Pipelines face prospect of tougher climate standard
Panel to review the scope of pollution in project OKs
WASHINGTON — In the years ahead, the natural gas sector is planning billions of dollars in construction projects to expand the network of pipelines that transport its product around the country and solidify the role of natural gas in the nation’s energy supply for decades to come.
But first they need to convince federal regulators to sign off as President Joe Biden sounds the alarm on climate change and the nation’s reliance on fossil fuels.
The Federal Energy Regulatory Commission is reviewing whether to include contributions to climate change in the criteria for approving pipelines and other natural gas projects. The review is ongoing, with no timeline or a decision, but such a change stands to radically alter how the federal government decides whether to allow the construction of gas pipelines.
“FERC almost never denies (pipeline) applications. As long as there’s a contract in place they approve it,” said Max Sarinsky, an attorney with New York University’s Institute for Public Policy. “They have an obligation to review the impacts of these pipelines, both
beneficial and adverse, and that’s not something they’ve been doing with climate impacts.”
That changed earlier this year when FERC, under new Chairman Richard Glick, a Democrat, considered the greenhouse gas implications of replacing an 87-milestretch of the Northern Natural pipeline, which runs from West Texas to Michigan. The commission approved the pipeline but the decision drew the angry dissent of Commissioner James Danly, a Republican, who argued the commission was overstepping its authority in considering the project’s emissions.
“It appears to me that the (pipeline) industry and its customers are on the verge of experiencing some dramatic changes in the coming months and years,” he said during a FERC meeting in February.
Tensions deepened Thursday, when Danly refused to approve two gas pipeline projects unless language was including in the construction order, stating that the analysis on greenhouse gas emissions was for, “informational purposes only.”
“If I’m the general counsel for these companies I’d be losing my mind right now,” said Commissioner Neil Chatterjee, a Republican who supports considering pipelines’ contributions to climate change.
Pipeline companies now face the question of whether their projects will pass muster with a more environmentally conscious FERC.
More than a dozen natural gas projects are under review at FERC, including a major expansion of Kinder Morgan’s Tennessee Gas Pipeline and Southern Gas Pipeline, which connect Texas and Louisiana gas fields to the eastern United States. Also, the Canadian firm TransCanada has five gas projects awaiting approval at FERC, including the expansion of a pipeline in southern Louisiana to supply the Plaquemines LNG export terminal, which is being developed by the Virginia LNG firm Venture Global.
In the meantime, Glick has signaled he is not going to tread as lightly around pollution from natural gas as his predecessors, recently ordering FERC staff to review whether the expansion of a gas compressor station in Massachusetts was in the “public interest” after a series of accidental leaks into the surrounding community.
“A proposed pipeline’s contribution to climate change is one of its most consequential environmental impacts and we must consider all evidence in the record,” Glick said in a statement earlier this year.
Pushback in Congress
That approach is drawing pushback in Congress. Earlier this month a group of 26 senators, including two Democrats — Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — wrote to FERC asking they move ahead on the pending projects without considering new standards on climate change.
“Many of the proposed projects before the commission, some pending for more than a year, are critical to addressing supply issues and strengthening our energy infrastructure,” read the letter, which was also signed by Texas’s Republican senators, John Cornyn and Ted Cruz.
Pipeline companies and their trade groups declined interview requests for this story, citing the ongoing debate within FERC. But behind the scenes, the prospect of the federal government digging into emissions data has widened an existing divide within the industry over climate change.
For some companies, it’s a reasonable request considering the need to reduce greenhouse gas emissions to net zero over the next three decades. But for others it’s a non-starter, giving environmental attorneys even more ammunition with which to tie up their projects in court.
“You have companies that want to be more proactive on methane and climate, but not everybody’s there yet,” said one energy attorney, who declined to discuss an active case before FERC.
The commission’s consideration of climate change, she said, “is not going to foreclose natural gas pipelines. That said it’s going to provide them with more cover and direction to consider climate impacts when they want to.”
The uproar over FERC’s certification process followed a recent trip by commissioner Danly to Houston, where he met with executives from natural gas and pipeline companies, said one executive, who declined to speak on record because his company has projects before FERC.
Danly “said all these orders are going to come out and you need to intervene,” the executive recounted. “The message was resonating all through the community.”
Danly did not respond to requests for comment.
Some 3 million miles of natural gas pipelines crisscross the United States, supplying power plants, industrial facilities and homes with what remains one of the world’s cheapest sources of energy.
But with scientists warning that the world needs to cut emissions immediately, pressure is growing on national governments to stop the construction of fossil fuel pipelines and compressor stations that are designed to run for decades. This week, the International Energy Agency, which advises governments on energy supply, recommended that oil and gas development be halted if the world is to slow global warming and avoid environmental catastrophe.
Biden took office took office promising to address climate change, which has become one of the preeminent issues of his party. But standing in the way are Republicans and Democrats from energy producing states, such as Manchin, who are not ready to give up on a fossil fuel industry that employs millions of people around the country.
Beefed-up presence
In recent years, pipeline companies have beefed up their presence on Capitol Hill, employing former top congressional and federal agency staff to lobby on pipeline issues. Kinder Morgan recently hired Manchin’s former chief of staff, Patrick Hayes, to lobby on their behalf. Dallas-based Energy Transfer Partners has Adam Ingols, the former chief of staff at the Department of Energy during the George W. Bush administration, lobbying on “issues associated with the siting, permitting, and construction of liquid and gas pipeline infrastructure.”
They likely have busy years ahead of them. Biden has put a temporary halt to oil and gas permitting on federal lands and committed the United States to cutting its greenhouse gas emissions by more than 50 percent by 2030, more doubled the reduction pledged by former president Barack Obama.
“The Biden administration is taking climate very seriously,” Sarinsky, the NYU attorney, said.
FERC, as an independent body, is not bound by the Biden administration’s policy choices. But later next month, the president will have the opportunity to decide on a replacement for Commissioner Neil Chatterjee, a Republican and former chief of staff to Senate Minority Leader Mitch McConnell, whose five-year term is coming to an end.
That would give Democrats a 3-2 majority on the commission.