The Federal Energy Regulatory Commission on Friday unanimously reinstated its approval of a New Jersey-area gas pipeline project owned by Transcontinental Gas Pipe Line Co., a Williams Co. subsidiary.
The agency also unanimously ended a proceeding for potentially changing its process for considering how proposed gas pipelines and other gas infrastructure can affect greenhouse gas emissions.
FERC in January 2023 approved Transco’s roughly $950 million Regional Energy Access expansion project in Pennsylvania, New Jersey and Maryland. Since then, the company brought the fully subscribed project into service. It increased Transco’s pipeline capacity by 829,000 dekatherms a day to provide fuel to local gas utilities.
However, the U.S. Court of Appeals for the District of Columbia Circuit in July vacated FERC’s certificate for the project. The court said FERC failed to explain why it dismissed studies showing that the pipeline may not be needed. Also, the commission’s decision not to determine the significance of the project’s greenhouse gas emissions was arbitrary and capricious, according to the court.
In its decision to reinstate the project’s permit, FERC reaffirmed its finding that the project was needed. FERC dismissed arguments that utilities would buy more capacity than they needed and foist the additional costs onto their ratepayers. New Jersey utility regulators, for example, will be able to review the prudency of the pipeline capacity contracts, according to FERC.
“Accordingly, we continue to find that precedent agreements with [local distribution companies] are probative of market need for new capacity, the same as any other precedent agreement, and that the precedent agreements supporting [Tranco’s] project are significant evidence of project need,” FERC said.
Without FERC’s action to reinstate the certificate, Transco would have had to take its facilities out of service on Jan. 28, according to the American Gas Association. “This scenario highlights the need for infrastructure permitting reform to ensure natural gas projects that enhance energy reliability and resiliency receive timely reviews, especially during freezing winter conditions affecting millions of Americans,” the trade group said.
In response to the court’s GHG ruling, FERC said it cannot determine the significance of a project’s GHG emissions and will instead continue to consider and contextualize GHG impacts on a case-by-case basis.
“We cannot characterize any project’s GHG emissions as significant or insignificant because we are unable to identify any accepted tool or method, including use of the social cost of GHGs, that would allow us to determine what level of GHG emissions’ contribution to adverse climate change impacts is significant,” FERC said.
In addition, no federal agency has established an accepted tool or method or a threshold for determining “significance” that the FERC could adopt, the agency said.
FERC ends GHG policy review
In a related move, FERC terminated its draft GHG policy statement proceeding. In February 2022, FERC released an interim GHG policy, explaining how it would assess carbon dioxide emissions from gas projects. About two months later, after major pushback from Congress, FERC downgraded the interim policy to a draft policy and took comments on it. FERC never used the draft policy.
“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 GHG policy statement,” FERC said.
In a concurrence, FERC’s Democratic commissioners — Judy Chang, Willie Phillips and David Rosner — said the agency’s approach to assessing GHG emissions will provide more certainty for all parties, fulfill the commission’s obligations to consider environmental impacts in its decisions and help the public understand how FERC makes its decisions.
Under FERC’s policy, the commission estimates “reasonably foreseeable” GHG emissions from a project, provides a discussion of potential harms from the emissions and, where possible, offers additional context by comparing estimated emissions to national and statewide emissions levels and by estimating the social cost of the emissions, the commissioners said.