The D.C. Circuit Court of appeals issued a major rebuke to those who believe climate change is no longer relevant in environmental reviews. In Sierra Club v. FERC, No. 16-1329 (D.C. Cir. Aug. 22, 2017), the Court agreed with environmental groups, including the Sierra Club, that the Federal Energy Regulatory Commission (FERC) failed to adequately analyze greenhouse gas emissions as part of a $3.5 billion dollar natural gas pipeline project. The project involves construction of a 500 mile long pipeline through Florida.
FERC Review Authority
The Natural Gas Act (NGA) provides FERC the authority to review and approve interstate pipeline projects, including the environmental impacts associated with the project. Section 7 of the NGA requires the pipeline owner to obtain a "certificate of public convenience and necessity" from FERC (i.e. Section 7 Certificate). One component of the Section 7 review is compliance with the National Environmental Policy Act (NEPA) which includes FERC’s preparation of an "Environmental Impact Statement" (EIS).
The Sierra Club argued that the FERC, in performing it EIS, failed to adequately consider the impacts of emission of greenhouse gases associated with the project. Specifically, the pipeline would supply natural gas to power plants in Florida which would generate additional greenhouse gas emissions by burning natural gas.
The Court said NEPA required FERC to consider both direct and potentially indirect impacts from those emissions.
- Direct Impacts– quantitative estimate of the downstream greenhouse
emissions that will result from burning the gas transported by the pipeline or explain in detail why such a estimate cannot be provided;
- Indirect Impacts- the court did not specify what indirect impacts, which leaves open the question of whether the EIS must analysis whether greenhouse gas emissions will result in more severe storms, agricultural impacts, etc.
Impact of the Decision
First, the decision demonstrates greenhouse gas issues are still alive and well. FERC must take steps to analyze greenhouse gas emissions as part of its EIS review.
Second, the decision doesn’t mean the Court took a negative view of natural gas pipelines. In fact, the Court specifically stated there can be both negative and positive impacts in terms of greenhouse gas emissions from these project. For example, burning natural gas made available via the pipeline may allow higher emitting coal fired power plants to shut down thereby reducing greenhouse gas emissions overall.
Third, perhaps the biggest impact will be seen on challenges to other projects that must get FERC approval. The requirement to include evaluation of impacts of projects on greenhouse gas emissions could result in other projects being successfully challenged in Court and may also delay some projects in order to allow required analysis to be included as part of the EIS.