Court ruling could broaden U.S. government environmental impact studies

NEW YORK (Reuters) - U.S. regulators assessing new gas pipelines must try to analyze their potential to increase greenhouse gas emissions before giving them the go-ahead, an appeals court ruled on Tuesday, in a decision that industry representatives and environmentalists said could have far-reaching effects on infrastructure projects.

Construction work continues on a natural gas pipeline near Morgantown in Chester County, Pennsylvania, August 1, 2017. REUTERS/Charles Mostoller

The ruling stemmed from a decision by the Federal Energy Regulatory Commission (FERC) to approve the Southeast Pipelines Project, three gas pipelines proposed by a consortium of companies including Duke Energy Corp, Spectra Energy Partners and NextEra Energy Inc.

Judges on the District of Columbia Circuit of the U.S. Court of Appeals said in their ruling that before FERC approved the project it should have considered the environmental impact of the greenhouse gases likely to be emitted when gas transported by the pipelines was burned.

While some experts said the decision meant little more than an increase in paperwork for regulators, others said it could change the way the federal government decides what issues to examine in environmental impact studies required under the National Environmental Policy Act.

In the past regulators have considered only the effects of a project they have the authority to control, which are considered direct effects. But the appeals court’s decision could force them to consider indirect effects as well.

“FERC would obviously prefer to say, ‘We’re approving a pipeline and here are the impacts from digging a trench and laying a pipe,’” said Elly Benson, a lawyer for the Sierra Club, one of the environmental groups that challenged the permit FERC gave for the pipelines in a petition before the appeals court.

“What they’re ignoring is the fact that this project includes the transmission of gas that everyone knows is going to be combusted,” added Benson, who called the court’s decision a “very important victory.”

A FERC spokeswoman declined to comment.

Andrea Grover, a spokeswoman for Sabal Trail Transmission, the joint venture company operating the pipeline, said: “We are reviewing the decision. The court’s decision will not affect Sabal Trail’s operations at this time.”

The ruling comes a week after President Donald Trump issued an executive order calling for regulators to shorten the process around infrastructure permitting to two years and appoint a lead federal agency to work on permitting for each new project.

Deidre Duncan, a partner at Hunton & Williams who represents a number of pipeline companies, said the ruling could foretell “significant” changes to regulators’ permitting duties, forcing regulators to look more broadly at proposed projects before approving them.

“If not changed on rehearing or ultimately by the Supreme Court, this case has broad implications for multiple industries and agencies in various contexts,” she said.

The case is Sierra Club et al v. Federal Energy Regulatory Commission, U.S. Court of Appeals, District of Columbia Circuit, 16-1329.

Reporting by Emily Flitter; Editing by Frances Kerry and Leslie Adler