This requirement has nothing to do with any discrete proposal’s likely impacts on the environment, their relative significance, or the alternatives that simply mitigate impacts of a discrete means/ends action.  It is rather a duty to “study” and “develop” alternatives wherever they may aid us in making different “uses of available resources.”

As we’ve written about before here  (and here and here), this “alternatives” mandate in NEPA § 102(2)(E) is a separate duty, independent of and apart from the “detailed statement” mandate of § 102(2)(C).

The regional groups like Preserve Craig and others (with the Sierra Club’s help) can certainly make the case that local surface and other disturbances from the installation aren’t worth the benefits.  But they are hardly positioned to do the kind of alternatives analysis of “the resource,” i.e., the atmosphere’s sinking services and/or the energy locked within the Marcellus shale, that FERC is positioned to prepare about this level of Marcellus development.

If the Natural Gas Act’s public interest mandate means anything, it is that FERC ought not to adjudicate its private applicants’ wish lists seriatim with no attention to the public’s larger, more strategically-informed welfare.  If NEPA’s statement of purposes and mandates to “all Federal Agencies” mean anything, it is that FERC—when it stands in the shoes of the United States—bears the awesome responsibility of balancing the many factors comprising the public interest.  And how could FERC possibly do that with multiple disconnected yet voluminous EISs about projects that literally bear the very same trade-offs, risks, and timing yet ignore the greenhouse gas implications of an accelerated Marcellus build-out?

One local news program painted the trade-offs starkly, noting that pipeline opponents bear the proof burden given one pipeline’s promise of 4,400 jobs, $165M in labor income and $34M in state and local tax revenues from the project.

But the trade-offs are much broader than that.  As we better estimate what’s left of our atmosphere’s capacity as a sink, it is becoming increasingly clear how much of our “proven” reserves of fossil fuels must remain in place if we are to avoid catastrophic climate disruption.  That is the sort of analysis that should be making waves at FERC today.

{Image: Protest @ FERC HQ}

I teach environmental, natural resources, and administrative law at Penn State Law. Before teaching I was an enforcement lawyer at U.S. EPA. Along the way I've done work for environmental nonprofits and written a fair bit about NEPA.
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