FERC's Hard Look at Pipeline Construction and GHG Emissions
The increase in U.S. pipeline construction resulting from natural gas production in unconventional places, including the Marcellus and Utica formations, has sparked additional interest in the Federal Energy Regulatory Commission’s (FERC) process for issuing “certificates of public convenience and necessity” that are required under Section 7 of the Natural Gas Act before construction can begin. One factor that FERC evaluates in choosing whether to award a certificate is the avoidance of unnecessary disruptions to the environment, which necessarily implicates one of the oldest federal environmental statutes, the National Environmental Policy Act (NEPA). Environmental groups and other stakeholders have argued that the greenhouse gas (GHG) emissions from the upstream
production of natural gas and the downstream combustion of that gas qualify as indirect and cumulative impacts that must be evaluated by FERC under NEPA before issuance of a Section 7 certificate. As described below, FERC’s approach to this argument necessarily shifted following the U.S. Court of Appeals for the D.C. Circuit’s August 2017 decision in Sierra Club v. FERC and will likely continue to be a key question in FERC proceedings going forward.