January 2024, Vol. 251, No. 1


NEPA Proposal Elevates GHG as Approval Impediment

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

The EPA isn’t the only Biden administration office throwing up potential roadblocks to pipeline construction. Interstate pipeline builders weighed in on the Council on Environmental Quality’s (CEQ) proposed reversal of changes to the National Environmental Policy Act (NEPA) made by the Trump administration.  

NEPA requires federal agencies, such as the Federal Energy Regulatory Commission (FERC) and the Army Corps of Engineers, to require companies to prove they meet regulatory standards such as the Natural Gas Act and Clean Water Act. 

The Biden-proposed NEPA changes would give environmentalists a leg up to block new pipelines because of alleged greenhouse gas (GHG) emissions. NEPA covers a broad range of government actions, including permit application decisions, federal land management decisions and the construction of major public infrastructure projects such as highways.  

Specifically, NEPA requires federal agencies to prepare environmental impact statements for “major federal actions significantly affecting the quality of the human environment.”  

The pipeline industry, gas and oil, has objected to numerous aspects of the NEPA proposal, both on substantive and procedural grounds. In a 40-page letter to the CEQ on Septe. 29, INGAA complained the NEPA reform proposal gave an incentive to agencies “to engage in wide-ranging and speculative analysis of GHG emissions and climate change … Moreover, CEQ’s proposed rule, if implemented as written, would slow down the NEPA process, mislead the public, and exacerbate the litigation risks that already create barriers to the construction of much-needed infrastructure.” 

For pipelines, any expansion of NEPA could impact FERC consideration of pipeline construction applications. The FERC is currently wrestling with consideration of downstream GHG emissions when determining whether a proposed project would create “significant” emissions. Those emissions have to rise to the level of being “reasonably foreseeable” before the FERC is required to make a “significance” decision.  

A majority of the FERC commissioners seemed to reach an agreement on those matters at their September meeting, a decision that could be read as positive for upcoming pipeline construction applications. A majority of the five commissioners essentially affirmed what is called the Driftwood compromise reached by the commission earlier in 2023.  

That had to do with the April  certificate order for Driftwood Pipeline LLC’s Line 200 and Line 300 Project. In a blog post, the law firm Vinson & Elkins LLP wrote the September approvals by FERC of six projects “show that the Commission now has a path forward on GHGs for all of the types of projects currently pending before the Commission, including those delivering to LDCs, downstream pipeline interconnections, LNG exporters, and power generators.” 

However, the Biden administration’s NEPA changes, if finalized, could force the FERC to go back to the drawing board and revisit the Driftwood compromise.  

About the proposed NEPA changes, the Williams Companies, Inc. told the CEQ: “Williams does not want or expect ‘easy’ regulation; we seek a permitting process that is fair, consistently applied, and in compliance with NEPA and a federal agency’s enabling statutes (e.g., such as the Natural Gas Act for FERC).  

It is difficult to conclude that such a process exists now. Rather, existing permitting uncertainty and unpredictable timelines are jeopardizing significant investment in new infrastructure and weakening our nation’s energy system.” 

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