On February 17, the Federal Energy Regulatory Commission (FERC or the Commission) issued two well-anticipated policy statements intended to provide guidance on its review of pending and future natural gas infrastructure projects (Updated Policy Statement on Certification of New Interstate Natural Gas Facilities, 178 FERC ¶ 61,107 (2022) (Updated Certificate Policy Statement); Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108 (2022) (GHG Policy Statement)). Specifically, the Commission will now consider a broader range of environmental and social impacts associated with proposed projects, including their reasonably foreseeable greenhouse gas (GHG) emissions. Passed by a 3-2 margin, with strong dissents by the Commission's two Republican commissioners, these policy announcements represent the Commission's most substantive revisions to its evaluation of proposed projects under the Natural Gas Act (NGA) in over two decades.
Acknowledging its previous approach toward evaluating the effects of certificating new natural gas projects focused primarily on economic interests, the Commission now intends to "evaluate all factors bearing on the public interest, including the balancing of economic and environmental interests in determining whether a project is required by the public convenience and necessity" under Section 7 of the NGA. In balancing the benefits of a project against its adverse impacts, the Commission will place highest importance on evidence demonstrating project need. To that end, project proponents can no longer simply rely on precedent agreements. Instead, the Commission will examine all relevant factors supporting the need for a project, such as whether it will displace a more carbon-intensive energy source or will enhance more renewable energy integration. In assessing the adverse impacts of a proposed project, the Commission will now examine the effects on:
The Commission will also evaluate how applicants intend to mitigate such impacts, and reserves the authority to condition a certificate on the requirement of additional mitigation measures. The companion GHG Policy Statement adds detail to how the Commission will integrate climate change considerations into its public interest findings under the NGA.
The Updated Certificate Policy Statement will apply immediately to any pending or new certificate applications. Stakeholders with pending applications will be given the opportunity to supplement the record in their existing dockets and to explain how their proposals are consistent with the new FERC policy.
The Commission's concurrent interim GHG Policy Statement outlines how the Commission will consider climate impacts, including GHG emissions, in its evaluation of jurisdictional natural gas infrastructure projects under both Section 3 and Section 7 of the NGA. The Commission will consider those emissions resulting from the construction and operation of such projects as well as, in most cases, GHG emissions associated with the upstream and downstream combustion of transported gas, in its reviews under the NGA and the National Environmental Policy Act (NEPA). Specifically, the Commission "will quantify a project's GHG emissions that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action, including those effects that occur at the same time and place as the proposed action and effects that are later in time or farther removed in distance from the proposed action."
Under the interim policy, a project's reasonable foreseeable GHG emissions will be based on the projected amount of capacity that will be actually used, and a "100% utilization or 'full burn' rate for the proposed project's emissions" for purposes of determining whether an Environmental Assessment (EA) or Environmental Impact Statement (EIS) will be required under NEPA. The Commission will apply a rebuttable presumption that projects with 100,000 metric tons per year of carbon dioxide equivalents (CO2e) emissions will be deemed to have significant impact on climate change, and will thus require the preparation of an EIS.
Under the GHG Policy Statement, the Commission encourages project sponsors to include the following information in any prospective NGA Section 3 or Section 7 application. This information will assist the Commission in considering any climate change impacts, inclusive of any mitigation measures, as part of both its NEPA determination and its NGA public interest determination:
The GHG Policy Statement will immediately apply to all current and pending NGA Section 3 and Section 7 applications. As with the Updated Certificate Policy Statement, project sponsors with pending proposals will be given the opportunity to supplement the record and to explain how their proposals are consistent with the new FERC policy. Given its interim designation, the GHG Policy Statement may still be revised based on the record developed in this proceeding. Comments on the interim GHG Policy Statement are due by April 4, 2022.
The immediate impact of these two new policies will be to introduce additional uncertainty into what has already become a prolonged FERC natural gas infrastructure permitting process. Ostensibly aimed at providing the Commission with a more robust record to defend against future judicial challenges to its project approval decisions, the policy statements' ambiguity concerning the appropriate level of GHG emissions mitigation may ultimately prove to be a greater deterrent to many future infrastructure investment decisions than the potential for an adverse decision from an appellate court. If past is prologue, such uncertainty will provide an additional legal battleground upon which FERC natural gas approval proceedings will be waged.
 Updated Certificate Policy Statement at P 51.
 Id. at P 54.
 Id. at PP 62, 98. The Commission specifically emphasizes that its evaluation of the impacts on environmental justice communities will now be "robust," and that addressing impacts on environmental justice communities is more than just "checking a box." Id. at PP 86, 94.
 Id. at PP 74, 98.
 GHG Policy Statement at P 28.
 Id. at P 3.
 Id. at P 129.
Day Pitney is a sponsor of the New England Women in Energy and the Environment (NEWIEE) 2022 Women Shaping the Agenda Event, "Doing Well By Doing Good," taking place on August 3 at the University of St. Joseph in West Hartford, CT.
Day Pitney Attorneys Eric Runge, Evan Reese and Margaret Czepiel authored the article, "FERC Interconnection Revamp Plan: Some Pain, Big Gains," for Law360.
Day Pitney Advisory
On June 16, Day Pitney will host a webinar, "FERC Order No. 2222 Implementation: Market Opportunities and Risks for Distributed Energy Resources."
Day Pitney Attorneys Joseph H. Fagan, Harold M. Blinderman, Margaret Czepiel and Samantha Regan authored the article, "FERC Issues Two Policy Statements Impacting Natural Gas Infrastructure Projects," for Pratt's Energy Law Report.
Day Pitney Renewable Energy Attorneys completed two major transmission siting filings in Massachusetts and Rhode Island related to a second 1,200 MW offshore wind transmission connector project for Mayflower Wind Energy LLC (Mayflower Wind), a major developer of offshore wind energy generation and related transmission projects.
Day Pitney Press Release
Day Pitney Press Release
Day Pitney Press Release
Day Pitney Boston-based Energy Counsel Eric Runge was quoted in Engineering News-Record article, "U.S. Offshore Wind: Moving Power to the People." Runge discussed how interconnection queue delays can impact power purchase agreements.