American Oil and Gas Reporter - March 2016 - 27

WASHINGTONWATCH
EPA's Comments
On FERC Guidance Manual
Demonstrate Bias
Among the duties of the Federal Energy Regulatory Commission are approving the siting and abandonment of interstate
natural gas pipelines and storage facilities, and ensuring the safe
operation and reliability of proposed and operating liquefied natural gas terminals. As part of this duty, FERC's Office of Energy Projects revised its Guidance Manual for Environmental Report Preparation and released it for public comment on Dec. 18.
First issued in August 2002, the Guidance Manual is intended to provide updated guidance on how to prepare resource reports, and how interstate and LNG projects may demonstrate compliance with certain regulatory requirements. Comments on the
draft Guidance Manual were filed at the end of January in Docket No. AD16-3.
Not surprisingly, pipelines and producers (Natural Gas Supply Association and Center for Liquefied Natural Gas) urged FERC
to refrain "from attempting to use the draft guidance to impose
requirements beyond those found in FERC's current regulations."
The surprise came in the form of comments from the U.S. Environmental Protection Agency Office of Enforcement and
Compliance Assurance, asking FERC to significantly expand
analyses to include indirect effects.
For natural gas pipeline proposals, EPA recommends FERC
ask applicants to "provide information regarding the potential for
increased natural gas production and the potential for environmental impacts associated with the potential increase." EPA further recommends that the FERC review "allow for a complete discussion of requirements for applicants related to information to
be included for greenhouse gas and climate change analyses, and
associated mitigation for the project. In addition to GHG emissions from the construction and operation of the project, the discussion should include emissions associated with the production,
transport, and combustion of the natural gas."
Several of EPA's regional offices have raised upstream environmental objections to specific pipeline projects. Such concerns
have been rejected by FERC and ultimately by the courts. However, this is the first to come from EPA headquarters.
EPA pushes back against FERC's consistent position that
FERC's environmental analysis must focus on issues that are within its jurisdiction and can be reasonably foreseen. For a pipeline
project transporting gas from the Marcellus, "The commission
plays no role in, nor retains any control over, Marcellus Shale well
development," FERC stated in Central New York Oil and Gas Company LLC, Docket No. CP10-480-001, order on rehearing,
clarification and stay, Feb. 13, 2012.
Marcellus Shale well development lies primarily within the
scope of state regulation.
EPA's comments on the draft guidance point to the studies conducted for the Department of Energy on the impact of natural gas
exports as an example of the expansive analysis EPA desires. But
DOE faces a different threshold in determining whether to grant
a natural gas export license to non-Free-Trade-Agreement countries.
FERC's job is to examine all direct, indirect, and reasonably

"EPA's Office of Enforcement and
Compliance Assurance is asking FERC to
expand analyses to include

indirect effects.

foreseeable cumulative impacts of a project, according to Council on Environmental Quality regulations. FERC exercises this
responsibility before an application is filed with prefiling meetings, followed by scoping meetings to ensure public involvement,
and the numerous conditions imposed on a project to minimize
and mitigate its environmental impacts. As FERC stated in the
Central New York order, it "takes seriously its responsibility to
authorize a project only after careful consideration of the project's
potential environmental impacts, and measures to mitigate,
minimize, or avoid any adverse impacts."
FERC is keenly aware of the increasingly complex issues surrounding permitting infrastructure: greater scrutiny, heightened
stakeholder involvement, more and more complex issues, legislative action, even presidential campaign rhetoric. The increasing
workload associated with each project is amplified by the number of projects pending at FERC. In December 2013, FERC staff
was working on 24 major pipeline projects with capacity of 14.4
billion cubic feet a day. In January 2016, that number had increased
to 62 projects with capacity of 47.0 Bcf/d. In today's litigious environment, the orders approving projects almost invariably are
followed by requests for rehearing and appellate review.
The effort to expand the scope of pipeline permitting is yet another example of fossil fuel opponents' "leave it in the ground"
advocacy. These opponents are not necessarily trying to ensure
a transition to renewable energy; instead, they are attacking fossil fuels at every possible place in the production chain.
But America's need for natural gas will continue. Based on
the latest data from DOE's Energy Information Administration,
oil and natural gas together supply around 65 percent of total U.S.
energy demand. EIA still expects overall demand increases this
year for both oil and natural gas. This can't be satisfied by leaving crude oil and natural gas in the ground and stymying construction of needed infrastructure.
❒

SUSAN GINSBERG is vice
president of crude oil and natural gas regulatory affairs for
the Independent Petroleum
Association of America. She
covers legislation and regulation, focusing on the CFTC
and FERC. Her experience in
natural gas regulatory affairs
spans 25 years.
MARCH 2016 27

American Oil and Gas Reporter - March 2016

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