Decisions made by state utility commissions and the Federal Energy Regulatory Commission (FERC) have much influence on both our energy future and that of responding to climate change. Two contrary decisions in June are described here.
FERC denied the rehearing of its order authorizing construction and operation of the Mountain Valley Pipeline Project in West Virginia and Virginia and a related project that would connect to Pennsylvania. Among the arguments rejected by the majority of FERC commissioners were that FERC should have evaluated whether energy demands could be met with “non-transportation alternatives” such as energy conservation or renewable energy resources, that FERC failed to adequately analyze climate change impacts of the end use of natural gas transported by the project, and that FERC’s consideration of climate change in the context of evaluating the public interest under Section 7 of the Natural Gas Act (NGA) was inadequate. The FERC majority said greenhouse gas emissions from the downstream use of natural gas did not fall within the definition of indirect or cumulative impacts, and also concluded that the Social Cost of Carbon tool could not meaningfully inform decisions on natural gas transportation projects under NGA. FERC said it continued to believe the Social Cost of Carbon tool was “more appropriately used by regulators whose responsibilities are tied more directly to fossil fuel production or consumption.” Two commissioners wrote dissents. In re Mountain Valley Pipeline, LLC, No. CP 16-10-001 (FERC June 15, 2018).
On June 26, 2018, the California Public Utilities Commission issued its final decision denying a certificate of public convenience and necessity for a new 47-mile natural gas pipeline to replace an existing pipeline. The proposed decision found that the applicants had failed to demonstrate a need for the project and had not shown “why it is necessary to build a very costly pipeline to substantially increase gas pipeline capacity in an era of declining demand and at a time when the state of California is moving away from fossil fuels.” The decision indicated that based on Commission precedent, the Commission could deny a proposed gas pipeline or transmission project based on insufficient need without completed CEQA analysis. The Commission directed that the preparation of a draft environmental impact report be halted. In re San Diego Gas & Electric Co., No. A1509013 (Cal. PUC June 26, 2018).
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