In re PennEast Pipeline Co.

The Federal Energy Regulatory Commission (FERC) denied rehearing of its order authorizing construction of the PennEast Project, a 116-mile natural gas pipeline extending from Pennsylvania to New Jersey and related lateral pipelines and facilities. FERC rejected arguments that its environmental review did not adequately consider the impact of greenhouse gas emissions on climate change. FERC said its review had gone beyond what NEPA required by examining regional and national emissions to put the project’s estimated greenhouse gas emissions in context. FERC also said it had appropriately used a qualitative approach in its analysis of climate change effects. FERC reiterated its position that the social cost of carbon was not a useful tool for its NEPA reviews. Two commissioners dissented. Commissioner LaFleur said she believed the record demonstrated sufficient need for the project, but that she fundamentally disagreed with the majority’s approach to examining climate impacts. She wrote that she believed the social cost of carbon “can meaningfully inform the Commission’s decision-making to reflect the climate change impacts of an individual project.” Commissioner Glick said the order denying rehearing was “not the product of reasoned decisionmaking,” citing in particular the majority’s assertions that upstream and downstream greenhouse gas emissions were not reasonably foreseeable and that it was not required to determine whether the impact from climate change was significant.

Two conservation groups filed a request for rehearing and motion for stay of the Federal Energy Regulatory Commission (FERC) order granting a conditional certificate of public convenience and necessity for the PennEast Pipeline Project. The project includes approximately 116 miles of natural gas pipeline extending from Pennsylvania to New Jersey, multiple lateral connections, a compressor station, and other facilities. The groups asserted that the order granting the certificate violated the Natural Gas Act, the Takings Clause, the Clean Water Act, the National Historic Preservation Act, and NEPA. With respect to the Natural Gas Act, the groups contended that FERC’s order failed to demonstrate that the project was required by the public convenience and necessity because, among other shortcomings, FERC failed to balance claimed economic benefits against potential adverse impacts, including adverse environmental impacts. The groups noted in their filing that if the pipeline would lead to a net increase in gas consumption, as claimed by the applicants, it would also enable upstream gas production (and fugitive emissions of methane) and downstream gas consumption (and combustion emissions of carbon dioxide). The groups also contended that the environmental impact statement for the project was “wholly deficient” because, among other reasons, it failed to include a robust alternatives analysis with adequate consideration of a no action alternative or clean energy or liquefied natural gas alternatives.