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January 03, 2024 Feature

II. Gas

Larry Inouye

 

A. Introduction

The Federal Energy Regulatory Commission (Commission) faces persistent and sophisticated challenges to its certification of natural gas infrastructure based on environmental impacts, particularly the climate change impacts from greenhouse gas (GHG) emission from burning gas as a fuel source. The changes center around the requirement under Sections 3 and 7 of the Natural Gas Act (NGA) that the Commission must find the approval of the construction and operation of such facilities to be in the “public interest” and to meet the requirements of the National Environmental Policy Act (NEPA), which governs the Commission’s review of the environmental impacts of a project. Other challenges to project certification include challenges to the Commission’s determination of the “need” for the project and post-certification challenges.

B. Commission’s 2022 Updating of Its Certification Policy/Guidance

The Commission’s 1999 Certificate Policy Statement provides the primary guidance for evaluating the need for a project and for determining whether it will serve the public interest. The Commission has, since that time, been criticized for not updating its certification policy statement, particularly with respect to determination of project need and consideration of the environmental impact of gas projects on global warming. On February 18, 2022, the Commission issued an “Updated Policy Statement on Certification of New Interstate Natural Gas Facilities” (Updated Policy Statement)and an interim policy statement describing procedures for evaluating climate impacts of greenhouse gas emissions (GHG) which would be integrated into its public interest determination (Interim GHG Policy Statement).

The Updated Policy Statement acknowledged that the Commission has, for its determination of need for a project, relied almost entirely on the project sponsors having entered into binding precedent agreements for the project’s capacity. But, in the future, project applicants were “encouraged” to provide additional information on the gas usage and to explain why the project is needed to serve that use, market studies that project load growth, evidence of consumer benefits, etc., as well as assessment of alternatives to the project. The Commission noted that the absence of such information may prevent an applicant from meeting its burden of demonstrating that a project is needed.

The Updated Policy Statement stated that, under its 1999 Policy Statement, the Commission would analyze the balancing of economic interests (e.g., project benefits vs. adverse impacts on the applicant’s other customers, on landowners, particularly the use of eminent domain, and surrounding communities) and then separately consider environmental impacts. Under the new approach, the Commission stated that it will consider environmental impacts and potential mitigation in both its environmental reviews under NEPA and its public interest determinations under NGA and balance all impacts, including environmental impacts, together in its public interest determinations under the NGA. The applicant would be expected to propose measures for mitigating impacts, and the Commission would consider those measures—or lack thereof—in balancing adverse impacts against potential benefits of a proposal and could deny an application based on any types of adverse impacts if the adverse impacts outweigh the benefits and cannot be mitigated or minimized.

The Interim GHG Policy Statement described the new procedures for evaluating climate impacts under NEPA and stated how those findings would be integrated into the public interest determinations under the NGA. Under NEPA regulations, the Commission is required to analyze and consider “reasonably foreseeable” impacts resulting from the agency’s authorization of the project. To quantify the amount of GHG emissions caused by the project, the Commission stated that, going forward, it would estimate emissions based on project capacity that will actually be used (project utilization rate) as opposed to assuming full capacity will be utilized all of the time, and consider evidence of factors expect to reduce or offset GHG emissions from the project. The Commission stated that it would consider on a case-by-case basis whether upstream emissions (e.g., gas production areas that would feed the pipeline project), and downstream emissions (e.g., the burning of gas by the ultimate consumers) are reasonably foreseeable, but, for export projects under NGA section 3 (e.g., LNG terminals that liquefy gas to be exported to foreign countries via ships), the Commission stated that it will not consider downstream GHG emissions as an effect requiring analysis under NEPA because the Department of Energy, not the Commission, has sole authority to authorize and consider the environmental impacts of the export of any natural gas. As to claims that the upstream and downstream activities for NGA Section 7 interstate natural gas companies are likewise subject to the jurisdiction of other regulators, the Commission stated that, because it has authority to reject a Section 7 certificate based on environmental impacts, including GHG emissions, it is required to consider the impacts resulting from its decision. The Commission found this is distinguishable from a Section 3 project where the independent authorization decision by DOE, which has sole authority to license and consider the environmental impacts of the export of gas, breaks the NEPA causal chain and absolves the Commission from considering the matter.

The Interim GHG Policy Statement set an estimated project emissions level of 100,000 metric tons per year of carbon dioxide equivalent as the threshold level that will be presumed to have a significant impact. Under NEPA regulations, this determination of significance sets the level of review—if the project’s emissions would have a significant impact, then a comprehensive review and the preparation of an Environmental Impact Statement is required, rather than the preparation of a smaller environmental assessment. But, this is not the only consequence of a significant impact determination. The Commission noted that, while NEPA is a procedural statute and does not require an agency to reject a project with significant adverse impacts or take action to mitigate adverse impacts, the Commission may require mitigation of such impacts as a condition of its approval. The Commission claimed that, while it does not have authority to impose conditions on the downstream user of gas or other entities outside of its jurisdiction, it has authority over the applicants and the NGA broadly instructs the Commission to consider public convenience and necessity (i.e., public interest) in balancing benefits against adverse effects, and has consistently exercised its broad conditioning authority under the NGA to attach conditions to mitigate adverse environmental impacts.

The Interim GHG Policy Statement “encouraged” project sponsors to propose measures to mitigate GHG emission to the extent that these emissions have significant adverse impacts and stated that the Commission will consider the impacts, including the project sponsor’s mitigation proposal, as part of its NGA Section 3 and 7 public interest determination. The Commission stated that the project sponsors are free to propose any mitigation mechanism to achieve real, verifiable, and measurable reductions and provided some examples such as (1) market-based mitigation (e.g., purchase of renewable energy credits, participation in cap and trade programs), or (2) physical mitigation (e.g., reducing fugitive methane emissions, incorporating renewable energy or energy efficient technologies to reduce compressor station GHG emissions, utilizing carbon capture and storage, and planting trees).

Both the Updated Policy Statement and the Interim GHG Policy Statements were highly controversial. Commissioner Danly, in his dissenting opinion, characterized the Interim GHG Policy Statement as “irredeemably flawed” and “practically unworkable because it establishes a standardless standard.” In particular, these policy statements were criticized for providing no guidance on how much mitigation a project sponsor should propose to mitigate, how proposals will be evaluated, or how the Commission will verify and track mitigation throughout the life of the project, etc.

Significantly, after concerted industry opposition and intense Senate scrutiny and skepticism, barely more than a month later the Commission issued an order converting both documents to “draft policy statements” and solicited comments on the draft; no further action has since been taken on these draft documents.

C. Post-2022 Updated Policy Statement

No NGA Section 7 interstate gas facilities nor any Section 3 gas import or export facilities were actually evaluated under the 2022 policy statements. What followed are Commission orders with extensive dissenting and concurring opinions of Commissioners regarding the environmental review process and the consideration of environmental impacts under the public interest standard. To illustrate this tension, what follows is a detailed description of an NGA Section 7 and NGA Section 3 order from the Commission.

1. NGA Section 7

Gas Transmission Northwest, LLC, 185 FERC ¶ 61,035 (2023).

On October 23, 2023, the Commission authorized Gas Transmission Northwest, LLC (GTN) to construct and operate facilities at three existing compressor stations in Idaho, Washington, and Oregon to enable GTN to provide an additional 150,000 dekatherms per day of firm transportation service. The full capacity of the project was subscribed by three shippers under long-term, binding precedent agreements. Two of the shippers are gas local distribution companies and one is a gas producer that will use the capacity to deliver Canadian gas to the West Coast markets serving residential, commercial, industrial, and electric generation needs.

The Commission found that GTN entering into long-term, binding precedent agreements for 100% of the project’s capacity is significant evidence of the need for the project. As to comments from the states of Washington, Oregon, and California, that alternative technologies, including renewable alternatives, can better serve consumers’ needs and that state policies intended to reduce GHG emissions will reduce regional demand, the Commission found that the record has not established that alternatives would satisfy the shippers’ needs, and that none of the States submitted evidence that their climate legislation has actually reduced demand for natural gas. The Commission also declared that it would not second-guess local distribution companies’ decision to contract to satisfy peak demand and to contract for such capacity now, when capacity is being offered at agreeable terms and conditions and price, rather than contracting for a smaller amount now with uncertainty about the terms and price at a later date. As to claims that an existing pipeline can provide the requested service, the Commission found that there were differences in locations of facilities and in priority of service. The Commission also noted that, while projects to serve new demand might be approved on a lesser showing of need, that does not mean that precedent agreements for projects to serve markets already served by another pipeline are not significant evidence of need. The Commission concluded that the precedent agreements for 100% of the project’s capacity are significant evidence of need and that the incremental addition to deliverability will provide shippers with additional flexibility to transport gas produced in Western Canada, which increases reliability and access to lower-cost Canadian gas.

For its environmental review, Commission staff prepared an EIS, with EPA participating as a cooperating agency. With respect to GHG emissions, the Commission found that construction emissions, operational emissions, and downstream combustion emissions associated with the project and its end users were reasonably foreseeable and estimated the metric tons of carbon dioxide equivalent emissions and the social cost of GHG from the project. The Commission concluded that, assuming the transported gas is not displacing equal or higher-emitting sources, the project’s contribution to GHG emissions globally contributes to future climate change impacts, but reiterated its past position in certificate orders that it cannot determine that such reasonably foreseeable emissions are significant or not significant in terms of their impact on global climate change. Despite the high dollar figure calculated using this metric, the Commission claimed that, while it has recognized in some past orders that social cost of GHGs may have some utility in certain contexts such as rulemakings, this does not enable the Commission to determine credibly whether such emissions are significant or not significant in terms of impact on global climate change because the mere conversion of GHG emission estimates to a range of dollar-denominated figures does not, in itself, provide a mechanism or standard for judging significance. The Commission claimed that there are no criteria to identify what monetized values are significant for NEPA purposes, nor are there any other scientifically accepted methods to determine significance.

As to claims of intervenors and the EPA that the Commission should quantify upstream emissions associated with natural gas production, and processing and transportation, the Commission reiterated its past position that the environmental effects of upstream production are neither caused by the project nor are they reasonably foreseeable consequences of the Commission’s approval of the project. The supply sources of the project shippers are unknown, and it is unknown whether there will be any incremental development of production wells associated with all of the shippers’ capacity—that production and transportation facilities are components of the general supply chain does not mean that approval of a particular project will cause additional gas production.

Commissioner Danly concurred in part and dissented in part. He concurred on the authorization of the project and on language holding that the social cost of GHG offers no means to assess the significance of GHG emissions. Commissioner Danly also addressed comments concerning state policies intended to reduce GHG; he stated that while such policies may have an effect on the ultimate consumers of gas, state restrictions on gas use cannot obstruct the Commission’s exclusive jurisdiction over the transportation and sale of gas in interstate commerce and the Commission makes its own determination of need, which in this case, is demonstrated by precedent agreements for 100% of the capacity. Commissioner Danly’s dissent criticized efforts by other commissioners to put into recent orders language that attempts to gradually put into effect the drastic changes of the policy statements from two years before that have now been converted to draft policy statements. Commissioner Danly accused the Commission of failing to implement the “Builder Act” portion of the Fiscal Responsibility Act of 2023, while waiting for the agency responsible for NEPA regulations to interpret this statute with respect to new NEPA requirements. In his view, the Builder Act changed the requirement from a requirement for agencies to analyze the “environmental impact of the proposed action” to a requirement for an analysis of the “reasonably foreseeable environmental effects of the proposed agency action.” This revision, Commissioner Danly claimed, reaffirms the decision in Public Citizen that held that agencies are only obligated to consider the effects of its action as the legal proximate cause of the effects; because the NGA confers no authority to the Commission to regulate end use or local distribution of gas, the agency does not cause the adverse effects of GHG emissions from burning gas—and the Commission should use the Builder Act to clarify the limits of its authority, which is to determine whether there is a need for interstate transportation capacity. Commissioner Danly also disputed the order’s finding that downstream emissions from local distribution company shippers are “reasonably foreseeable” because the Commission relied on a “full burn” calculation of emissions (entire project capacity assumed to be used every day) even though the Commission knows that pipelines only operate at full capacity during limited periods of full demand. Commissioner Danly called this categorical use of full burn analysis, even when contrary to record evidence, “bad policy, factually unsupportable, and . . . a violation of the APA.”

Commissioner Clements concurred in part and dissented in part. Commissioner Clements concurred with the issuance of the certificate, but did so “reluctantly” because the states of Washington, Oregon, and California have raised serious questions about the future need for additional gas transportation service, while the Commission, lacking a suitable policy framework or procedures for evaluating need, is forced to rely solely on precedent agreements which leaves a “skeletal” administrative record that raises more questions than it answers. This approach, according to Commissioner Clements, is becoming increasingly untenable as a combination of market forces and federal, state, and local climate protection policies signal potentially flat or declining demand for natural gas over time. Commissioner Clements stated that the Commission’s decisional process would have greatly benefited from market studies, which the Commission could have asked for, as well as more specific information about the effect of regulatory and public and private actions on GHG emissions on future need. The deficiency in information could have been addressed, according to Commissioner Clements, by adopting the need provisions of its Draft Updated Policy Statement issued in 2022. Commissioner Clements also dissented from the Commission’s assertion that it is incapable of determining the significance of GHG impacts. Commissioner Clements that the Commission claims that it cannot determine significance of GHG emissions despite never responding to comments in the Interim GHG Policy Statement docket addressing methods for so doing, that the Commission has not seriously studied whether the Social Cost of Carbon (SCC) protocol or another tool can be used to determine significance and that these unresolved issues should be decided in a generic proceeding with full transparency.

2. NGA Section 3

Texas LNG Brownsville LLC, 185 FERC ¶ 61,079 (2023).

On October 27, 2023, the Commission issued an order addressing arguments raised on rehearing concerning its authorization of Texas LNG Brownsville LLC’s (Texas LNG) project which consists of constructing and operating a new liquified natural gas (LNG) terminal designed to produce up to four million metric tons per annum (MTPA) of LNG for export pursuant to NGA Section 3. The Commission authorized the project in 2019; Sierra Club and several other parties requested rehearing which was denied in 2020; and Sierra Club petitioned for review of the Commission’s order to the D.C. Circuit. In 2021, the Court remanded the Authorization and Rehearing Orders to the Commission. The Court held that Commission’s NEPA analysis of the project’s impacts on climate change and environmental justice communities were deficient and directed the Commission to (1) explain whether the NEPA regulations require the Commission to apply the SCC protocol or some other analytical framework, as generally accepted by the scientific community; and (2) explain why the Commission chose to analyze the project’s impacts on communities within a different radius from each project site and to determine whether the Commission’s environmental justice conclusion still holds. Because of these deficiencies, the Court directed the Commission to revisit its determination about the public interest under NGA Section 3.

Following remand and Texas LNG submitting additional information requested by the Commission and public comment on the filings, the Commission issued the Remand Order. The Remand Order addressed the issues remanded by Vencinos and supplemented the environmental analysis by addressing the argument regarding the SCC and by updating the analysis of the project’s environmental justice impacts consistent with current Commission practice and concluded that the project, as conditioned in the Authorization Order and as modified by the Remand Order, is not inconsistent with the public interest. On rehearing, Sierra Club argued that the Commission erred by failing to (1) consider issues that were not remanded by the court; (2) properly consider air pollution and environmental justice impacts; (3) properly consider GHG emission impacts; and (4) supplement the final Environmental Impact Statement (EIS) based on new information about SpaceX.

Sierra Club asserted that, once the Commission reacquired jurisdiction on remand, the Commission had discretion to reconsider the whole of its original decision and should have done so as the project and environmental context have changed since the prior approval. The Commission stated that it is under no legal obligation to revisit any portion of its original decision, other than those issues remanded, and to the extent it considered new information that bore upon the two issues remanded, the public had meaningful opportunity to review and comment on the information.

As to air quality and environmental justice communities, the Commission found that new data was properly collected and supports its prior findings. The Commission disagreed with Sierra Club’s claim that the Commission cannot assume that if air pollution will not violate the National Ambient Air Quality Standards (NAAQS) then health impacts related to air pollution will be insignificant. The Commission claimed that it used a conservative fifty-kilometer radius around the project to identify environmental justice communities and found that the air quality impacts from pollutants covered under the NAAQS to be less than significant. The Remand Order added a new Environmental Condition 130, which required Texas LNG, prior to commissioning the project, to file a Project Ambient Air Quality Mitigation and Monitoring Plan for particulate matter and nitrogen dioxide for periods when construction, commissioning and start-up, and operation of the project occur simultaneously. Sierra Club argued that this condition is insufficient because it orders Texas LNG to produce a plan in the future, and hence the effectiveness of the plan could not be evaluated prior to the Commission issuing the Remand Order; thus, according to Sierra Club, the Commission cannot rely on this condition to determine that air quality impacts would not be significant during concurrent construction and operation of the project, whether the project is considered on its own or cumulatively with the nearby Rio Grande LNG Project. The Commission held that this argument fails because it rests on the erroneous premise that the Commission is required to have a final mitigation plan in place before it can act. The Commission explained that courts have held that NEPA does not require the formulation of a specific mitigation plan, only that mitigation is discussed in sufficient detail to ensure that environmental consequences have been fairly evaluated.

As to whether a supplemental EIS should have been prepared, the Commission explained that in Marsh v. Oregon Natural Resources Council the Supreme Court explained that an agency’s decision to prepare a supplemental EIS is governed by a rule of reason and that an agency need not supplement an EIS every time new information comes to light. Here, the Commission concluded that it was not required to prepare a supplemental EIS because the issues discussed on remand did not result in any new significance determinations and the decision to not prepare a supplemental EIS did not preclude Sierra Club from commenting on the information in question.

As to the Vecinos requirement that the Commission revisit its public interest determination under the NGA, the Commission stated that the Remand Order included a “robust” environmental justice analysis that built upon its staff’s EIS and none of the information analyzed on remand undermines the Commission’s public interest determination; with this additional analysis, the Commission satisfies NEPA responsibilities. The Commission also noted that, for proposal under NGA section 3, the presumption favors authorization, and although the Commission may approve or deny an application, courts have explained that overcoming the favorable presumption in the NGA requires an affirmative showing of inconsistency with the public interest.

Sierra Club argued that the Commission has an obligation to consider GHG emissions as part of its public interest determination under the NGA, which therefore requires the Commission to consider the significance and impact of such emission under NEPA. The Commission dismissed this argument as not properly before it on remand because the remand was limited to the narrow question of whether NEPA regulations called for the Commission to apply the SCC or some other analytical framework generally accepted by the scientific community. The Commission found that Sierra Club “conflates” the Commission’s NEPA and NGA responsibilities and that the Commission’s balancing of factors bearing on public interest is consistent with the NGA and does not require the Commission to characterize estimated GHG emissions as “significant or insignificant” under NEPA. The Commission explained that NEPA is a procedural statute that describes the necessary process but does not mandate the agencies achieve particular substantive environmental results. The Commission stated that since it has found that the SCC has no utility in the NEPA determination of significance and there are no other methods enabling the Commission to do so, the Commission is not obligated to use SCC in its NGA review. The Commission acknowledged that its staff, in the EIS, estimated SCC associated with reasonably foreseeable emissions from the project, the Commission has nonetheless found that the calculation of the social cost of GHG does not enable the Commission to determine the significance in terms of the impact on global climate change; currently, no criteria identify what monetized values are significant for NEPA purposes, nor is the Commission aware of other scientifically accepted method to determine the significance of reasonably foreseeable GHG emissions. The Commission noted that the D.C. Circuit has affirmed the Commission’s decision not to analyze the SCC in its NEPA analysis and has found that petitioner fare no better when the issue is framed as NGA challenges. The Commission clarified that—to the extent there are some statements in staff environmental documents and the Remand Order that the project contributes to GHG emissions contribute incrementally to future climate change impacts—this is assuming that the transported gas is not displacing equal, or higher, emitting sources, and, in any case, there are currently no accepted tools or methods to determine significance; the Commission did not characterize these emissions as significant or insignificant, and does not do so on rehearing.

As to concerns over future SpaceX launches near the project, the Commission disagreed that it should have supplemented its NEPA analysis because this issue was not raised in rehearing and was not included in the Vecinos remand. Moreover, the Commission noted that its Authorization Order contains two conditions that require Texas LNG to develop and implement procedures to monitor and mitigate adverse impacts from SpaceX launches and that Sierra Club offered no support for its claim that these measures are not sufficient.

Commissioner Clements issued a dissenting opinion, agreeing with the Sierra Club that the Commission was obligated to prepare a supplement EIS and provide the public with a meaningful opportunity to comment on it as well as on required mitigation measures. Commissioner Clements argued that the Remand Order identified hundreds of additional environmental justice communities potentially affected by the project, constituting the “significant new information” requiring a supplemental EIS. Commissioner Clements also took issue with the Remand Order’s finding that the project would not have a significant impact on air quality and therefore no supplemental EIS is required. Commissioner Clements argued that Environmental Condition 130 is nothing more than a plan to have a plan—it does not say how many and what types of monitors Texas LNG must have, how an NAAQS exceedance would be calculated, what mitigation measures Texas LNG must implement in response to an exceedance and how quickly it must do so, and, worst of all, there is no explanation of whether it will be feasible for Texas LNG to prevent a NAAQS exceedance. Commissioner Clements dissented from the Commission’s GHG findings because she viewed it as a failure to satisfy the Vecinos direction to explain whether NEPA regulations call for the use of SCC or some other analytical framework to assess GHG. Commissioner Clements argued that—in analyzing that the Council on Environmental Quality’s (CEQ) NEPA regulations call for the use of the SCC protocol—the obvious central question is what is CEQ’s position, and the answer is unambiguous support for the use of SCC based on 2016 and 2023 guidance documents. Commissioner Clements accused the Commission of deliberately making it unclear as to whether the Commission considers GHG emissions at all in its NGA public interest determination. Commissioner Clements claims that the Commission’s recent orders leave reviewing courts unable to discern whether the Commission must consider climate impacts, and if so, whether and how it weighs them in the public interest determination. Commissioner Clements took issue with the Commission’s claims that its responsibilities under NEPA and the NGA are separate and distinct so as to suggest that they bear no relation to each other; to the contrary, in her view, the two requirements are inextricably linked. Instead, Commissioner Clements argued that NEPA directs agencies to the fullest extent possible to interpret their organic statues in accordance with environmental protection objectives, and in requiring the Commission to consider environmental impacts in its substantive decision-making, NEPA gives content to the NGA’s broad public interest standard.

Commissioner Christie issued a concurring opinion. Commissioner Christie said that, while its order correctly rejects the use of SSC in its public interest calculus under the NGA, this rejection should be more comprehensive. Commissioner Christie argued that SSC does not have the slightest scientific validity in any serious cost-benefit analysis of gas infrastructure projects because the SSC number represents “negative externalities” but does not bother to calculate a project’s positive externalities and net them out. Commissioner Christie opined that the entire push—dating back to the failed attempt to enact the draft Certificate Policy and GHG Statements, and CEQ’s and EPA’s claim that the Commission should consider both upstream and downstream non-jurisdictional activities—is intended to put in place a process and legal foundation for the Commission to reject needed natural gas projects solely on the basis of a single project’s purported impacts on global climate. But that effort would represent a radical rewrite of the NGA which, according to Commissioner Christie, neither the Commission nor the courts have the authority to do; global climate change and what to do about it from a regulatory standpoint are “major questions of public policy,” which, as the Supreme Court recently held, are the exclusive province of the legislature.

D. Post-Certification Challenges

On March 29, 2024, the D.C. Circuit upheld the Commission’s decision to grant extensions of time to complete two projects—improvements to an LNG terminal in Texas and related pipeline; and a ninety-nine-mile pipeline in the Northeast connecting gas producers to markets in Canada. The court noted that, although the NGA does not require the Commission to set deadlines for completion of projects, the Commission has in place regulations requiring a deadline for completion of a project and regulations for granting of extensions for “good cause.” These regulations are predicated on NGA authority to “perform any and all acts, and to prescribe, issue, make, amend [or] rescind [a certificate order] . . . as [the agency] may find necessary or appropriate to carry out the [NGA]” The court stated that the Commission’s discretion in granting an extension is limited only by the arbitrary and capricious standard of the Administrative Procedure Act, which means that the court must uphold the Commission’s decision if the Commission has examined the relevant considerations and articulated a satisfactory explanation of its action, including a rational connection between facts found and choice made. Here, the Commission reasonably found that litigation delays for the ninety-nine-mile pipeline constituted good cause for an extension and that the COVID-19 pandemic causing logistical problems for the LNG project amounted to good cause.

However, under Commission precedent, “good cause” applies only within a time frame during which the environmental and other public interest findings underlying the authorization can be expected to remain valid, and the Commission may account for changed conditions by relying on its discretion to “amend” a certificate as “necessary or appropriate.” The Commission disagreed with petitioners that this NGA authority also constitutes a requirement to reevaluate findings under the certificate to ensure that its decision is “appropriate.” The court found that this provision empowers the Commission to take action and the plain language allows the Commission to determine, in its discretion, what is “appropriate” to be considered. Nevertheless, the court stated that the Commission must account for substantial or significant changes that impact an approval under NEPA regulations and must prepare a supplemental environmental analysis if (1) a major federal action remains to occur, and (2) the agency makes substantial changes to the proposed action that are relevant to environmental concerns or there are new significant circumstances or information relevant to environmental concerns. In sum, the court found that NGA, NEPA, and Commission precedent provide bases for the Commission to revisit its prior findings due to significant changed circumstances and that the Commission has substantial discretion to amend an approved certificate if it believes doing so is “necessary or appropriate” under the NGA or is mandated by NEPA, and that such a decision is entitled to substantial deference because it necessarily relies on the Commission’s technical expertise in determining what constitutes substantial changes to a project or significant new circumstances or information related to a project.

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    Larry Inouye

    Van Ness Feldman, LLP

    Larry Inouye is a Senior Energy Analyst with Van Ness Feldman, LLP.