Council on Environmental Quality Seeks Public Comment on Draft NEPA Greenhouse Gas Emission Guidance

Brett A. Snyder and Lamiya N. Rahman

The Council on Environmental Quality has published Draft Guidance to federal agencies to evaluate the effects of greenhouse gas emissions under the National Environmental Policy Act. The Draft Guidance is largely consistent with the approach taken by the Federal Energy Regulatory Commission in recent natural gas infrastructure orders. Comments are due on July 26, 2019.

Introduction

On June 26, 2019, the Council on Environmental Quality (“CEQ”) published new draft guidance to clarify the scope of review federal agencies should undertake when considering the effects of greenhouse gas (“GHG”) emissions under the National Environmental Policy Act (“NEPA”) and related regulations.The Draft Guidance is intended to replace CEQ’s prior GHG-related guidance, which was adopted in 2016 and later rescinded pursuant to an Executive Order in 2017.2 The Draft Guidance is largely consistent with the approach taken by the Federal Energy Regulatory Commission (“FERC”) in recent natural gas infrastructure orders.

CEQ’s Draft Guidance

NEPA is a procedural statute that requires federal agencies to analyze the environmental impacts of any major federal action significantly affecting the quality of the human environment.3 Although NEPA does not mandate any particular substantive outcomes, it requires an agency to consider the direct and reasonably foreseeable indirect effects of a proposed action.4

The Draft Guidance states that “[a] projection of a proposed action’s direct and reasonably foreseeable indirect GHG emissions may be used as a proxy for assessing potential climate effects.”5 While direct effects are caused by an action and occur at the same time or place, indirect effects are caused by the action and are later in time or farther removed in distance but are still reasonably foreseeable. Thus, the proposed guidance suggests that quantification of emissions is sufficient to meet an agency’s obligation to assess effects of emissions.

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FERC Reaffirms Its Final Rule on Rate Changes Relating to Federal Income Tax Rates for Natural Gas Pipelines

Mark R. Haskell, Brett A. Snyder, George D. Billinson, and Lamiya N. Rahman

The Commission’s recent order upholds the Form No. 501-G filing requirement, which was designed to determine whether pipelines are over-recovering on their cost of service in light of recent federal income tax rate and policy changes. Thus far, the Commission has initiated investigations into the rates of six pipelines pursuant to its authority under section 5 of the Natural Gas Act. These proceedings are ongoing.

On April 18, 2019, the Federal Energy Regulatory Commission (“FERC” or “the Commission”) issued an order (“Order No. 849-A”)1 denying requests for rehearing of its final rule on federal income tax rates for jurisdictional natural gas pipelines (“Order No. 849”).2 Order No. 849 adopted procedures for determining whether pipelines may be collecting unjust and unreasonable rates in light of income tax reductions established by the Tax Cuts and Jobs Act and the Commission’s revised tax allowance policy following the United Airlines, Inc. v. FERC decision.3 These procedures included a requirement that certain interstate natural gas pipelines file a FERC Form No. 501-G to estimate cost of service reductions and changes in returns on equity (“ROE”) resulting from the income tax changes. Continue reading “FERC Reaffirms Its Final Rule on Rate Changes Relating to Federal Income Tax Rates for Natural Gas Pipelines”

FERC to Review Its Policies Regarding the Determination of the Return on Equity in Jurisdictional Rates

Mark R. Haskell, Brett A. Snyder, and George D. Billinson

FERC is conducting a comprehensive review of its method for determining the appropriate return on equity in jurisdictional rates across the energy industry. Comments are due no later than 90 days, and reply comments no later than 120 days, after the publication of the NOI in the Federal Register.

On March 21, 2019, the Federal Energy Regulatory Commission (“FERC” or “the Commission”) issued a Notice of Inquiry (“NOI”) as to whether it should modify its policies (and, if so, how) for calculating the return on equity (“ROE”) for jurisdictional rates.1 Although ostensibly directed at policies applicable to public utilities, the NOI also seeks comment as to whether those policies should also be applied to interstate natural gas pipelines and oil pipelines. Continue reading “FERC to Review Its Policies Regarding the Determination of the Return on Equity in Jurisdictional Rates”

Charting Climate Change Cases: A Survey of Recent Litigation

Margaret Anne Hill and Stephen C. Zumbrun

Introduction

Right now, cases involving climate change are being heavily litigated in courts across the United States. Hundreds of climate change-related cases have been filed in both federal and state courts, where parties are challenging governments’ and industry’s knowledge of and contribution to climate change. In the abstract, one would think that litigation involving emissions of greenhouse gases (“GHG”) linked to climate change would largely focus on the federal Clean Air Act. Yet, climate change-related cases now involve ever-expanding causes of action, including not only claims under the federal Clean Air Act and other federal statutes, but claims under the U.S. Constitution, state law claims, and common law claims.

There are several active cases that may have major implications on the government’s role in determining the direction of climate change policy, and on private companies’ past and future liability for alleged contributions to climate change, as well as knowledge of climate change impacts on business decision-making. This article discusses notable current cases involving climate change. Continue reading “Charting Climate Change Cases: A Survey of Recent Litigation”

Pipeline Update: Here Today, Gone Tomorrow? FERC’s Natural Gas Pipeline Greenhouse Gas Analysis Policy

Stephen C. Zumbrun

The Republican majority of the Federal Energy Regulatory Commission (“FERC” or “Commission”) has drawn a clear distinction with how and when the Commission will analyze upstream and downstream greenhouse gas (“GHG”) emissions when reviewing natural gas pipeline projects. But with the recent announced resignation by Republican Commissioner Robert Powelson, a pending Notice of Inquiry issued by the Commission, a separate advanced Notice of Proposed Rulemaking issued by the Council on Environmental Quality (“CEQ”), and a recent petition to the D.C. Circuit Court, this current established protocol may not last and by this time next year we may see a whole new approach to pipeline GHG analysis coming out of FERC. Continue reading “Pipeline Update: Here Today, Gone Tomorrow? FERC’s Natural Gas Pipeline Greenhouse Gas Analysis Policy”

Pipeline Update: Pennsylvania Commonwealth Court Allows Environmental Rights Amendment Challenge to Sunoco Pipeline’s Mariner East Project to Proceed

Frank L. Tamulonis III and Stephen C. Zumbrun

The Pennsylvania Commonwealth Court recently ruled that a challenge to Sunoco Pipeline L.P.’s (“Sunoco”) Mariner East Project under Article 1, Section 27 of the Pennsylvania Constitution (the “Environmental Rights Amendment” or “ERA”) may proceed. In Clean Air Council, et al. v. Sunoco Pipeline L.P., Docket No. 112 C.D. 2017 (Opinion issued April 30, 2018), the Court reversed, in part, the trial court’s denial of Sunoco’s motion for summary judgment, ordering an entry of summary judgment for Sunoco on all counts except for Plaintiffs’ claims brought under the ERA.

The case involves a challenge by Clean Air Council (“CAC”) and other individuals to Sunoco’s Mariner East Project, a pipeline construction project designed to transport natural gas liquids across Pennsylvania from the Marcellus and Utica basins to Marcus Hook in eastern Pennsylvania. Plaintiffs brought a variety of claims challenging Sunoco’s right and power to condemn property including a challenge to Sunoco’s public utility status as well as various constitutional claims, including an ERA claim, takings claims, and procedural due process claims. Plaintiffs are seeking declaratory and injunctive relief that would halt pipeline construction. Continue reading “Pipeline Update: Pennsylvania Commonwealth Court Allows Environmental Rights Amendment Challenge to Sunoco Pipeline’s Mariner East Project to Proceed”

Pipeline Update: Decisions in Pennsylvania and the Fourth Circuit Should Pave Way for Pipeline Development

Frank L. Tamulonis III and Margaret A. Hill

Two recent decisions, one from the Fourth Circuit Court of Appeals and one from Pennsylvania’s Commonwealth Court, rejected arguments from pipeline opponents that, if accepted, would have bolstered local efforts to stymie pipeline development. In Orus Ashby Berkley, et al. v. Mountain Valley Pipeline, LLC, landowners challenged Mountain Valley Pipeline, LLC’s (“MVP”) eminent domain authority for the construction of a Federal Energy Regulatory Commission (“FERC”)-regulated pipeline designed to transport natural gas from West Virginia to Virginia. See 2017 U.S. Dist. LEXIS 202907 (W.D. Va. Dec. 11, 2017). Landowners launched a challenge against MVP and FERC, arguing that Congress’s delegation of eminent domain authority to FERC and pipeline developers under the Natural Gas Act (“NGA”) was overly broad and unconstitutional, and that FERC’s standard to determine whether land is being taken for “public use” does not pass muster under the Fifth Amendment. On December 11, 2017, the District Court ruled that the court lacked jurisdiction to consider the constitutional arguments, reasoning that the NGA makes clear that any challenges to FERC orders must be first reheard by FERC, and then can only be challenged in a federal court of appeals. Id. The plaintiff landowners appealed that decision, which is still pending. Continue reading “Pipeline Update: Decisions in Pennsylvania and the Fourth Circuit Should Pave Way for Pipeline Development”