March 2020, Vol. 247, No. 3


Federal Regulatory Actions Ease Pipeline Construction

Stephen Barlas, Contributing Editor, Washington, D.C.

Two key Trump administration environmental regulators have made moves to wipe away potential barriers to new pipeline construction. The White House Council on Environmental Quality (CEQ) issued a proposed rule that would make it more difficult for environmentalists to block infrastructure construction because of concerns raised about the project’s creation of greenhouse gas (GHG) emissions.

Over the past few years, the Federal Energy Regulatory Commission (FERC) has considered GHG emissions that might occur upstream and downstream from new pipeline construction but declined to nix the projects. 

Environmental groups and FERC Commissioner Richard Glick have criticized FERC’s refusal as not complying with federal court decisions. The CEQ proposed rule, if it becomes final in the proposed form, would give FERC’s pro-pipeline inclinations new regulatory ammunition against opponents raising the flag of “climate change.”

The Environmental Protection Agency’s (EPA) final rule on what bodies of water are considered wetlands removes a somewhat more indirect threat to pipeline construction. By reducing the waters considered to be wetlands, the EPA reduces the occasions when pipeline companies have to apply to the Army Corps of Engineers and the EPA for a permit to cross a wetland. National Wetlands Permit No. 12 is specifically designed for pipelines.  

“Nationwide Permit 12 is a vital tool for the construction of necessary gathering infrastructure while protecting the environment,” said Matthew Hite, vice president of Government Affairs, GPA Midstream Association. “Under the new WOTUS [waters of the U.S.] final rule, our reading of it will not require gathering lines to get a permit for ephemeral or isolated streams. But the permit will still be important for crossing major streams and their tributaries.” 

The CEQ proposed rule has the more important potential ramifications for pipeline construction given the recent, more frequent objections raised by environmental groups to new pipeline construction in the context of FERC proceedings. 

Before he left office in January, Don Santa, president and chief executive officer of the Interstate Natural Gas Association of America, praised the CEQ’s interpretation of the National Environmental Policy Act (NEPA), which mandates that federal agencies, including FERC, assess the impact of human health and the environment before approving new projects. That requirement applies to pipeline, highway, port and many other types of construction considered by a variety of federal agencies, not just FERC.

“The lack of clarity in the existing NEPA regulations has led courts to fill the gaps, spurring costly litigation, and has led to unclear expectations, which has caused significant and unnecessary delays for infrastructure projects across the country,” Santa said. “The Council on Environmental Quality’s proposed rule is an important step in restoring the intent of NEPA by ensuring that federal agencies focus their attention on significant impacts to the environment that are relevant to their decision-making authorities.”

The Natural Resources Defense Council (NRDC) criticized both the CEQ and EPA actions. In the latter case, Jon Devine, director, Federal Water Policy, Water Division, Nature Program, pointed out that the EPA final rule was criticized by the EPA Science Advisory Board whose members have been appointed by President Trump. 

Gina McCarthy, former EPA administrator under President Obama, now president and chief executive officer at the NRDC, said about the CEQ’s proposed changes to NEPA, “We will use every tool in our toolbox to stop this dangerous move and safeguard our children’s future.”

Over the last few years, FERC has navigated around two separate, but related, decisions issued by the U.S. Court of Appeals for the District of Columbia Circuit. The first in 2017 involved a Sierra Club protest of FERC’s approval of the Spectra Energy Partners and others’ Sabal Trail pipeline in Florida, a 517-mile (832-km) interstate natural gas pipeline providing transportation services for power generation needs to Florida Power and Light and Duke Energy of Florida. 

The second in 2019 focused on the Sierra Club’s contention that FERC had not heeded the Court’s Sabal decision in approving a Tennessee Gas Pipeline Co. compressor station, part of the Broad Run Expansion project.

In both instances, FERC approval of the projects stood, though the federal court said in both instances that FERC had to consider direct and indirect greenhouse emissions as part of an environmental review. But, in the 2019 decision, the court on the one hand emphasized its earlier Sierra Club decision did not establish a general rule that downstream gas consumption impacts are “always” reasonably foreseeable indirect impacts while making it clear FERC had to quantify GHG emissions caused by a project.

Commissioner Richard Glick cited both court cases in arguing in a number of 2019 dissents that FERC had not followed the court’s directions. In May 2019, he protested FERC approval of the Transcontinental Gas Pipe Line Company’s (Transco) proposed Northeast Supply Enhancement Project because the Commission “again refuses to assess the significance of the Project’s contribution to climate change … and to identify or consider the Project’s reasonably foreseeable impacts on upstream or downstream GHG emissions.”  

Then, in November 2019, he dissented from FERC’s order authorizing El Paso Natural Gas Company’s proposed South Mainline Expansion Project. There he said, “The United States Court of Appeals for the District of Columbia Circuit has repeatedly criticized the Commission for its stubborn refusal to identify and consider the reasonably foreseeable GHG emissions caused by the downstream combustion of natural gas transported through an interstate pipeline. But even so, today’s order doubles down on approaches that the D.C. Circuit has already rejected.”

In essence, the CEQ proposed rule strengthens the non-Glick FERC commissioners’ position that GHG emissions from a pipeline or compressor project can be minimized for a number of reasons when an environmental impact statement is prepared. 

A key element of the proposal is that GHG emissions must be “reasonably foreseeable” and have a “reasonably close causal relationship to the proposed action or alternatives.” CEQ’s proposed NEPA Update Rule strikes the current requirement to consider “indirect” and “cumulative” impacts, which the CEQ notes are not terms used in NEPA. The CEQ explains that effects should not be considered if they are “remote in time, geographically remote or the product of a long causal chain.”  

The narrower issue addressed by the EPA final rule is what water bodies crossed by new pipelines and other infrastructure projects are required to get Clean Water permits from the Army Corps of Engineers and the EPA. Pipeline crossings typically require obtaining a Nationwide Wetlands Permit (NWP), which, in the case of pipelines, normally means at a minimum NWP 12, which applies to utilities. 

NWP 12 can be used only if the activity (e.g., a water crossing) does not result in the loss of more than 0.5 acres of waters in the United States. The Corps estimates that NWP 12 is used on average approximately 11,500 times per year on a national basis.

Groups such as the Texas Pipeline Assoc-iation and GPA Midstream had pushed the EPA to narrow the instances in which NWP 12 was necessary via clarification of some language that had evolved, both during the Obama administration, which issued a final rule in 2015 and in a number of Supreme Court decisions. 

The EPA’s final rule, according to the law firm Van Ness Feldman, “substantially narrows the scope of waterbodies subject to regulation under the Clean Water Act – notably removing interstate streams as a separate jurisdictional category; excluding ephemeral streams and water features; requiring rivers, streams and other natural channels to directly or indirectly contribute flow to a territorial sea or traditional navigable water; and excluding wetlands that are not adjacent to another non-wetland jurisdictional water.”

In addition, the rule removes potential groundwater impacts as a factor in obtaining a permit. The Obama 2015 WOTUS rule expanded federal control over several types of waterbodies, particularly with respect to tributaries, adjacent waters and wetlands.

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