FERC issues new greenhouse gas, certificate policy statements

The Federal Energy Regulatory Commission (FERC) issued two policy statements last week, providing guidance for natural gas projects.

One is a certificate policy statement, and the other is an interim greenhouse gas (GHG) policy statement. They are intended to provide an analytical framework for many environmental and public interest issues that arise when companies seek to build new natural gas facilities. They also seek to improve the legal durability of FERC’s natural gas certificate and LNG (liquid natural gas) decisions following a series of court decisions raising concerns about FERC’s prior approach.

This is the first revision in more than 20 years to the Commission’s policy for the certification of new interstate natural gas projects under section 7 of the Natural Gas Act (NGA). The Updated Certificate Policy Statement reaffirms many of the goals and objectives of the Commission’s 1999 policy statement. Further, it clarifies how it will execute its public interest obligations under the Natural Gas Act. Specifically, the Commission intends to consider all proposed project impacts, including economic and environmental impacts, together. It also calls for a robust consideration of impacts to landowners and environmental justice communities in the decision-making process.

With the interim GHG Policy statement, the Commission explains how it will assess the impacts of natural gas infrastructure projects on climate change in its reviews under the National Environmental Policy Act and the Natural Gas Act. The interim policy sets a threshold of 100,000 metric tons per year of GHG emissions. Projects under consideration with emissions above that level will require the preparation of Environmental Impact Statements (EIS). This will include GHG emissions from construction and operation of the project and may include GHG emissions resulting from the upstream production and downstream combustion of transported gas.

FERC is seeking comment on the interim greenhouse gas policy statement. The guidance is subject to revision based on the record developed in this proceeding; however, FERC will begin applying the framework established in this policy statement in the interim.

“I believe today’s long overdue policy statements are essential to ensuring the Commission’s natural gas siting decisions are reflective of all stakeholder concerns and interests,” FERC Chairman Rich Glick said. “We have witnessed the impact on pipeline projects when federal agencies, including the Commission, fail to fulfill their statutory responsibilities assessing the potential effects of a project on the environment, landowners, and communities. If we are going to ensure legal durability of our orders, it is essential that the Commission satisfy its statutory obligations the first time.”

As policy statements, neither document establishes binding rules. They are intended to explain how the Commission will consider applications for natural gas project construction. They will apply only to pending and new projects. Those with projects now pending before the Commission will have the opportunity to supplement their records.