FERC Issues Certificate For Texas Eastern’s Lambertville Expansion, LaFleur Conducts Own GHG Analysis

In a statement explaining her consideration of greenhouse gas (GHG) emissions for a pipeline project, Commissioner Cheryl LaFleur issued a concurring statement in the November 16 certificate order approving Texas Eastern Transmission, LP’s (CP18-26) proposed Lambertville East Expansion Project. Saying she found the project to be in the public interest, LaFleur noted that she was basing her decision about the project’s climate change impacts on the “facts in the record—even ones not discussed in our environmental documents or in the certificate order.”

LaFleur also posted a statement on her Twitter account that, “I weighed project need and impact, including an estimate of downstream GHGs set out in my concurrence. I am considering each project case by case despite my disagreement on assessment of GHGs. These issues should be front and center in our review of the Certificate Policy Statement.”

FERC opened a notice of inquiry and received comments on the policy statement, though plenty of observers believe the Commission will not take action in the proceeding until there is a full complement of five commissioners. Among the four commissioners in place, Democrats LaFleur and Richard Glick have disagreed with Republican members when it comes to consideration of GHG emissions associated with upstream and downstream impacts associated with natural gas pipeline projects.

LaFleur has issued separate statements in several recent certificate orders stating her belief that the Commission has an obligation to address GHG emissions in evaluating proposed projects.

A majority at FERC has favored the policy that the Commission does not need to consider either the upstream production or downstream use of natural gas as indirect effects of pipeline projects because without knowing specifically where the gas will be produced and consumed, it is unable to estimate with any precision the level of GHG emissions associated with a project. Glick and LaFleur have asserted that the Commission has failed to properly evaluate the climate impacts of a project to meet the public interest standards under the National Environmental Policy Act and Natural Gas Act.

The Commission’s November 16 order included an environmental analysis (EA) and granted a certificate to Texas Eastern for its proposed Lambertville East Expansion Project to replace two existing compressor units at its Lambertville Compressor Station in Hunterdon County, New Jersey. The project will allow Texas Eastern to provide an additional 60,000 Dth/d of firm transportation service from interconnections in Lambertville, New Jersey, and Marietta, Pennsylvania, to existing city gates in New Jersey. Also, the project is designed to enable Texas Eastern to comply with new air emissions regulations in New Jersey.

In her concurrence in Texas Eastern, LaFleur noted she is “trying to move beyond our disagreement on the Commission’s approach” to GHG emissions by analyzing the pipeline’s application and GHG emissions based on the facts in the record.

LaFleur explained that she used a methodology developed by the Environmental Protection Agency  to estimate downstream GHG emissions from the project, and concluded that the project would result in 1.16 million metric tons per year of CO2 which would be a one percent increase in GHG emissions in New Jersey, and a 0.02 percent increase nationally.

Several sources could not recall an instance when a commissioner calculated their own estimation of GHG emissions in a natural gas pipeline proceeding, other than a Tennessee Gas Pipeline expansion for its Broad Run project in June, where LaFleur used a similar assessment in support of the project.

The separate environmental analysis by an individual commissioner, apart from what was contained in the project EA, was deemed unusual by James Costan, partner at Dentons. He said the concurring statement and approval of the project by LaFleur is reflective of her concern about not wanting a deadlocked FERC when it comes to orders on pipeline applications.

“She decided to adopt her own approach to satisfy the things she’s concerned about” regarding analysis of GHG emissions as part of the public interest determination for a pipeline project, Costan said in a brief interview. He termed LaFleur’s move a pragmatic way to reach a decision on pipeline applications while remaining true to her principles.

The Interstate Natural Gas Association of America (INGAA) is pleased that LaFleur found the Texas Eastern project to be in the public interest after her assessment, a spokesperson said November 20.

Expanding natural gas infrastructure has been a critical aid in helping the U.S. cut its carbon dioxide emissions over the last decade, INGAA noted. “This decision will allow more clean-burning natural gas to be used domestically, providing additional environmental benefits,” the INGAA spokesperson said.

In the order, the Commission noted that it was permitting Texas Eastern to include an income tax allowance in its cost of service, subject to Texas Eastern filing a written statement about its change in entity type because of a change by its corporate parent Spectra Energy Partners.

Glick dissented in part because he believes FERC can “determine the Project’s incremental physical impacts on the environment caused by GHG emissions” by using the Social Cost of Carbon tool. Glick said that “the Commission’s failure to undertake any consideration of the Project’s contribution to climate change falls well short of our obligations under the Natural Gas Act and the National Environmental Policy Act.”

At a press briefing following the Commission’s November 15 meeting, Chairman Neil Chatterjee was asked if the Social Cost of Carbon tool would be addressed in any future policy statements, and Chatterjee said the issues about GHG emissions are very complex and must be addressed cautiously because of the potential impact on future projects.

By Denise Ryan DRyan@fosterreport.com

 

This article appears as published in The Foster Report No. 3225, issued on November 23, 2018

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