Yesterday, Attorney General William Tong and 14 other Attorneys General (AGs) submitted a comment to the Federal Energy Regulatory Commission (FERC), opposing a proposed rule that would greatly increase the scale and scope of gas pipelines allowed to bypass federal review.
“The Commission’s proposal to significantly expand the scope and scale of qualifying projects under its blanket certificate program is likely to raise energy bills, increase air pollution, and cause other harms without countervailing benefits,” reads the comment. “As Americans endure a growing energy affordability crisis and suffer through increasingly frequent extreme heat, wildfires, and other disasters fueled by climate pollution, the Commission must fulfill its responsibility under the Natural Gas Act to ensure that gas infrastructure expansions are consistent with the public interest.”
The Natural Gas Act, a federal law that was passed in 1938, established the FERC to regulate the interstate transportation of natural gas. In 1982, the FERC created a blanket certificate program, allowing interstate natural gas pipelines to bypass FERC review or public notice on small projects that are deemed to have “relatively little impact on ratepayers, or little effect on pipeline operations.” Currently, any pipeline that has a blanket certificate receives automatic approval for any project worth less than $14.5 million. The FERC’s proposed rule change would more than double that amount, allowing any pipeline project under $30 million to proceed without further review.
The proposed rule also seeks to increase the monetary threshold for “prior notice” projects, which require FERC approval, a 60-day public hearing, and direct notice to affected landowners before proceeding. Currently, any proposed project on a blanket certificate pipeline that costs more than $14.5 million but less than $41.1 million is deemed a prior notice project; the FERC proposed increasing that threshold to $86 million. While the FERC currently adjusts these thresholds based on an inflationary index, the FERC is now proposing an annual increase schedule based on an index provided by natural gas providers, who have argued to the FERC that construction costs have outpaced inflation. Lastly, the FERC proposed giving prior notice authorization to all gas compressor projects that fit on the property of extant compression stations, regardless of cost, and also proposed allowing certain mainline projects to receive automatic authorization.
Joining Tong in submitting the comment were the AGs of Washington, Massachusetts, Arizona, California, Colorado, Illinois, Maine, Maryland, Michigan, Minnesota, New York, Oregon, Vermont, and Washington, D.C. The AGs comment in opposition to the proposals argued that it would violate the Natural Gas Act, the Administrative Procedure Act, and the National Environmental Policy Act. They called the “evidence allegedly showing” that the cost of construction has outpaced inflation “incomplete and unreliable.” They also attacked the proposal to allow automatic authorization for mainline projects.
“Automatically authorizing mainline expansion projects is inconsistent with the Natural Gas Act’s plain language, judicial precedent, and the Commission’s current rationale for automatic authorizations,” reads their comment. “Nor is there a basis to decline to review new or expanded facilities pursuant to the National Environmental Policy Act.”
The AGs recommended that FERC instead limit the number of blanket certificate projects a gas company can develop on a rolling, three-year basis, to “disincentivize pipeline companies from unlawfully segmenting projects to fit within the blanket certificate’s cost caps.” They also requested FERC to adopt broader public accountability measures for blanket certificate projects.
“FERC has a responsibility to protect families, not to fast-track fossil fuel infrastructure,” said Tong. “This unlawful plan will lead to more pollution, fewer safeguards, and higher energy costs for families who are already paying too much.”
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