D.C. Circuit orders FERC to revise assessment of pipeline upgrade

(Reuters) - The Federal Energy Regulatory Commission must revise its environmental assessment of a Kinder Morgan subsidiary’s upgrades to a natural-gas pipeline in Massachusetts, a federal appeals court held.

In a partial win for environmental advocacy group Food & Water Watch, the U.S. Court of Appeals for the District of Columbia Circuit said Friday FERC “failed to account for the reasonably foreseeable indirect effects of the project—specifically, the greenhouse-gas emissions attributable to burning the gas to be carried in the pipeline.”

The court rejected Food & Water Watch’s other challenges to the project, which added a compressor station and another 2.1 miles of pipe to Tennessee Gas Pipeline Co’s system near Agawam, Mass. The upgrades are operating, and Friday’s ruling does not require Tennessee Gas to shut them down during FERC’s reevaluation.

Even so, the court “made it clear that downstream emissions from compressor station expansions are, in fact, reasonably foreseeable when they feed a local distribution system for commercial and residential use,” said Adam Carlesco of Food & Water Watch. “FERC has consistently denied this contention for years.”

FERC’s attorneys had no immediate comment on Friday. Kinder Morgan spokeswoman Katherine Hill declined to comment.

In a 2017 decision in an unrelated case, the D.C. Circuit held that FERC’s review of proposed pipeline projects must include reasonably foreseeable “downstream” effects, including combustion of the fossil fuels the pipelines carry.

In reviewing the Agawam project, FERC concluded in February 2020 that the downstream effects were “inherently unforeseeable.” Now-Chairman Richard Glick dissented, saying it was a “relatively easy” calculation. The D.C. Circuit agreed with Glick on that point.

However, the panel stopped short of ordering FERC to quantify the effect of those increased emissions on climate change by using the social cost of carbon metric.

Since Food & Water Watch had never suggested the social cost of carbon “or any other workable alternative” to FERC during the administrative review process in 2019 and 2020, it could not do so on appeal, Chief Circuit Judge Sri Srinivasan wrote, joined by Circuit Judges Patricia Millett and Gregory Katsas.

The social cost of carbon was developed by the Obama administration, nearly decimated by the Trump administration, and reinstated by the Biden administration in January 2021. However, a federal judge in Louisiana issued a preliminary injunction against its use last month, leading the administration to put its review of federal oil and gas leases and other projects on hold.

The case decided Friday is Food & Water Watch et al. v. FERC et al., U.S. Court of Appeals for the D.C. Circuit No. 20-1132.

For Food & Water Watch: Adam Carlesco and Zachary Corrigan of Food & Water Watch and Carolyn Elefant

For FERC: Susanna Chu and Robert Solomon of FERC

For Tennessee Gas Pipeline Co: Brian O'Neill and Michael Pincus of Van Ness Feldman

Our Standards: The Thomson Reuters Trust Principles.