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171 FERC ¶ 61,232
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Richard Glick, Bernard L. McNamee,
and James P. Danly.
Mountain Valley Pipeline, LLC
Docket No. CP 19-14-000
ORDER ISSUING CERTIFICATE
(Issued June 18, 2020)
1. On November 6, 2018, Mountain Valley Pipeline, LLC (Mountain Valley) filed an
application pursuant to section 7(c) of the Natural Gas Act (NGA)1 and Part 157 of the
Commission's regulations2 for authorization to construct and operate approximately
75.1 miles of natural gas pipeline and associated aboveground facilities in Pittsylvania
County, Virginia, and Rockingham and Alamance Counties, North Carolina (Southgate
Project). The Southgate Project is designed to provide up to 375,000 dekatherms (Dth)
per day of firm transportation service.
2. For the reasons discussed below, we will grant the requested authorizations, subject
to the conditions described herein.
I. Background
3. Mountain Valley,' a Delaware limited liability company, does not currently provide
any services subject to the Commission's jurisdiction. On October 13, 2017, the
Commission issued a certificate of public convenience and necessity authorizing Mountain
Valley to construct and operate a new 303.5-mile-long, 42-inch-diameter interstate pipeline
system to provide up to 2,000,000 Dth per day of firm natural gas transportation service
from Wetzel County, West Virginia, to an interconnection with Transcontinental Gas Pipe
' 15 U.S.C. § 717f(c) (2018).
2 18 C.F.R. pt. 157 (2019).
3 Five companies own Mountain Valley: (1) EQM Midstream Partners, LP
(45.5%); (2) NextEra Energy (31%); (3) Con Edison Transmission, Inc. (12.5%);
(4) WGL Midstream (10%); and (5) RGC Midstream, LLC (1%).
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Line, LLC's (Transco) Compressor Station 165 in Pittsylvania County, Virginia (Mainline
System).'
4. In early 2018, Commission staff authorized Mountain Valley to commence
construction of the Mainline System, and, in February 2018, Mountain Valley
commenced construction.' On July 27, 2018, the U.S. Court of Appeals for the Fourth
Circuit issued an order vacating authorizations issued by the Department of the Interior's
Bureau of Land Management (BLM) and the Department of Agriculture's Forest Service
(Forest Service) for the Mainline System.6 Thereafter, on August 3, 2018, Commission
staff issued a Notification of Stop Work Order for the Mainline System.' Subsequently,
on August 29, 2018, Commission staff authorized partial construction to resume based on
staff s assessment that completing construction and restoration as quickly as possible
would best protect the environment.'
5. On October 3, 2018, Mountain Valley informed the Commission that the U.S.
Court of Appeals for the Fourth Circuit had issued an order vacating the U.S. Army
Corps of Engineers (Army Corps) Huntington District's Nationwide Permit 12 for the
project, and that it was suspending construction in waters of the United States in the
'Mountain Valley Pipeline, LLC, 161 FERC ¶ 61,043 (2017), order on reh g,
163 FERC ¶ 61,197 (2018) (Mountain Valley), aff'd sub nom., Appalachian Voices v.
FERC, No. 17-1271, 2019 WL 847199 (D.C. Cir. Feb. 19, 2019).
' See Mountain Valley's Weekly Status Report Nos. 14 and 15 (filed
February 7 and 15, 2018, respectively, in Docket No. CP16-10-000) (construction did not
commence until after February 2, 2018).
6 Sierra Club, Inc. v. U.S. Forest Serv., 897 F.3d 582 (4th Cir. 2018) (vacating the
permit for the pipeline to cross 3.6 miles of the Jefferson National Forest in West
Virginia and Virginia).
7 Mountain Valley Pipeline, LLC, Notification of Stop Work Order, Docket
No. CP 16-10-000 (August 3, 2018) (delegated order).
'Mountain Valley Pipeline, LLC, Partial Authorization to Resume Construction,
Docket No. CP 16-10-000 (August 29, 2018) (delegated order) (allowing construction
except for the area containing the 3.5 miles of pipeline route across the Jefferson National
Forest, in Monroe County, West Virginia and Giles County, Virginia, between
milepost 196.0 and milepost 221.0).
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Army Corps' Huntington District.' Subsequently, Mountain Valley notified the
Commission that the Army Corps' Norfolk and Pittsburgh Districts had suspended their
nationwide permits issued for the Mainline System, and that, consequently, Mountain
Valley was suspending construction in waters of the United States in those Army Corps
districts as well.10
6. On August 15, 2019, Mountain Valley voluntarily suspended new construction
activities in certain watersheds to avoid potential impacts on listed threatened and
endangered aquatic species.11 On August 28, 2019, the Commission requested that the
U.S. Fish and Wildlife Service (FWS) reinitiate consultation under section 7 of the
Endangered Species Act (ESA) with respect to the Mainline System project.
7. On October 11, 2019, the United States Court of Appeals for the Fourth Circuit
issued an order granting a stay of the FWS's 2017 Biological Opinion and Incidental
Take Statement (Biological Opinion) issued for the Mainline System and granting the
Department of the Interior's motion to hold the litigation in abeyance until completion of
reinitiated ESA consultation.12 In response to the court's stay of the 2017 Biological
Opinion, the Director of the Office of Energy Projects notified Mountain Valley that it
' Mountain Valley's October 3, 2018 Letter, Docket No. CP 16-10-000 (providing
opinion of the U.S. Court of Appeals for the Fourth Circuit, Sierra Club v. U.S. Army
Corps of Eng'rs, 905 F.3d 285 (4th Cir. 2018)).
10 Mountain Valley's October 9 and 22, 2018 Letters, Docket No. CP16-10-000
(providing the Army Corps' Norfolk and Pittsburg Districts' notices suspending
authorization, respectively).
11 Mountain Valley's August 15, 2019 Voluntary Suspension Letter, Docket
No. CP16-10-000 (suspending work within mileposts 107.5-122.5, 196.3-201.8, and
218.6-293.3). The FWS issued a Biological Opinion for the Mainline System on
November 21, 2017. Since issuance of the Biological Opinion, the candy darter, which is
known to inhabit streams in the project area, was listed as endangered by the FWS.
New information on the possible effects of the Mainline System on certain species
covered by the Biological Opinion (i.e., Roanoke logperch, Indiana bat, and Northern
long-eared bat) has also been identified in the interim (e.g., new information regarding
impacts from sedimentation and slips).
12 Wild Virginia v. Department of the Interior, Order, 4th Cir. No. 19-1866
(Oct. 11, 2019) (order granting stay and holding case in abeyance). On September 11,
2019, the FWS accepted the Commission's August 28, 2019 request to reinitiate
consultation pursuant to section 7 of the ESA regarding impacts to certain species
covered in the 2017 Biological Opinion (i.e., the candy darter, Roanoke logperch, Indiana
bat, and Northern long-eared bat).
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must cease all construction activity along the entirety of the Mainline System and in all
work areas except for restoration and stabilization activities.13 At that time, Mountain
Valley had completed construction (trenched, installed, and backfilled the pipeline) on
about 78% of the Mainline System right-of-way and final restoration on about 51 % of the
Mainline System.
8. Currently, Mountain Valley is not authorized to recommence construction of the
Mainline System, as reinitiated ESA consultation is ongoing. In addition, Mountain
Valley cannot construct the portion of the Mainline System that crosses the Jefferson
National Forest in West Virginia and Virginia, or that is in waters of the United States
subject to the Army Corps' Nationwide Permit 12.
9. While we are authorizing the Southgate Project with this order, we are directing
the Office of Energy Projects to not issue any notice to proceed with construction14 of the
Southgate Project until Mountain Valley receives the necessary federal permits for the
Mainline System, and the Director of the Office of Energy Projects, or the Director's
designee, lifts the stop -work order and authorizes Mountain Valley to continue
constructing the Mainline System.
10. Upon commencing operations on its Mainline System, Mountain Valley will
become a natural gas company within the meaning of section 2(6) of the NGA.15
II. Southeate Proiect Prouosal
11. Mountain Valley proposes to construct and operate the Southgate Project to
provide up to 375,000 Dth per day of firm transportation service from an interconnect
approximately 0.1 mile upstream of the terminus of the Mainline System in Pittsylvania
County, Virginia, to Dominion Energy North Carolina's (Dominion)16 local distribution
13 Mountain Valley Pipeline LLC, Cessation of Certain Activities, Docket
No. CP16-10-000 ( October 15, 2019) (delegated order).
" Construction activities include tree -clearing. See, e.g., PennEast Pipeline Co.,
LLC, 164 FERC ¶ 61,098, n.136 (2018) ("PennEast is prohibited from commencing
construction, including any tree clearing activities ....").
" 15 U.S.C. § 717(a)(6) ("a `natural gas company' means a person engaged in the
transportation of natural gas in interstate commerce ....").
16 Dominion is a local distribution company primarily engaged in the purchase,
transportation, distribution, and sale of natural gas to customers in North Carolina.
Following a January 2, 2019 merger, Dominion Energy, Inc. acquired the Public Service
Company of North Carolina and changed the company name to Dominion Energy North
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facilities, via the Dan River Interconnect and the Haw River Interconnect in Rockingham
and Alamance Counties, North Carolina, respectively. The proposed project will provide
Dominion access to natural gas produced in the Marcellus and Utica shale regions, and a
connection to East Tennessee Natural Gas, LLC's (East Tennessee) pipeline system.17
Specifically, Mountain Valley proposes to construct:
approximately 0.5 mile of 24-inch-diameter natural gas pipeline in
Pittsylvania County, Virginia;
• approximately 30.7 miles of new 24-inch-diameter natural gas pipeline in
Pittsylvania County, Virginia, and Rockingham County, North Carolina;
approximately 43.9 miles of new 16-inch-diameter natural gas pipeline in
Rockingham and Alamance Counties, North Carolina;
• one new 28,915-horsepower compressor station, including two natural gas -
fired turbine -driven compressor units, in Pittsylvania County, Virginia
(Lambert Compressor Station);
• four new interconnects and associated meter stations, enabling the
Southgate Project to receive natural gas from Mountain Valley's Mainline
System (Mainline Interconnect) and East Tennessee's LN 3600 (East
Tennessee Interconnect),18 and to deliver natural gas to Dominion's T-15
Dan River facilities (Dan River Interconnect) and T-21 Haw River facilities
(Haw River Interconnect); and
Carolina. For ease of reference, we will refer to the project shipper as Dominion
throughout.
17 Currently, Dominion accesses gas it stores in Spectra Energy Partner's Saltville
Storage facility, which is located on East Tennessee's pipeline system, through secondary
firm backhaul transportation on Transco's pipeline system to Dominion's local
distribution system. The Southgate Project would provide Dominion with a primary
receipt and delivery forward haul transportation path between East Tennessee's system
and Dominion's local distribution system.
" The project will provide for the receipt of 250,000 Dth per day of natural gas
from the Mainline System and 50,000 Dth per day of natural gas from the East Tennessee
Interconnect.
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• ancillary facilities including pig launchers and receivers,19 mainline block
valves, and cathodic protection beds.
Mountain Valley estimates that the Southgate Project will cost approximately $468 million.20
12. Mountain Valley conducted a binding open season for firm transportation service
from April 11 through May 11, 2018. As a result, Mountain Valley executed a binding
precedent agreement with Dominion for 300,000 Dth per day of firm transportation on
the project. The precedent agreement requires Dominion to execute a 20-year term firm
transportation service agreement. Dominion has elected to pay negotiated rates.
13. Mountain Valley proposes to provide Firm (Rate Schedule FTS), Interruptible
(Rate Schedule ITS), and Interruptible Parking and Lending (Rate Schedule ILPS)
transportation services under a separate rate zone called the Southgate System.
III. Procedural
A. Notice, Interventions, Protests, and Comments
14. Notice of Mountain Valley's application was published in the Federal Register on
November 26, 2018.21 A number of timely motions to intervene were filed.22 Robert
McNutt, Mark Ruffin, Renee Womack, the Sappony Tribe, and the Monacan Indian
Nation filed late motions to intervene, which were granted by notice issued on April 23,
2019. On January 31, 2020, Transco filed a late motion to intervene, which was denied
by notice issued on April 6, 2020.13
19 A "pig" is a device used to clean or inspect the interior of a pipeline.
20 Mountain Valley's November 6, 2018 Application, Exhibit K at 1 (Application).
21 83 Fed. Reg. 60,420 ( Nov. 26,2018).
22 Timely, unopposed motions to intervene and notices of intervention are
granted by operation of Rule 214 of the Commission's Rules of Practice and Procedure.
18 C.F.R. § 385.214(c)(1) and 385.214(a)(2) (2019). Timely motions to intervene
include those filed dealing with environmental issues during the comment period for the
draft environmental impact statement (EIS). See id. § 380.10(a)(1)(i). Because
Bobby Pulliam, Eleanor Amidon, Food and Water Watch, and the City of Burlington
filed motions to intervene during the comment period for the draft EIS, their motions are
deemed timely.
23 Mountain Valley filed an answer in opposition to Transco's request to intervene
out -of -time on February 14, 2020. On February 28, 2020, Transco filed an answer to
Mountain Valley's answer. Because Transco's motion to intervene late was denied, we
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15. The North Carolina Utilities Commission (North Carolina Commission) protests
Mountain Valley's proposed recourse rates for the Southgate Project because it contends
that the two largest components of the proposed rates — the return on equity (ROE) and
the depreciation rate — are not adequately supported.24 The Appalachian Mountain
Advocates, Appalachian Voices, the Center for Biological Diversity, the Chesapeake
Climate Action Network, the Haw River Assembly, and the Sierra Club (collectively,
Appalachian Mountain Advocates) jointly filed a protest in opposition to the project in its
entirety, asserting that the project is not needed and is likely to adversely impact a range
of environmental resources.25 We will discuss the merits of these protests below.26
16. Numerous entities, including landowners and individuals, filed comments raising
concerns over the environmental impacts of the project. These comments are addressed
in the final Environmental Impact Statement (EIS) and, as appropriate, below. In
addition, the North Carolina Economic Development Association and the North Carolina
Chamber filed comments in support of the Southgate Project based on the project's job
creation benefits; the final EIS addressed these comments.
B. Answers
17. Mountain Valley and Dominion filed answers to the North Carolina Commission's
and the Appalachian Mountain Advocates' protests.27 Although the Commission's Rules
of Practice and Procedure do not permit answers to protests or answers to answers, we
find good cause to waive our rules and accept the answers because they provide
information that has assisted in our decision -making process.28
consider Transco's filings as comments and Mountain Valley's response as an answer to
them; accordingly, concerns raised in the filings are addressed below in the
environmental analysis section.
2' North Carolina Commission's December 10, 2018 Notice of Intervention and
Protest at 4 (North Carolina Commission Protest).
2s Appalachian Mountain Advocates' December 10, 2018 Motion to Intervene and
Protest at 7-8 (AMA Protest).
26 See infra PP 29-51 (project need) and 53-64 (recourse rates).
27 Dominion's December 28, 2018 Answer (Dominion Answer); Mountain
Valley's January 8, 2019 Answer (Mountain Valley Answer).
21 See 18 C.F.R. § 385.213(a)(2).
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C. Reauests for Formal Hearin
18. The North Carolina Commission and Appalachian Mountain Advocates request a
formal hearing on Mountain Valley's Southgate Project application that would address,
respectively, whether Mountain Valley's proposed recourse rates comply with
Commission policy,29 and whether the project is needed."
19. An evidentiary, trial -type hearing is necessary only where there are material issues
of fact in dispute that cannot be resolved on the basis of the written record.31 Neither the
North Carolina Commission nor Appalachian Mountain Advocates have raised a material
issue of fact that the Commission cannot resolve on the basis of the written record. As
demonstrated by the discussion below, the existing written record provides a sufficient
basis to resolve the issues relevant to this proceeding. The Commission has satisfied the
hearing requirement by giving all interested parties a full opportunity to participate
through evidentiary submission in written form.32 Therefore, we will deny the North
Carolina Commission's and the Appalachian Mountain Advocates' requests for a formal
hearing.
D. Request for Technical Conference
20. In comments filed March 27, 2020, Transco requests a technical conference to
allow it to explain "its safety, integrity, and operational concerns" regarding the portion
of the proposed Southgate Project that would be collocated with Transco's existing
pipeline right-of-way.33 In a response filed May 8, 2020, Mountain Valley asserts that a
technical conference is not necessary where, as is the case here, the questions raised can
be resolved through the written record.3' Mountain Valley responds to Transco's general
concerns regarding construction practices in the collocated segments, and maintains it is
more appropriate for Mountain Valley and Transco to work together to discuss and
21 See North Carolina Commission Protest at 16-17.
30 See AMA Protest at 15-16.
31 See, e.g., Southern Union Gas Co. v. FERC, 840 F.2d 964, 970 (D.C. Cir.
1988); Dominion Transmission, Inc., 141 FERC ¶ 61,183, at P 15 (2012).
32 Moreau v. FERC, 982 F.2d 556, 568 (D.C. Cir. 1993).
33 See Transco's March 27, 2020 Comments at 3.
34 See Mountain Valley's May 8, 2020 Comments at 1-2.
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resolve engineering and technical issues related to construction and operation of their
collocated pipelines than to hold a conference.35
21. Because the merits of this matter can be adequately addressed based on the
information in the record in this proceeding, we find no need to convene a technical
conference. Transco's concerns regarding collocation of the Southgate Project pipeline
with Transco's existing right-of-way are discussed further in the environmental section
of this order."
IV. Discussion
22. Because the proposed facilities will be used to transport natural gas in interstate
commerce, subject to the jurisdiction of the Commission, the construction and operation
of the facilities are subject to subsections (c) and (e) of the NGA.
A. Application of the Certificate Policy Statement
23. The Certificate Policy Statement provides guidance for evaluating proposals to
certificate new construction.37 The Certificate Policy Statement establishes criteria for
determining whether there is a need for a proposed project and whether the proposed project
will serve the public interest. The Certificate Policy Statement explains that, in deciding
whether to authorize the construction of new pipeline facilities, the Commission balances
the public benefits against the potential adverse consequences. The Commission's goal
is to appropriately consider the enhancement of competitive transportation alternatives,
the possibility of overbuilding, subsidization by existing customers, the applicant's
responsibility for unsubscribed capacity, avoidance of unnecessary disruptions of the
environment, and the unneeded exercise of eminent domain in evaluating new pipeline
construction.
24. Under this policy, the threshold requirement for existing pipelines proposing new
projects is that the pipeline must be prepared to financially support the project without
relying on subsidization from existing customers. The next step is to determine whether
the applicant has made efforts to eliminate or minimize any adverse effects the project
might have on the applicant's existing customers, existing pipelines in the market and
their captive customers, or landowners and communities affected by the proposed route
35 See id. at 2.
36 See infra PP 127-133.
37 Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC
¶ 61,227; corrected, 89 FERC ¶ 61,040 (1999), clarified, 90 FERC ¶ 61,128; further
clarified, 92 FERC ¶ 61,094 (2000) (Certificate Policy Statement).
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or location of the new pipeline facilities. If residual adverse effects on these interest
groups are identified after efforts have been made to minimize them, the Commission
will evaluate the project by balancing the evidence of public benefits to be achieved
against the residual adverse effects. This is essentially an economic test. Only when the
benefits outweigh the adverse effects on economic interests will the Commission proceed
to complete the environmental analysis where other interests are considered.
1. Subsidization and Impacts on Existing Customers
25. As discussed above, the threshold requirement is that the applicant must be
prepared to financially support the project without relying on subsidization from its
existing customers. Mountain Valley proposes to establish a separate rate zone for
service on the Southgate Project. The design of the Southgate Project allows only for the
physical flow of gas from the Mainline System to the Southgate Project facilities. 38
Thus, the Southgate System rates will apply to all facilities downstream of the Mainline
System (i.e., the Lambert Compressor Station, the Mainline Interconnect, the East
Tennessee Interconnect, the Haw River Interconnect, and the Dan River Interconnect).
Mountain Valley has designed the initial recourse rates for the Southgate System as a
separate rate zone to ensure that the cost of the project, and the risks inherent in it, are
borne by Mountain Valley and the Southgate Project customers, and not its Mainline
System customers. Therefore, once operation of the Mainline System commences, there
would be no risk that existing Mainline System customers would be subsidizing service
on the Southgate Project, and no degradation of service to those customers.
2. Existing Pipelines and Their Customers
26. We find that there will be no adverse impact on other pipelines in the region or
their captive customers. The Southgate Project will provide up to 375,000 Dth per day of
incremental firm transportation service in North Carolina and southern Virginia. No
transportation service provider or captive customer has protested this project.39
Therefore, we find that the Southgate Project will have no adverse impact on existing
pipelines or their captive customers.
3. Landowners and Communities
27. We are satisfied that Mountain Valley has taken appropriate steps to minimize
adverse impacts on landowners. As discussed in greater detail in the final EIS and below,
Mountain Valley's proposed project will disturb approximately 1,466 acres of land
38 Application at 15.
31 In PP 128-133 below, we address Transco's comments regarding the
collocation of the Southgate pipeline with Transco's mainline.
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during construction, and approximately 450 acres of land during operation.40 Mountain
Valley participated in the Commission's pre -filing process and has actively worked with
local stakeholders, including homeowners and landowners, as well as with federal and
state agencies, to develop the proposed pipeline route, culminating in more than
190 route adjustments and the elimination of a second compressor station that had
originally been proposed in pre -filing to be located near milepost 26 in North Carolina.41
Mountain Valley obtained permission to survey, and completed field surveys of,
approximately 96% of the route42 and has committed to minimizing the use of eminent
domain to the greatest extent possible by negotiating easement agreements for the
permanent and temporary easements necessary to construct and operate the project.43
Approximately 49% (i.e., 36.8 miles) of the proposed pipeline route would be collocated
with existing utility corridors and rights-of-way.44
28. Several commenters question the appropriateness of granting private pipeline
companies the power of eminent domain, and request that the Commission not grant
Mountain Valley that authority. The Commission itself does not confer the right of
eminent domain. Under NGA section 7, the Commission has jurisdiction to determine if
the construction and operation of proposed interstate pipeline facilities are in the public
convenience and necessity. Once the Commission makes that determination, NGA
section 7(h) authorizes a certificate holder to acquire the necessary land or property to
construct the approved facilities by exercising the right of eminent domain if it cannot
40 Final EIS at 4-114 (Table 4.8-1).
41 Application at 12.
42 Final EIS at 1-3.
43 Application at 11.
44 Final EIS at 2-3.
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acquire the easement by an agreement with the landowner.4' Thus, the NGA, not the
Commission, grants certificate holders the right to take property by eminent domain.46
4. Need for the Proiect
29. Mountain Valley has entered into a long-term, firm precedent agreement with
Dominion for 300,000 Dth per day of firm transportation service, 80% of the project
capacity.
30. Appalachian Mountain Advocates, the North Carolina Department of
Environmental Quality (North Carolina DEQ), Friends of the Central Shenandoah, and
various commenters challenge the need for the Southgate Project on several grounds.
These parties and commenters maintain that existing infrastructure is available to meet
the demand for natural gas in North Carolina, a demand which they believe Mountain
Valley overstates, and ask the Commission to evaluate new pipeline infrastructure
projects on a regional basis. They also seek heightened scrutiny of Mountain Valley's
precedent agreement with the project shipper, Dominion, due to Dominion's former
affiliate status.47
a. Ability of Existing Infrastructure to Meet Demand
31. Appalachian Mountain Advocates assert that a surplus of pipeline capacity exists
when existing pipelines, projects under construction, and applications in the regulatory
as 15 U.S.C. § 717f(h) ("When any holder of a certificate of public convenience
and necessity cannot acquire by contract, or is unable to agree with the owner of property
to the compensation to be paid for, the necessary right-of-way ... it may acquire the
same by the exercise of the right of eminent domain ....") (emphasis added); see also
Midcoast Interstate Transmission, Inc. v. FERC, 198 F.3d 960, 973 (D.C. Cir. 2000)
(holding that the Commission does not have the discretion to deny a certificate holder the
power of eminent domain); Appalachian Voices v. FERC, No. 17-1271, 2019 WL 847199
at *2 (noting that eminent domain power is conferred to the certificate holder under
section 7(h) of the NGA).
46 Islander East Pipeline Co., 102 FERC ¶ 61,054, at PP 124-31 (2003).
47 Compare Application at 4 (explaining that on November 6, 2018, Dominion's
predecessor owned a 30% interest in the Southgate Project's Series B ownership
structure) and Mountain Valley's December 20, 2018 Change in Ownership Notification
(notifying the Commission that Dominion "no longer has any equity interest in the
Southgate Project").
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queue are considered as a whole." As in previous Commission proceedings,49
commenters, including Appalachian Mountain Advocates, Friends of the Central
Shenandoah, Blue Ridge Environmental Defense League, and Katie Whitehead, cite to a
study by Synapse Energy Economics, Inc. (Synapse Study) that Southern Environmental
Law Center and Appalachian Mountain Advocates commissioned, which asserts that
existing gas pipeline capacity, existing storage in Virginia and the Carolinas, and the
future operation of Transco's Atlantic Sunrise Project and Columbia's WB Xpress
Project can satisfy the growing peak demand in that region.50 The Synapse Study
concludes that the natural gas infrastructure capacity of the Virginia and the Carolinas
region is more than sufficient to meet expected future peak demand. Appalachian
Mountain Advocates and Katie Whitehead also cite to a study by the Institute for Energy
Economics and Financial Analysis (IEEFA), which argues, in part, that interstate pipeline
infrastructure constructed to ship natural gas from the Marcellus and Utica region is
overbuilt." Finally, Appalachian Mountain Advocates cites a Department of Energy
41 AMA Protest at 11.
49 See Ad. Coast Pipeline, LLC, 161 FERC ¶ 61,042, at P 30 (2017), order on
reh g, 164 FERC ¶ 61,100, at PP 53-44 (2018); Mountain Valley, 161 FERC ¶ 61,043 at
P 37, order on reh g, 163 FERC ¶ 61,197 at PP 45-47.
50 Synapse Energy Economics, Inc., Are the Atlantic Coast Pipeline and the
Mountain Valley Pipeline Necessary? An examination of the need for additional pipeline
capacity into Virginia and Carolinas, (2016) (filed as Exhibit A of AMA Protest)
(Synapse Study). The Commission previously considered the findings of the Synapse
Study and found that the study makes an unlikely assumption that all gas is flowed by
primary customers along their contracted paths, and fails to consider the use of regional
pipeline capacity by shippers outside of Virginia and the Carolinas through interruptible
service or capacity release. Mountain Valley, 161 FERC ¶ 61,043 at P 41 n.47, order on
reh g, 163 FERC ¶ 61,197 at P 47.
" Institute for Energy Economics and Financial Analysis, Risks Associated With
Natural Gas Expansion in Appalachia, Proposed Atlantic Coast and Mountain Valley
Pipelines Need Greater Scrutiny (Apr. 2016) (filed as Exhibit E of AMA Protest) (IEEFA
Study). The Commission previously considered the findings of the IEEFA Study and
determined that the study "speaks in generalities" and suggests that pipelines like the
proposed project may serve to aid in the delivery of lower -priced natural gas to higher -
priced markets — a result which would serve the public interest. Mountain Valley,
163 FERC ¶ 61,197 at P 47.
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study in support of its argument that, through 2022, pipeline capacity will exceed by over
50% production capacity in the Appalachian Basin.52
32. North Carolina DEQ and Appalachian Mountain Advocates argue that, even if
capacity needs increase alongside projected population growth, Dominion's capacity
needs can be met through its existing contracted capacity.53 In support of its claim that
natural gas demand will only experience a nominal increase in the future, Appalachian
Mountain Advocates point to Energy Information Administration (EIA) forecasts that
residential use of natural gas will decline by 0.6% per year over the next two decades,
while commercial and industrial uses will respectively increase 0.4% and 0.6% per
year.54
33. Mountain Valley filed its own market demand study (Wood Mackenzie Study),"
estimating that demand growth for natural gas capacity in the Southeast will reach
8.3 billion cubic feet (Bcf) per day56 by 2030." The study also posits that much of the
gas needed to meet this demand would be from the Marcellus and Utica shale regions,
thus requiring additional pipeline capacity.58 Appalachian Mountain Advocates, Friends
" AMA Protest at 12 n.4 (quoting U.S. Dep't of Energy, Natural Gas Infrastructure
Implications of Increased Demand from the Electric Power Sector (Feb. 2015),
http://energy.gov/epsa/downloads/report-natural-gas-infrastructure-implications-
increased-demand-electric-power-sector) (DOE Study). The Commission previously
considered the findings of the DOE Study and concluded that although the study notes
that natural gas companies are increasingly using underutilized capacity on existing
pipelines, re-routing natural gas flows, and expanding existing pipeline capacity, the
study does not contend that this supplants the need to build new infrastructure. Mountain
Valley, 161 FERC ¶ 61,043 at P 40 n.47, order on reh g, 163 FERC ¶ 61,197 at P 47.
s3 AMA Protest at 13-14; North Carolina DEQ's November 5, 2018 Comments in
Docket PF 18-4-000 at 4-5 (North Carolina DEQ's November 5, 2018 Comments).
sa AMA Protest at 13 -14.
ss Wood Mackenzie, Inc., Southeast U.S. Natural Gas Market Demand in Support
of the Mountain Valley Pipeline Project (Jan. 2016) (filed as Exhibit I of Mountain
Valley's Application) (Wood Mackenzie Study).
56 A volumetric capacity of 8.3 Bcf per day is equivalent to 8,300,000,000 Dth
per day.
" Wood Mackenzie Study at 6.
511 See id. at 20-21.
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of the Central Shenandoah, and other commenters question the usefulness of the Wood
Mackenzie Study because it covers a seven -state region in the Southeast, while the
Southgate Project will only serve a portion of central North Carolina.
34. Appalachian Mountain Advocates submitted an analysis performed by the Applied
Economics Clinic (AEC Report)59 to counter Mountain Valley's projections showing
increasing natural gas demand in the future. As Mountain Valley has not indicated that
gas delivered by the project will be used for electric generation,60 Appalachian Mountain
Advocates explains that the AEC Report focuses on gas demand for residential,
commercial, and industrial end -use customers.61 Specifically, the AEC Report takes
issue with Mountain Valley's (i) reliance on a nationwide, rather than regional, projection
of gas demand;6' (ii) failure to exclude gas consumption for electric generation from
North Carolina's expected annual growth in gas demand; 63 and (iii) use of a purportedly
inflated projection of future population growth in North Carolina and failure to consider
the steady downward trend in per capita gas consumption attributed to increased energy
efficiency and other advances.64
35. Commenters contend that the Commission must conduct an independent
evaluation of actual market demand.65 As part of this independent evaluation of whether
expected gas demand can be met by existing pipeline capacity, Appalachian Mountain
Advocates asserts that the Commission should evaluate the potential for production
" Elizabeth A. Stanton, PhD and Eliandro Tavares, Analysis of the Mountain
Valley Pipeline Southgate Project (Jul. 2019) (filed as Exhibit A of Appalachian
Mountain Advocates' September 16, 2019 Comments on Draft EIS) (AEC Report).
6" Mountain Valley states that the natural gas transported by the Southgate Project
will be used to make bundled gas sales primarily to residential and small- and medium-
sized commercial customers for heating, cooking, and other end -uses typical of natural
gas local distribution company customers. Mountain Valley's March 15, 2019 Data
Request Response at 3.
61 Appalachian Mountain Advocates' September 16, 2019 Comments on Draft EIS
at 6 (AMA's September 16, 2019 Comments).
62 AEC Report at 8.
63 Id. at 9-11.
64 Id. at 9.
61 See, e.g., North Carolina DEQ's November 5, 2018 Comments at 5; AMA
Protest at 15; Friends of the Central Shenandoah's April 1, 2019 Comments at 9.
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decline in the Marcellus and Utica shale formations.66 Commenters further suggest that
the Commission should assess the ability of renewable energy sources and energy
efficiency to meet electric demand over the life of the proposed pipelines.6' Noting that
market forces indicate that LNG exports will increase in future years, Blue Ridge
Environmental Defense League argues that the Mountain Valley's statements that it has
no plans to export natural gas and the draft EIS's observation that there is no direct
connection from the Southgate Project's terminus to Cove Point LNG — the nearest
export terminal located approximately 190 miles away in Calvert County, Maryland — are
an insufficient guarantee that LNG exports are not necessary to financially sustain the
project.61
36. Finally, Appalachian Mountain Advocates and Friends of the Central Shenandoah
recommend that the Commission evaluate the need for new pipeline infrastructure on a
regional basis because failure to do so will lead to the development of unnecessary
pipelines.69
37. In its January 8, 2019 answer, Mountain Valley asserts that Dominion's binding,
20-year precedent agreement for 80% of the Southgate Project's capacity is "significant
evidence of demand for [a] project."70 Mountain Valley notes that the Commission
previously evaluated the Synapse and U.S. Department of Energy studies submitted by
Appalachian Mountain Advocates and observed that commenter depictions of the
66 AMA's September 16, 2019 Comments at 4.
67 See, e.g., AMA's September 16, 2019 Comments at 4; Friends of the Central
Shenandoah's April 1, 2019 Comments at 5; Southern Environmental Law Center's
September 16, 2019 Comments on the Draft EIS at 2-3 (SELC's September 16, 2019
Comments).
68 Blue Ridge Environmental Defense League's September 16, 2019 Comments on
the Draft EIS at 12-13 (Defense League's September 16, 2019 Comments).
61 AMA's September 16, 2019 Comments at 3-4; Friends of the Central
Shenandoah's April 1, 2019 Comments at 22. In addition, the Synapse Study asserts that
considering each new pipeline proposal in isolation ignores important alternatives, such as
upgrades to existing pipelines and storage facilities, which would increase regional natural
gas supply capacity and avoid the adverse impacts on communities or the environment.
Synapse Study at 4. Similarly, the IEEFA Study argues that the Commission should
evaluate regional requirements for additional pipeline capacity similar to other
infrastructure programs such as electric transmission and highways. IEEFA Study at 6-7.
7° Mountain Valley Answer at 10 (quoting Certificate Policy Statement, 88 FERC
at 61,744).
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findings of the studies were overstated.71 Mountain Valley counters that the Wood
Mackenzie Study forecasts that local distribution company and other non -electric
generation gas usage in the Southeast will expand at a 1.6% annual growth rate7' and
further contends that Dominion needs the proj ect's additional pipeline capacity to meet
its design -day requirements, which are expected to increase 11 % as a result of population
growth in North Carolina.73
38. Mountain Valley argues that the Southgate Project will: (i) provide North
Carolina and southern Virginia access to new natural gas supplies in the Marcellus and
Utica shale regions; (ii) provide the opportunity to serve commercial and industrial load
in Virginia and North Carolina not currently served by natural gas; (iii) provide new
interconnects that improve the interstate grid and increase reliability and resiliency of
North Carolina's gas infrastructure; (iv) eliminate a bottleneck by allowing Dominion to
transport gas received from East Tennessee on a firm forward haul basis, rather than
relying on backhauls on Transco's system; and (v) introduce a new entrant into the North
Carolina interstate pipeline market, which may foster competition and lower consumer
costs.74 The company states that the North Carolina Commission has recognized the
public benefits of the Southgate Project and has authorized payment under Dominion's
precedent agreement with Mountain Valley. 71 Mountain Valley argues that the North
Carolina Commission's approval warrants deference and "boosts the [precedent
agreement's] probative value."76
39. It is well established that precedent agreements are significant evidence of demand
fora project." As the court stated in Minisink Residents for Environmental Preservation
71 Id. at 12 (citing Mountain Valley, 161 FERC ¶ 61,043 at P 41 n.47, order on
reh 'g, 163 FERC ¶ 61,197 at P 47).
72 Id. at 12-13.
73Id. at 13.
74 Mountain Valley Answer at 13-14 (citing Application at 13-14).
71 Id. at 14-15; see infra note 94.
76 Id. at 15 (citing NEXUS Gas Transmission, LLC, 160 FERC ¶ 61,022 (2017),
order on reh g, 164 FERC ¶ 61,054, at P 39 n.102 (2018) (NEXUS), aff'd in relevant
part, City of Oberlin v. FERC, 937 F.3d 599 (D.C. Cir. 2019)).
77 Certificate Policy Statement, 88 FERC at 61,748 (precedent agreements, though
no longer required, "constitute significant evidence of demand for the project"); Sierra
Club v. FERC, 867 F.3d 1357, 1379 (D.C. Cir. 2017) (Sabal Trail) (affirming Commission
reliance on preconstruction contracts for 93% of project capacity to demonstrate market
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& Safety v. FERC (Minisink Residents), and again in Myersville Citizens for a Rural
Community, Inc., v. FERC, nothing in the Certificate Policy Statement or in any
precedent construing it suggest that the policy statement requires, rather than permits, the
Commission to assess a project's benefits by looking beyond the market need reflected
by the applicant's precedent agreements with shippers.78 Given the substantial financial
commitment required under these agreements by project shippers, we confirm that
precedent agreements are the best evidence that the service to be provided by the project
is needed in the markets to be served.79 Moreover, it is current Commission policy to not
look beyond precedent or service agreements to make judgments about the needs of
individual shippers.80
need); Twp. of Bordentown v. FERC, 903 F.3d 234, 263 (3d Cir. 2018) ("As numerous
courts have reiterated, FERC need not `look[] beyond the market need reflected by the
applicant's existing contracts with shippers."') (quoting Myersville Citizens for a Rural
Cmty., Inc., v. FERC, 783 F.3d 1291, 1301, 1311 (D.C. Cir. 2015)); Appalachian Voices v.
FERC, No. 17-1271, 2019 WL 847199 at *1 (precedent agreements are substantial
evidence of market need); see also Midship Pipeline Co., LLC, 164 FERC ¶ 61,103, at P 22
(2018) (long-term precedent agreements for 64% of the system's capacity is substantial
demonstration of market demand); PennEast Pipeline Co., LLC, 164 FERC ¶ 61,098 at P
16 (affirming that the Commission is not required to look behind precedent agreements to
evaluate project need); NEXUS, 160 FERC ¶ 61,022 at P 41, order on reh g, 164 FERC
¶ 61,054, aff'd in relevant part, City of Oberlin, 937 F.3d at 605 (finding need for a new
pipeline system that was 59% subscribed).
78 Minisink Residents, 762 F.3d 97, 110 n.10 (D.C. Cir. 2014); see also Myersville
Citizens, 783 F.3d at 1311. Further, Ordering Paragraph (C)(4) of this order requires that
Mountain Valley file a written statement affirming that it has executed contracts for
service at the levels provided for in their precedent agreements prior to commencing
construction.
71 See, e.g., Adelphia Gateway, LLC, 169 FERC ¶ 61,220, at P 35 (2019), order
denying reh g, 171 FERC ¶ 61,049, at P 12 (2020); Tenn. Gas Pipeline Co., L.L.C.,
169 FERC ¶ 61,230, at P 19 (2019), order denying reh g, 170 FERC ¶ 61,142, at P 10
(2020). In addition to precedent agreements, applicants may rely on a variety of relevant
factors to demonstrate need. Certificate Policy Statement, 88 FERC at 61,747. These
factors might include, but are not limited to, demand projections, potential cost savings to
consumers, or a comparison of projected demand with the amount of capacity currently
serving the market. Id. at 61,747.
80 Id. at 61,744 (citing Transcon. Gas Pipe Line Corp., 82 FERC ¶ 61,084, at
61,316 (1998)).
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40. Here, Mountain Valley has entered into a long-term, firm precedent agreement with
Dominion for 300,000 Dth per day of firm transportation service — 80% of the project's
design capacity.81 To further confirm this showing of need, Ordering Paragraph (C)(4) of
this order requires that Mountain Valley file a written statement affirming that it has
executed contracts for service at the levels provided for in its precedent agreements prior
to commencing construction. Dominion, the sole project shipper, is a local distribution
company that has determined, based on its assessment of the long-term needs of its
customers and market, that there is a market for the natural gas to be transported and that
the Southgate Project is the preferred means for delivering or receiving that gas. In
addition, the project's interconnect with East Tennessee will allow Dominion to access
gas it stores in the Saltville Storage facility on a more reliable firm forward haul basis.
We find that Mountain Valley has sufficiently demonstrated that there is market demand
for its project.
41. We disagree with commenters' assertion that the Commission should examine the
need for pipeline infrastructure on a region -wide basis. Commission policy is to examine
the merits of individual projects and assess whether each project meets the specific need
demonstrated. While the Certificate Policy Statement permits the applicant to show need
in a variety of ways, it does not suggest that the Commission should examine a group of
projects together and pick which project(s) best serve an estimated future regional
demand. Projections regarding future demand often change and are influenced by a
variety of factors, including economic growth, the cost of natural gas, environmental
regulations, and legislative and regulatory decisions by the federal government and
individual states. Given the uncertainty associated with long-term demand projections,
including those presented in the studies noted by commenters and applicant above, where
an applicant has precedent agreements for long-term firm service, the Commission deems
the precedent agreements to be the better evidence of demand.82 The Commission
evaluates individual projects based on the evidence of need presented in each proceeding.
Where, as here, it is demonstrated that specific shippers have entered into precedent
agreements for project service, the Commission places substantial reliance on those
agreements to find that the project is needed.
42. Nor are we persuaded by commenters' contention that there is insufficient supply
in the Appalachian Basin to support the pipeline. Although Mountain Valley has stated
that the intended source of supply for the Southgate Project will be production in the
81 Prior to the Certificate Policy Statement, the Commission required a new
pipeline project to have contractual commitments for at least 25% of the proposed
project's capacity. See Certificate Policy Statement, 88 FERC at 61,743. Mountain
Valley would have satisfied this prior, more stringent, requirement.
12 Ad. Coast Pipeline, LLC, 161 FERC ¶ 61,042 at P 56; Mountain Valley,
161 FERC ¶ 61,043 at P 42, order on reh g, 163 FERC ¶ 61,197 at PP 46-47.
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Appalachian Basin, the Southgate Project is also connected to other interstate pipelines,
such as East Tennessee and — by virtue of its connection with the Mainline System —
Equitrans, which could potentially supply gas to the project from other areas of supply.
Additionally, because the amount of gas that will be produced from the region is
reflective of, among other things, the price of natural gas, projections regarding the
amount of gas available for the Southgate Project are speculative.
43. Allegations that the project is not needed because gas that is transported by it may
be exported through an LNG terminal are not persuasive. There is no evidence in the
record that indicates that the project will be used to transport natural gas for export. The
project shipper is a local distribution company, which will locally distribute gas to
residential, commercial, and industrial end -use customers. Thus, even if there was
evidence that some of the gas would be exported, that fact would not undercut our finding
here that the project is necessary for the transportation of natural gas in interstate
commerce.83
44. We also disagree with commenters' claim that the project is not needed because of
the availability of existing capacity on other pipelines or due to the Commission's
approval of the Atlantic Coast Pipeline Project (ACP Project). The EIS analyzed whether
existing natural gas transmission pipelines in the project area, including the authorized
ACP Project, could possibly be used as system alternatives for the Southgate Project .84
The EIS concluded that these existing pipeline systems are fully subscribed and cannot
provide firm transportation of the required volumes of gas to the area that Mountain
Valley is proposing to serve.85 Thus, contrary to commenters' assertions, we are not
persuaded that authorization of the Southgate Project would lead to the overbuilding of
pipeline infrastructure. The EIS further found that expansion of these systems would
likely result in environmental impacts similar to the Southgate Project's anticipated
impacts.86 Therefore, the EIS concluded that utilization of existing pipeline systems
would not offer a significant environmental advantage.87
13 Moreover, no gas can be exported from the United States without a finding by
the Secretary of Energy that such export is not inconsistent with the public interest.
Sierra Club v. FERC, 827 F.3d 36, 40 (D.C. Cir. 2016) (Freeport LNG) (citing 15 U.S.C.
§ 717b(a)).
14 Final EIS at 3-3 to 3-6.
85 Id. at 5-14.
86 Id.
87 See id. at 3-3 to 3-6.
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45. Additionally, renewable energy sources would not accomplish the project purpose
of providing natural gas transportation service.88 The Commission cannot require
individual energy users to use different or specific energy resources.89
b. Precedent Aureement with Affiliated Shipper
46. Appalachian Mountain Advocates and North Carolina DEQ argue that because
Dominion is affiliated with Mountain Valley, the Commission should exercise
heightened scrutiny in reviewing whether there is actual market demand for the project.
Appalachian Mountain Advocates assert that Mountain Valley's precedent agreement
with Dominion should be viewed with skepticism, and afforded less weight, because
Dominion had acquired a 30% ownership interest in Mountain Valley after executing the
precedent agreement.'"
47. In response, Mountain Valley points to its December 2018 filing, notifying the
Commission that Dominion "no longer has any equity interest in the Southgate Project,"
and is "no longer an affiliate of Mountain Valley."91 Thus, Mountain Valley contends,
any concerns regarding Dominion's affiliate status are moot.
48. In its December 28, 2018 answer, Dominion confirmed that it is no longer
affiliated with Mountain Valley.92 Additionally, Dominion put into the record testimony
88 See id. at 3-2 (concluding that generation of electricity from renewable energy
sources or the gains realized from increased energy efficiency and conservation are not
transportation alternatives and cannot function as a substitute for the proposed project);
see also Columbia Gas Transmission, LLC, 164 FERC ¶ 61,036, at P 65 and n.147
(2018), order denying reh g, 170 FERC ¶ 61,247 (2020) ("As we have concluded with
respect to other natural gas transportation infrastructure projects, we do not find that the
potential for energy conservation and renewable energy sources to be practical
alternatives."); Mountain Valley, 161 FERC ¶ 61,043 at P 43 (recognizing that
"renewable energy is not a comparable replacement for the transportation of natural
gas").
89 RH energytrans, LLC, 165 FERC ¶ 61,218, at P 21 (2018).
'" AMA Protest at 14-15; North Carolina DEQ's December 10, 2018 Intervention
at 3.
91 Mountain Valley Answer at 11 (citing Mountain Valley's December 20, 2018
Change in Ownership Notification).
92 Dominion Answer at 3.
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and pleadings from two proceedings before the North Carolina Commission,93 which
Dominion offers as evidence that the North Carolina Commission has authorized
Dominion's payment of compensation to Mountain Valley under a service agreement for
the Southgate Project.94 Dominion explains that the 2018 North Carolina Commission
testimony states that "[Dominion] projects that by the winter of 2019-20 it will need
additional interstate capacity to serve expected peak -day requirements," and includes a
table showing the forecasted peak -day demand requirements for winter seasons from
2017-18 through 2022-23.91 Dominion further explains that the table shows a deficit of
7,710 Dth per day beginning in 2019-20, increasing to 62,111 Dth per day by 2022-23.96
Additionally, Dominion notes, a significant amount of the subscribed capacity reflected
in the table is for secondary firm service as backhaul,97 which has a lower scheduling
priority than the capacity that would be provided by the Southgate Project.98 According
to Dominion, the secondary nature of this capacity "takes on greater significance as flows
become increasingly bidirectional on the pipelines that [Dominion] uses."99
49. As Dominion "no longer has an equity interest in the Southgate Project,"'"" we
agree with Mountain Valley that the affiliate concerns are moot. In any event, the fact
that a project shipper is affiliated with a project sponsor does not require the Commission
to look behind the precedent agreements to evaluate project need.'"' As the court
93 Id. (Exhibits A-D).
94Id. at Exhibit D (Order Accepting Affiliated Agreements for Filing and
Permitting Operation Thereunder Pursuant to N. C. Gen. Stat. §62-153, Docket No. G-5,
SUB 593 (N.C. Util. Comm'n Oct. 9, 2018)) (also filed as Exhibit Z-1 of Mountain
Valley's Application).
9s Id. at 3-4.
96 Id. at 4.
97 Backhaul refers to transportation service where a shipper's delivery point is
upstream of the receipt point.
98 Dominion Answer at 4.
99 Id. at 4.
'"" Mountain Valley's December 20, 2018 Change in Ownership Notification.
'"' Millennium Pipeline Co., L.P., 100 FERC ¶ 61,277, at P 57 (2002) ("as long as
the precedent agreements are long-term and binding, we do not distinguish between
pipelines' precedent agreements with affiliates or independent marketers in establishing
the market need for a proposed project"); see also Certificate Policy Statement,
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affirmed in Minisink Residents, the Commission may reasonably accept the market need
reflected by the applicant's existing contracts with shippers and not look behind those
contracts to establish need.10' And in Appalachian Voices v. FERC, the court affirmed
the Commission's determination that "[a]n affiliated shipper's need for new capacity and
its obligation to pay for such service under a binding contract are not lessened just
because it is affiliated with the project sponsor."103 When considering applications for
new certificates, the Commission's primary concern regarding affiliates of the pipeline as
shippers is whether there may have been undue discrimination against a non -affiliate
shipper.M Here, no such allegations have been made, nor have we found that the project
sponsor engaged in any anticompetitive behavior. As discussed above, Mountain Valley
held a binding open season for capacity on the project and all potential shippers had the
opportunity to contract for service.
50. Finally, commenters question the probative value of the contract between
Mountain Valley and Dominion, arguing that, as a regulated utility, Dominion will seek
recovery of its Southgate Project -related costs from "captive ratepayers," resulting in
guaranteed rates, and the ability to reallocate the financial risk of the Southgate Project
from the project owner to captive ratepayers.105 However, this argument glosses over the
important role of the North Carolina Commission, which is responsible for setting retail
rates for Dominion. The North Carolina Commission will disallow costs that are not
justified according to North Carolina state law after considering, in the judgment of the
88 FERC at 61,748 (explaining that the Commission's policy is less focused on whether
the contracts are with affiliated or unaffiliated shippers and more focused on whether
existing ratepayers would subsidize the project) and at 61,744 (the Commission does not
look behind precedent agreements to question the individual shippers' business decisions
to enter into contracts) (citing Transcon., 82 FERC ¶ at 61,316).
io2 Minisink Residents ,762 F.3d at 110 n.10; see also Sabal Trail, 867 F.3d at
1379 (finding that pipeline project proponent satisfied Commission's "market need"
where 93% of the pipeline project's capacity has already been contracted for).
io3 Appalachian Voices v. FERC, No. 17-1271, 2019 WL 847199, at *I (quoting
Mountain Valley, 161 FERC ¶ 61,043 at P 45).
'"' See 18 C.F.R. § 284.7(b) (2019) (requiring transportation service to be provided
on a non-discriminatory basis).
... See, e.g., AMA Protest at 14-15; Friends of the Central Shenandoah's April 1,
2019 Comments at 22-23. As we previously noted, Dominion is no longer affiliated with
Mountain Valley; however, commenters warn that Dominion could purchase a portion of
the Southgate Project following certificate issuance.
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North Carolina Commission, the interests of North Carolina ratepayers.106 Matters
relating to Dominion's retail rates are for the North Carolina Commission and are not
within the Commission's jurisdiction.10' Therefore, it is reasonable for the Commission
to rely on the contract between Mountain Valley and Dominion as evidence of need to
conclude that the project is in the public interest.108
51. In conclusion, we find that the precedent agreement signed by Dominion for
approximately 80% of the Southgate Project's capacity adequately demonstrates that the
project in needed.
5. Certificate Policy Statement Conclusion
52. The proposed project will enable Mountain Valley to provide 375,000 Dth per day
of incremental firm transportation service, of which 80% is subscribed. We find that
Mountain Valley has demonstrated a need for the Southgate Project and further, that the
project will not have adverse economic impacts on existing shippers or other pipelines
and their existing customers, and that the project's benefits will outweigh any adverse
economic effects on landowners and surrounding communities. Therefore, we conclude
that the project is consistent with the criteria set forth in the Certificate Policy Statement
and analyze the environmental impacts of the project below.109
106 The North Carolina Commission has the jurisdiction to regulate the sale and
transportation of natural gas within North Carolina, including regulating Dominion, the
sole entity that has contracted to take service on the Southgate Project. See North
Carolina Commission Protest at 2-3.
107 NEXUS, 164 FERC ¶ 61,054 at P 39.
108 The North Carolina Commission's approval of the contract boosts its probative
value. See Guardian Pipeline, L.L.C, 91 FERC ¶ 61,285, at 61,966-67 (2000) ("It is also
the Commission's preference not to second guess the business decisions of end users or
challenge the business decision of an end user on whether it is economic to undertake
direct service from a pipeline supplier, particularly when that decision has been approved
by the appropriate state regulatory body.") (emphasis added) (citing Southern Natural Gas
Co., 76 FERC ¶ 61,122, at 61,635 (1996)).
'09 See Certificate Policy Statement, 88 FERC at 61,745-46 (explaining that only
when the project benefits outweigh the adverse effects on the economic interests will the
Commission then complete the environmental analysis).
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B. Rates
1. Initial Recourse Rates
53. Mountain Valley proposes to provide firm (Rate Schedule FTS), interruptible
(Rate Schedule ITS), and interruptible lending and parking (Rate Schedule ILPS)
transportation services under a separate rate zone called the Southgate System. Mountain
Valley developed its proposed cost of service utilizing a capital structure of 50% debt and
50% equity, a proposed cost of debt of 6%, an ROE of 14%, and a 5% depreciation rate
based on the 20-year contract life of the executed agreement with Dominion. Mountain
Valley utilizes a straight fixed -variable rate design to derive its rates based on the full
project design capacity of 375,000 Dth per day and a first -year cost of service of
$84,889,100."0 In its revised Exhibit P, Mountain Valley calculates a maximum monthly
firm reservation recourse charge of $18.7651 per Dth and a firm usage charge of $0.0033
per Dth.u1 Mountain Valley proposes a maximum daily interruptible and interruptible
lending and parking recourse charge of $0.6202 per Dth based on the maximum daily
Rate Schedule FTS reservation charge plus the Rate Schedule FTS usage charge.
54. We have reviewed Mountain Valley's proposed cost of service and rates and find
that they reasonably reflect current Commission policy, as modified below.
a. Return on Equity
55. On December 10, 2018, the North Carolina Commission filed a protest stating that
Mountain Valley failed to provide substantial evidence to justify its proposed 14% ROE.
The North Carolina Commission notes that Mountain Valley's only support are the facts
that the Commission approved a 14% ROE for the Mountain Valley Mainline System and
that a 14% ROE is consistent with the Commission's policy with respect to greenfield
pipelines.112 The North Carolina Commission states that simply citing cases where the
Commission has allowed the use of a 14% ROE is inadequate and conflicts with the
statutory requirement that an applicant demonstrate that its recourse rates are in the
public convenience and necessity."' The North Carolina Commission states that
Mountain Valley has failed to provide any analysis of current financial markets or current
110 In its August 22, 2019 Data Request Response, Mountain Valley submitted a
revised Exhibit P with a corrected operating and maintenance expense calculation.
111 In its revised Exhibit P, Schedule 2, Mountain Valley breaks down the total
cost of service into $84,443,026 for fixed costs and $446,074 for variable costs.
112 North Carolina Commission Protest at 8.
113 Id. at 9.
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investor expectations, nor has Mountain Valley provided an analysis of the specific risks
the pipeline faces. In addition, the North Carolina Commission questions whether the
proposed rates, based on an ROE not supported by current market data, provided the
necessary check on the potential exercise of market power at the time Mountain Valley
entered into the negotiated rate agreement with Dominion, as required by the
Commission's Alternative Rates Policy Statement.114
56. In its January 8, 2019 answer, Mountain Valley states that because the Mountain
Valley Mainline System is not yet in service and Mountain Valley is not yet an
established pipeline company with an existing revenue base, the Southgate Project is
more akin to a new greenfield project than to the expansion of an existing system, given
the business risks associated with the project.115 Mountain Valley states that a 14% ROE
for a new pipeline project is not only consistent with Commission precedent, but has also
been upheld by the U.S. Court of Appeals for the District of Columbia Circuit in Sierra
Club vs. FERC."' In addition, Mountain Valley states that its proposed ROE is
consistent with Commission precedent, citing Rockies Express Pipeline, LLC, where the
Commission allowed the company to use the same 13% ROE approved as part of its
greenfield certificate application for two expansion projects."' Mountain Valley argues
that it did not exercise any alleged market power when signing an agreement with
Dominion at a negotiated rate and that the parties negotiated based on an estimated
recourse rate dependent on numerous factors and Dominion's independent research of
marketplace rates for similar capacity."'
114 Id. at 11-12 (citing Alternatives to Traditional Cost -of -Service Ratemaking for
Natural Gas Pipelines; Regulation of Negotiated Transportation Services of Natural Gas
Pipelines, 74 FERC ¶ 61,076, order granting clarification, 74 FERC ¶ 61,194, order on
reh g and clarification, 75 FERC ¶ 61,024, reh g denied, 75 FERC ¶ 61,066, reh g
dismissed, 75 FERC ¶ 61,291 (1996), petition denied sub nom. Burlington Res. Oil &
Gas Co. v. FERC, 172 F.3d 918 (D.C. Cir. 1998) (Alternative Rate Policy Statement)).
115 Mountain Valley Answer at 5.
116Id. (citing Sabal Trail, 867 F.3d 1357).
117 Id. (citing Rockies Express Pipeline LLC, 116 FERC ¶ 61,272, at P 44 (2006)
(addressing preliminary non -environmental issues for REX-West expansion); Rockies
Express Pipeline LLC 119 FERC ¶ 61,069 (2007) (certificating REX-West expansion);
Rockies Express Pipeline LLC, 123 FERC ¶ 61,234, at P 55 (2008) (certificating REX-
East expansion)).
11s Mountain Valley Answer at 9.
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57. We will approve Mountain Valley's proposed 14 ROE. Though the Southgate
Project is an extension from the previously certificated Mountain Valley Mainline
System, the Mainline System is not in service. Thus, just as was the case when it
proposed its initial Mainline System, Mountain Valley is not an established pipeline
company and has no existing revenue base. Without cash flows from existing operations
and a proven track record, we find that, with respect to the Southgate Project, Mountain
Valley faces a capital funding outlook similar to other companies constructing new
pipeline systems. The reasoning the Commission has relied upon in other instances for
authorizing lower ROEs for extension of existing pipeline systems is not applicable under
this fact pattern, as those pipelines obtained revenues for service on their existing
systems. Therefore, for purposes of establishing initial rates, we believe it is appropriate
to treat Mountain Valley, whose Mainline System is not in service, in the same manner as
we would an applicant proposing its initial greenfield system, because there are no
established operations or revenue streams that would reduce the risk to the level
experienced by natural gas companies whose existing systems are in service.
b. Depreciation
58. The North Carolina Commission protests Mountain Valley's proposed five percent
depreciation rate for the Southgate Project, which is based on the 20-year term of
Mountain Valley's contract with Dominion. The North Carolina Commission recognizes
that there have been instances where the Commission has found it appropriate to base the
depreciation rate for new, incremental projects on contract life but explains that those
instances involve delivery laterals built on behalf of specific customers."' Noting that
Dominion has only contracted for 300,000 of the 375,000 Dth per day of capacity to be
created by the Southgate Project and that Mountain Valley anticipates executing
agreements with other potential shippers for additional capacity in the future, the North
Carolina Commission asserts "there is no basis to presume that the useful life of the
facilities will end when the primary contract term ends."120 Mountain Valley responds
that the five percent depreciation rate is appropriately based on a 20-year life of the
project because, while it continues to market unsubscribed capacity, a primary purpose of
the Southgate Project is to serve Dominion's needs."' According to Mountain Valley,
the North Carolina Commission overstates Commission precedent by suggesting the
Commission only approves contract life depreciation rates for delivery laterals, but rather
that the Commission has approved contract life depreciation rates for incrementally -
"'North Carolina Commission Protest at 14.
120 Id.
121 Mountain Valley Answer at 7.
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priced projects like the Southgate Project."' Specifically, Mountain Valley notes that in
Equitrans, L.P. (Equitrans),"' the Commission approved depreciation rates based on the
life of the contract for an expansion project that was integrated with the rest of
Equitrans's mainline system.
59. The Commission's general policy with respect to depreciation for pipeline expansions
is to use the pipeline's last approved depreciation rate."' Although the Commission has
deviated from this general policy and allowed the depreciation rate to be based on the life of
the contract with respect to delivery laterals built on behalf of specific customers,125 we do
not find Mountain Valley's use of a five percent depreciation rate based on its 20-year
contract term with Dominion appropriate. In addition to serving the needs of Dominion,
Mountain Valley states that the purpose of the Southgate Project is to "provide North
Carolina and southern Virginia with direct pipeline access to the Marcellus and Utica gas
regions in West Virginia, Ohio and southwestern Pennsylvania," and to "meet the growing
needs of natural gas users in the southeastern U.S.""' Mountain Valley designed the
Southgate Project so that it will have the ability to provide additional capacity to other
potential shippers at or prior to the Dan River Interconnect127 and states that it has engaged in
discussions with additional potential shippers and anticipates that it will execute agreements
for the additional 75,000 Dth per day of available capacity in the future.128 Thus, this
mainline expansion will not function merely as a delivery lateral to serve Dominion, but
instead will have the potential to meet increased demand and serve other customers.
122 Id.
123 Id. at 7-8 (citing Equitrans, L.P., 153 FERC ¶ 61,381, at P 17 (2015), reh g
denied, 155 FERC ¶ 61,194 (2016)).
124 See, e.g., Cheyenne Connector, 168 FERC ¶ 61,180 at PP 50-54 (approving an
expansion project depreciation rate equivalent to the rate approved in the initial certificate
where no NGA section 4 rate filing had been made in the interim); see also Gulf South,
163 FERC ¶ 61,124 at P 22, order on reh'g, 166 FERC ¶ 61,089 at P 30, aff'd in part,
Gulf South Pipeline Co., LP v. FERC, No. 19-1074, slip op. at 22-24 (D.C. Cir. Apr. 10,
2020); Wyoming Interstate Co., Ltd., 119 FERC ¶ 61,251, at P 22 (2007).
125 See, e.g., Transcon. Gas Pipe Line Co., 147 FERC ¶ 61,102 (2014); Gas
Transmission NW, LLC, 142 FERC ¶ 61,186 (2013).
126 Application at 2.
127 Id. at 9.
128Id. at 2.
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60. We acknowledge that in Equitrans the Commission authorized Equitrans to extend
its mainline system and approved the pipeline's proposed depreciation rate based on the
life of the shipper's 20-year contract term.129 However, the Commission did so without
explanation, and that case is inconsistent with our general policy, discussed above. We
note that in Tennessee Gas Pipeline Co., L.L. C.,130 the Commission recently reaffirmed
its policy to use the last stated and approved depreciation rate for incremental expansion
projects.
61. In sum, we find that Mountain Valley has not shown that its 20-year contract term
with Dominion is determinative of the useful life of the Southgate Project facilities.
Accordingly, we direct Mountain Valley to revise its rates for the Southgate System using
the 2.5% depreciation rate underlying its currently -approved Mainline System rates.
C. Section 7 Recourse Rate Review
62. In its protest, the North Carolina Commission argues that the Commission has
repeatedly erred in relying on Atlantic Refining Co. v. Pub. Serv. Comm 'n off. Y.131 a
case regarding the Commission's discretion in NGA section 7 proceedings to approve
initial rates that will "hold the line" until just and reasonable rates are adjudicated under
sections 4 or 5 of the NGA.132 The North Carolina Commission claims that, by declining
to do a more thorough review of proposed recourse rates in a section 7 proceeding and
deferring to a section 4 proceeding to ensure that the rates are just and reasonable, the
Commission fails to ensure that the recourse rates available to Dominion when it
negotiated its precedent agreement provided the necessary check on the exercise of
market power by the pipeline at the time those negotiations occurred.133 The North
Carolina Commission also argues that the "hold the line" approach affirmed in CATCO
was only found to be warranted because the Commission had ensured that the consuming
public would be protected while awaiting adjudication of just and reasonable rates. The
North Carolina Commission asserts that in the instant project proposal, given that the two
129 See Equitrans L.P., 153 FERC ¶ 61,381, at P 17 n.18.
13" 169 FERC ¶ 61,230, at PP 33-34 (2019).
131 360 U.S. 378 (1959) (CATCO).
132 North Carolina Commission Protest at 15.
133 Id
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largest cost -of -service elements are significantly overstated, there are no assurances that
the consuming public will be protected from excessive rates.134
63. We disagree with the North Carolina Commission's assertion that the Commission's
reliance on the CATCO decision is in error. The existence of negotiated rates does not
negate the Commission's discretion to approve initial rates in this proceeding under the
public convenience and necessity standard, pending the adjudication of just and reasonable
rates in Mountain Valley's next general NGA section 4 rate case. In CATCO, the Court
compared the less rigorous public convenience and necessity standard of review employed
under section 7 to assess initial rates for new service or facilities with the just and
reasonable standard of review for rate changes under sections 4 and 5.13' The less exacting
standard used in a section 7 certificate proceeding is intended to mitigate the delay
associated with a full evidentiary rate proceeding, and, as here, the Commission has
discretion to approve initial rates that will "hold the line" while awaiting the adjudication
of just and reasonable rates.136
64. As explained above, we are requiring Mountain Valley to revise its proposed
recourse rates to reflect a reduction to its depreciation rate as requested by the North
Carolina Commission. Subject to Mountain Valley making that change addressed above,
we will approve Mountain Valley's rates for the Southgate Project.
2. Fuel
65. Mountain Valley states that it will implement a retainage factor to track and
recover actual experienced fuel and lost and unaccounted for gas on the Southgate
System. The company states that the initial retainage factor for the Southgate System
will be 1.66%, based on the submitted fuel study, and that it will adjust the Retainage
Factor quarterly to reflect actual fuel and lost and unaccounted for gas. We approve
Mountain Valley's proposed initial fuel retainage percentage of 1.66% for the Southgate
Project.
3. Reporting Incremental Costs
66. We will require Mountain Valley to keep separate books and accounting of costs
and revenues attributable to the proposed services and capacity created by the Southgate
134Id. at 16.
131 See CATCO, 360 U.S. at 390-91.
136 Transcon. Gas Pipe Line Co., LLC, 169 FERC ¶ 61,051, at P 35 (2019) (citing
Transcon. Gas Pipe Line Co., LLC, 161 FERC ¶ 61,212, at P 6 (2017)).
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Project, as required by section 154.309 of the Commission's regulations.13' The books
should be maintained with applicable cross-reference and the information must be in
sufficient detail so that the data can be identified in Statements G, I, and J in any future
NGA section 4 or 5 rate case, and the information must be provided consistent with
Order No. 710.131
4. Negotiated Rate Agreements
67. Mountain Valley proposes to provide service to the project shipper under a
negotiated rate agreement. Mountain Valley must file either its negotiated rate agreement
or tariff records, setting forth the essential terms of the agreement associated with the
Project, in accordance with the Alternative Rate Policy Statement13' and the Commission's
negotiated rate policies."" Mountain Valley must file the negotiated rate agreement or
tariff record no earlier than 60 days and no later than 30 days prior to the proposed
effective date for such rates.141
5. Pro Forma Tariff Records
68. Mountain Valley included in Exhibit P pro forma tariff records reflecting the
addition of the separate Southgate System rate zone. We approve the pro forma tariff
records included in Exhibit P, except as detailed above, and direct Mountain Valley to
file the tariff records no earlier than 60 days and no later than 30 days prior to the in-
service date of the facilities.
137 18 C.F.R. § 154.309 (2019).
138 See Revisions to Forms, Statements, and Reporting Requirements for Natural
Gas Pipelines, Order No. 710, 122 FERC ¶ 61,262, at P 23 (2008).
13' Alternative Rate Policy Statement, 74 FERC ¶ 61,076, order granting
clarification, 74 FERC ¶ 61,194.
140 Natural Gas Pipeline Negotiated Rate Policies and Practices; Modification of
Negotiated Rate Policy, 104 FERC ¶ 61,134 (2003), order on reh g and clarification,
114 FERC ¶ 61,042, dismissing reh g and denying clarification, 114 FERC ¶ 61,304
(2006).
141 Pipelines are required to file any service agreement containing non -conforming
provisions and to disclose and identify any transportation term or agreement in a
precedent agreement that survives the execution of the service agreement. See 18 C.F.R.
§ 154.112(b) (2019); see also, e.g., Texas Eastern Transmission, LP, 149 FERC ¶ 61,198,
at P 33 (2014).
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C. Environmental Analysis
1. Pre -filing Review
69. On May 18, 2018, Commission staff granted Mountain Valley's request to use the
pre -filing process in Docket No. PF 18-4-000. As part of the pre -filing review, on
August 9, 2018, the Commission issued a Notice of Intent to Prepare an Environmental
Impact Statement for the Planned MVP Southgate Project, and Request for Comments on
Environmental Issues, and Notice of Public Scoping Sessions (NOI). The NOI was
published in the Federal Register on August 15, 201814. and sent to more than 1,100
interested parties, including representatives of federal, state, and local agencies; elected
officials; environmental and public interest groups; Native American tribes; potentially
affected landowners; concerned citizens; and local libraries and newspapers. The NOI
announced the date, time, and location of three public scoping sessions, and established
September 10, 2018, as the deadline for public comments on the project.
70. A total of 68 people provided oral comments at the public scoping sessions.l43 In
addition, we received 69 written or electronically -filed comment letters and 65 form
letters during the public scoping period.144
2. Application Review
71. On November 6, 2018, following the pre -filing process, Mountain Valley filed an
application for authorization to construct and operate the Southgate Project.
72. To satisfy the requirements of the National Environmental Policy Act of 1969
(NEPA),141 Commission staff evaluated the proposed project's potential environmental
impacts in an EIS, with respect to which the Army Corps and the FWS's Virginia and
North Carolina Field Offices participated as cooperating agencies.
lag 83 Fed. Reg. 40,509 (Aug. 15, 2018).
143 Between August 20-23, 2018, Commission staff held public scoping sessions in
Reidsville, North Carolina; Chatham, Virginia; and Haw River, North Carolina.
Transcripts for the public comment sessions were placed in the public record for the
proceeding.
144 Table 1.3-1 of the final EIS provides a detailed and comprehensive list of issues
raised during scoping.
lay 42 U.S.C. §§ 4321 et seq. (2018). See also the Commission's NEPA-
implementing regulations at Title 18 of the Code of Federal Regulations, Part 380.
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73. On July 26, 2019, Commission staff issued a draft EIS addressing the issues raised
during the scoping period and including staff s independent analysis of the project's
environmental impacts. Notice of the draft EIS was published in the Federal Register on
August 2, 2019, establishing a 45-day public comment period that ended on September 16,
2019.116 Commission staff held three public comment sessions between August 19-22,
2019, to receive comments on the draft EIS.147 Approximately 65 people provided oral
and written comments at the public comment sessions. Transcripts of the public comment
sessions were placed in the Commission's public record for this proceeding. In addition,
we received 77 written or electronically -filed comments.
74. In October 2019, after issuance of the draft EIS, Mountain Valley filed a number of
minor route modifications to reduce environmental and cultural resources impacts, to
accommodate landowner requests, or for constructability reasons. On November 15, 2019,
Commission staff mailed letters to 24 landowners affected by the route modifications
(including 14 newly affected landowners), requesting comments on the route modifications
during a supplemental comment period that ended December 15, 2019. None of the
landowners affected by these route modifications filed comments.
75. On February 14, 2020,141 Commission staff issued the final EIS for the project,
addressing all of the substantive environmental comments received on the draft EIS.""
The final EIS addresses geology; soils; water resources; wetlands; vegetation; wildlife
and fisheries; threatened, endangered, and other special status species; land use,
recreation and visual resources; socioeconomics; cultural resources; air quality and noise;
reliability and safety; cumulative impacts; and alternatives. In addition to the
environmental comments, several commenters raised concerns about the scope of the
analysis in the EIS and the NEPA process generally.
76. The final EIS concludes that if the Southgate Project is constructed and operated in
accordance with applicable laws and regulations, the project will result in limited adverse
environmental impacts; however, these impacts would be reduced to less -than -significant
146 84 Fed. Reg. 37,859 (Sept. 16, 2019).
147 Commission staff held public comment meetings on the draft EIS in
Wentworth and Haw River, North Carolina and Chatham, Virginia.
148 The Commission received additional comments on the draft EIS after the close
of the comment period, which were addressed in the final EIS to the extent possible.
14' Notice of the final EIS was issued in the Federal Register on February 26,
2020. 85 Fed. Reg. 11,064 (Feb. 26, 2020).
lso Final EIS at Appendices I.1, I.2, and I.3.
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levels with the implementation of Mountain Valley's proposed and Commission staff s
recommended avoidance, minimization, and mitigation measures, which are included as
conditions in the appendix to this order.
77. Between issuance of the final EIS and May 31, 2020, the Commission received
comments on the final EIS from the applicant, the U.S. Environmental Protection Agency
(EPA), Transco, the Monacan Indian Nation and the Sappony Tribe, Roger Sisson, Katie
Whitehead, and the Blue Ridge Environmental Defense League. To the extent they raise
substantive issues, these comments are discussed below.
3. Comments on the Scope of Analysis in the EIS
a. Completeness of Draft EIS and Requests for Revised or
Supplemental Draft EIS
78. Some entities requested an extension of the draft EIS comment period."' The
Commission's standard draft EIS comment period is 45 days, which is consistent with the
Council for Environmental Quality's (CEQ) regulations implementing NEPA.ls2
Moreover, in preparing the final EIS, Commission staff considered late -filed comments
on the draft EIS to the extent practicable."' In addition, due to route modifications
submitted by Mountain Valley in October 2019, Commission staff initiated a
supplemental 30-day comment period to allow landowners affected by the route
modifications (including 14 newly affected landowners) the opportunity to comment and
to file motions to intervene in the proceeding. This supplemental comment period closed
on December 15, 2019, nearly 90 days following Commission staff s issuance of the draft
EIS. Any substantive comments filed during this time, regardless of whether the
commenter was a newly affected landowner, were considered and addressed in the final
EIS.
79. Some commenters allege that the draft EIS contained "substantial deficiencies"isa
that precluded meaningful public participation in the NEPA process, including a failure
to evaluate the need for the Southgate Project, insufficient information about the project's
isi See, e.g., Defense League's September 16, 2019 Comments at 3; Katie
Whitehead's August 8, 2019 Comments.
152 40 C.F.R. § 1506.10(c) (2019).
151 See supra note 148.
154 Sierra Club's January 28, 2020 Request for Revised or Supplemental Draft EIS
(Sierra Club's January 28, 2020 Comments).
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environmental impacts, and incomplete or draft plans regarding mitigation.155 In
addition, Sierra Club argues that Commission staff issued the draft EIS prematurely,
pointing to environmental information requests issued by Commission staff following
issuance of the draft EIS and additional information submitted by Mountain Valley
providing information responsive to these information requests."' For these reasons,
Sierra Club and others argue that a revised or supplemental draft EIS should have been
issued for comment.157
80. We find that a revised or supplemental draft EIS was not warranted because the
draft EIS was adequate and allowed for meaningful analysis. The draft EIS is a draft of
the agency's proposed final EIS and, as such, its purpose is to elicit suggestions for
change. A draft is adequate when it allows for "meaningful analysis" and "make[s] every
effort to disclose and discuss" major points of view on the environmental impacts.'58
NEPA does not require a complete mitigation plan be actually formulated at the onset,
but only that the proper procedures be followed for ensuring that the environmental
consequences have been fairly evaluated.151 In addition, NEPA does not require every
study or aspect of an analysis to be completed before an agency can issue a final EIS, and
155 See, e.g., id. at 5.
116 See id. at 6-7. In particular, Sierra Club takes issue with staff s November 15,
2019 additional information request that accompanied a revised notice of schedule for
completion of the environmental review for the Southgate Project. This additional
information request, and the revised schedule, were appropriate and timely responses to
Mountain Valley's October 2019 submittal of minor route modifications. These minor
route modifications, and any related environmental impacts, were fully disclosed and
analyzed in the final EIS.
117 See, e.g., Sierra Club's January 28, 2020 Comments; SELC's September 16,
2019 Comments at 6, 13.
15s 40 C.F.R. § 1502.9(a) (2019); see also Nat'l Comm. for the New River, Inc. v.
FERC, 373 F.3d 1323, 1328 (D.C. Cir. 2004) (Nat'l Comm. for the New River) (holding
that FERC's draft EIS was adequate even though it did not have a site -specific crossing
plan for a major waterway where the proposed crossing method was identified and thus
provided "a springboard for public comment") (quoting Robertson v. Methow Valley
Citizens Council, 490 U.S. 332, 349 (1989) (Methow Valley Citizens Council)).
is9 See Methow Valley Citizens Council, 490 U.S. at 352-53.
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the courts have held that agencies do not need perfect information before taking any
action.""
81. The draft EIS identified baseline conditions for all relevant resources. To ensure
that the final EIS included the most up to date information, the draft EIS recommended
the filing of supplemental information prior to the end of the draft EIS comment period.
However, as stated in section 5.2 of the draft EIS, Commission staff did not expect that
the updated information and documents would materially change any of the conclusions
in the draft EIS. Final mitigation plans will not present new environmentally significant
information nor pose substantial changes to the proposed action that would otherwise
require a supplemental EIS.
82. We also disagree that there was a need to issue a revised draft EIS. CEQ
regulations require agencies to prepare a supplement to either a draft or final EIS if.
(i) the agency makes substantial changes to the proposed action that are relevant to
environmental concerns; or (ii) there are significant new circumstances or information
relevant to environmental concerns and bearing on the proposed action or its
impact.161 Here, the final EIS, which incorporates comments filed on the draft EIS,
contains ample information for the Commission to fully consider and address the
environmental impacts associated with the Southgate Project. As discussed further
below, the final EIS recommends, and we require in this order, that Mountain Valley not
16" U.S. Dep't of the Interior v. FERC, 952 F.2d 538, 546 (D.C. Cir. 1992); Alaska
v. Andrus, 580 F.2d 465, 473 (D.C. Cir. 1978), vacated in part sub nom. W. Oil & Gas
Ass'n v. Alaska, 439 U.S. 922 (1978) ("NEPA cannot be `read as a requirement that
[c]omplete information concerning the environmental impact of a project must be
obtained before action may be taken."') (quoting Jicarilla Apache Tribe of Indians v.
Morton, 471 F.2d 1275, 1280 (9th Cir. 1973)).
16140 C.F.R. § 1502.9(c).
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commence construction of the Southgate Project until it provides specified information162
and confirms it has received all applicable authorizations required under federal law.163
b. Project Purpose and Need, and Ranee of Alternatives
83. Several commenters contend that the EIS defined the purpose and need of the
project too narrowly, which led to an insufficient analysis of the project alternatives.164
An agency's environmental document must include a brief statement of the purpose and
need to which the proposed action is responding.l61 An agency uses the purpose and need
statement to define the objectives of a proposed action and then to identify and consider
legitimate alternatives.166 CEQ has explained that "[r]easonable alternatives include those
162 See, e.g., Environmental Conditions 13-16. Environmental Condition 14, for
example, requires Mountain Valley to file with the Commission the locations of all
private water wells and springs identified within 150 feet of the project work areas. This
submittal must identify the status, use, distance from construction workspace, and any
proposed measures to minimize or avoid impacts for each private water well or spring
identified. Environmental Condition 16 requires Mountain Valley to file for Commission
approval a final list of water sources to be used for project purposes (e.g., dust control,
hydrostatic testing, and horizontal directional drill operations), which identifies intake
location, waterbody name, withdrawal rate and method, and measures to minimize
aquatic species entrainment.
161 See Environmental Condition 10. Further, as stated above, we are directing the
Office of Energy Projects to not issue any notice to proceed with construction of the
Southgate Project until Mountain Valley receives the necessary federal permits for the
Mainline System, and the Director of the Office of Energy Projects lifts the stop -work
order and authorizes Mountain Valley to continue construction on the Mainline System.
See supra P 9.
161 See, e.g., Sierra Club's January 28, 2020 Comments at 3-5; EPA's September 23,
2019 Comments at 3; North Carolina DEQ's September 16, 2019 Comments at 2-4;
AMA's September 16, 2019 Comments at 1-7; Defense League's September 16, 2019
Comments at 5-8; SELC's September 16, 2019 Comments at 2-3.
161 See 40 C.F.R. § 1508.9 (2019) (for an Environmental Assessment); 40 C.F.R.
§ 1502.13 (2019) (for an EIS).
166 See Colo. Envtl. Coal. v. Dombeck, 185 F.3d 1162, 1175 (loth Cir. 1999).
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that are practical or feasible from the technical and economic standpoint and using
common sense, rather than simply desirable from the standpoint of the applicant."167
84. Courts have upheld federal agencies' use of applicants' project purpose and need
as the basis for evaluating alternatives.16I When an agency is asked to consider a specific
plan, the needs and goals of the parties involved in the application should be taken into
account.161 We recognize that a project's purpose and need should not be so narrowly
defined as to preclude consideration of what may actually be reasonable alternatives.170
Nonetheless, an agency need only consider alternatives that will bring about the ends of
the proposed action, and the evaluation is "shaped by the application at issue and by the
function that the agency plays in the decisional process.11171
85. For the Southgate Project, the EIS appropriately relied on the applicant's stated
purpose and need. We find that doing so did not predetermine from the outset the results
of the alternatives analysis for the Southgate Project.171 In fact, Commission staff
identified numerous reasonable alternatives to the project, which were evaluated in the
EIS.173 Staff concluded that none of the alternatives analyzed would meet the project's
purpose and need, be technically feasible, and offer a significant environmental
advantage.174
167 Forty Most Asked Questions Concerning CEQ's National Environmental
Policy Act Regulations, 46 Fed. Reg. 18,026-27 (Mar. 23, 1981).
16s E.g., City of Grapevine v. U.S. Dep't of Transp., 17 F.3d 1502, 1506 (D.C.
Cir. 1994).
161 Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 196 (D.C. Cir. 1991).
17" Id. at 196.
171 Id. at 199; see also Sierra Club v. U.S. Forest Serv., 897 F.3d 582 (finding the
statement of purpose and need for a Commission jurisdictional natural gas pipeline
project that explained where the gas must come from, where it will go, and how much the
project would deliver, allowed for a sufficiently wide range of alternatives but was
narrow enough that there were not an infinite number of alternatives).
172 See North Carolina DEQ's September 16, 2019 Comments at 4.
173 See final EIS at 3-1 to 3 -45.
174 See id. at 3-45.
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86. We also reject the Southern Environmental Law Center's (SELC) argument that
because the EIS "only considered alternatives that transport natural gas, the
[Commission] has not taken a hard look at the No Action Alternative —or the possibility
that the project is not constructed, as required by NEPA."175 Contrary to SELC's
contention, the EIS states that under the no -action alternative the Southgate Project would
not be constructed, and that the environmental impacts associated with the project would
not occur.176 Moreover, the resource -by -resource discussion in section 4 of the final EIS
first details the existing state of each resource and then describes the environmental
impacts of the preferred alternative.177 Section 5 of the final EIS summarizes staff s
conclusions about those impacts.178 By providing a description of the existing state of
each resource and a description of the environmental impacts of the preferred alternative,
the EIS provides the Commission with a meaningful comparison of the harm to be
avoided under a no -action alternative.
87. Some commenters state that the EIS failed to evaluate the public benefit or market
need for the project. These commenters conflate the balancing of economic benefits
(market need) and effects under the Certificate Policy Statement with the description of
the purpose and need in the EIS.179 The purpose and need statement in the final EIS
complied with CEQ's regulations, which provide that this statement "shall briefly specify
the underlying purpose and need to which the agency is responding in proposing the
alternatives including the proposed actions" for purposes of its environmental analysis.180
The public interest determination, including market need, for the pipeline lies with the
Commission. Neither NEPA nor the NGA requires the Commission to make its
determination of whether a project is required by the public convenience and necessity
before its final order. The final EIS appropriately explained that the determination of
171 See SELC's September 16, 2019 Comments at 2-3.
176 Final EIS at 3-2.
177 Id. at 4-1 to 4-264.
178Id. at 5-1 to 5-14.
179 See, e.g., Sierra Club's January 28, 2020 Comments at 3-5; North Carolina
DEQ's September 16, 2019 Comments at 2; SELC'S September 16, 2019 Comments
at 2-3.
"" 40 C.F.R. § 1502.13 (2019).
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whether the Southgate Project satisfied a showing of market need according to the
Certificate Policy Statement was beyond the scope of the environmental document.181
C. Segmentation
88. Some commenters argue that the Commission impermissibly segmented its NEPA
review of the Southgate Project by failing to consider Mountain Valley's Mainline
System and Southgate Project in a single EIS.182 Appalachian Mountain Advocates
assert that the Southgate Project and the Mainline System are "connected actions," and
argues that the Commission's failure to evaluate the two projects in a single EIS renders
the Commission's significance findings incomplete.181
89. CEQ regulations require the Commission to include "connected actions,"
"cumulative actions," and "similar actions" in its NEPA analyses. An agency
impermissibly `segments' NEPA review when it divides connected, cumulative, or
similar federal actions into separate projects and thereby fails to address the true scope
and impact of the activities that should be under consideration.18' "Connected actions"
include actions that: (a) automatically trigger other actions, which may require an EIS;
(b) cannot or will not proceed without previous or simultaneous actions; or (c) are
interdependent parts of a larger action and depend on the larger action for their
justification."'
90. Assertions that we segmented our environmental review by not re-examining the
Mainline System's impacts alongside the Southgate Project's impacts in a single EIS are
misplaced. The Commission's consideration of Mountain Valley's two projects did not
overlap. The Commission completed a comprehensive analysis of the environmental
impacts of Mountain Valley's Mainline System between 2016 and 2017, culminating in
the issuance of a final EIS in June 2017 and certificate authorization in October 2017.
Commission staff s review of the environmental impacts of the Southgate Project began
during the pre -filing process in mid-2018, continuing with Mountain Valley's filing of an
181 See final EIS at ES-2, 1-2, I.2-1 (Appendix I.2), and I.3-37 (Appendix I.3).
182 See, e.g., AMA's September 16, 2019 Comments at 8-10; Defense League's
September 16, 2019 Comments at 3-5.
183 AMA's September 16, 2019 Comments at 10.
18a Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1313 (D.C. Cir. 2014).
185 40 C.F.R. § 1508.25(a)(1) (2019).
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application for the Southgate Project in November 2018, and culminating in staff s
issuance of the final EIS in February 2020.
91. The final EIS for the Mainline System fully analyzed the environmental impacts of
Mountain Valley's mainline pipeline as originally proposed. Issued over two and a half
years later, the final EIS for the Southgate Project fully analyzed the environmental
impacts of Mountain Valley's proposed expansion of its mainline system. Moreover, the
Southgate Project's EIS thoroughly examined whether the Southgate Project's impacts
would result in a cumulative impact on the environment when combined with the impacts
of other past, present, and reasonably foreseeable future projects, including Mountain
Valley's Mainline System."'
92. CEQ defines cumulative impacts as "the impact on the environment that results
from the incremental impact of the action when added to other past, present, and
reasonably foreseeable future actions."18' A cumulative environmental impact results
from the effect of the current project along with any other actions "in the same
geographic area as the project under review."188
93. The EIS disclosed impacts associated with the Southgate Project and identified the
geographic scope of the cumulative impacts analysis based on the resources affected by
project construction and operation. Specifically, Commission staff defined resource -
specific geographic scopes for its cumulative impacts analysis to include projects or
actions within 0.25 mile of construction activities for impacts to air quality and noise;
within the same HUC-12 watershed area181 for impacts to groundwater, wetlands,
vegetation, and wildlife; and within the same HUC-10 watershed for impacts to surface
water, fisheries and aquatic resources."' The EIS explained that only a small portion of
the Mainline System's southern terminus falls within the Southgate Project's resource -
specific geographic scopes."' Accordingly, the EIS evaluated the cumulative impacts of
116 See final EIS at 4-225 to 4-264.
187 40 C.F.R. § 1508.7 (2019).
188 Freeport LNG, 827 F.3d at 47 (citations omitted); see also 40 C.F.R. § 1508.7.
189 A HUC is the acronym for Hydrologic Unit Code, designated by the U.S.
Geological survey, which identifies hydrological features, such as a drainage basin or
watershed. HUC-10 refers to a watershed typically 40,000-250,000 acres in area, while
HUC-12 refers to more local sub -watershed, typically ranging from 10,000 to 40,000 acres.
19" Final EIS at 4-227 to 4-229 (Table 4.13-1).
191 Id. at 4-236.
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Mountain Valley's Southgate Project and Mainline System across all resource areas. The
final EIS concluded that — when added to the impacts of other past, present, and
reasonably foreseeable future actions, including Mountain Valley's Mainline System —
the Southgate Project's impacts would not result in any significant cumulative impacts on
environmental resources within the geographic scopes affected by the Southgate
Proj ect.112
94. For these reasons, the concerns central to a segmented NEPA review, namely the
dividing of one project into several in order to reduce the true scope of a project's
environmental impacts, are not present here. Thus, the Commission appropriately did not
consider the impacts of the Mainline System and Southgate Project in a single NEPA
document.
d. Greenhouse Gas Emissions and Climate Change Impacts
95. Appalachian Mountain Advocates and others argue that we did not take a hard
look at the Southgate Project's greenhouse gas (GHG) emissions and climate impacts. In
support of this claim, Appalachian Mountain Advocates points to the EIS's failure to
provide estimates of the project's upstream"' and downstream... GHG emissions.
Appalachian Mountain Advocates argues that the EIS's failure to assess the project's
indirect GHG emissions "is contrary to NEPA's goals of informed decisionmaking and
informed public comment" and undermines the Commission's environmental analysis.195
Last, Appalachian Mountain Advocates asserts that the EIS fails to assess the
significance of the Southgate Project's GHG emissions on climate change, in violation of
the NEPA requirements.196
96. NEPA requires agencies to consider indirect effects or impacts that "are caused by
the action and are later in time or farther removed in distance, but are still reasonably
foreseeable."19' With respect to causation, "NEPA requires `a reasonably close causal
relationship' between the environmental effect and the alleged cause"198 in order "to
192Id. at 5-13 to 5-14.
1.3 AMA's September 16, 2019 Comments at 11-13.
194 Id. at 13 -15 .
115 Id. at 23.
196Id. at 15-24.
117 40 C.F.R. § 1508.8(b) (2019).
19' U.S. Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Pub. Citizen)
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make an agency responsible for a particular effect under NEPA."199 As the Supreme
Court has explained, "a `but for' causal relationship is insufficient [to establish cause for
purposes of NEPA]."200 Thus, "[s]ome effects that are `caused by' a change in the
physical environment in the sense of `but for' causation," will not fall within NEPA if
"the causal chain is too attenuated."201 Further, the Court has stated that "where an
agency has no ability to prevent a certain effect due to its limited statutory authority over
the relevant actions, the agency cannot be considered a legally relevant `cause' of the
effect."202 Regarding reasonable foreseeability, courts have found that an impact is
reasonably foreseeable if it is "sufficiently likely to occur that a person of ordinary
prudence would take it into account in reaching a decision."203 Although courts have
held that NEPA requires "reasonable forecasting,"204 an agency "is not required to engage
in speculative analysis"205 or "to do the impractical, if not enough information is
available to permit meaningful consideration."206
97. As we have previously concluded in other natural gas infrastructure proceedings
and affirm with respect to the Southgate Project, the environmental effects resulting from
natural gas production are generally neither caused by a proposed pipeline project nor are
they reasonably foreseeable consequences of our approval of an infrastructure project, as
(quoting Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 (1983)
(Metro. Edison Co.)).
199 Pub. Citizen, 541 U.S. at 767.
20o Id.
201 Metro. Edison Co., 460 U.S. at 774.
202 Pub. Citizen, 541 U.S. at 770. See generally Transcontinental Gas Pipe Line
Co., LLC, 171 FERC ¶ 61,032 (2020) (Transco) (McNamee, Comm'r, concurrence).
203 EarthReports, Inc. v. FERC, 828 F.3d 949, 955 (D.C. Cir. 2016) (citations
omitted); see also Sierra Club v. Marsh, 976 F.2d 763, 767 (1st Cir. 1992).
204 N. Plains Res. Council, Inc. v. Surface Transp. Bd., 668 F.3d 1067, 1079
(9th Cir. 2011) (quoting Selkirk Conservation Alliance v. Forsgren, 336 F.3d 944, 962
(9th Cir. 2003)).
2o5Id. at 1078.
206 Id. (quoting Envtl. Prot. Info. Ctr. v. U.S. Forest Serv., 451 F.3d 1005, 1014
(9th Cir. 2006)).
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contemplated by CEQ regulations, where the supply source is unknown.207 Because the
Southgate Project will receive natural gas from other interstate pipelines (Mountain
Valley's Mainline System and East Tennessee's system), the specific source of natural
gas to be transported via the project is currently unknown and will likely change
throughout the project's operation. Moreover, there is no evidence in the record that
would help the Commission determine the origin of the natural gas that will be
transported on the Southgate Project, let alone predict the number and location of any
additional wells that would be drilled as a result of any production demand associated
with the project. Nor is there evidence that, absent approval of the Southgate Project, this
gas would not be brought to the market by other means. Therefore, we conclude that the
environmental impacts of upstream natural gas production are not an indirect effect of the
project.201 Last, where there is not even an identified general supply area for the gas that
will be transported on the project, any analysis of production impacts would be so
generalized it would be meaningless.209
98. As to downstream emissions from gas consumption, the U.S. Court of Appeals for
the D.C. Circuit in Sierra Club v. FERC held that where it is known that the natural gas
transported by a project will be used for a specific end -use combustion, the Commission
should "estimate[] the amount of power -plant carbon emissions that the pipelines will
207 See, e.g., Central New York Oil and Gas Co., LLC, 137 FERC ¶ 61,121, at PP
81-101 (2011), order on reh'g, 138 FERC ¶ 61,104, at PP 33-49 (2012), petition for
review dismissed sub nom. Coal. for Responsible Growth v. FERC, 485 F. App'x. 472,
474-75 (2d Cir. 2012) (unpublished opinion); see also Adelphia Gateway, LLC, 169
FERC ¶ 61,220, at P 243 (2019), order on reh g, 171 FERC ¶ 61,049, at P 89 (2020).
20. Birckhead v. FERC, 925 F.3d 510, 518 (D.C. Cir. 2019) (holding the Commission
did not violate NEPA in not considering upstream impacts where there was no evidence to
predict the number and location of additional wells that would be drilled as a result of a
project). See generally Transco, 171 FERC ¶ 61,032 (2020) (McNamee Comm'r
concurrence) (elaborating on the purpose of the NGA and that one of its purposes is to
facilitate the development of and access to natural gas; as well as an analysis of
consideration of indirect effects under NEPA).
209 See Sierra Club v. U.S. Dep't of Energy, 867 F.3d 189, 198-99 (D.C. Cir. 2017)
(accepting Department of Energy's "reasoned explanation" as to why the indirect effects
pertaining to induced natural gas production were not reasonably foreseeable where the
Department noted the difficulty of predicting both the incremental quantity of natural gas
that might be produced and where at the local level such production might occur, and that
an economic model estimating localized impacts would be far too speculative to be
useful).
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make possible."M However, in Birckhead v. FERC (Birckhead), a case that did not
involve a known specific end use, the D.C. Circuit stated that "emissions from
downstream gas combustions are [not], as a categorical matter, always a reasonably
foreseeable indirect effect of a pipeline project."211 The court in Birckhead also noted
that "NEPA ... requires the Commission to at least attempt to obtain the information
necessary to fulfill its statutory responsibilities," but, citing to Delaware Riverkeeper
Network, the court acknowledged that NEPA does not "demand forecasting that is not
meaningfully possible."212
99. In this case, because the end -use of the contracted for volumes is unknown, any
potential GHG emissions associated with the ultimate combustion of the transported gas
are not reasonably foreseeable, and therefore, not an indirect impact of the Southgate
Project. The Commission requested information from Mountain Valley about the
ultimate end use of the gas to be transported by the Southgate Project.213 However, as
discussed in the final EIS, most of the gas will serve North Carolina end -users, primarily
by residential and small and medium-sized commercial customers, and that some
volumes will go to North Carolina and Virginia, but that the end -use of the gas is
unknown."' Beyond serving North Carolina end -users, we do not know how Dominion
will be utilizing the gas, and there remains a range of possible uses for the gas to be
delivered by the project. Accordingly, we find this generalized information insufficient
to render the emissions associated with any consumption of the gas to be transported a
reasonably foreseeable indirect effect of the project.
100. In any event, since the Southgate Project will receive gas from the Mainline
System and East Tennessee's system, Mountain Valley contends it is not necessary to
provide an estimate of the GHG emissions associated with the end use combustion of the
gas to be transported on the project.211 Mountain Valley points out that the Commission
previously quantified the GHG emissions that could result from the end use consumption
of the volumes transported on Mountain Valley's Mainline System, and previously
21" Sabal Trail, 867 F.3d at 1371.
211 925 F.3d at 519 (citing Calvert Cliffs' Coordinating Comm., Inc. v. U.S. Atomic
Energy Comm 'n, 449 F.2d 1109, 1122 (D.C. Cir. 1971)).
212 Id. at 520 (quoting Del. Riverkeeper Network, 753 F.3d at 1310).
211 See Commission staff s March 5, 2019 Data Request.
214 Final EIS at 4-263; see also Mountain Valley's March 15, 2019 Data Request
Response.
211 Mountain Valley's March 31, 2020 Comments at 1-2.
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evaluated the environmental impacts associated with the volumes transported on East
Tennessee's system."' Thus, Mountain Valley asserts, quantifying the downstream
GHG emissions associated with the Southgate Project would lead to "double counting" of
emissions.217 We note that the final EIS for the Mountain Valley Mainline System,
which is expected to source approximately 80% of the gas transported on the Southgate
Project facilities, conservatively estimated the GHG emissions associated with the full
combustion of the volume of natural gas transported on its mainline system.218 This
underscores the point that, given the connected nature of the interstate pipeline system,
the transportation capacity associated with a new pipeline does not necessarily represent,
on a national level, incremental capacity. It further underscores our determination that
providing upper bound estimates of downstream GHG emissions on individual pipelines
may be misleading and does not provide meaningful information regarding a pipeline
project's impact on GHG emissions and climate change.
101. Some commenters assert that the Commission's NEPA analysis is flawed because
the EIS does not use the Social Cost of Carbon, or a similar tool, to evaluate climate
change impacts."' Appalachian Mountain Advocates, the Institute for Policy Integrity at
New York University School of Law, and others assert that the Commission erroneously
claims there is no reliable method for evaluating climate impacts.22" Commenters further
argue that the Commission's failure to use the Social Cost of Carbon or a similar
methodology renders NEPA's "hard look" requirement unmet.221
216 Id. at 2.
217 Id.
218 Mountain Valley, 161 FERC ¶ 61,043 at P 293. The Commission noted that
this estimate represents an upper bound for the amount of end -use combustion that could
result from the gas transported by these projects and we reiterate that providing upper
bound estimates of downstream effects using worst -case scenarios of peak use does not
meaningfully inform its decision. See Columbia Gas Transmission, 170 FERC ¶ 61,246,
at P 47 (2020).
211 See, e.g., AMA's September 16, 2019 Comments at 11-24; Institute for Policy
Integrity at New York University School of Law's September 16, 2019 Comments
(Institute for Policy Integrity's September 16, 2019 Comments).
220 AMA's September 16, 2019 Comments at 18-22; Institute for Policy Integrity's
September 16, 2019 Comments at 1.
221 See, e.g., AMA's September 16, 2019 Comments at 11.
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102. The Social Cost of Carbon has been described as an estimate of the monetized
climate change damage associated with an incremental increase in carbon dioxide (CO2)
emissions in a given year."' The Commission has provided extensive discussion on why
the Social Cost of Carbon is not appropriate in project -level NEPA review, and cannot
meaningfully inform the Commission's decisions on natural gas infrastructure projects
under the NGA.223 We adopt that reasoning here. As the Commission has previously
explained, the Social Cost of Carbon is not appropriate for use in any project -level NEPA
review for the following reasons:
(1) the EPA states that "no consensus exists on the appropriate [discount] rate
to use for analyses spanning multiple generations"224 and consequently,
significant variation in output can result;225
(2) the tool does not measure the actual incremental impacts of a project on the
environment; and
222 Interagency Working Group on the Social Cost of Greenhouse Gases,
Technical Support Document — Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis — Under Executive Order 12866 at 3 (Aug. 2016), https://
www.epa.gov/sites/production/files/2016-12/documents/sc—co2—tsd august-2016.pdf
223 Mountain Valley, 161 FERC ¶ 61,043 at P 296, order on reh g, 163 FERC
¶ 61,197, at PP 275-297, aff'd sub nom., Appalachian Voices v. FERC, No. 17-1271,
2019 WL 847199 at *2 ("[The Commission] gave several reasons why it believed
petitioners' preferred metric, the Social Cost of Carbon tool, is not an appropriate
measure of project -level climate change impacts and their significance under NEPA or
the Natural Gas Act. That is all that is required for NEPA purposes.").
224 See EPA, Fact Sheet: Social Cost of Carbon (November 2013),
https:// 19j anuary2017snapshot.epa.gov/climatechange/social-cost-carbon—.html.
221 Depending on the selected discount rate, the tool can project widely different
present-day cost to avoid future climate change impacts. See generally Transco, 171
FERC ¶ 61,032 (2020) (McNamee, Comm'r, concurring at n.142) ("The Social Cost of
Carbon produces wide-ranging dollar values based upon a chose discount rate, and the
assumptions made. The Interagency Working Group on Social Cost of Greenhouse
Gases estimated in 2016 that the Social Cost of one ton of carbon dioxide for the year
2020 ranged from $12 to $123. ").
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(3) there are no established criteria identifying the monetized values that are to
be considered significant for NEPA reviews.226
Moreover, the Commission has explained it does not use monetized cost -benefit analyses
as part of its NEPA review.227 In any event, there is no universally accepted
methodology for evaluating the Southgate Project's impacts on climate change. As the
Commission has previously concluded, it cannot determine a project's incremental
physical impacts on the environment caused by GHG emissions.228 We have also
previously concluded the Commission cannot determine whether an individual project's
contribution to climate change would be significant.22' That situation has not changed.
4. Comments Received After Issuance of Final EIS
103. As noted above, between issuance of the final EIS and May 31, 2020, the
Commission received substantive comments on the final EIS from the applicant, the
EPA, Transco, the Monacan Indian Nation and the Sappony Tribe, Roger Sisson, Katie
Whitehead, and the Blue Ridge Environmental Defense League.230 We address the issues
raised in these comments below.
221 See generally Transco, 171 FERC ¶ 61,032 (2020) (McNamee, Comm'r,
concurring at P 66) ("When the Social Cost of Carbon estimates that one metric ton of
CO2 costs $12 (the 2020 cost for a discount rate of five percent), agency decision -makers
and the public have no objective basis or benchmark to determine whether the cost is
significant. Bare numbers standing alone simply cannot ascribe significance.") (emphasis
in original) (footnote omitted).
227 See Florida Southeast Connection, LLC, 162 FERC ¶ 61,233, at PP 39-44
(2018).
228 Dominion Transmission, Inc., 163 FERC ¶ 61,128, at PP 67-70 (2018)
(LaFleur, Comm'r, dissenting in part; Glick, Comm'r, dissenting in part); see generally
Transco 171 FERC ¶ 61,032 (2020) (McNamee, Comm'r, concurring at PP 63-74)
(explaining that the Commission has no standard for determining whether GHG
emissions significantly affect the environment, elaborating on why the Social Cost of
Carbon is not a useful tool for determining whether GHG emissions are significant, and
explaining that the Commission has no authority or reasoned basis to establish its own
framework).
229 Id.
23" We received a few comments raising general concerns about the Novel
Coronavirus Disease (COVID-19) pandemic. Because the comments do not raise
project -specific concerns we do not address them herein. However, the Commission
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a. Applicant's Final EIS Clarifications and Supplemental
Filin
104. In its comments on the final EIS, Mountain Valley provided some minor
clarifications responding to information contained in the final EIS. Mountain Valley's
clarifications addressed its proposed construction schedule and work hours, and its
proposed construction corridor for certain wetland crossings.231
105. Mountain Valley states that in section 2.5 of the final EIS, Construction Schedule
and Workforce, the construction schedule description should be clarified to note that
Mountain Valley anticipates conducting construction work seven days per week.232
Mountain Valley's application and residential construction plans both contemplated
construction occurring six days per week. This was the schedule reviewed and
recommended in the final EIS and this is the schedule approved herein. Although we
have, on a case -by -case basis, approved construction schedules where an applicant has
demonstrated a need to perform limited construction activities seven days per week,233
Mountain Valley has not provided a sufficient demonstration here. Therefore, we are not
revising the authorized construction schedule.
106. Referencing section 2.4 of the final EIS, Construction Procedures, Mountain
Valley clarifies that its Wetland and Waterbody Construction and Mitigation
Procedures234 requested a greater than 75-foot-wide construction corridor at five wetland
locations, rather than four.13' Although the final EIS stated that "[t]here are four
locations where Mountain Valley is requesting a greater than 75-foot-wide construction
corridor in wetlands," the final EIS analyzed all five individual wetlands where Mountain
continues to closely monitor the situation and is committed to ensuring the health and
safety of the public and the continued reliability of the nation's energy sector.
231 Mountain Valley's March 31, 2020 Comments at 2-3.
232 See final EIS at 2-29.
233 See, e.g., Algonquin Gas Transmission, LLC, 158 FERC ¶ 61,061, at P 217
(2017) (explaining, in the context of the noise analysis for horizontal directional drill
(HDD) construction, that "[w]hile we encourage applicants make reasonable efforts to
comply with state and local noise regulations, to the extent practicable, HDD construction
is primarily a 24-hour per day activity.").
234 Mountain Valley's October 23, 2019 Supplemental Filing.
235 Final EIS at 2-13 (stating that Mountain Valley requested a greater than 75-foot-
wide construction corridor at four wetland locations).
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Valley requested a greater than 75-foot-wide construction corridor.216 The final EIS
evaluated four locations, one of which included two individual wetland crossings that
were considered to be at the same general location due to their proximity, site conditions,
and justification provided by Mountain Valley. Accordingly, we grant the requested
clarification. Neither of the foregoing clarifications changes the conclusions in the final
EIS.
107. On April 21, 2020, Mountain Valley filed changes to the Southgate Project,
including slight realignments of the pipeline route at waterbody crossings and minor
changes in workspace locations.237 Because this route modification request was received
at such a late stage in the proceeding and because it is not clear that Mountain Valley has
obtained landowner approval for the modifications requested, we are not approving the
April 21 realignments as part of the pipeline route certificated herein. Should Mountain
Valley choose to resubmit these route realignments as part of its Implementation Plan
required by Environmental Condition 6 or as part of a variance request in accordance
with Environmental Condition 5, which requires landowner approval, Commission staff
will review the requested modifications at that time.
b. Agency and Tribal Consultation
108. EPA recommends incorporating in the record of decision the results of the
Commission's consultation or coordination efforts related to aquatic resources,
endangered species, historic preservation, and tribes.238 EPA also states that every effort
should be made to minimize impacts on tribal interests within the vicinity of the proposed
project. On April 27, 2020, Cultural Heritage Partners filed comments on behalf of the
Monacan Indian Nation and the Sappony Tribe concerning the Commission's
consultation with the tribes. These comments are addressed below.
109. The final EIS, prepared in coordination with cooperating agencies Army Corps
and FWS, contains a comprehensive evaluation of the various resource areas identified
by EPA and discusses the Commission's consultation efforts through publication of the
236 Id. at 4-57.
237 Mountain Valley's April 21, 2010 Supplemental Filing.
23s EPA's March 23, 2020 Comments at 1.
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final EIS.239 Below, we summarize the results of our efforts to consult under the ESA,
under the National Historic Preservation Act, and with tribes.
i. Endangered Species Act
110. With respect to consultation under the ESA, the final EIS identifies six species that
are federally listed as threatened or endangered (or are identified as proposed for federal
listing) and may occur in or near the project area.240 No critical habitat has been
designated in the project area for any of these species.141 Commission staff determined
that the project is not likely to adversely affect any proposed or listed species.14' The
final EIS also identifies two federally designated species of concern243 that could occur in
the project area and concludes that the project would not likely impact these species.244
On March 19, 2020, the FWS's Raleigh Ecological Services Field Office filed a letter
concurring with the final EIS's determinations of effect on five of the six federally listed
or proposed species that potentially occur in the project area.14' The final EIS considers
the sixth species, the northern long-eared bat, and concludes that there are no known
hibernacula or maternity roosts in the survey area and, with the application of FWS's
final 4(d) rule,246 the project may affect but is not likely to adversely affect the northern
long-eared bat.
211 See final EIS at sections 4.3 (water resources); 4.7.1 — 4.7.6 (federally listed
threatened, endangered, and other species of concern); 4.9.8 (environmental justice); and
4.10.1 (cultural resources and tribal consultations).
14" Id. at 4-97 (Table 4.7-1).
241 Id. at 4-96.
242 Id. at 4-96.
243 "Species of concern" is an informal term used by FWS to refer to species that
have been identified as important to monitor, but do not have endangered, threatened or
candidate status and thus receive no legal protection.
244 Id. at 4-97 (Table 4.7-1).
245 FWS's March 19, 2020 Letter.
246 In January 2016, the FWS finalized a rule under authority of section 4(d) of the
ESA that provides measures that are necessary and advisable to provide for the
conservation of the northern long-eared bat. See final EIS at 4-98.
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111. ESA consultation with the FWS is not yet complete. FWS has not yet responded
to staff s request for concurrence with staff s ESA determination that the project is not
likely to adversely affect the northern long-eared bat. Further, because access was denied
on some properties, a limited number of areas may require surveys following issuance of
the certificate. Last, Mountain Valley has indicated that water required for construction
and hydrostatic test would be primarily obtained from the Dan River (which contains
federally listed species).24' Environmental Condition 16 requires Mountain Valley to
provide written concurrence from the FWS for any water withdrawals from the Dan
River. As required by Environmental Condition 19, Mountain Valley may not commence
construction activities until it files with the Secretary the results of all outstanding
biological surveys, the staff completes ESA consultation with the FWS, and Mountain
Valley has received written notification from the Director of OEP, or the Director's
designee, that construction or mitigation activity may begin.
ii. National Historic Preservation Act and Tribal
Consultation
112. The Commission's consultation efforts in compliance with section 106 of the
National Historic Preservation Act (NHPA)248 and its implementing regulations249 are
documented in the final EIS. As described in section 4.10.3 of the final EIS, Commission
staff consulted with the State Historic Preservation Officers (SHPO) of Virginia and
North Carolina, interested Indian tribes, and other consulting parties prior to making
determinations regarding National Register of Historic Places (NRHP) eligibility and
project effects.250 The final EIS recommends, and we require in Environmental
Condition 20, that Mountain Valley not begin construction of facilities or use of any
staging, storage, temporary work areas, or new or to -be -improved access roads until:
(1) Mountain Valley files with the Commission all remaining cultural resources survey
reports, site evaluations, and avoidance or treatment plans for NRHP-listed or eligible
sites, as necessary, and comments on those reports and plans from the SHPOs, interested
141 FWS's March 19, 2020 Letter indicates that additional ESA surveys and
consultation may be needed as the result of certain project modifications, such as
"changing from municipal water supplies to surface water intakes." FWS's March 19,
2020 Letter at 1. The final EIS explains that Mountain Valley has not yet finalized its
water sources to be used for project purposes (e.g., dust control, hydrostatic testing, and
horizontal directional drilling) nor has Mountain Valley obtained permission from the
FWS for any water withdrawals from the Dan River. See final EIS at 4-48.
24' 54 U.S.C. § 306108 (2018).
249 36 C.F.R. pt. 800 (2019).
25" See final EIS at 4-154 to 4-173.
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Indian tribes, and other consulting parties; and (2) Commission staff reviews and
approves all cultural resources reports, studies, and plans, and notifies Mountain Valley
in writing that treatment plans and mitigation measures may be implemented and/or
construction may proceed.
113. The final EIS concludes that although construction and operation of the Southgate
Project would have adverse effects on historic properties, an agreement document would
be developed with the goal of resolving those impacts."' On November 14, 2019,
Commission staff notified the Advisory Council on Historic Preservation (Advisory
Council) that the Southgate Project may have adverse effects on historic properties, and
invited the Advisory Council to participate in the resolution of adverse effects through
the development of an agreement document. By letter filed December 11, 2019, the
Advisory Council declined to participate in the consultation to resolve adverse effects.252
Commission staff then prepared a draft programmatic agreement that was sent to the
SHPOs and other consulting parties on January 8, 2020. After addressing the Virginia
and North Carolina SHPOs' comments on the draft agreement, Commission staff sent a
final programmatic agreement to the SHPOs and other consulting parties on March 10,
2020. The North Carolina SHPO signed the agreement on March 24, 2020.
114. By letter dated April 1, 2020,253 the Virginia SHPO requested that the Commission
consider comments on the final agreement that the Virginia SHPO stated it received on
March 25, 2020, from Cultural Heritage Partners on behalf of the Monacan Indian Nation
and the Sappony Tribe.211 Commission staff responded to these comments in an April
10, 2020 letter to the Virginia SHPO and requested the SHPO's signature on the final
agreement. The Virginia SHPO signed the agreement on May 17, 2020. Execution of
the programmatic agreement by the Commission, the North Carolina SHPO, and the
Virginia SHPO255 concludes the NHPA section 106 process. The programmatic
agreement provides a mechanism for the review of future cultural resources
investigations to cover the entire area of potential effect for the undertaking, avoidance or
treatment for historic properties, and future consultations among the consulting parties.
251 Id. at 5-11.
252 Advisory Council's December 11, 2019 Response to Notice of Adverse Effect.
253 The Virginia SHPO's letter was filed in the public docket on April 9, 2020.
214 Neither tribe submitted substantive comments on the text of the draft agreement
document directly to the Commission.
255 The executed programmatic agreement was placed into the public record for
this proceeding on May 19, 2020.
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Environmental Condition 20 requires Mountain Valley to implement the stipulations of
the programmatic agreement.
115. On April 24, 2020, Cultural Heritage Partners filed comments on behalf of the
Monacan Indian Nation and the Sappony Tribe (collectively, Tribes).211 The Tribes
argue that the Commission process for developing the programmatic agreement "failed to
comply with the letter and spirit of Section 106 of the [NHPA] ...."257 The Tribes
believe that since they have obligations under the programmatic agreement, they should
be recognized as invited signatories to the agreement.
116. Pursuant to the section 106 implementing regulations, the agency must consult
with the SHPO and other consulting parties (including interested Indian tribes) to seek
ways to avoid, minimize, or mitigate the undertaking's adverse effects.258 If they agree
on how to resolve the adverse effects, the agency and the SHPO must execute an
agreement document.25' By developing and executing an agreement document with the
North Carolina and Virginia SHPOs, in order to resolve adverse effects on historic
properties affected by the Southgate Project, the Commission has complied with both the
letter and spirit of section 106 of the NHPA.
117. The required signatories to a section 106 agreement document include the agency
official, the appropriate SHPO, and, if participating in the consultation, the Advisory
Council.26" Generally, if the project were to occur on or affect historic properties on tribal
lands, the tribe would also be a signatory to the agreement.26' That is not the case here.
Section 800.6(c)(2) of the section 106 implementing regulations allows, but does not
require, the Commission to invite additional consulting parties to be signatories to a
116 Cultural Heritage Partners also filed comments on the Tribes' behalf
commenting on the Commission's development of the programmatic agreement on
January 16, and February 7, 2020.
117 Monacan Indian Nation's and Sappony Tribe's April 27, 2020 Letters at 1.
258 36 C.F.R. § 800.6(b)(1)(i) (2019).
259Id. § 800.6(b)(1)(iv).
26" Id. § 800.6(c)(1). As noted above, the Advisory Council declined to participate
in the consultation for the Southgate Project by letter filed December 11, 2019.
261 See 36 C.F.R. §§ 800.6(c)(1) and 800.2(c)(2)(i) (2019).
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section 106 agreement document (i.e., "invited signatories").262 Citing Advisory Council
guidance, the Tribes argue that they should be invited signatories because they have
obligations under the programmatic agreement.263 However, the Advisory Council's
guidance further underscores that it is within the Commission's discretion to determine
whether to invite additional parties to sign an agreement document, explaining that
"[f]ederal agencies ... should weigh the decision carefully, since an invited signatory who
actually signs an agreement has the same ability to amend or terminate the agreement as
other signatories."264 Accordingly, the Commission acted within its discretion, and in
accord with the NHPA and its implementing regulations, by limiting the signatories to the
programmatic agreement to those required under section 800.6(c)(1).26s Nevertheless,
because the Monacan Indian Nation and the Sappony Tribe are considered to be
consulting parties, the Commission invited the tribes to sign the agreement as concurring
parties. To date, neither tribe has done so.
118. The Tribes also take issue with Commission staff s development of the
programmatic agreement, stating that the programmatic agreement was presented as a
"done deal" and "appears to be nothing more than a standard FERC template."266
119. As described above, a draft programmatic agreement was circulated among
consulting parties on January 8, 2020. The purpose of distributing the draft agreement
was to elicit substantive comments and edits from the consulting parties. Commission
staff made substantial changes to the final programmatic agreement based on comments
received from the Virginia and North Carolina SHPOs. Moreover, the use of a common
161 Id. § 800.6(c)(2)(i) ("The agency official may invite additional parties to be
signatories to a memorandum of agreement.") (emphasis added).
161 Cultural Heritage Partner's April 27, 2020 Comment at 1 (citing Advisory
Council, Guidance on Agreement Documents: Executing Agreement Documents,
https://www.achp.gov/executing_agreement—documents).
26' Advisory Council, Guidance on Agreement Documents: Executing Agreement
Documents, https://www.achp.gov/executing_agreement_documents.
265 36 C.F.R. § 800.6(c)(1).
266 Monacan Indian Nation's and Sappony Tribe's April 27, 2020 Letters at 1.
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template for the same type of program or undertaking, such as for natural gas projects, is
contemplated by the section 106 implementing regulations."'
120. The Tribes assert that the Commission has not engaged in meaningful government
to government consultation.26' They also take issue with certain aspects of Mountain
Valley's Plan for Unanticipated Discoveries of Historic Properties and Human Remains
(Unanticipated Discovery Plan).169
121. Commission staff initiated consultation on August 8, 2018, by mailing the NOI for
the Southgate Project to a wide variety of stakeholders, including the Virginia and North
Carolina SHPOs and potentially interested Indian tribes. On October 16, 2018, staff
supplemented the information contained in the NOI by sending individual letters to
25 federally recognized tribes, including the Monacan Indian Nation.270 In response, staff
received comments from five tribes. Commission staff held meetings, in person or via
teleconference, with three federally recognized Indian tribes, including a January 17,
2019 meeting with representatives of the Monacan Indian Nation in Richmond, Virginia.
On February 21, 2019, Mountain Valley provided the Monacan Indian Nation and the
Sappony Tribe copies of the cultural resources investigations reports prepared for the
project.271 Both Tribes commented on the cultural resources reports in July 2019.272
Both Tribes also commented on the draft EIS. Staff addressed the Tribes' comments in
the final EIS.273
267 See 36 C.F.R. § 800.14(b)(4) (2019) (describing the use of a "prototype
programmatic agreement" for the "same type of program or undertaking in more than one
case or area").
268 Monacan Indian Nation's and Sappony Tribe's April 27, 2020 Letters at 2.
269 Id.
27" The Sappony Tribe is a North Carolina state -recognized tribe.
171 Id. at 4-159; see also Mountain Valley's March 5, 2019 Information Request
Response at 127.
272 See Monacan Indian Nation's July 1, 2019 Comments on Cultural Resources
Reports (filed as privileged); Sappony Tribe's July 1, 2019 Comments on Cultural
Resources Reports (filed as privileged).
271 See final EIS, Appendix I.3 at I.3-62 to I.3-67 (addressing Sappony Tribe's
September 16, 2019 Comments on the draft EIS); I.3-68 to I.3-74 (addressing Monacan
Indian Nation's September 16, 2019 Comments on the draft EIS); I.3-75 to I.3-77
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122. Section 800.2(a)(4) of the regulations implementing section 106 of the NHPA
states that "[t]he [Advisory] Council encourages the agency official to use to the extent
possible existing agency procedures and mechanisms to fulfill the consultation
requirements of this part."274 By using our existing procedures, including notices, letters
to and from tribes, and meetings between staff and tribal representatives, Commission
staff has conducted consultation with Indian tribes. Section 4.10.1.2 of the final EIS
provides a detailed account of the Commission's efforts to consult on a government -to -
government basis with Indian tribes that may attach religious or cultural significance to
sites in the region or may be interested in potential impacts from the Southgate Project on
cultural resources.275
123. Mountain Valley developed its Unanticipated Discovery Plan276 in consultation
with the Virginia and North Carolina SHPOs. The plan notes that Mountain Valley "is
contacting federally -recognized Native American Tribes to solicit their concerns and
input regarding potential Project effects to historic properties, tribal resources, and human
remains."277 In addition, the plan sets forth the procedures to which Mountain Valley
would adhere if archaeological resources or human remains are discovered during project
construction. The plan includes two distinct protocols, the use of which is dependent
upon whether or not the discovered cultural resources may involve human remains or
funerary objects.27' Both protocols require Mountain Valley to notify and consult with
"Interested Tribes," which Mountain Valley has defined as "tribes that have asked to be
(addressing Monacan Indian Nation's November 11, 2019 Comments); and I.3-78 to I.3-80
(addressing Sappony Tribe's December 12, 2019 Comments).
274 36 C.F.R. § 800.2(a)(4) (2019).
271 See also final EIS, Appendix E-3 (Table 4.10-2).
276 Mountain Valley's original Unanticipated Discovery Plan was filed as part of
its November 8, 2018 Application. See Application, Resource Report 4, Appendix 4-C.
The Unanticipated Discovery Plan was revised in May 2019. See Mountain Valley's
May 22, 2019 Supplemental Filing, attachment 5. In its comments on the final EIS,
Mountain Valley clarified that the Unanticipated Discovery Plan has not been revised
since the May 2019 version filed with the Commission. Mountain Valley's March 31,
2020 Comments at 3.
277 Unanticipated Discovery Plan, section 3.0.
271 Compare Mountain Valley's Unanticipated Discovery Plan, section 4.2
(Notification and Assessment Procedures — Not Involving Human Remains or Funerary
Objects) and section 4.3 (Notification and Treatment Procedures — Human Remains or
Funerary Objects).
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consulted in the event of a discovery"279 and "tribes that have requested consultation
during the FERC review process."280 Mountain Valley filed a revised Unanticipated
Discovery Plan on May 22, 2019, which was subsequently approved by the North
Carolina SHPO on August 19, 2019, and the Virginia SHPO on October 18, 2019.281 We
are satisfied that Mountain Valley has developed appropriate protocols for addressing
unanticipated discoveries during project construction, and that Mountain Valley will seek
input from the Tribes regarding any discoveries, as appropriate.282 In the event of the
unanticipated discovery of human remains, funerary object, sacred objects, or objects of
cultural patrimony, Mountain Valley would follow the protocols set forth in the
Unanticipated Discovery Plan and the executed programmatic agreement,283 and has
committed to treating any such discovery in a manner guided by the Advisory Council's
Policy Statement Regarding Treatment of Burial Sites, Human Remains, and Funerary
Objects (2007) and any relevant state laws and guidelines.181
124. As detailed above, the Commission engaged in meaningful consultation pursuant to
our obligations under NHPA section 106 and pursuant to our government -to -government
271 Unanticipated Discovery Plan, section 3.0.
2s0 Mountain Valley's October 18, 2019 Response to Environmental Information
Request at 29.
2s1 We note that, by letter filed May 19, 2020, the Virginia SHPO requested that
Mountain Valley re -open consultation on the Unanticipated Discovery Plan to explore
ways in which the Tribes may be more involved in determinations of significance of any
discoveries.
282 If the discovery is determined to be a newly identified and potentially
significant archaeological site (i.e., exhibiting archaeological features, intact contacts, or
patterned artifact distributions that could provide substantive information concerning
prehistory or history), or if it represents information that would alter the understanding of
a previously known and cleared archaeological resource, Mountain Valley must notify
the Commission, the relevant SHPO, and Interested Tribes within 24 hours of the
determination. See Unanticipated Discovery Plan, section 4.2.
213 The programmatic agreement includes Stipulation VI.B, which states in part:
"Human remains, funerary objects, sacred objects, and objects of cultural patrimony shall
be treated in accordance with the [Unanticipated Discover Plan]; and repatriated to
appropriate consulting Indian tribes or reburied after analysis, as determined by
consultations among the signatories to this [programmatic agreement]."
214 See Mountain Valley's October 18, 2019 Response to Environmental
Information Request at 29.
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responsibility to Indian tribes. Execution of the programmatic agreement, and
implementation thereof, evidences the Commission's compliance with the section 106
review process.
C. Environmental Justice
125. EPA states that every effort should be made to minimize impacts to environmental
justice communities within the vicinity of the project facilities.28' The final EIS
identified potential environmental justice communities (i.e., minority or low-income
populations) in the project area consistent with EPA guidance.286 The project pipeline
would cross 35 census block groups, 15 of which contain environmental justice
populations.28' Two environmental justice populations are located within one mile of the
proposed Lambert Compressor Station.288 The EPA does not identify specific impacts to
environmental justice communities that the Commission should minimize; however, the
final EIS discusses factors that could affect such communities and determined that
potentially adverse environmental effects would be minimized and/or mitigated.289 Based
on an evaluation of the project's potential environmental impacts on the identified
environmental justice communities and finding that those impacts would be minimized or
mitigated, the final EIS concludes that the project would not have a disproportionately
high and adverse environmental or human health impact on minority or low-income
populations.290
215 EPA's March 23, 2020 Comments at 1.
211 See final EIS at 4-144 to 4-149 (Table 4.9-7). Potential environmental justice
communities include: (1) census block groups that have a minority population of more
than 50% or a population that is 10 percentage points higher than their respective county;
and (2) census block groups that have a household poverty rate of more than 20% or a
household poverty rate that is 10 percentage points higher than their respective county.
Id. at 4-142.
287 Id. at 4-142.
288 Id.
211 Id. Factors that could affect environmental justice communities include air and
noise impacts from construction and operation (section 4.11), visual impacts (section 4.8),
and socioeconomic impacts such as traffic, loss of tourism, and crop loss (section 4.9).
210 See id. at 4-153 and 5-11.
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d. Hydrostatic Testinu
126. EPA reiterates an earlier request for a hydrostatic testing report and recommends
that Mountain Valley consider recycling the water used for hydrostatic testing.291 The
final EIS provides a description of Mountain Valley's proposed hydrostatic testing plans,
including source and volume of water and discharge procedures.292 The final EIS also
notes that Mountain Valley would test the pipeline in segments, and that the water may
be moved through each sequential segment along the route, or the water would be
discharged.293 If the hydrostatic test water is discharged, it would be discharged through
sediment filters in vegetated uplands away from waterbodies and wetlands.294 Prior to
construction, Mountain Valley must apply for any applicable permits to discharge
hydrostatic test water.
e. Collocation with Transco Pipeline
127. The Southgate Project's proposed pipeline route is adjacent to, or collocated with,
Transco's existing system of three and four parallel, natural gas pipelines for
approximately 33 miles. Transco and a landowner, Katie Whitehead, filed comments on
the final EIS regarding the Southgate Project's proposed collocation.
i. Transco Comments
128. On March 27, 2020, Transco filed comments on the final EIS identifying several
issues with collocating portions of the proposed Southgate Project with Transco's
pipeline system.291 Specifically, Transco is concerned with possible interference with
Transco's cathodic protection system, the use of Transco's right-of-way for Southgate
Project construction purposes (e.g., spoil storage, grading, heavy equipment, timber
291 EPA's March 23, 2020 Comments at 1.
212 Final EIS at 4-46 and 4-47.
293 Id. at 2-20.
294 Id.
291 On January 31, 2020, Transco raised, for the first time, concerns that
construction and operation of the Southgate Project would encroach on Transco's
existing right-of-way and could potentially adversely affect the safety, integrity,
operations, and expandability of Transco's pipeline system. Transco's January 31, 2020
Motion to Intervene Out of Time. The filing noted that Transco and Mountain Valley
had executed an agreement on July 1, 2019, that set forth terms for Mountain Valley to
cross Transco's right-of-way. Id. at 5.
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storage, burning of brush, blasting impacts), and Transco's ability to access its right-of-
way throughout the Southgate Project construction and restoration phase while erosion
and sediment control devices remain on site.
129. On April 6, 2020, in response to staff s data request seeking detailed locations of
the Transco pipeline systems, Mountain Valley filed revised alignment sheets showing
that, for the majority of the proposed Southgate Project pipeline route, Mountain Valley
proposes to place the Southgate Project pipeline at least 50 feet away from Transco
facilities, with the exception of seven locations where the Southgate Project pipeline
route would cross the Transco right-of-way and one location where the pipe would be
horizontally directionally drilled under the Dan River. Mountain Valley states that it
continues to coordinate with Transco at these locations. On May 8, 2020, Mountain
Valley filed a response to Transco's March 27, 2020 comments.
130. We encourage collocated pipelines to minimize the space between existing and
new pipelines in order to reduce the impact on natural resources and to minimize the
amount of land that would need to be acquired from landowners. We note that collocated
pipelines often use workspace associated with existing pipelines' permanent rights -of -
way. Here, Mountain Valley has proposed placing its new pipeline at least 50 feet away
from Transco facilities, with a few exceptions. Regarding Transco's safety concerns
about the appropriate distances between pipelines, we note that maintaining a 50-foot
separation between pipelines is not uncommon and that there are numerous examples of
pipelines located less than 50 feet apart, including along Transco's own pipeline
system.296 Mountain Valley has also confirmed that the Southgate Project's proposed
construction workspaces do not overlap a Transco pipeline in any location other than
where the Southgate Project route would cross Transco's right-of-way. We note that the
Interstate Natural Gas Association of America (INGAA) has adopted standard guidance
216 Mountain Valley points out that Transco has collocated its own pipelines in the
same right-of-way, with as little as a 25-foot separation. See Mountain Valley's May 8,
2020 Comments (quoting a February 4, 2019 comment filed by Transco in Docket
No. CP 18-186-000 for Transco's Southeastern Trail Expansion Project, in which Transco
stated that "[c]urrent industry best practice is to maintain 25 feet of separation between
large diameter, high-pressure natural gas transmission pipeline. This is designed to give
the operating company clear access to safely excavate the pipeline for future maintenance
activities (if necessary). The proposed 25-foot separation also allows construction to take
place without regularly operating heavy equipment over the existing, in-service
pipelines.").
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calling for a 50-foot separation between pipelines.29' The Southgate Project alignment
along Transco's pipeline system is consistent with this guidance.
131. Regarding Transco's concerns about possible interference with its cathodic
protection system, Mountain Valley must design, construct, operate, and maintain the
Southgate Project pipeline in accordance with the U.S. Department of Transportation's
(DOT) minimum federal safety standards.29' In compliance with 49 CFR Part 192,
subpart I, gas pipelines must be properly coated and have cathodic protection to prevent
corrosion. The performance of cathodic protection systems must be monitored regularly
with tests performed at least once per year. Records must be maintained for the life of
the pipeline. Pipelines that are found to have deficient cathodic protection must be
remediated in a timely manner (usually within 12 to 18 months after discovery).
132. We expect Mountain Valley's adherence to these requirements (as well as
Transco's) will ensure that the location of Mountain Valley's new pipeline in proximity
to Transco's existing pipelines will not result in detrimental impacts to any of the
pipelines' cathodic protection systems. If any such impact occurred, the monitoring
required by 49 CFR Part 192 would identify it and require remediation. Mountain Valley
states that it continues to coordinate with Transco to ensure that the potential for
interference and stray current between their cathodic protection systems is eliminated,
and that it agrees with Transco that it would be advantageous to develop a plan to
mitigate any potential risks to Transco's existing cathodic protection system.299
133. Mountain Valley has committed to working with Transco during construction and
operation of the Southgate Project to coordinate access to the right-of-way in the event
that unplanned issues arise. In response to Transco's concern that Mountain Valley's
installation of erosion and sediment control devices would "unduly inhibit Transco's
ability to access its right-of-way for operational and safety purposes,"300 Mountain Valley
responds that any controls within Transco's right-of-way can be temporarily removed to
allow access.3oi We expect Mountain Valley to continue to coordinate with Transco to
297 See, e.g., INGAA Foundation, Building Interstate Natural Gas Transmission
Pipelines: A Primer 87 (Jan. 2013), https://www.ingaa.org/constructionprimer.aspx.
29' 49 C.F.R. pt. 192 (2019).
299 See Mountain Valley's May 8, 2020 Comments at 2.
300 Transco's March 27, 2020 Comments at 2.
M Mountain Valley's May 8, 2020 Comments at 2.
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resolve Transco's collocation and safety concerns. Based on the foregoing, we conclude
that the Southgate Project, as proposed, could be constructed and operated safely.
H. Katie Whitehead Comments
134. On April 8, 2020, landowner Katie Whitehead filed a comment in response to
Mountain Valley's April 6 filing. Ms. Whitehead asserts that on the revised alignment
sheets the location of Transco's existing pipelines on her property is not correct.
Ms. Whitehead claims that the alignment sheets incorrectly depict the location of the
Transco pipelines within Transco's right-of-way. Specifically, Ms. Whitehead believes
that the Transco pipeline is located at least 40 feet from the edge of its right-of-way;
therefore, based on Mountain Valley's pipeline alignment, there would be, at a minimum,
a 65-foot separation between the existing Transco pipeline and the proposed Southgate
Project pipeline. Ms. Whitehead states that she is unable to negotiate an appropriate
easement without accurately knowing the temporary and permanent easement
boundaries.3o2
135. On April 28, 2020, Mountain Valley responded that the alignment sheets are
correct, based on data obtained from Transco as well as use of pipe locating equipment to
determine the location of the Transco pipeline. In its filing, Mountain Valley included
additional images of Ms. Whitehead's property to clarify the Transco pipeline locations
with respect to the right-of-way and the proposed Southgate pipeline. In response to
Ms. Whitehead, Mountain Valley stated that it has offered to make changes to the
proposed route to reduce the impact on Ms. Whitehead's property and has stated that it
will file the revised alignment sheets reflecting the changes as part of the project's
Implementation Plan.30
136. On May 11, 2020, Ms. Whitehead responded, raising questions about the easement
agreement process. Specifically, Ms. Whitehead's filing requests information related to
agreements between Transco and Mountain Valley regarding the joint use of the right-of-
way, including Mountain Valley's proposed crossing of a spillway leading from a small
lake on her property304 and Mountain Valley's plan for felled trees.
3oz. Ms. Whitehead is specifically concerned about the excessive removal of trees
and the impact on silviculture to accommodate the temporary workspace on her property.
See Katie Whitehead's September 16, 2019 and November 17, 2019 Comments on the
draft EIS.
303 Final EIS at 3-26, Table 3.4-10 (Mountain Valley would reduce temporary
workspace from 100 feet to 75 feet the entire distance on the Whitehead property).
IN Mountain Valley identified the spillway as a surface water feature with
intermittent flow. Final EIS Appendix I.3 at I.3-220. Mountain Valley will treat this
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137. Mountain Valley proposes to treat the spillway on Ms. Whitehead's property as a
waterbody crossing.305 Pursuant to Mountain Valley's Wetland and Waterbody
Construction and Mitigation Procedures, Mountain Valley will be required to restore the
spillway after construction. Regarding tree felling, Environmental Condition 17 requires
Mountain Valley to remove and dispose of timber and debris from the right-of-way.
Mountain Valley must ensure that any timber that is not removed and remains on or
adjacent to the right-of-way, as agreed to by the landowner, is located at access points
where the landowner can reasonably retrieve the timber without any inadvertent impacts
on the restored right-of-way, in accordance with the section III.E of the Commission's
Upland Erosion Control, Revegetation, and Maintenance Plan.
138. The landowner easement agreement process provides an opportunity for Ms. Whitehead
to express her concerns to Mountain Valley and to negotiate site -specific plans to meet her
needs.3o6 Environmental Condition 5 allows Mountain Valley to make minor adjustments
to the route per landowner request so long as the route adjustments do not affect other
landowners or sensitive environmental areas. Should Mountain Valley seek to revise its
proposal based on easement negotiations with landowners, Environmental Condition 4 of
this order requires Mountain Valley to file revised detailed survey alignment maps/sheets
prior to the start of construction. Any changes to the approved route would be reflected on
these alignment sheets.
L Sandy Creek Crossing
139. Roger Sisson notes concerns about the Southgate Project's impacts on a spring -fed
well on his property. Mr. Sisson is also concerned about the pipeline's crossing of the
Sandy Creek riverbed, noting the potential for pipeline shifting and corrosion, due to the
wet and sandy nature of the soil, and the possibility of flood damage.
140. Mountain Valley is required to identify all private wells and springs that are used
for potable water in the project area. Accordingly, the final EIS recommends, and we
feature as a surface water crossing during construction, which will include a dry open -cut
crossing consisting of either dam and pump or a flume. Final EIS Appendix B.5 at B.5-1.
3os See Final EIS Appendix I.3 at I.3-220 and Appendix B.5 at B.5-1 (waterbody
S-E18-4 at milepost 4.8).
3"1 We note that NGA section 7(h) provides that a holder of a certificate of
convenience and necessity, which this order issues to Mountain Valley, may acquire the
needed property rights by exercise of the right of eminent domain. See generally,
Mountain Valley, 161 FERC ¶ 61,043, at PP 59-62, order on reh °g, 163 FERC ¶ 61,197,
at PP 48-51, aff'd sub nom., Appalachian Voices v. FERC, No., 17-1271, 2019 WL
847199.
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require in Environmental Condition 14, that Mountain Valley, prior to construction, file
the locations of all private water wells and springs identified within 150 feet of the
project work areas — including each water source's status, use, direction, and distance
from construction workspace — and any proposed mitigation measures that would
minimize or avoid impacts on the private water wells or springs.30' To address potential
impacts on groundwater wells, Mountain Valley will offer to conduct pre- and post -
construction water quality testing for all water supply wells located within 150 feet of
project workspaces, as described in Mountain Valley's Water Resources Identification
and Testing Plan.308
141. The Southgate Project will cross Sandy Creek at milepost 12.8 in Pittsylvania
County, Virginia.309 To cross Sandy Creek, Mountain Valley will use dry -ditch methods
(i.e., dam -and -pump or flume)311 to minimize in -stream construction and surface water
impacts .311 Regarding Mr. Sisson's concerns about flood damage and risk to the pipeline
from shifting in the stream bed, the final EIS explains that, although flooding itself does
not generally present a risk to pipeline facilities, bank erosion and/or scour could expose
the pipeline or cause sections of pipe to become unsupported. The final EIS states that
the pipeline will be installed below scour depth for each waterbody crossed, and that at
least four feet of cover would be maintained at waterbody crossings, except in
consolidated rock, where there would be a minimum of two feet of cover.312 The final
EIS further states that flooding can also affect the pipeline by increasing buoyancy,
causing the pipe to rise toward the land surface where it may become exposed.313 To
minimize and prevent impacts, Mountain Valley would implement mitigation measures
such as use of concrete coating, gravel -filled blankets, or concrete weights on the pipeline
to maintain negative buoyancy.314 These measures are included in Mountain Valley's
307 Final EIS at 5-3.
308 Id.
309 Id. Appendix B.5 at B.5-3.
310 The dam -and -pump and flume methods are types of dry -ditch crossings that
involve diverting the flow of water across construction work areas using one or more
flume pipes, or a series of pumps and hoses, placed in the waterbody. Id. at 2-22 to 2-23.
311 Id
312 Id. at 2-22.
313 Id. at 4-13 .
314Id. at 4-14.
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Wetland and Waterbody Construction and Mitigation Procedures and project -specific
Erosion and Sediment Control Plan, which Mountain Valley is required to follow at all
waterbody crossings.
142. Cathodic protection would be installed along the entire length of the pipeline to
prevent corrosion.311 In addition, as described above, Mountain Valley will complete
periodic corrosion and leak surveys .316 Finally, Mountain Valley must design, construct,
operate, and maintain the Southgate Project pipeline in accordance with DOT's minimum
federal safety standards,311 including requirements for internal, external, and atmospheric
corrosion control.318
g. Natural Resources Conservation Service Riparian Area
143. On April 17, 2020, the Blue Ridge Environmental Defense League filed a
comment on behalf of landowner Douglas Bryant, who is concerned about a riparian area
on his property that would be crossed by the proposed pipeline at milepost 21.5 and that
was part of a Natural Resources Conservation Service conservation program. Mr. Bryant
requested that the Southgate Project pipeline route avoid this area on his property.
Commission staff confirmed, through information provided by the Natural Resources
Conservation Service, that this riparian area is no longer under a conservation program
and does not warrant special protection. Therefore, there is no need to consider a reroute
in the area. In general, to minimize impacts and restore riparian areas affected by the
project, Mountain Valley would implement its Upland Erosion Control, Revegetation
and Maintenance Plan, Wetland and Waterbody Construction and Mitigation Procedures
and its project -specific Erosion and Sediment Control Plan. In addition, Environmental
Condition 5 allows for Mountain Valley to make minor adjustments to the route per
landowner request so long as the route adjustments do not affect other landowners or
sensitive environmental areas.
5. Environmental Analysis Conclusion
144. We have reviewed the information and analysis contained in the final EIS
regarding the potential environmental effects of the Southgate Project, as supplemented
herein. We agree with the conclusions presented in the final EIS and find that the
environmental impacts associated with the project, if constructed and operated as
115 Id. at 4-218.
316 See supra P 131.
317 49 C.F.R. pt. 192.
318Id. § § 192.451-192.493 (subpart I); see also final EIS at 2-12.
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described in the final EIS, are acceptable considering the public benefits that the project
will provide. We accept the final EIS's environmental recommendations, as revised
herein, and include them as conditions in the appendix to this order.
145. Based on our Certificate Policy Statement determination and our environmental
analysis, we find under section 7 of the NGA that the public convenience and necessity
requires approval of Mountain Valley's Southgate Project, subject to the conditions in
this order.
146. Compliance with the environmental conditions appended to our orders is integral
to ensuring that the environmental impacts of approved projects are consistent with those
anticipated by our environmental analyses. Commission staff carefully reviews all
information submitted and will only issue a notice to proceed with construction when
satisfied that the applicant has complied with all applicable conditions. We also note that
the Commission has the authority to take whatever steps are necessary to ensure the
protection of environmental resources during construction and operation of the project,
including authority to impose any additional measures deemed necessary to ensure
continued compliance with the intent of the conditions of the order, as well as the
avoidance or mitigation of unforeseen adverse environmental impacts resulting from
project construction and operation.
147. Any state or local permits issued with respect to the jurisdictional facilities
authorized herein must be consistent with the conditions of this certificate. The
Commission encourages cooperation between interstate pipelines and local authorities.
However, this does not mean that state and local agencies, through application of state or
local laws, may prohibit or unreasonably delay the construction or operation of facilities
approved by this Commission.319
148. At a hearing held on June 18, 2020, the Commission on its own motion received
and made a part of the record in this proceeding all evidence, including the application, as
supplemented, and exhibits thereto, and all comments, and upon consideration of the
record,
311 See 15 U.S.C. § 717r(d) (2018) (state or federal agency's failure to act on a
permit considered to be inconsistent with Federal law); see also Schneidewind v. ANR
Pipeline Co., 485 U.S. 293, 310 (1988) (state regulation that interferes with FERC's
regulatory authority over the transportation of natural gas is preempted) and Dominion
Transmission, Inc. v. Summers, 723 F.3d 238, 245 (D.C. Cir. 2013) (noting that state and
local regulation is preempted by the NGA to the extent it conflicts with federal
regulation, or would delay the construction and operation of facilities approved by the
Commission).
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The Commission orders:
(A) A certificate of public convenience and necessity is issued to Mountain
Valley, authorizing it to construct and operate the proposed facilities, as described and
conditioned herein, and as more fully described in the application, and subsequent filings
by the applicant, including any commitments made therein.
(B) The construction of the Southgate Project facilities will not commence until
Mountain Valley receives the appropriate federal permits for the Mainline System, and
the Director of the Office of Energy Projects, or the Director's designee, lifts the stop -
work order and authorizes Mountain Valley to continue constructing the remaining
portions of the Mainline System.
on:
(C) The certificate authority issued in Ordering Paragraph (A) is conditioned
(1) Mountain Valley's completion of construction of the proposed
facilities and making them available for service within three years of the date of
this order pursuant to section 157.20(b) of the Commission's regulations;
(2) Mountain Valley's compliance with all applicable Commission
regulations under the NGA including, but not limited to, Parts 154, 157, and 284,
and paragraphs (a), (c), (e), and (f) of section 157.20 of the Commission's
regulations;
(3) Mountain Valley's compliance with the environmental conditions
listed in the appendix to this order; and
(4) Mountain Valley's filing a written statement affirming that it has
executed firm service agreements for volumes and service terms equivalent to
those in its precedent agreements, prior to commencing construction.
(D) Mountain Valley's proposed rates for service on the Southgate System are
approved, as modified above.
(E) Mountain Valley's proposal to charge an initial retainage factor to recover
fuel costs associated with the Southgate System is approved.
(F) Mountain Valley is required to file actual tariff records setting forth rates
and the separately -stated fuel rate for the project and other proposed changes to its tariff
implementing the project no more than 60 days and no less than 30 days prior to placing
the project in service.
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(G) Mountain Valley shall notify the Commission's environmental staff by
telephone or e-mail of any environmental noncompliance identified by other federal,
state, or local agencies on the same day that such agency notifies Mountain Valley.
Mountain Valley shall file written confirmation of such notification with the Secretary of
the Commission within 24 hours.
(H) The North Carolina Utilities Commission's and the Appalachian Mountain
Advocates' requests for a full evidentiary, trial -type hearing are denied.
(I) Transcontinental Gas Pipe Line Company, LLC's request for a technical
conference is denied.
By the Commission. Commissioner Glick is dissenting in part with a separate statement
attached.
Commissioner McNamee is concurring with a separate statement
attached.
(SEAL)
Nathaniel J. Davis, Sr.,
Deputy Secretary.
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Appendix
Environmental Conditions
As recommended in the final Environmental Impact Statement (EIS) for the Southgate
Project (Project) and modified herein, this authorization includes the following
conditions:
1. Mountain Valley shall follow the construction procedures and mitigation measures
described in its application, supplemental filings (including responses to staff data
requests), and as identified in the EIS, unless modified by the Order. Mountain
Valley must:
a. request any modification to these procedures, measures, or conditions in a
filing with the Secretary of the Commission (Secretary);
b. justify each modification relative to site -specific conditions;
C. explain how that modification provides an equal or greater level of
environmental protection than the original measure; and
d. receive approval in writing from the Director of the Office of Energy
Projects (OEP), or the Director's designee, before using that
modification.
2. The Director of OEP, or the Director's designee, has delegated authority to
address any requests for approvals or authorizations necessary to carry out the
conditions of the Order, and take whatever steps are necessary to ensure the
protection of environmental resources during construction and operation of the
Project. This authority shall allow:
a. the modification of conditions of the Order;
b. stop -work authority; and
C. the imposition of any additional measures deemed necessary to ensure
continued compliance with the intent of the conditions of the Order as well
as the avoidance or mitigation of unforeseen adverse environmental impact
resulting from Project construction and operation.
3. Prior to any construction, Mountain Valley shall file an affirmative statement
with the Secretary, certified by a senior company official, that all company
personnel, environmental inspectors (EIs), and contractor personnel will be
informed of the EIs' authority and have been or will be trained on the
implementation of the environmental mitigation measures appropriate to their jobs
before becoming involved with construction and restoration activities.
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4. The authorized facility locations shall be as shown in the EIS, as supplemented by
filed alignment sheets. As soon as they are available, and before the start of
construction, Mountain Valley shall file with the Secretary any revised detailed
survey alignment maps/sheets at a scale not smaller than 1:6,000 with station
positions for all facilities approved by the Order. All requests for modifications of
environmental conditions of the Order or site -specific clearances must be written
and must reference locations designated on these alignment maps/sheets.
Mountain Valley's exercise of eminent domain authority granted under Natural
Gas Act Section 7(h) in any condemnation proceedings related to the Order must
be consistent with these authorized facilities and locations. Mountain Valley's
right of eminent domain granted under Natural Gas Act Section 7(h) does not
authorize it to increase the size of its natural gas facilities to accommodate future
needs or to acquire a right-of-way for a pipeline to transport a commodity other
than natural gas.
5. Mountain Valley shall file with the Secretary detailed alignment maps/sheets and
aerial photographs at a scale not smaller than 1:6,000 identifying all route
realignments or facility relocations, and staging areas, construction support areas,
new access roads, and other areas that would be used or disturbed and have not
been previously identified in filings with the Secretary. Approval for each of these
areas must be explicitly requested in writing. For each area, the request must
include a description of the existing land use/cover type, documentation of
landowner approval, whether any cultural resources or federally listed threatened
or endangered species would be affected, and whether any other environmentally
sensitive areas are within or abutting the area. All areas shall be clearly identified
on the maps/sheets/aerial photographs. All areas must be approved in writing by
the Director of OEP, or the Director's designee, before construction in or near
that area.
This requirement does not apply to extra workspace allowed by the Commission's
Upland Erosion Control, Revegetation, & Maintenance Plan and/or minor field
realignments per landowner needs and requirements that do not affect other
landowners or sensitive environmental areas such as wetlands.
Examples of alterations requiring approval include all facility location changes
resulting from:
a. implementation of cultural resources mitigation measures;
b. implementation of endangered, threatened, or special concern species
mitigation measures;
C. recommendations by state regulatory authorities; and
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d. agreements with individual landowners that affect other landowners or
could affect sensitive environmental areas.
6. Within 60 days of the acceptance of the Certificate and before construction
begins, Mountain Valley shall file its Implementation Plan with the Secretary, for
review and written approval by the Director of OEP, or the Director's designee.
Mountain Valley must file revisions to its plans as schedules change. The plans
shall identify:
a. how Mountain Valley will implement the construction procedures and
mitigation measures described in its application and supplements (including
responses to staff data requests), identified in the EIS, and required by the
Order;
b. how Mountain Valley will incorporate these requirements into the contract
bid documents, construction contracts (especially penalty clauses and
specifications), and construction drawings so that the mitigation required at
each site is clear to on -site construction and inspection personnel;
C. the number of EIs assigned per spread and/or facility, and how Mountain
Valley will ensure that sufficient personnel are available to implement the
environmental mitigation;
d. company personnel, including EIs and contractors, who will receive copies
of the appropriate materials;
e. the location and dates of the environmental compliance training and
instructions Mountain Valley will give to all personnel involved with
construction and restoration (initial and refresher training as the Project
progresses and personnel change), with the opportunity for OEP staff to
participate in the training session(s);
f. the company personnel (if known) and specific portion of Mountain
Valley's organization having responsibility for compliance;
g. the procedures (including use of contract penalties) Mountain Valley will
follow if noncompliance occurs; and
h. for each discrete facility, a Gantt or Program Evaluation Review Technique
(PERT) chart (or similar Project scheduling diagram), and dates for:
1. the completion of all required surveys and reports;
2. the environmental compliance training of on -site personnel;
3. the start of construction; and
4. the start and completion of restoration.
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7. Mountain Valley shall employ a team of EIs (i.e., two or more or as may be
established by the Director of OEP or the Director's designee) per construction
spread. The EIs shall be:
a. responsible for monitoring and ensuring compliance with all mitigation
measures required by the Order and other grants, permits, certificates, or
authorizing documents;
b. responsible for evaluating the construction contractor's implementation of
the environmental mitigation measures required in the contract (see
condition 6 above) and any other authorizing document;
C. empowered to order correction of acts that violate the environmental
conditions of the Order, and any other authorizing document;
d. a full-time position separate from all other activity inspectors;
e. responsible for documenting compliance with the environmental conditions
of the Order, as well as any environmental conditions/permit requirements
imposed by other federal, state, or local agencies; and
f. responsible for maintaining status reports.
8. Beginning with the filing of its Implementation Plan, Mountain Valley shall file
updated status reports with the Secretary on a weekly basis until all construction
and restoration activities are complete. On request, these status reports will also
be provided to other federal and state agencies with permitting responsibilities.
Status reports shall include the following:
a. an update on Mountain Valley's efforts to obtain the necessary federal
authorizations;
b. the construction status of each spread, work planned for the following
reporting period, and any schedule changes for stream crossings or work in
other environmentally sensitive areas;
C. a listing of all problems encountered and each instance of noncompliance
observed by the EIs during the reporting period (both for the conditions
imposed by the Commission and any environmental conditions/permit
requirements imposed by other federal, state, or local agencies);
d. a description of the corrective actions implemented in response to all
instances of noncompliance;
e. the effectiveness of all corrective and remedial actions implemented;
f. a description of any landowner/resident complaints which may relate to
compliance with the requirements of the Order, and the measures taken to
satisfy their concerns; and
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g. copies of any correspondence received by Mountain Valley from other
federal, state, or local permitting agencies concerning instances of
noncompliance, and Mountain Valley's response.
9. Mountain Valley shall implement its environmental complaint resolution
procedure. The procedure shall provide landowners with clear and simple
directions for identifying and resolving their environmental mitigation
problems/concerns during construction of the Project and restoration of the right-
of-way. Prior to construction, Mountain Valley shall mail the complaint
procedures to each landowner whose property will be crossed by the Project.
a. In its letter to affected landowners, Mountain Valley shall:
i. provide a local contact that the landowners should call first with
their concerns; the letter shall indicate how soon a landowner should
expect a response;
ii. instruct the landowners that if they are not satisfied with the
response, they should call Mountain Valley's Hotline; the letter shall
indicate how soon to expect a response; and
iii. instruct the landowners that if they are still not satisfied with the
response from Mountain Valley's Hotline, they should contact the
Commission's Landowner Helpline at 877-337-2237 or at
LandownerHelp@ferc.gov.
b. In addition, Mountain Valley shall include in its weekly status report a
copy of a table that contains the following information for each
problem/concern:
i. the identity of the caller and date of the call;
ii. the location by milepost and identification number from the
authorized alignment sheet(s) of the affected property;
iii. a description of the problem/concern; and
iv. an explanation of how and when the problem was resolved, will be
resolved, or why it has not been resolved.
10. Mountain Valley must receive written authorization from the Director of OEP, or
the Director's designee, before commencing construction of any Project
facilities. To obtain such authorization, Mountain Valley must file with the
Secretary documentation that it has received all applicable authorizations required
under federal law (or evidence of waiver thereof).
11. Mountain Valley must receive written authorization from the Director of OEP, or
the Director's designee, before placing the Project facilities into service. Such
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authorization would only be granted following a determination that rehabilitation
and restoration of the areas affected by the Project are proceeding satisfactorily.
12. Within 30 days of placing the authorized facilities in-service, Mountain Valley
shall file an affirmative statement with the Secretary, certified by a senior
company official:
a. that the facilities have been constructed in compliance with all applicable
conditions, and that continuing activities will be consistent with all
applicable conditions; or
b. identifying which of the conditions of the Order Mountain Valley has
complied with or will comply with. This statement shall also identify any
areas affected by the Project where compliance measures were not properly
implemented, if not previously identified in filed status reports, and the
reason for noncompliance.
13. Prior to construction, Mountain Valley shall file with the Secretary, for review
and written approval by the Director of OEP, or the Director's designee, a revised
General Blasting Plan that clarifies it will not bury excess rock fragments
generated during trenching or blasting in any location other than where the rock
originated. Excess rock fragments not suitable for reburial at the point of origin
should be considered construction debris and should be disposed of consistent
with our Upland Erosion Control, Revegetation, & Maintenance Plan at sections
III.E and V.A.3.
14. Prior to construction, Mountain Valley shall file with the Secretary, for review
and written approval by the Director of OEP, or the Director's designee, the
locations of all private water wells and springs identified within 150 feet of the
Project work areas, including the well's or springs' status, use, distance from
construction workspace, and any proposed measures to minimize or avoid impacts
on the private water wells or springs.
15. Prior to construction, Mountain Valley shall file with the Secretary, for review
and written approval by the Director of OEP, or the Director's designee, site -
specific plans detailing the enhanced erosion control measures and maintenance
requirements for each location where the Project will parallel and remove
vegetation within 15 feet of a waterbody.
16. Prior to construction, Mountain Valley shall file with the Secretary, for review
and written approval by the Director of OEP, or the Director's designee, its final
list of water sources to be used for the Project (dust control, hydrostatic testing,
and horizontal directional drill operations), including intake location, waterbody
name, withdrawal rate and method, and measures to minimize entrainment of
aquatic species. Mountain Valley shall also provide written concurrence from the
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U.S. Fish and Wildlife Service (FWS) for any water withdrawals from the Dan
River.
17. During construction and prior to any Project in-service approval, Mountain
Valley shall remove and dispose of timber and debris from the right-of-way.
Mountain Valley must ensure that any beneficial reuse of timber that is not
removed and remains on or adjacent to the right-of-way, as agreed to by the
landowner, is located at access points where the landowner can reasonably retrieve
timber without any inadvertent impacts on the restored right-of-way, in
accordance with the FERC Upland Erosion Control, Revegetation, and
Maintenance Plan, section III.E.
18. In order to identify locations where additional protection measures will be needed,
and to inform compliance monitoring, Mountain Valley shall file with the
Secretary, the results of the pre -construction bald eagle nest and colonial rookery
surveys prior to construction.
19. Mountain Valley shall not begin construction activities until:
a. Mountain Valley files with the Secretary the results of all outstanding
biological surveys;
b. the staff completes Endangered Species Act consultation with the FWS;
and
C. Mountain Valley has received written notification from the Director of
OEP, or the Director's designee, that construction or use of mitigation may
begin.
20. Mountain Valley shall not begin construction of facilities and/or use of all
staging, storage, or temporary work areas and new or to -be -improved access roads
until:
a. Mountain Valley files with the Secretary:
i. remaining cultural resources survey reports;
ii. site evaluation reports and avoidance or treatment plans, as required;
and
iii. comments on the cultural resources reports and plans from the
Virginia and North Carolina State Historic Preservation Officers
and interested Indian tribes.
b. Mountain Valley implements the stipulations of the May 17, 2020 executed
programmatic agreement for the Southgate Project; and
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c. The Commission staff reviews and the Director of OEP, or the Director's
designee, approves the cultural resources reports and plans, and notifies
Mountain Valley in writing that treatment plans/mitigation measures
(including archaeological data recovery) may be implemented and/or
construction may proceed.
All materials filed with the Commission containing location, character, and
ownership information about cultural resources must have the cover and
any relevant pages therein clearly labeled in bold lettering: "CUI//PRIV-
DO NOT RELEASE."
21. Prior to construction, Mountain Valley shall file its Nighttime Construction
Noise Management Plan with the Secretary, for review and written approval by
the Director of OEP, or the Director's designee, that demonstrates noise levels will
be reduced below 48.6 decibels on the A -weighted scale (dBA) at night and 55
dBA day -night sound level (Lan) overall at the nearest noise sensitive area (NSA),
or not exceed 10 dBA over the ambient at the nearest NSA where ambient noise
levels are already above 55 dBA. This plan shall indicate site -specific mitigation
measures and indicate resulting noise impacts on NSAs.
22. No later than 60 days after placing the Lambert Compressor Station
(including the Interconnect) into service, Mountain Valley shall file a noise
survey with the Secretary. If a full load condition noise survey is not possible,
Mountain Valley shall provide an interim survey at the maximum possible load
within 60 days of placing the station into service and provide the full load survey
within 6 months. If the noise attributable to the operation of the equipment at the
station under interim or full load conditions exceeds an Lan of 55 dBA at the
nearest NSA, Mountain Valley shall file a report on what changes are needed and
shall install the additional noise controls to meet the level within 1 year of the
in-service date. Mountain Valley shall confirm compliance with the above
requirement by filing a second noise survey with the Secretary no later than
60 days after it installs the additional noise controls.
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UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Mountain Valley Pipeline, LLC Docket No. CP 19-14-000
(Issued June 18, 2020)
GLICK, Commissioner, dissenting in part:
l . I dissent in part from today's order because I believe that the Commission's action
violates both the Natural Gas Act' (NGA) and the National Environmental Policy Act2
(NEPA). The Commission once again refuses to consider the consequences its actions
have for climate change. Although neither the NGA nor NEPA permit the Commission
to assume away the climate change implications of constructing and operating this
project, that is exactly what the Commission is doing here.
2. In today's order authorizing Mountain Valley Pipeline, LLC's (Mountain Valley)
proposed Southgate Project (Project),' the Commission continues to treat greenhouse gas
(GHG) emissions and climate change differently than all other environmental impacts.
The Commission again refuses to consider whether the Project's contribution to climate
change from GHG emissions would be significant,' even though it quantifies the direct
GHG emissions from the Project's construction and operation.' That failure forms an
integral part of the Commission's decisionmaking: The refusal to assess the significance
of the Project's contribution to the harm caused by climate change is what allows the
Commission to determine that the environmental impacts associated with the Project are
"acceptable"' and, as a result, conclude that the Project is required by the public
' 15 U.S.C. § 717f (2018).
2 National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321 et seq.
3 Mountain Valley Pipeline, L.L. C., 171 FERC ¶ 61,232 (2020) (Certificate Order).
4 Id. PP 97-99.
' Southgate Project Final Environmental Impact Statement at 4-184-4-185 &
Tables 4.11-4, 4.11-5 (EIS).
6 Certificate Order, 171 FERC ¶ 61,232 at P 144; EIS at 5-1 ("If the Project is
constructed and operated in accordance with the mitigating measures discussed in this
EIS, and our recommendations, adverse environmental impacts would be reduced to less
than significant levels").
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convenience and necessity.' Claiming that a project has no significant environmental
impacts while at the same time refusing to assess the significance of the project's impact
on the most important environmental issue of our time is not reasoned decisionmaking.8
3. Making matters worse, the Commission again refuses to make a serious effort to
assess the indirect effects of the Project —despite the fact that the record plainly provides
that the Project will be used to transport natural gas to residential and commercial end -
users in North Carolina and Virginia.' The United States Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) has repeatedly criticized the Commission for
its stubborn refusal to identify and consider the reasonably foreseeable GHG emissions
caused by the downstream combustion of natural gas transported through an interstate
pipeline. But even so, today's order doubles down on approaches that the D.C. Circuit
has already rejected. So long as the Commission refuses to heed the court's
unambiguous directives, I have no choice but to dissent.
4. Finally, I disagree with the Commission's decision to grant Mountain Valley a 14
percent return on equity (ROE) for the Project's initial rates.1" The majority's decision
not only represents an unwarranted departure from recent precedent," but it also does
' Certificate Order, 171 FERC ¶ 61,232 at P 145.
' Commissioner McNamee argues that the Commission can consider a project's
direct GHG emissions under NEPA and in its public convenience and necessity
determination without actually assessing whether the GHG emissions are significant.
Certificate Order, 171 FERC ¶ 61,232 (McNamee, Comm'r, concurring at P 2). No
matter how many times he says so, this does not constitute consideration of the impact of
the Project's GHG emissions. If you refuse to consider how the project's GHG emissions
will impact the environment you aren't actually examining those emissions for purposes
of NEPA and the NGA.
' Certificate Order, 171 FERC ¶ 61,232 at n.60 ("Mountain Valley states that the
natural gas transported by the Southgate Project will be used to make bundled gas sales
primarily to residential and small- and medium-sized commercial customers for heating,
cooking, and other end -uses typical of natural gas local distribution company
customers.") (citing Mountain Valley's March 15, 2019 Data Request Response at 3); see
id. P 43 ("The project shipper is a local distribution company, which will locally
distribute gas to residential, commercial, and industrial end -use customers."); id. P 99
("[A]s discussed in the final EIS, most of the gas will serve North Carolina end -users,
primarily by residential and small and medium-sized commercial customers.").
io Id. P 57.
" In developing incremental rates for pipeline expansion projects, the
Commission's general policy is to use the rate of return components approved in the
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nothing but lend credence to the North Carolina Commission's concern that we offer "no
assurances that the consuming public will be protected from excessive rates."12
I. The Commission's Public Interest Determination Is Not the Product of
Reasoned Decisionmaking
5. We know with certainty what causes climate change: It is the result of GHG
emissions, including carbon dioxide and methane, released in large quantities through the
production, transportation, and consumption of fossil fuels, including natural gas. The
Commission recognizes this relationship, finding, as it must, that "anthropogenic sources
of GHGs are the primary cause of warming of the global climate system"13 and that GHG
emissions from the Project's construction and operation "would increase the atmospheric
concentration of GHGs, in combination with past, current, and future emissions from all
other sources globally and contribute incrementally to future climate change impacts.""
In light of this undisputed relationship between anthropogenic GHG emissions and
climate change, the Commission must carefully consider the Project's contribution to
climate change, both in order to fulfill NEPA's requirements and to determine whether
the Project is in the public interest."
pipeline's last NGA section 4 rate proceeding, or in the absence of a litigated ROE on
file, the most recent ROE approved in a litigated NGA section 4 rate case. Gulfstream
Natural Gas Sys., L.L.C., 170 FERC ¶ 61,199, at PP 18-19 (2020); Cheyenne Connector,
LLC 168 FERC ¶ 61,180, at PP 51-52 (2019); Cheniere Corpus Christi Pipeline, LP, 169
FERC ¶ 61,135, at PP 34-35.
12 See Certificate Order, 171 FERC ¶ 61,232 at 62; North Carolina Commission
Protest at 16.
13 EIS at 4-176.
14Id. at 4-262.
" Section 7 of the NGA requires that, before issuing a certificate for new pipeline
construction, the Commission must find both a need for the pipeline and that, on balance,
the pipeline's benefits outweigh its harms. 15 U.S.C. § 717f. Furthermore, NEPA
requires the Commission to take a "hard look" at the environmental impacts of its
decisions. See 42 U.S.C. § 4332(2)(C)(iii); Balt. Gas & Elec. Co. v. Nat. Res. Def.
Council, Inc., 462 U.S. 87, 97 (1983). This means that the Commission must consider
and discuss the significance of the harm from a pipeline's contribution to climate change
by actually evaluating the magnitude of the pipeline's environmental impact. Doing so
enables the Commission to compare the environment before and after the proposed
federal action and factor the changes into its decisionmaking process. See Sierra Club v.
FERC, 867 F.3d 1357, 1374 (D.C. Cir. 2017) (Sabal Trail) ("The [FEIS] needed to
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6. Today's order on rehearing falls short of that standard. As part of its public
interest determination, the Commission must examine the Project's impact on the
environment and public safety, which includes the facility's impact on climate change.16
That is now clearly established D.C. Circuit precedent.17 The Commission, however,
insists that it need not consider whether the Project's contribution to climate change is
significant because —for want of a better explanation —it "cannot."18 However, the most
troubling part of the Commission's rationale is what comes next. Based on this alleged
inability to assess the significance of the Project's impact on climate change, the
Commission still summarily concludes that all of the Project's environmental impacts
would be "acceptable."19 Think about that. The Commission is simultaneously stating
that it cannot assess the significance of the Project's impact on climate change2" while
concluding that all environmental impacts are acceptable to the public interest.21 That is
include a discussion of the `significance' of this indirect effect."); 40 C.F.R. § 1502.16
(a)—(b) (An agency's environmental review must "include the environmental impacts of
the alternatives including the proposed action," as well as a discussion of direct and
indirect effects and their significance. (emphasis added)).
16 See Sabal Trail, 867 F.3d at 1373 (explaining that the Commission must
consider a pipeline's direct and indirect GHG emissions because the Commission may
"deny a pipeline certificate on the ground that the pipeline would be too harmful to the
environment"); see also Ad. Ref. Co. v. Pub. Serv. Comm'n off. Y, 360 U.S. 378, 391
(1959) (holding that the NGA requires the Commission to consider "all factors bearing
on the public interest").
17 See Allegheny Def. Project v. FERC, 932 F.3d 940, 945-46 (D.C. Cir. 2019),
reh g en Banc granted, judgment vacated, 2019 WL 6605464 (D.C. Cir. Dec. 5, 2019);
Birckhead v. FERC, 925 F.3d 510, 518-19 (D.C. Cir. 2019); Sabal Trail, 867 F.3d at
1371-72. The history of these cases is discussed further below. See infra P 9.
18 See Certificate Order, 171 FERC ¶ 61,232 at P 102 ("[T]he Commission cannot
determine whether an individual project's contribution to climate change would be
significant."); EIS at 4-263 ("Currently, there is no universally accepted methodology to
attribute discrete, quantifiable, physical effects on the environment to the Southgate
Project's incremental contribution to GHGs.").
" Certificate Order, 171 FERC ¶ 61,232 at P 144; EIS at 5-1.
2° Certificate Order, 171 FERC ¶ 61,232 at P 102; EIS at 4-263-4-264 ("[W]e are
unable to determine the significance of the Southgate Project's contribution to climate
change.").
21 Certificate Order, 171 FERC ¶ 61,232 at P 144.
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unreasoned and an abdication of our responsibility to give climate change the "hard look"
that the law demands.22
7. It also means that the volume of emissions caused by the Project does not play a
meaningful role in the Commission's public interest determination, no matter how many
times the Commission assures us otherwise. Using the approach in today's order, the
Commission will always be able to conclude that a project will not have any significant
environmental impact irrespective of the project's actual GHG emissions or those
emissions' impact on climate change. So long as that is the case, a project's impact on
climate change cannot, as a logical matter, play a meaningful role in the Commission's
public interest determination. A public interest determination that systematically
excludes the most important environmental consideration of our time is contrary to law,
arbitrary and capricious, and not the product of reasoned decisionmaking.
8. Commissioner McNamee notes that he believes the D.C. Circuit cases cited
above23 were wrongly decided." Although that is his prerogative, it is irrelevant to the
task before us. As he has explained, we are called on to apply the law and the facts, not
our personal policy preferences. But surely, implicit in that statement, is a recognition
that we must apply the law as it is, not as we wish it were. The D.C. Circuit has
unambiguously interpreted the "public convenience and necessity" standard in section 7
of the NGA to encompass the authority to consider and, if appropriate, act upon "the
direct and indirect environmental effects" of a proposed pipeline.2' As Commissioners,
22 See, e.g., Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301,
1322 (D.C. Cir. 2015) (explaining that agencies cannot overlook a single environmental
consequence if it is even "arguably significant"); see also Michigan v. EPA, 135 S. Ct.
2699, 2706 (2015) ("Not only must an agency's decreed result be within the scope of its
lawful authority, but the process by which it reaches that result must be logical and
rational." (internal quotation marks omitted)); Motor Vehicle Mfrs. Ass'n, Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (explaining that agency action is
"arbitrary and capricious if the agency has ... entirely failed to consider an important
aspect of the problem, [or] offered an explanation for its decision that runs counter to the
evidence before the agency").
23 Supra notes 16-17.
24 See Certificate Order, 171 FERC ¶ 61,232 (McNamee, Comm'r, concurring at
PP 12-13).
25 E.g., Sabal Trail, 867 F.3d at 1373.
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our job is to apply that law, not to attack binding judicial precedent in favor of an
interpretation that was, in fact, expressly rejected by the court.26
II. The Commission's NEPA Analysis of the Project's Contribution to
Climate Change Is Deficient
9. The Commission's NEPA analysis is similarly flawed. In order to evaluate the
environmental consequences of the Project under NEPA, the Commission must consider
the harm caused by its GHG emissions27 and "evaluate the `incremental impact' that
[those emissions] will have on climate change or the environment more generally."28 The
D.C. Circuit has repeatedly instructed the Commission that the GHG emissions caused by
the reasonably foreseeable combustion of natural gas transported through a pipeline are
an indirect effect and must, therefore, be included within the Commission's NEPA
analysis.29 While the Commission quantifies the Project's direct GHG emissions from
construction and operation,30 it refuses to even disclose the Project's indirect GHG
emissions from downstream combustion. Once again the Commission takes the position
that if it does not know the exact volume and end -use of the natural gas, any associated
GHG emissions are categorically not reasonably foreseeable.31 What's more, the
26 Id.; see Birckhead, 925 F.3d at 519 (explaining that in "the pipeline certification
context the Commission does have statutory authority to act" on the reasonably
foreseeable GHG emissions caused by the pipeline (citing Sabal Trail, 867 F.3d at
1373)).
27 When conducting a NEPA review, an agency must consider both the direct and
the indirect effects of the project under consideration. 40 C.F.R. §§ 1502.16(b),
1508.8(b); Sabal Trail, 867 F.3d at 1371.
28 See Ctr. for Biological Diversity, 538 F.3d at 1216 ("While the [environmental
document] quantifies the expected amount of CO2 emitted ... , it does not evaluate the
`incremental impact' that these emissions will have on climate change or on the
environment more generally ...."); Klamath-Siskiyou Wildlands Ctr. v. Bureau of Land
Mgmt., 387 F.3d 989, 995 (9th Cir. 2004) ("A calculation of the total number of acres to
be harvested in the watershed is a necessary component ... , but it is not a sufficient
description of the actual environmental effects that can be expected from logging those
acres.").
29 See Allegheny Def. Project, 932 F.3d at 945-46; Birckhead, 925 F.3d at 518-19;
Sabal Trail, 867 F.3d at 1371-72.
30 EIS at 4-184-4-185 & Tables 4.11-4, 4.11-5.
" Certificate Order, 171 FERC ¶ 61,232 at P 99 (stating that "because the end -use
of the contracted for volumes is unknown, any potential GHG emissions associated with
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Commission even goes so far as to suggest that, because constructing any new pipeline
may not increase the interstate transportation system's overall capacity, estimating the
pipeline's downstream GHG emissions is not just needless, but "misleading."32 This is
nothing more than another version of the Commission's argument that Sabal Trail "is
narrowly limited to the facts of that case" —an argument that the D.C. Circuit rejected
emphatically in Birckhead.33 Indeed, Birckhead rejected as a "total non -sequitur" the
argument that the potential for increased natural gas transportation capacity to reduce
GHG emissions by displacing existing natural gas supplies or more GHG-intensive forms
of electricity generation somehow renders the downstream GHG indirect emissions from
a natural gas pipeline not reasonably foreseeable.34 Even in the face of some uncertainty,
the courts have required the Commission to use its "best efforts" to identify and consider
the full scope of a project's environmental impact, an exercise which may require using
educated assumptions."
10. Instead, the Commission's overly narrow and circular definition of indirect
effects36 disregards the Project's central purpose —to facilitate additional natural gas
the ultimate combustion of the transported gas are not reasonably foreseeable, and
therefore, not an indirect impact of the Southgate Project").
32Id. P 100.
33 Birckhead, 925 F.3d at 518-19.
34 Id.
31 Sabal Trail, 867 F.3d at 1374 ("We understand that emission estimates would
be largely influenced by assumptions rather than direct parameters about the project, but
some educated assumptions are inevitable in the NEPA process. And the effects of
assumptions on estimates can be checked by disclosing those assumptions so that readers
can take the resulting estimates with the appropriate amount of salt." (internal citations
and quotation marks omitted)).
36 See San Juan Citizens All. et al. v. U.S. Bureau of Land Mgmt., No. 16-CV-376-
MCA-JHR, 2018 WL 2994406, at * 10 (D.N.M. June 14, 2018) (holding that it was
arbitrary for the Bureau of Land Management to conclude "that consumption is not `an
indirect effect of oil and gas production because production is not a proximate cause of
GHG emissions resulting from consumption"' as "this statement is circular and worded
as though it is a legal conclusion"). The Commission must use its "best efforts" to
identify and quantify the full scope of the environmental impacts and, as the U.S. Court
of Appeals for the District of Columbia found in Sierra Club v. FERC, educated
assumptions are inevitable in the process of emission quantification. See 867 F.3d 1357,
1374 (D.C. Cir. 2017) (Sabal Trail).
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consumption.37 The Commission cannot ignore the fact that adding firm transportation
capacity is likely to "spur demand" for natural gas38—a fact that Mountain Valley
certainly recognizes39—and, for that reason, the Commission must at least examine the
effects that an expansion of pipeline capacity might have on consumption and
production.4" Indeed, if a proposed pipeline neither increases the supply of natural gas
available to consumers nor decreases the price that those consumers would pay, it is hard
to imagine why that pipeline would be "needed" in the first place.
11. Recognizing this fact, Mountain Valley instead claims that it would be "double
counting" to consider the Project's downstream GHG emissions here, because the
Commission "previously quantified" these emissions when it authorized the Mountain
Valley mainline system.41 But, as I argued in that proceeding, while the Commission
may have quantified the GHG emissions, at no point did the Commission consider them
37 See supra note 9; see also Certificate Order, 171 FERC ¶ 61,232 at P 38
(Mountain Valley argues that the Project "will ... provide North Carolina and southern
Virginia access to new natural gas supplies" and "provide the opportunity to serve
commercial and industrial load in Virginia and North Carolina not currently served by
natural gas.").
3s Barnes v. U.S. Dep't of Transp., 655 F.3d 1124, 1138 (9th Cir. 2011) (holding
that it "is completely inadequate" for an agency to ignore a project's "growth inducing
effects" where the project has a unique potential to spur demand); id. at 1139
(distinguishing City of Carmel -by -the -Sea v. U.S. Dep't of Transp., 123 F.3d 1142 (9th
Cir. 1997), which the majority relies on in today's order) ("[O]ur cases have consistently
noted that a new runway has a unique potential to spur demand, which sets it apart from
other airport improvements, like changing flight patterns, improving a terminal, or adding
a taxiway, which increase demand only marginally, if at all."); id. at 1139 ("[E]ven if the
stated purpose of [a new airport runway project] is to increase safety and efficiency, the
agencies must analyze the impacts of the increased demand attributable to the additional
runway as growth -inducing effects.").
39 See Certificate Order, 171 FERC ¶ 61,232 at P 38.
ao As the United States Court of Appeals for the Eighth Circuit explained in Mid
States Coal. for Progress v. Surface Transp. Bd.a case that also involved the
downstream emissions from new infrastructure for transporting fossil fuels —when the
"nature of the effect" (end -use emissions) is reasonably foreseeable, but "its extent is not"
(specific consumption activity producing emissions), an agency may not simply ignore
the effect. 345 F.3d 520, 549 (8th Cir. 2003).
41 Certificate Order, 171 FERC ¶ 61,232 at P 100.
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in making its public interest determination.42 Simply asserting that a project is in the
public interest without any discussion why is not reasoned decisionmaking. The
Commission's utter failure to actually consider these emissions as part of its public
interest determination renders Mountain Valley's argument empty and unconvincing.
12. I remain baffled by the Commission's continued refusal to take any step towards
considering indirect downstream emissions and their impact on climate change unless
specifically and expressly directed to do so by the courts (and even that does not always
seem to be the case43). Here there are plenty of steps that the Commission could take to
consider the GHGs associated with the Project's incremental capacity if the Commission
were actually inclined to take a `hard look' at climate change. At a minimum, we know
that the vast majority, 97 percent, of all natural gas consumed in the United States is
combusted44a fact that, on its own might be sufficient to make downstream emissions
reasonably foreseeable, at least absent contrary evidence. After all, the D.C. Circuit has
recognized that NEPA does not require absolute certainty and that "some educated
assumptions are inevitable in the NEPA process."45 Moreover, the record here makes
this a relatively easy case: Mountain Valley states that the natural gas transported by the
Project will be sold "primarily to residential and small- and medium-sized commercial
customers for heating, cooking, and other end -uses typical of natural gas local
distribution company customers."46 That would seem to be more -than -sufficient to
confirm that the gas is highly likely to be combusted, making the resulting GHG
emissions reasonably foreseeable.
12 See Mountain Valley Pipeline, LLC, 163 FERC ¶ 61,197 (2018) (Glick,
Comm'r, dissenting).
"El Paso Natural Gas Co., L.L.C., 169 FERC ¶ 61,133 (2019) (Glick, Comm'r,
dissenting in part at PP 10-11) (criticizing the Commission for failing to follow the
D.C.'s guidance in Birckhead and consider GHG emissions associated with natural gas
transportation capacity that it was told would be used to serve electricity generation).
as U.S. Energy Info. Admin., September 2019 Monthly Energy Review 22, 97
(2019) (reporting that, in 2018, 778 Bcf of natural gas had a non -combustion use
compared to 29,956 Bcf of total consumption),
https: //www. eia.gov/totalenergyldata/monthly/archivel00351908.pdf.
as Sabal Trail, 867 F.3d at 1374; see id. (stating that "the effects of assumptions on
estimates can be checked by disclosing those assumptions so that readers can take the
resulting estimates with the appropriate amount of salt").
46 Certificate Order, 171 FERC ¶ 61,232 at n.60; Mountain Valley March 15, 2019
Data Request Response at 3.
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13. In any case, even where the Commission quantifies the Project's construction and
operational GHG emissions, it still fails to "evaluate the `incremental impact' that [those
emissions] will have on climate change or the environment more generally."41 In Sabal
Trail, the court explained that the Commission was required "to include a discussion of
the `significance' of the indirect effects of the project, including its GHG emissions."
That makes sense. Identifying and evaluating the consequences that a project's GHG
emissions may have for climate change is essential if NEPA is to play the disclosure and
good government roles for which it was designed.4' But neither the Commission's orders
in this proceeding nor the accompanying EIS provide that discussion or even attempt to
assess the significance of the Project's GHG emissions.
14. Instead, the Commission insists that it need not assess the significance of the
Project's GHG emissions because it lacks a "universally accepted methodology" for
evaluating the project's impact on climate change. 50 But that does not excuse the
Commission's failure to evaluate these emissions let alone to determine the significance
of the Project's environmental impact from these emissions. As an initial matter, the lack
of a single methodology does not prevent the Commission from adopting a methodology,
even if that methodology is not universally accepted. One possible methodology
endorsed by the courts is comparing a project's GHG emissions against a known
benchmark, such as a state emission reduction requirement, an approach the Commission
47 Ctr. for Biological Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d
1172, 1216 (9th Cir. 2008); see also WildEarth Guardians v. Zinke, No. CV 16-1724
(RC), 2019 WL 1273181, at *I (D.D.C. Mar. 19, 2019) (explaining that the agency was
required to "provide the information necessary for the public and agency decisionmakers
to understand the degree to which [its] decisions at issue would contribute" to the
"impacts of climate change in the state, the region, and across the country").
48 Sabal Trail, 867 F.3d at 1374.
49 See, e.g., Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349
(1989) (explaining that one of NEPA's purposes is to ensure that "relevant information
will be made available to the larger audience that may also play a role in both the
decisionmaking process and the implementation of that decision"); Lemon v. Geren, 514
F.3d 1312, 1315 (D.C. Cir. 2008) ("The idea behind NEPA is that if the agency's eyes
are open to the environmental consequences of its actions and if it considers options that
entail less environmental damage, it may be persuaded to alter what it proposed.").
so Certificate Order, 171 FERC ¶ 61,232 at P 102; EIS at 4-263 ("[T]here is no
universally accepted methodology to attribute discrete, quantifiable, physical effects on
the environment to the Southgate Project's incremental contribution to GHGs.").
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has relied on in the past51 but inexplicably fails to undertake here, even though the
Commission recognizes that both North Carolina and Virginia have GHG emissions
reduction targets.52 Armed with a known target, the Commission has all the information
necessary to "compare the emissions from this project to emissions from other projects,
to total emissions from the state" and make a determination about significance.53 As the
D.C. Circuit stated in Sabal Trail, "[w]ithout such comparisons, it is difficult to see how
[the Commission] could engage in `informed decision making' with respect to the
greenhouse -gas effects of this project, or how `informed public comment' could be
possible."54 Instead of doing so here, the Commission disregards its prior position and
asserts that "[w]ithout the ability to determine discrete resource impacts, we are unable to
determine the significance of the Southgate Project's contribution to climate change."55
This defies logic. The Commission cannot simultaneously argue an established
benchmark is necessary to determine significance and, then, when a benchmark is
provided, argue the relevant comparison is not useful. Moreover, the Commission often
relies on percentage comparisons when it comes to other environmental impacts as the
basis for determining significance.56 Refusing to apply the same consideration when it
comes to GHG emissions and climate change is arbitrary and capricious.
" Fl. Se. Connection, LLC, 164 FERC ¶ 61,099, at PP 19-21 (2018) (Glick,
Comm'r, dissenting) (arguing that the Commission's refusal to assess the significance of
a project's GHG emissions, despite having compared project emissions to state and
national emission inventories, is not reasoned decisionmaking); PennEast Pipeline Co.,
164 FERC ¶ 61,098, at PP 118-121 (2018) (Glick, Comm'r, dissenting) (same); Venture
Global Calcasieu Pass, LLC, 166 FERC ¶ 61,144 (2019) (Glick, Comm'r, dissenting)
(same). In each of the orders cited above, the Commission offered reasoning, similar to
that advanced in today's order, in an attempt to justify the Commission's refusal to
determine the significance of the projects' respective contributions to climate change.
And, yet, in each of these cases the Commission compared the project emissions to
national, and in some cases state, emission inventories. The Commission offers nothing
in today's order to explain its refusal to similarly disclose and compare project emissions
in this case.
52 EIS at 4-263.
53 Sabal Trail, 867 F.3d at 1374.
5a Id.
55 EIS at 4-263-4-264.
56 See, for example, the Commission's environmental analysis of Columbia Gas
Transmission's Buckeye XPress Project, where the Commission finds that impacts
amounting to one percent of the overall prime farmland affected would be "permanent,
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Docket No. CP 19-14-000
-12-
15. Independent of whether there are established GHG reduction targets, the
Commission has several tools to assess the harm from the Project's contribution to
climate change, including, for example, the Social Cost of Carbon. By measuring the
long-term damage done by a ton of carbon dioxide, the Social Cost of Carbon links GHG
emissions to actual environmental effects from climate change, thereby facilitating the
necessary "hard look" at the Project's environmental impacts that NEPA requires.
16. Especially when it comes to a global problem like climate change, a measure for
translating a single project's climate change impacts into concrete and comprehensible
terms plays a useful role in the NEPA process by putting the harms from climate change
in terms that are readily accessible for both agency decisionmakers and the public at
large. The Commission, however, continues to ignore the tools at its disposal, relying on
deeply flawed reasoning that I have previously critiqued at length.57
17. Regardless of the tools, methodologies, or targets available, the Commission can
use its expertise to consider all factors and determine, quantitatively or qualitatively,
whether the Project's GHG emissions have a significant impact on climate change. That
is precisely what the Commission does in other aspects of its environmental review.
Consider, for example, the Commission's findings that the Project will not have a
significant effect on issues as diverse as "wildlife,"58 and "forests,"59 and "property
values,160 without relying on a specific federal or state benchmark. Notwithstanding the
lack of any "universally accepted methods" to assess these impacts, the Commission
managed to use its judgment to conduct a qualitative review and assess the significance
but not significant." Buckeye Xpress Project Environmental Assessment, Docket No.
CP18-137-000, at B-33; see also Columbia Gas Transmission, LLC, 170 FERC ¶ 61,045,
at P 138 (2020). Notwithstanding the fact that there are no universally accepted or
objective standards or targets to compare this impact to, the Commission was able to
determine that the project's environmental impact was not significant based on this
proportionate effect. It is clear that it is only when it comes to climate change that the
Commission suddenly gets cold feet about using percentages to determine significance.
57 See, e.g., Transcontinental Gas Pipe Line Co., LLC, 167 FERC ¶ 61,110 (2019)
(Glick, Comm'r, dissenting in part at P 6 & n.11) (noting that the Social Cost of Carbon
"gives both the Commission and the public a means to translate a discrete project's
climate impacts into concrete and comprehensible terms"); Fla. Se. Connection, LLC,
164 FERC ¶ 61,099 (2018) (Glick, Comm'r, dissenting).
58 EIS at 4-95.
11 Id. at 4-62-4-71.
6" Id. at 4-137-4-138. 4-153.
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of the Project's effect on those considerations.61 The Commission's refusal to, at the very
least, exercise similar qualitative judgment to assess the significance of GHG emissions
here is arbitrary and capricious.62
18. That refusal is even more mystifying because NEPA "does not dictate particular
decisional outcomes."63 NEPA "`merely prohibits uninformed —rather than unwise —
agency action. 11'61 In other words, taking the matter seriously —and rigorously examining
a project's impacts on climate change —does not necessarily prevent any Commissioner
from ultimately concluding that a project meets the public interest standard.
19. Even if the Commission were to determine that a project's GHG emissions are
significant, that would not be the end of the inquiry nor would it mean that the project is
not in the public interest or required by the public convenience and necessity. Instead,
the Commission could require mitigation —as the Commission often does with regard to
other environmental impacts. The Supreme Court has held that, when a project may
cause potentially significant environmental impacts, the relevant environmental impact
statement must "contain a detailed discussion of possible mitigation measures" to address
adverse environmental impacts.6' The Court explained that, "[w]ithout such a discussion,
neither the agency nor other interested groups and individuals can properly evaluate the
severity of the adverse effects" of a project, making an examination of possible
mitigation measures necessary to ensure that the agency has taken a "hard look" at the
environmental consequences of the action at issue.66 The Commission not only has the
obligation to discuss mitigation of adverse environmental impacts under NEPA, but also
" See also supra note 56 and accompanying discussion describing the
Commission's use of just such a technique regarding impacts to farmland.
62 After all, the standard the Commission typically uses for evaluating significance
is whether the adverse impact would result in a substantial adverse change in the physical
environment. Surely that standard is open to some subjective interpretation by each
Commissioner. What today's order does not explain is why it is appropriate to exercise
subjective interpretation and judgment when it comes to potential impacts such as those
to property values and forests, but not climate change.
63 Sierra Club v. U.S. Army Corps of Engineers, 803 F.3d 31, 37 (D.C. Cir. 2015).
64 Id. (quoting Robertson, 490 U.S. at 351).
65 Robertson, 490 U.S. at 351.
66Id. at 352; see also 40 C.F.R. §§ 1508.20 (defining mitigation), 1508.25
(including in the scope of an environmental impact statement mitigation measures).
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the authority to condition certificates under section 7 of the NGA,67 which could
encompass measures to mitigate a project's GHG emissions.68
20. My colleague, Commissioner McNamee, seems to relish in constantly reminding
us that Congress has failed to enact more than 70 bills proposed to reduce GHG
emissions. Somehow that must suggest that climate change is not worthy of
consideration and mitigation under the Natural Gas Act's public interest standard. But as
science tells us and, in fact the Commission's orders admit, increased GHG emissions
cause climate change.69 And, as is the case with regard to numerous other environmental
impacts for which Congress has not established regulatory regimes,71 this Commission
has the duty to ensure that impacts attributable to the Project's direct and indirect GHG
emissions are sufficiently mitigated or, if they cannot be mitigated, that the Project's
benefits outweigh those impacts. Commissioner McNamee argues that the Commission
67 15 U.S.C. § 717f(e); Certificate Order, 171 FERC ¶ 61,232 at P 146 ("[T]he
Commission has the authority to take whatever steps are necessary to ensure the
protection of environmental resources .... including authority to impose any additional
measures deemed necessary to ensure continued compliance with the intent of the
conditions of the order, as well as the avoidance or mitigation of unforeseen adverse
environmental impacts resulting from project construction and operation.").
61 Commissioner McNamee implies that, as part of a mitigation mechanism, I want
the Commission to consider imposing a carbon tax or a cap -and -trade like
system. Certificate Order, 171 FERC ¶ 61,232 (McNamee, Comm'r, concurring at P
52). That is a red herring. To my knowledge, no one has suggested that the Commission
can impose a carbon tax or something similar under NGA section 7. My point is that the
Commission could consider discrete measures that offset the adverse effects of the
Project itself, just like it does for a host of other adverse environmental impacts. For
example, the project developer could purchase renewable energy credits or plant trees
sufficient to sequester the Project's GHG emissions. Tailored programs that offset the
actual emissions from the Project are a far cry from a comprehensive emissions -trading
scheme and have much in common with other forms of mitigation routinely required by
the Commission, including the mitigation contained in this order.
61 See supra notes 13 and 14 and accompanying text.
7° Take, for example, the Commission's analysis of the Project's impacts on
"forests," for which there is no congressionally -established regulatory regime.
Notwithstanding this fact, the Commission concludes that, "in the context" of the total
number of acres of forestland in Virginia and North Carolina, impacts on forests,
including the clearing of 597.5 acres of forested uplands and the permanent conversion of
18.5 acres of interior forest, would be long-term but mitigated to less than significant
levels. See EIS at 4-62-4-71.
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cannot require mitigation for the Project's GHG emissions without a congressionally
endorsed mitigation program with established limits.71 But the absence of such a regime
has not stopped the Commission —with Commissioner McNamee's support —from
requiring the mitigation it determined to be necessary in the past.72 After all, section 7 of
the NGA gives the Commission the express "power to attach to the issuance of the
certificate and to the exercise of the rights granted thereunder such reasonable terms and
conditions as the public convenience and necessity may require."73 That climate impacts
continue to be treated differently serves only to highlight this Commission's stubborn
refusal to identify any potential climate mitigation measures or discuss how such
measures might affect the magnitude of the Project's impact on climate change.
21. Furthermore, a rigorous examination and determination of significance regarding
climate change impacts would bolster any finding of public interest by providing the
Commission a more complete set of information necessary to weigh benefits against
adverse effects. By refusing to assess significance, however, the Commission short
circuits any discussion of mitigation measures for the Project's GHG emissions,
eliminating a potential pathway for us to achieve consensus on whether the Project is
consistent with the public interest.
III. The Commission's Initial Rate Determination Is an Unwarranted
Departure from Commission Precedent
22. I disagree with the Commission's decision to authorize Mountain Valley's
proposed 14 percent ROE, because I believe it is unwarranted and gratuitous and will
ultimately come at the expense of end -users, such as the residential, commercial, and
industrial customers this project is meant to serve. In approving 14 percent ROES for
greenfield pipeline projects, the Commission has held that it is an appropriate rate of
return because it reflects the fact that new entrants developing greenfield projects
experience greater risk than existing pipeline companies. 14 In contrast, the Commission's
general policy in developing rates for incremental expansion projects is to require a
pipeline to use the ROE approved in its last NGA section 4 rate proceeding, or, if the
" See Certificate Order, 171 FERC ¶ 61,232 (McNamee, Comm'r, concurring at
PP 53, 57).
72 See Jordan Cove Energy Project L.P., 170 FERC ¶ 61,202, at PP 139, 279 &
envtl. condition 28 (2020) (requiring certificate applicant to mitigate adverse impacts on
short-term housing by hiring a professional housing coordinator to address the
Commission's housing concerns).
73 15 U.S.C. § 717f(e).
74 Cheniere Corpus Christi Pipeline, LP, 169 FERC ¶ 61,135 at P 34.
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pipeline has not filed a rate case, the ROE from the last litigated NGA section 4 rate
case.75 The Commission departs from its general policy in today's order, by allowing
Mountain Valley to use a 14 percent ROE in setting rates for the Project —an incremental
expansion of Mountain Valley's mainline system —when Mountain Valley already
received the right to charge this higher rate for service on its mainline system.76 What is
more, the company has since executed binding service contracts with shippers for the
mainline system's full design capacity, providing a level of revenue certainty that
applicants for greenfield projects do not typically have.
23. Mountain Valley has more in common with an existing pipeline company
proposing an expansion project than a new market entrant proposing to construct a
greenfield pipeline. For this reason, I would have applied the Commission's current
policy and required Mountain Valley to use the 10.55 percent ROE approved in El Paso
Natural Gas Co.77—the most recent NGA section 4 rate case litigated before the
Commission —to design the initial rates for the Project.78 Mountain Valley has not
provided any evidence justifying a departure from the Commission's current policy,
which it has recently applied to multiple similar incremental pipeline expansion
71 See Cheyenne Connector, LLC, 168 FERC ¶ 61,180 at PP 51-52 (rejecting
Rockies Express's proposal to use a 13 percent ROE approved as part of its greenfield
certificate authorization to an incremental pipeline expansion project, and instead
requiring Rockies Express to revise its incremental recourse rates to reflect a 10.55
percent ROE from the last litigated rate case); see also Gulfstream Natural Gas Sys.,
L.L.C., 170 FERC ¶ 61,199 at P 19 (rejecting Gulfstream Natural's proposal to use a 14
percent ROE, found to be appropriate for its greenfield project, to an incremental pipeline
expansion project, and instead requiring use of use the most recent ROE approved by the
Commission in a litigated NGA section 4 rate case, 10.55 percent); Cheniere Corpus
Christi Pipeline, LP, 169 FERC ¶ 61,135 at PP 34-35 ("It is not appropriate to use the 14
percent ROE approved in Cheniere Pipeline's initial certificate authorizations in
determining the cost of service for [an incremental expansion project] because it would
not adequately reflect the lower risks associated with expanding an existing pipeline
system.").
76 Certificate Order, 171 FERC ¶ 61,232 at P 57.
77 145 FERC ¶ 61,040, at P 642 (2013), reh'g denied, 154 FERC ¶ 61,120 (2016).
78 Gulfstream Natural Gas Sys., L.L.C., 170 FERC ¶ 61,199 at PP 18-19;
Cheyenne Connector, 168 FERC ¶ 61,180 at PP 51-52; Corpus Christi, 169 FERC ¶
61,135 at PP 34-35; Alliance Pipeline L.P., 140 FERC ¶ 61,212, at PP 18-20 (2012).
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projects.79 The Commission's decision today serves only to further erode confidence in
its promise to "`hold the line' while awaiting the adjudication of just and reasonable
rates."8"
For these reasons, I respectfully dissent in part.
Richard Glick
Commissioner
71 See e.g., Gulfstream Natural Gas Sys., L.L. C., 170 FERC ¶ 61,199 at P 19,
decided less than a month ago.
80 See Certificate Order, 171 FERC ¶ 61,232 at P 62.
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UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Mountain Valley Pipeline, LLC Docket No. CP 19-14-000
(Issued June 18, 2020)
McNAMEE, Commissioner, concurring:
I . Today's order issues Mountain Valley Pipeline, LLC (Mountain Valley) a
certificate to construct and operate its proposed Southgate Project.' The Southgate
Project is designed to provide up to 375,000 dekatherms (Dth) per day of firm
transportation service.' Additionally, this order directs the Office of Energy Projects
(OEP) to not issue any notice to proceed with construction of the Southgate Project until
Mountain Valley receives necessary federal permits for the Mainline System3, and the
Director of OEP, or the Director's designee, lifts the stop -work order and authorizes
Mountain Valley to continue constructing the Mainline System.' I agree that the order
complies with the Commission's statutory responsibilities under the Natural Gas Act
(NGA) and the National Environmental Policy Act (NEPA). The order determines that
the Project is in the public convenience and necessity, finding that the project will not
adversely affect Mountain Valley's existing customers or competitor pipelines and their
captive customers, and the project's benefits will outweigh any adverse economic effects
on landowners and surrounding communities.' The order also finds that the
environmental impacts associated with the project, if constructed and operated as
described in the Environmental Impact Statement (EIS), are acceptable considering the
public benefits that the project will provide.' Consistent with the holding in Sierra Club
v. FERC (Sabal Trail),' the Commission quantified and considered the greenhouse gas
' Mountain Valley Pipeline, LLC, 171 FERC ¶ 61,232 (2020) (Certificate Order).
'Id. P 11.
s Id. P 3. (The Mainline System consists of a 303.5-mile-long, 42-inch-diameter
interstate pipeline system to provide up to 2,000,000 Dth per day of firm natural gas
transportation service from Wetzel County, West Virginia, to an interconnection with
Transcontinental Gas Pipe Line, LLC's Compressor Station 165 in Pittsylvania County,
Virginia.)
4 Id. P 9.
' Id. P 52.
6 Id. P 144.
7 867 F.3d 1357 (D.C. Cir. 2017). This case is commonly referred to as "Sabal
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(GHG) emissions associated with the construction and operation of the Project and found
that because the end -use of the contracted volumes is unknown, any potential GHG
emissions are not reasonably foreseeable.' The Commission also found that the Social
Cost of Carbon is not a suitable methodology to determine whether the Project would
have a significant impact on climate change.'
2. Although I fully support this order, I write separately to address what I perceive to
be a misinterpretation of the Commission's authority under the NGA and NEPA. There
have been contentions that the NGA authorizes the Commission to deny a certificate
application based on the environmental effects that result from the upstream production
and downstream use of natural gas, that the NGA authorizes the Commission to establish
measures to mitigate GHG emissions, and that the Commission violates the NGA and
NEPA by not determining whether GHG emissions significantly affect the environment.
I disagree.
3. A close examination of the statutory text and foundation of the NGA demonstrates
that the Commission does not have the authority under the NGA or NEPA to deny a
pipeline certificate application based on the environmental effects of the upstream
production or downstream use of natural gas nor does the Commission have the authority
to unilaterally establish measures to mitigate GHG emissions. Further, the Commission
has no objective basis to determine whether GHG emissions will have a significant effect
on climate change nor the authority to establish its own basis for making such a
determination.
4. It is my intention that my discussion of the statutory text and foundation will assist
the Commission, the courts, and other parties in their arguments regarding the meaning of
the "public convenience and necessity" and the Commission's consideration of a
project's effect on climate change. Further, my review of appellate briefs filed with the
court and the Commission's orders suggests that the court may not have been presented
with the arguments I make here. Before I offer my arguments, it is important that I
further expound on the current debate.
I. Current debate
5. When acting on a certificate application, the Commission has two primary
statutory obligations: (1) to determine whether the project is required by the "public
Trail" because the Sabal Trail Pipeline is one of the three pipelines making up the
Southeast Market Pipelines Project.
' Certificate Order, 171 FERC ¶ 61,232 at P 99; Final Environmental Impact
Statement at 4-263.
' Id. P 102.
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convenience and necessity" as required by the NGA;10 and (2) to take a "hard look" at the
direct," indirect,12 and cumulative effects13 of the proposed action as required by NEPA
and the Council on Environmental Quality's (CEQ) implementing regulations. Recently,
there has been much debate concerning what factors the Commission can consider in
determining whether a proposed project is in the "public convenience and necessity," and
whether the effects of upstream production and downstream use of natural gas are
indirect effects of a certificate application as defined by NEPA.
6. Equating NGA section 7's "public convenience and necessity" standard with a
"public interest" standard, my colleague has argued that NGA section 7 requires the
Commission to weigh GHGs emitted from project facilities and related to the upstream
production or downstream use of natural gas.14 In support of his contention, my
colleague has cited the holding in Sabal Trail and dicta in Atlantic Refining Co. v. Public
Service Commission of State of New York (CATCO).15 My colleague has argued that the
NGA requires the Commission to determine whether GHG emissions have a significant
impact on climate change in order for climate change to "play a meaningful role in the
Commission's public interest determination."16 And he argues that by not determining
the significance of those emissions, the "public interest determination [] systematically
10 15 U.S.C. § 717f(e) (2018).
11 Direct effects are those "which are caused by the action and occur at the same
time and place." 40 C.F.R. § 1508.8(a) (2019).
12 Indirect effects are those "caused by the action and are later in time or farther
removed in distance, but are still reasonably foreseeable." 40 C.F.R. § 1508.8(b) (2019).
The U.S. Supreme Court held that NEPA requires an indirect effect to have "a reasonably
close causal relationship" with the alleged cause; "a `but for' causal relationship is
insufficient to make an agency responsible for a particular effect under NEPA and the
relevant regulations." Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004).
13 Cumulative effects are those "which result[] from the incremental impact of the
action when added to other past, present, and reasonably foreseeable future actions." 40
C.F.R. § 1508.7 (2019).
14 See, e.g., Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019) (Glick, Comm'r,
dissenting at P 3) (Adelphia Dissent); Cheyenne Connector, LLC, 168 FERC ¶ 61,180
(2019) (Glick, Comm'r, dissenting at P 4) (Cheyenne Connector Dissent).
1s Adelphia Dissent P 4 n.7 (citing CATCO, 360 U.S. 378, 391 (1959)). The case
Atlantic Refining Co. v. Public Service Commission of State of New York is commonly
known as "CATCO" because the petitioners were sometimes identified by that name.
16 Adelphia Dissent P 5.
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excludes the most important environmental consideration of our time" and "is contrary to
law, arbitrary and capricious" and is not "the product of reasoned decision making."17
7. My colleague has also argued that the emissions from all downstream use of
natural gas are indirect effects of a project and must be considered in the Commission's
NEPA environmental documents.18 In other proceedings, he has argued that the
Commission must also consider as indirect effects GHG emissions from upstream natural
gas production.19 He has asserted that NEPA requires the Commission to determine
whether GHG emissions will have a significant effect on climate change and that the
Commission could make that determination using the Social Cost of Carbon or its own
expertise.2" Further, he has contended that the Commission could mitigate any GHG
emissions in the event that it made a finding that the GHG emissions had a significant
impact on climate change."
8. Several recent cases before the United States Court of Appeals for the D.C. Circuit
have also considered the Commission's obligations under NGA section 7 and NEPA as
they apply to what environmental effects the Commission is required to consider under
NEPA.22 In Sabal Trail, the D.C. Circuit vacated and remanded the Commission's order
issuing a certificate for the Southeast Market Pipelines Project, finding that the
Commission inadequately assessed GHGs emitted from downstream power plants in its
EIS for the project. 23 The court held that the downstream GHG emissions resulting from
burning the natural gas at the power plants were a reasonably foreseeable indirect effect
17 Id.
1s Id. P 6.
"Cheyenne Connector Dissent P 10.
20 Adelphia Dissent PP 8-10.
21 Id. P 12.
22 The courts have not explicitly opined on whether the Commission is required to
determine whether GHG emissions will have a significant impact on climate change or
whether the Commission must mitigate GHG emissions. The D.C. Circuit, however, has
suggested that the Commission is not required to determine whether GHG emissions are
significant. Appalachian Voices v. FERC, 2019 WL 847199, *2 (D.C. Cir. Feb. 19,
2019) (unpublished) ("FERC provided an estimate of the upper bound of emissions
resulting from end -use combustion, and it gave several reasons why it believed
petitioner's preferred metric, the Social Cost of Carbon, is not an appropriate measure of
project -level climate change impacts and their significance under NEPA or the Natural
Gas Act. That is all that is required for NEPA purposes.").
23 Sabal Trail, 867 F.3d 1357.
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of authorizing the project and, at a minimum, the Commission should have estimated
those emissions.
9. Further, the Sabal Trail court found the Commission's authorization of the project
was the legally relevant cause of the GHGs emitted from the downstream power plants
"because FERC could deny a pipeline certificate on the ground that the pipeline would be
too harmful to the environment."24 The court stated the Commission could do so
because, when considering whether pipeline applications are in the public convenience
and necessity, "FERC will balance `the public benefits against the adverse effects of the
project,' see Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101-02
(D.C. Cir. 2014) (internal quotation marks omitted), including adverse environmental
effects, see Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301, 1309 (D.C.
Cir. 2015)."25 Relying on its finding that the Commission could deny a pipeline on
environmental grounds, the court distinguished Sabal Trail from the Supreme Court's
holding in Public Citizen, where the Court held "when the agency has no legal power to
prevent a certain environmental effect, there is no decision to inform, and the agency
need not analyze the effect in its NEPA review"26 and the D.C. Circuit's decision in
Sierra Club v. FERC (Freeport), where it held "that FERC had no legal authority to
prevent the adverse environmental effects of natural gas exports."27
10. Based on these findings, the court concluded that "greenhouse -gas emissions are
an indirect effect of authorizing this project, which FERC could reasonably foresee, and
which the agency has legal authority to mitigate."28 The court also held "the EIS for the
Southeast Market Pipelines Project should have either given a quantitative estimate of the
downstream greenhouse emissions ... or explained more specifically why it could not
have done so."29 The court impressed that "[it did] not hold that quantification of
greenhouse -gas emissions is required every time those emissions are an indirect effect of
an agency action" and recognized that "in some cases quantification may not be
feasible."3"
24Id. at 1373.
25 Id.
26 Id. at 1372 (citing Pub. Citizen, 541 U.S. at 770) (emphasis in original).
27 Id. at 1373 (citing Freeport, 827 F.3d 36, 47 (D.C. Cir. 2016)) (emphasis in
original).
28Id. at 1374 (citing 15 U.S.C. § 717f(e)).
29 Id.
3o Id. (emphasis in original).
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11. More recently, in Birckhead v. FERC,31 the D.C. Circuit commented in dicta on
the Commission's authority to consider downstream emissions. The court stated that
because the Commission could "`deny a pipeline certificate on the ground that the
pipeline would be too harmful to the environment, the agency is the legally relevant
cause of the direct and indirect environmental effects of pipelines it approves' —even
where it lacks jurisdiction over the producer or distributor of the gas transported by the
pipeline."32 The court also examined whether the Commission was required to consider
environmental effects related to upstream gas production, stating it was "left with no
basis for concluding that the Commission acted arbitrarily or capriciously or otherwise
violated NEPA in declining to consider the environmental impacts of upstream gas
production."33
12. I respect the holding of the court in Sabal Trail and the discussion in Birckhead,
and I recognize that the Sabal Trail holding is binding on the Commission. However, I
respectfully disagree with the court's finding that the Commission can, pursuant to the
NGA, deny a pipeline based on environmental effects stemming from the upstream
production or downstream use of natural gas, and that the Commission is therefore
required to consider such environmental effects under the NGA and NEPA.14
13. The U.S. Supreme Court has observed that NEPA requires an indirect effect to
have "a reasonably close causal relationship" with the alleged cause.31 Whether there is a
reasonably close causal relationship depends on "the underlying policies or legislative
intent" of the agency's organic statute "to draw a manageable line between those causal
changes that may make an actor responsible for an effect and those that do not."36
Below, I review the text of the NGA and subsequent acts by Congress to demonstrate that
the "public convenience and necessity" standard in the NGA is not so broad as to include
31925 F.3d 510 (D.C. Cir. 2019).
32 Id. at 519 (citing Sabal Trail, 867 F.3d at 1373) (internal quotations omitted).
33 Id. at 518.
34 Though the D.C. Circuit's holding in Sabal Trail is binding on the Commission,
it is not appropriate to expand that holding through the dicta in Birckhead so as to
establish new authorities under the NGA and NEPA. The Commission is still bound by
the NGA and NEPA as enacted by Congress, and interpreted by the U.S. Supreme Court
and the D.C. Circuit. Our obligation is to read the statutes and case law in harmony.
This concurrence articulates the legal reasoning by which to do so.
31 Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 (1983).
36 Id. at 774 n.7.
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environmental effects of the upstream production or downstream use of natural gas, and
that the Commission cannot be responsible for those effects.
14. As for GHGs emitted from pipeline facilities themselves, I believe that the
Commission can consider such emissions in its public convenience and necessity
determination and is required to consider them in its NEPA analysis. As I set forth
below, however, the Commission cannot unilaterally establish measures to mitigate GHG
emissions, and there currently is no suitable method for the Commission to determine
whether GHG emissions are significant.
II. The NGA does not permit the Commission to deny a certificate
application based on environmental effects related to the upstream
production or downstream use of natural gas
15. To interpret the meaning of "public convenience and necessity," we must begin
with the text of the NGA.37 I recognize that the Commission" and the courts have
equated the "public convenience and necessity" standard with "all factors bearing on the
public interest."39 However, the phrase "all factors bearing on the public interest" does
not mean that the Commission has "broad license to promote the general public
welfare"40 or address greater societal concerns. Rather, the courts have stated that the
words must "take meaning from the purposes of regulatory legislation."41 The Court has
37 15 U.S.C. § 717f(e) (2018). See infra PP 42-48. It is noteworthy that the phrase
"public interest" is not included in NGA section 7(c)(1)(A) (requiring pipelines to have a
certificate) or NGA section 7(e) (requiring the Commission to issue certificates). Rather,
these provisions use the phrase "public convenience and necessity." NGA section
7(c)(1)(B) does refer to public interest when discussing how the Commission can issue a
temporary certificate in cases of emergency. Id. § 717f(c)(1)(B). Congress is "presumed
to have used no superfluous words." Platt v. Union Pac. R.R. Co., 99 U.S. 48, 58 (1878);
see also U.S. ex rel. Totten v. Bombardier Corp., 380 F.3d 488, 499 (D.C. Cir. 2004) ("It
is, of course, a `cardinal principle of statutory construction that a statute ought, upon the
whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall
be superfluous, void, or insignificant."' (citing Alaska Dep't of Envtl. Conservation v.
EPA, 540 U.S. 461, n.13 (2004))).
38 See, e.g., North Carolina Gas Corp., 10 FPC 469, 475 (1950).
31 CATCO, 360 U.S. at 391 ("This is not to say that rates are the only factor
bearing on the public convenience and necessity, for § 7(e) requires the Commission to
evaluate all factors bearing on the public interest."). The Court never expounded further
on that statement.
4o NAACP V. FPC, 425 U.S. 662, 669 (1976).
41 Id.; see also Office of Consumers' Counsel v. FERC, 655 F.2d 1132, 1147 (D.C.
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made clear that statutory language "cannot be construed in a vacuum. It is a fundamental
canon of statutory construction that the words of a statute must be read in their context
and with a view to their place in the overall statutory scheme."42 The Court has further
instructed that one must "construe statutes, not isolated provisions."43
16. Indeed, that is how the Court in CATCO — the first U.S. Supreme Court case
including the "all factors bearing on the public interest" language — interpreted the phrase
"public convenience and necessity." In that case, the Court held that the public
convenience and necessity requires the Commission to closely scrutinize initial rates
based on the framework and text of the NGA.aa
17. Following this precedent, the phrase "public convenience and necessity" must
therefore be read within the overall statutory scheme of the NGA. As set forth below,
construing the NGA as a statute demonstrates that Congress determined the public
Cir. 1980) ("Any such authority to consider all factors bearing on the `public interest'
must take into account what the `public interest' means in the context of the Natural Gas
Act. FERC's authority to consider all factors bearing on the public interest when issuing
certificates means authority to look into those factors which reasonably relate to the
purposes for which FERC was given certification authority. It does not imply authority
to issue orders regarding any circumstance in which FERC's regulatory tools might be
useful.").
42 Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989).
43 Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S.
280, 290 (2010) (quoting Gustafson v. Alloyd Co., 513 U.S. 561, 568 (1995)).
44 CATCO, 360 U.S. 378, 388-91. The Court stated "[t]he Act was so framed as to
afford consumers a complete, permanent and effective bond of protection from excessive
rates and charges." Id. at 388. The Court found that the text of NGA sections 4 and 5
supported the premise that Congress designed the Act to provide complete protection
from excessive rates and charges. Id. ("The heart of the Act is found in those provisions
requiring ... that all rates and charges `made, demanded, or received' shall be `just and
reasonable."'); id. at 389 ("The overriding intent of the Congress to give full protective
coverage to the consumer as to price is further emphasized in § 5 of the Act ...."). The
Court recognized that the Commission's role in setting initial rates was a critical
component of providing consumers complete protection because "the delay incident to
determination in § 5 proceedings through which initial certificated rates are reviewable
appears nigh interminable" and "would provide a windfall for the natural gas company
with a consequent squall for the consumers," which "Congress did not intend." Id.
at 389-90.
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interest required (i) the public to have access to natural gas and (ii) economic regulation
of the transportation and sale of natural gas to protect such public access.
A. The text of the NGA does not support denying a certificate
application based on the environmental effects of the upstream
production or downstream use of natural gas
1. NGA section 1(a)—limited meaning of "public interest"
18. Section 1 of the NGA sets out the reason for its enactment. NGA section 1(a)
states, "[a]s disclosed in reports of the Federal Trade Commission [(FTC)] made pursuant
to S. Res. 83 (Seventieth Congress, first session) and other reports made pursuant to the
authority of Congress, it is declared that the business of transporting and selling natural
gas for ultimate distribution to the public is affected with a public interest, and that
Federal regulation in matters relating to the transportation of natural gas and the sale
thereof in interstate and foreign commerce is necessary in the public interest.""
19. A review of the FTC Report referred to in NGA section 1 demonstrates that the
NGA was enacted to counter activities that would limit the public's access to natural gas
and subject the public to abusive pricing. Specifically, the FTC Report states "[a]ll
communities and industries within the capacity and reasonable distance of existing or
future transmission facilities should be assured a natural-gas supply and receive it at fair,
nondiscriminatory prices."46
20. The FTC Report further states "[a]ny proposed Federal legislation should be
premised, in part at least, on the fact that natural gas is a valuable, but limited, natural
resource in Nation-wide demand, which is produced only in certain States and limited
areas, and the conservation, production, transportation, and distribution of which,
therefore, under proper control and regulation, are matters charged with high national
public interest."47
21. The text of NGA section 1(a) and its reference to the FTC Report make clear that
"public interest" is directly linked to ensuring the public's access to natural gas through
as 15 U.S.C. § 717(a) (2018) (emphasis added).
46 FEDERAL TRADE COMMISSION, UTILITY CORPORATIONS FINAL REPORT OF THE
FEDERAL TRADE COMMISSION TO THE SENATE OF THE UNITED STATES PURSUANT TO
SENATE RESOLUTION NO.83, 70TH CONGRESS, 1 ST SESSION ON ECONOMIC, CORPORATE,
OPERATING, AND FINANCIAL PHASES OF THE NATURAL -GAS -PRODUCING, PIPE -LINE,
AND UTILITY INDUSTRIES WITH CONCLUSIONS AND RECOMMENDATIONS NO. 84-A at 609
(1936) (FTC Report), hM2s://babel.hathitrust.org/cgi/Tt?id=ien.355560213
515 98&view= l up&seq=718.
47 Id. at 611.
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regulating its transport and sale. Moreover, the NGA is designed to promote the "public
interest" primarily through economic regulation. This is apparent in the text of the NGA
and by its reference to the FTC Report that identifies the concern with monopolistic
activity that would limit access to natural gas.48
22. Therefore, there is no textual support in NGA section 1 for the claim that the
Commission may deny a pipeline application due to potential upstream and downstream
effects of GHG emissions on climate change. But, this is not the end of the analysis. We
must also examine the Commission's specific authority under NGA section 7.
2. NGA section 7—Congress grants the Commission and
pipelines authority to ensure the public's access to
natural gas
23. Like NGA section 1, the text of NGA section 7 makes clear that its purpose is to
ensure that the public has access to natural gas. A review of the various provisions of
NGA section 7 make this point evident:
• Section 7(a) authorizes the Commission to "direct a natural-gas company to
extend or improve its transportation facilities, to establish physical
connection of its transportation facilities with the facilities of, and sell
natural gas ... to the public ...."49 The Commission has stated that
"[s]ection 7(a) clearly established the means whereby the Commission
41 15 U.S.C. § 717(a) (2018) ("Federal regulation in matters relating to the
transportation of natural gas and the sale thereof in interstate and foreign commerce is
necessary in the public interest"). The limited, economic regulation meaning of "public
interest" was clear at the time the NGA was adopted. The NGA's use of the phrase
"affected with the public interest" is consistent with the States' use of this phrase when
enacting laws regulating public utilities. Historically, state legislatures used the phrase
"affected with the public interest" as the basis of their authority to regulate rates charged
for the sale of commodities, rendered services, or use of private property. Munn v.
Illinois, 94 U.S. 113, 125-26 (1876). The Court found that businesses affected with a
public interest or "said to be clothed with a public interest justifying some public
regulation" include "[b]usinesses, which, though not public at their inception, may be
fairly said to have risen to be such and have become subject in consequence to some
government regulation." Charles Wolff Packing Co. v. Court of Indus. Relations, 262
U.S. 522, 535 (1923). In essence, these businesses became quasi -public enterprises and
were determined to have an "indispensable nature." Id. at 538. Such a conclusion also
meant that if these businesses were not restrained by the government, the public could be
subject to "the exorbitant charges and arbitrary control to which the public might be
subjected without regulation." Id.
41 15 U.S.C. § 717f(a) (2018).
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could secure the benefits of gas service for certain communities, markets
and territories adjacent to those originally established by the gas industry,
where in the public interest."so
• Section 7(b) requires Commission approval for a natural gas pipeline
company to "abandon all or any portion of its facilities subject to the
jurisdiction of the Commission, or any service rendered by means of such
facilities."51 That is, Congress considered access to natural gas to be so
important that it even prohibited natural gas pipeline companies from
abandoning service without Commission approval.
• Section 7(c)(1)(B) authorizes the Commission to "issue a temporary
certificate in cases of emergency, to assure maintenance of adequate service
or to serve particular customers, without notice or hearing, pending the
determination of an application for a certificate."52 The underlying
presumption of this section is that the need for natural gas can be so
important that the Commission can issue a certificate without notice and
hearing.
• Section 7(e) states "a certificate shall be issued" when a project is in the
public convenience and necessity,53 leaving the Commission no discretion
after determining a project meets the public convenience and necessity
standard.
• Section 7(h) grants the pipeline certificate holder the powers of the
sovereign to "exercise of the right of eminent domain in the district court of
the United States."5' By granting the power of eminent domain, Congress
made clear the importance of ensuring that natural gas could be delivered
from its source to the public by not allowing traditional property rights to
stand in the way of pipeline construction. Furthermore, the sovereign's
'"Arcadian Corp. v. Southern Nat. Gas Co., 61 FERC ¶ 61,183, at 61,676 (1992)
(emphasis added). The Commission's analysis in this regard was unaffected by the
opinion in Atlanta Gas Light Co. v. FERC, 140 F.3d 1392 (1 lth Cir. 1998) (vacating the
Commission's 1991 and 1992 orders on other grounds).
51 15 U.S.C. § 717f(b) (2018).
52 Id. § 717f(c)(1)(B).
53 Id. § 717f(e) (emphasis added).
sa Id. § 717f(h).
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power of eminent domain must be for a public use55 and Congress
considered natural gas pipelines a public use.
24. Each of these textual provisions illuminate the ultimate purpose of the NGA: to
ensure that the public has access to natural gas because Congress considered such access
to be in the public interest.56 To now interpret "public convenience and necessity" to
mean that the Commission has the authority to deny a certificate for a pipeline due to
upstream or downstream emissions because the pipeline may result in access to, and the
use of, natural gas would radically rewrite the NGA and undermine its stated purpose.
3. NGA section 1(b) and section 201 of the Federal Power
Act (FPA)—authority over environmental effects related
to the upstream production and downstream use of
transported natural gas reserved to States
25. Statutory text also confirms that control over the physical environmental effects
related to the upstream production and downstream use of natural gas are squarely
reserved for the States. NGA section 1(b) provides that "[t]he provisions of this chapter
.. shall not apply to any other transportation or sale of natural gas or to the local
distribution of natural gas or to the facilities for such distribution or to the production or
gathering of natural gas."57 The Ninth Circuit and the D.C. Circuit have interpreted the
reference to distribution as meaning that States have exclusive authority over the gas
ss Miss. & Rum River Boom Co. v. Patterson, 98 U.S. 403, 406 (1878) ("The right
of eminent domain, that is, the right to take private property for public uses, appertains to
every independent government.").
56 This interpretation is also supported by the Commission's 1999 Certificate
Policy Statement. Certification of New Interstate Natural Gas Pipeline Facilities, 88
FERC ¶ 61,227, 61,743 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC
¶ 61,094 (2000) (Certificate Policy Statement) ("[I]t should be designed to foster
competitive markets, protect captive customers, and avoid unnecessary environmental
and community impacts while serving increasing demands for natural gas.") (emphasis
added); id. at 61,751 ("[T]he Commission is urged to authorize new pipeline capacity to
meet an anticipated increase in demand for natural gas ....").
57 15 U.S.C. § 717(b) (2018); see Pennzoil v. FERC, 645 F.2d 360, 380-82
(5th Cir. 1981) (holding that FERC lacks the power to even interpret gas purchase
agreements between producers and pipelines for the sale of gas that has been removed
from NGA jurisdiction).
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once the gas moves beyond high-pressure mainlines.58 Likewise, FPA section 201
specifically reserves the authority to make generation decisions to the States."
26. U.S. Supreme Court precedent and legislative history confirm that the regulation
of the physical upstream production and downstream use of gas is reserved for the
States.6" The Court has observed that Congress enacted the NGA to address "specific
evils" related to non -transparent rates for the interstate transportation and sale of natural
gas and the monopoly power of holding companies that owned natural gas pipeline
company stock.61 The Court has also found that Congress enacted the NGA to
58 See S. Coast Air Quality Mgmt. Dist. v. FERC, 621 F.3d 1085, 1092 (9th Cir.
2010) ("In sum, the history and judicial construction of the Natural Gas Act suggest that
all aspects related to the direct consumption of gas ... remain within the exclusive
purview of the states."); Pub. Utils. Comm'n of Cal. v. FERC, 900 F.2d 269, 277 (D.C.
Cir. 1990) ("[T]he state ... has authority over the gas once it moves beyond the high-
pressure mains into the hands of an end user."). I note that the court in Sabal Trail did
not discuss or distinguish Public Utilities Commission of State of Cal v. FERC.
59 16 U.S.C. § 824(b)(1) (2018) ("The Commission ... shall not have jurisdiction,
except as specifically provided in this subchapter and subchapter III of this chapter, over
facilities used for the generation of electric energy ...."). Despite Congress explicitly
denying the Commission jurisdiction over generation decisions in the FPA, some argue
that the Commission has the authority to prevent natural gas generation through general
language in the NGA regarding public convenience and necessity. Such an approach
violates the principle that explicit language trumps general provisions. See, e.g.,
Passamaquoddy Tribe v. State of Me., 897 F. Supp. 632, 635 ("In this case, the
unequivocal language in the Maine Settlement Act clearly trumps the Gaming Act's
general provisions that are silent as to Maine.").
60 Some will argue that the Court's dicta in FPC v. Hope Natural Gas Co.
(Hope)"[t]he Commission is required to take account of the ultimate use of the gas,"
320 U.S. 591, 639 (1944)—means that the Commission can consider environmental
effects related to the downstream use of natural gas. However, such argument takes the
Court's statement out of context. In fact, that Court makes that statement in support of its
argument that while the 1942 amendments to the NGA eliminated the language, "the
intention of Congress that natural gas shall be sold in interstate commerce for resale for
ultimate public consumption for domestic, commercial, industrial, or any other use at the
lowest possible reasonable rate consistent with the maintenance of adequate service in the
public interest," "there is nothing to indicate that it was not and is still not an accurate
statement of purpose of the Act." Id. at 638. Such argument further supports that
Congress enacted the NGA to provide access to natural gas and to protect consumers
from monopoly power.
61 Id. at 610 ("state commissions found it difficult or impossible to discover what
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fill the regulatory void created by the Court's earlier decisions
prohibiting States from regulating interstate transportation
and sales for resale of natural gas, while at the same time
leaving undisturbed the recognized power of the States to
regulate all in -state gas sales directly to consumers. Thus, the
NGA "was drawn with meticulous regard for the continued
exercise of state power, not to handicap it any way."62
27. In Transco,61 the Court also recognized that "Congress did not desire that an
important aspect of this field be left unregulated."6' Thus, the Court held that where
it cost interstate pipe -line companies to deliver gas within the consuming states"); id.
("[T]he investigations of the Federal Trade Commission had disclosed the majority of the
pipe -line mileage in the country used to transport natural gas, together with an increasing
percentage of the natural gas supply for pipe -line transportation, had been acquired by a
handful of holding companies."). Senate Resolution 83, which directed the FTC to
develop the report that the NGA is founded on, also demonstrates that Congress was only
concerned with consumer protection and monopoly power. The resolution directed the
FTC to investigate capital assets and liabilities of natural gas companies, issuance of
securities by the natural gas companies, the relationship between company stockholders
and holding companies, other services provided by the holding companies, adverse
impacts of holding companies controlling natural gas companies, and potential legislation
to correct any abuses by holding companies. FTC Report at 1.
62 Gen. Motors Corp. v. Tracy, 519 U.S. 278, 292 (1997) (internal citations
omitted) (quoting Panhandle E. Pipeline Co. v. Pub. Serv. Comm'n oflnd., 332 U.S. 507,
516-22 (1947) (Panhandle)); see also Nw. Cent. Pipeline v. State Corp. Comm'n, 489
U.S. 493, 512 (1989) ("The NGA `was designed to supplement state power and to
produce a harmonious and comprehensive regulation of the industry. Neither state nor
federal regulatory body was to encroach upon the jurisdiction of the other."' (quoting
Panhandle, 332 U.S. at 513)); Panhandle, 332 U.S. at 520 (In recognizing that the NGA
articulated a legislative program recognizing the respective responsibilities of federal and
state regulatory agencies, the Court noted that the NGA does not "contemplate ineffective
regulation at either level as Congress meant to create a comprehensive and effective
regulatory scheme, complementary in its operation to those of the states and in no manner
usurping their authority."). Congress continued to draw the NGA with meticulous regard
to State power when it amended the NGA in 1954 to add the Hinshaw pipeline exemption
so as "to preserve state control over local distributors who purchase gas from interstate
pipelines." Louisiana Power & Light Co. v. Fed. Power Conun n, 483 F.2d 623, 633 (5th
Cir. 1973).
63 Transco, 365 U.S. 1 (1961).
64Id. at 19.
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congressional authority is not explicit and States cannot practicably regulate a given area,
the Commission can consider the issue in its public convenience and necessity
determination.65
28. Based on this rule, and legislative history,66 the Transco Court found that in its
public convenience and necessity determination, the Commission appropriately
considered whether the end -use of the gas in a non -producing state was economically
wasteful as there was a regulatory gap and no State could be expected to control how gas
is used in another State.6' The Court also impressed that
The Commission ha[d] not attempted to exert its influence
over such "physically" wasteful practices as improper well
spacing and the flaring of unused gas which result in the
entire loss of gas and are properly of concern to the producing
State; nor has the Commission attempted to regulate the
"economic" aspects of gas used within the producing State.68
29. In contrast, there is no legislative history to support the Commission considering
environmental effects related to the upstream production or downstream use of gas.
Furthermore, the field of environmental regulation of such activities is not one that has
been left unregulated.69 Unlike in Transco, States can reasonably be expected to regulate
65Id. at 19-20.
66 Id. at 10-19.
67 Id. at 20-21.
61 Id. at 20 (emphasis added).
69 I note that the Federal Power Commission, the Commission's predecessor, at
times previously considered environmental impacts in its need analysis when weighing
the beneficial use of natural gas between competing uses. The Federal Power
Commission did not consider negative environmental impacts of downstream end use as
a reason to deny the use of natural gas. See, e.g., El Paso Natural Gas Co., 50 FPC 1264
(1973) (denying a certificate because the proposed project would impact existing
customers dependent on natural gas and use of gas was not needed to keep sulfur
emissions within the national ambient air quality standards); Transwestern Pipeline Co.,
36 FPC 176 (1966) (discussing use of gas instead of oil or coal and noting potential air
pollution benefits); El Paso Nat. Gas Co., 22 FPC 900, 950 (1959) ("[T]he use of
natural gas as boiler fuel in the Los Angeles area should be considered as being in a
different category than gas being used for such a purpose in some other community
where the smog problem does not exist and that the use of gas for boiler fuel in this area
should not be considered an inferior use."); see also FPC ANNUAL REP. at 2 (1966)
("Any showing that additional gas for boiler fuel use would substantially reduce air
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air emissions from the upstream production or downstream use of natural gas: "air
pollution control at its source is the primary responsibility of States and local
governments."70 The Clean Air Act vests States with authority to issue permits to
regulate stationary sources related to upstream and downstream activities.71 In addition,
pursuant to their police powers, States have the ability to regulate environmental effects
related to the upstream production and downstream use of natural gas within their
jurisdictions.72 The FTC Report referenced in NGA section 1(a) recognizes States'
ability to regulate the use of natural gas.73 And, various States have exercised this ability.
For example, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire,
New York, Rhode Island, and Vermont participate in the Regional Greenhouse Gas
pollution merits serious consideration. Important as this factor may be, however, it
cannot be considered in isolation."). Often these orders discussed sulfur and smog air
pollution that occurred in the area where the natural gas would be transported when
determining need as compared to the need or use of natural gas somewhere else. All of
this was premised on the Commission's NGA authority to use its public convenience and
necessity authority to provide access to natural gas and to conserve gas by preventing
economic waste. The Commission appears to have stopped this analysis in the late-
1970s. It is noteworthy that the U.S. Environmental Protection Agency (EPA) was
established in 1970, Congress established more comprehensive air emissions regulation
by amending the Clean Air Act in 1970 and 1977 (Pub. L. 91-604, 84 Stat. 1676 (1970);
Pub. L. 95-95, 91 Stat. 685 (1977)), and Congress enacted the Department of Energy
Organization Act, which replaced the Federal Power Commission with the Federal
Energy Regulatory Commission, 42 U.S.C. §§ 7101 et seq.
70 42 U.S.C. § 7401 (2018).
71 Id. § 7661 e ("Nothing in this subchapter shall prevent a State, or interstate
permitting authority, from establishing additional permitting requirements not
inconsistent with this chapter."). The Act defines "permitting authority" as "the
Administrator or the air pollution control agency authorized by the Administrator to carry
out a permit program under this subchapter." Id. § 7661.
72 Huron Portland Cement Co. v. Detroit, 362 U.S. 440, 442 (1960) ("Legislation
designed to free from pollution the very air that people breathe clearly falls within the
exercise of even the more traditional concept of what is compendiously known as the
police power.").
73 FTC Report at 716 (describing Louisiana) ("The department of conservation be,
and it is hereby, given supervision over the production and use of natural gas in
connection with the manufacture of carbon black in other manufacturing enterprises and
for domestic consumption.").
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Initiative (RGGI), which requires power plants with a capacity over 25 megawatts to hold
allowances equal to their CO2 emissions over a three-year control period.74
30. Some may make the argument that "considering" the environmental effects related
to upstream production and downstream use is hardly "regulating" such activities. I
disagree. For the Commission to consider such effects would be an attempt to exert
influence over States' regulation of physical upstream production or downstream use of
natural gas, which the Court in Transco suggested would be encroaching upon forbidden
ground. If, for example, the Commission considered and denied a certificate based on the
GHG emissions released from production activities, the Commission would be making a
judgment that such production is too harmful for the environment and preempting a
State's authority to decide whether and how to regulate upstream production of natural
gas. Furthermore, for the Commission to consider and deny a project based on emissions
from end users, the Commission would be making a judgment that natural gas should not
be used for certain activities.71 Such exertion of influence is impermissible: "when the
Congress explicitly reserves jurisdiction over a matter to the states, as here, the
Commission has no business considering how to `induc[e] a change [of state] policy'
with respect to that matter."76
31. Hence, there is no jurisdictional gap in regulating GHG emissions for the
Commission to fill. The NGA reserves authority over the upstream production and
downstream use of natural gas to the States, and States can practicably regulate GHGs
emitted by those activities. And, even if there were a gap that federal regulation could
fill, as discussed below, it is nonsensical for the Commission to attempt to fill a gap that
74 REGIONAL GREENHOUSE GAS INITIATIVE, https://www.rggi.org//pro rg am-
overview-and-design/elements (LAST ACCESSED Nov. 18, 2019).
71 See also Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301,
1320 (D.C. Cir. 2015) ("The Commission's power to preempt state and local regulation
by approving the construction of natural gas facilities is limited by the Natural Gas Act's
savings clause, which provides that the Natural Gas Act's terms must not be construed to
`affect[] the rights of States' under the Clean Air Act. 15 U.S.C. § 717b(d)(2).");
Dominion Transmission, Inc. v. Summers, 723 F.3d 238, 243 (D.C. Cir. 2013) ("But
Congress expressly saved states' [Clean Air Act] powers from preemption.").
76 Altamont Gas Transmission Co. v. FERC, 92 F.3d 1239, 1248 (D.C. Cir. 1996);
see ANR Pipeline Co. v. FERC, 876 F.2d 124,132 (D.C. Cir. 1989) ("We think it would
be a considerable stretch from there to say that, in certifying transportation that is
necessary to carry out a sale, the Commission is required to reconsider the very aspects of
the sale that have been assessed by an agency specifically vested by Congress with
authority over the subject.").
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Congress has clearly meant for the EPA to occupy." Therefore, because GHG emissions
from the upstream production and downstream use of natural gas are not properly of
concern to the Commission, the Commission cannot deny a certificate application based
on such effects.
B. Denying a pipeline based on upstream or downstream
environmental effects would undermine other acts of Congress
32. Since enactment of the NGA and NEPA, Congress has enacted additional
legislation promoting the production and use of natural gas and limiting the
Commission's authority over the natural gas commodity. Each of these legislation
enactments indicates that the Commission's authority over upstream production and
downstream use of natural gas has been further limited by Congress. Arguments that the
Commission can rely on the NGA's public convenience and necessity standard and
NEPA to deny a pipeline application so as to prevent the upstream production or
downstream use of natural gas would undermine these acts of Congress.
1. Natural Gas Policy Act of 1978
33. Determining that federal regulation of natural gas limited interstate access to the
commodity, resulting in shortages and high prices, Congress passed the Natural Gas
Policy Act of 1978 (NGPA). The NGPA significantly deregulated the natural gas
industry.71 Importantly, NGPA section 601(c)(1) states, "[t]he Commission may not
deny, or condition the grant of, any certificate under section 7 of the Natural Gas Act
based upon the amount paid in any sale of natural gas, if such amount is deemed to be
just and reasonable under subsection (b) of this section."79
34. Besides using price deregulation to promote access to natural gas, Congress gave
explicit powers to the President to ensure that natural gas reached consumers. NGPA
section 302(c) explicitly provides, "[t]he President may, by order, require any pipeline to
transport natural gas, and to construct and operate such facilities for the transportation of
77 See infra PP 53-58.
78 Generally, the NGPA limited the Commission's authority over gas that is not
transported in interstate commerce, new sales of gas, sales of gas and transportation by
Hinshaw pipelines, and certain sales, transportation and allocation of gas during certain
gas supply emergencies. See, e.g., NGPA sections 601(a)(1)(A)-(D), 15 U.S.C.
§ 343 1 (a)(1)(A)-(D) (2018).
79 Id. § 3431(c)(1) (2018). In addition, section 121(a) provides, "the provisions of
subtitle A respecting the maximum lawful price for the first sale of each of the following
categories of natural gas shall, except as provided in subsections (d) and (e), cease to
apply effective January 1, 1985." 15 U.S.C. § 3331(a), repealed by the Wellhead
Decontrol Act of 1989, Pub. L. 101-60 § 2(b), 103 Stat. 157 (1989).
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natural gas, as he determines necessary to carry out any contract authorized under
subsection (a)."80 Similarly, the NGPA gave authority to the Secretary of Energy to
promote access to natural gas.81
35. There can be no doubt about the plain language of the NGPA: the Court observed
that Congress passed the NGPA to "promote gas transportation by interstate and
intrastate pipelines."82 Furthermore, the NGPA was "intended to provide investors with
adequate incentive to develop new sources of supply."83
2. Powerplant and Industrial Fuel Use Act of 1978
36. With respect to natural gas as a fuel source for electric generation, in 1987
Congress repealed sections of the Powerplant and Industrial Fuel Use Act of 1978 (Fuel
Use Act),84 which had restricted the use of natural gas in electric generation so as to
conserve it for other uses. With the repeal of the Fuel Use Act, Congress made clear that
natural gas could be used for electric generation and that the regulation of the use of
natural gas by power plants unnecessary.85
80Id. § 3362.
81 See id. § 3391(a) ("[T]he Secretary of Energy shall prescribe and make effective
a rule ... which provides ... no curtailment plan of an interstate pipeline may provide
for curtailment of deliveries for any essential agricultural use ...."); id. § 3392(a) ("The
Secretary of Energy shall prescribe and make effective a rule which provides that
notwithstanding any other provisions of law (other than subsection (b)) and to the
maximum extent practicable, no interstate pipeline may curtail deliveries of natural gas
for any essential industrial process or feedstock use ...."); id. § 3392(a) ("The Secretary
of Energy shall determine and certify to the Commission the natural gas requirements
(expressed either as volumes or percentages of use) of persons (or classes thereof) for
essential industrial process and feedstock uses (other than those referred to in
section 3391(f)(1)(13))."); id. § 3393(a) ("The Secretary of Energy shall prescribe the
rules under sections 3391 and 3392 of this title pursuant to his authority under the
Department of Energy Organization Act to establish and review priorities for
curtailments under the Natural Gas Act.").
82 Gen. Motors Corp. v. Tracy, 519 U.S. at 283 (quoting 57 Fed. Reg. 13271
(Apr. 16, 1992)).
83 Pub. Serv. Comm'n of State off. Y v. Mid -Louisiana Gas Co., 463 U.S. 319,
334 (1983).
84 42 U.S.C. § 8342, repealed by Pub. L. 100-42, § 1(a), 101 Stat. 310 (1987).
85 The Commission need not look any further than the text of the statutes to
determine its authority. In the case of the repeal of the Fuel Use Act, the legislative
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3. Natural Gas Wellhead Decontrol Act of 1989
37. If there were any remaining doubt that the Commission has no authority to
consider the upstream production of natural gas and its environmental effects, such doubt
was put to rest when Congress enacted the Wellhead Decontrol Act.86 In this legislation,
Congress specifically removed the Commission's authority over the upstream production
of natural gas.87
38. But the Wellhead Decontrol Act was not merely about deregulating upstream
natural gas production. Congress explained that the reason for deregulating natural gas at
the wellhead was important to ensuring that end users had access to the commodity. The
Senate Committee Report for the Wellhead Decontrol Act states "the purpose (of the
legislation) is to promote competition for natural gas at the wellhead to ensure consumers
an adequate and reliable supply of natural gas at the lowest reasonable price."88
Similarly, the House Committee Report to the Wellhead Decontrol Act notes, "[a]ll
sellers must be able to reasonably reach the highest -bidding buyer in an increasingly
history is informative as to Congress's reasoning. See H.R. Rep. 100-78 *2 ("By
amending [Fuel Use Act], H.R. 1941 will remove artificial government restrictions on the
use of oil and gas; allow energy consumers to make their own fuel choices in an
increasingly deregulated energy marketplace; encourage multifuel competition among
oil, gas, coal, and other fuels based on their price, availability, and environmental merits;
preserve the `coal option' for new baseload electric powerplants which are long-lived and
use so much fuel; and provide potential new markets for financially distressed oil and gas
producers."); id. *6 ("Indeed, a major purpose of this bill is to allow individual choices
and competition and fuels and technologies ...."); see also President Ronald Reagan's
Remarks on Signing H.R. 1941 Into Law, 23 WEEKLY COMP. PREs. Doc. 568, (May 21,
1987) ("This legislation eliminates unnecessary restrictions on the use of natural gas. It
promotes efficient production and development of our energy resources by returning fuel
choices to the marketplace. I've long believed that our country's natural gas resources
should be free from regulatory burdens that are costly and counterproductive.").
86 Pub. L. 101-60, 103 Stat. 157 (1989).
87 The Wellhead Decontrol Act amended NGPA section 601(a)(1)(A) to read,
"[f]or purposes of section 1(b) of the Natural Gas Act, the provisions of the Natural Gas
Act and the jurisdiction of the Commission under such Act shall not apply to any natural
gas solely by reason of any first sale of such natural gas." 15 U.S.C. § 343 1 (a)(1)(A),
amended by, Pub. L. 101-60 § 3(a)(7)(A), 103 Stat. 157 (1989). United Distrib. Cos. v.
FERC, 88 F.3d 1105, 1166 (D.C. Cir. 1996) ("That enactment contemplates a
considerably changed natural gas world in which regulation plays a much reduced role
and the free market operates at the wellhead.").
88 S. Rep. No. 101-39 at 1 (emphasis added).
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national market. All buyers must be free to reach the lowest -selling producer, and obtain
shipment of its gas to them on even terms with other suppliers."89 The House Committee
Report also states the Commission's "current competitive `open access' pipeline system
[should be] maintained."90 With this statement, the House Committee Report references
Order No. 436 in which the Commission stated that open access transportation "is
designed to remove any unnecessary regulatory obstacles and to facilitate transportation
of gas to any end user that requests transportation service."91
4. Energy Policy Act of 1992
39. In the Energy Policy Act of 1992 (EPAct 1992), Congress also expressed a
preference for providing the public access to natural gas. EPAct section 202 states, "[i]t
is the sense of the Congress that natural gas consumers and producers, and the national
economy, are best served by a competitive natural gas wellhead market."92
40. The NGA, NGPA, the repeal of the Fuel Use Act, the Wellhead Decontrol Act,
and EPAct 1992 each reflect Congressional mandates to promote the production,
transportation, and use of natural gas. None of these acts, and no other law, including
NEPA, modifies the presumption in the NGA to facilitate access to natural gas. And, it is
not for the Commission to substitute its judgment for that of Congress in determining
energy policy.
C. "Public convenience and necessity" does not support
consideration of environmental effects related to upstream
production or downstream use of natural gas
41. In addition to considering the text of the NGA as a whole and subsequent -related
acts, we must interpret the phrase "public convenience and necessity" as used when
enacted. As discussed below, "public convenience and necessity" has always been
understood to mean "need" for the service. To the extent the environment is considered,
such consideration is limited to the effects stemming from the construction and operation
of the proposed facilities and is not as broad as some would believe.93
89 H.R. Rep. No. 101-29 at 6.
90 Id. at 7.
91 Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, Order
No. 436, 50 Fed. Reg. 42,408, 42,478 (Oct. 18, 1985) (Order No. 436).
92 Pub. L. No. 102-486, 106 Stat. 2776 (1992).
93 Some will cite the reference to environment in footnote 6 in NAACP v. FPC to
argue that the Commission can consider the environmental effects of upstream
production and downstream use of natural gas. NAACP v. FPC, 425 U.S. 662, 670 n.6.
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42. When Congress enacted the NGA, the phrase "public convenience and necessity"
was a term of art used in state and federal public utility regulation.94 In 1939, one year
after the NGA's enactment, the Commission's predecessor agency, the Federal Power
Commission, defined public convenience and necessity as "a public need or benefit
without which the public is inconvenienced to the extent of being handicapped in the
pursuit of business or comfort or both, without which the public generally in the area
involved is denied to its detriment that which is enjoyed by the public of other areas
similarly situated."95 To make such showing, the Commission required certificate
applicants to demonstrate that the public needed its proposed project, the applicant could
perform the proposed service, and the service would be provided at reasonable rates.96
43. To the extent that public convenience and necessity included factors other than
need, they were limited and directly related to the proposed facilities, not upstream or
downstream effects related to the natural gas commodity. Such considerations included
the effects on pipeline competition, duplication of facilities, and social costs, such as
misuse of eminent domain and environmental impacts resulting from the creation of the
The Court's statement does not support that argument. The Court states that the
environment could be a subsidiary purpose of the NGA and FPA by referencing FPA
section 10, which states the Commission shall consider whether a hydroelectric project is
best adapted to a comprehensive waterway by considering, among other things, the
proposed hydroelectric project's effect on the adequate protection, mitigation, and
enhancement of fish and wildlife. Nothing in the Court's statement or the citation would
support the consideration of upstream and downstream impacts. See supra note 67
(explaining that the Federal Power Commission previously considered environmental
impacts of downstream end use when weighing the beneficial use of natural gas between
competing uses).
94 William K. Jones, Origins of the Certificate of Public Convenience and
Necessity: Developments in the States, 1870-1920, 79 CoLum. L. REv. 426, 427-28
(1979) (Jones).
95 Kan. Pipe Line & Gas Co., 2 FPC 29, 56 (1939).
96 See Order No. 436, at 42,474 (listing the requirements outlined in Kan. Pipe
Line & Gas Co.: "(1) they possess a supply of natural gas adequate to meet those
demands which it is reasonable to assume will be made upon them; (2) there exist in the
territory proposed to be served customers who can reasonably be expected to use such
natural-gas service; (3) the facilities for which they seek a certificate are adequate; (4) the
costs of construction of the facilities which they propose are both adequate and
reasonable; (5) the anticipated fixed charges or the amount of such fixed charges are
reasonable; and (6) the rates proposed to be charged are reasonable.").
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right-of-way or service.97 For example, the Commonwealth of Massachusetts considered
environmental impacts resulting from the creation of the right-of-way and service in
denying an application to build a railroad along a beach. The Commonwealth found that
"the demand for train service was held to be outweighed by the fact the beach traversed
`will cease to be attractive when it is defaced and made dangerous by a steam
railroad. "'98
44. The Commission's current guidance for determining whether a proposed project is
in the public convenience and necessity is consistent with the historic use of the term. As
outlined in its 1999 Certificate Policy Statement, the Commission implements an
economic balancing test that is focused on whether there is a need for the facilities and
adverse economic effects stemming from the construction and operation of the proposed
facilities themselves. The Commission designed its balancing test "to foster competitive
markets, protect captive customers, and avoid unnecessary environmental and community
impacts while serving increasing demands for natural gas."99 The Commission also
stated that its balancing test "provide[s] appropriate incentives for the optimal level of
construction and efficient customer choices.""' To accomplish these objectives, the
Commission determines whether a project is in the public convenience and necessity by
balancing the public benefits of the project against the adverse economic impacts on the
applicant's existing shippers, competitor pipelines and their captive customers, and
landowners.101
45. Although the Certificate Policy Statement also recognizes the need to consider
certain environmental issues related to a project, it makes clear that the environmental
impacts to be considered are related to the construction and operation of the pipeline
itself and the creation of the right-of-way.102 As noted above, it is the Commission's
objective to avoid unnecessary environmental impacts, meaning to route the pipeline to
avoid environmental effects where possible and feasible, not to prevent or mitigate
environmental effects from the upstream production or downstream use of natural gas.
This is confirmed when one considers that, if the project had unnecessary adverse
97 Jones at 428.
98 Id. at 436.
99 Certificate Policy Statement, 88 FERC ¶ at 61,743.
100 Id
101 Id
102 See also Ctr. for Biological Diversity v. U.S. Army Corps of Eng'rs, 941 F.3d
1288, 1299 (1 lth Cir. 2019) ("Regulations cannot contradict their animating statutes or
manufacture additional agency power.") (citing FDA v. Brown & Williamson Tobacco
Corp., 529 U.S. 120, 125-26 (2000)).
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environmental effects, the Commission would require the applicant to reroute the
pipeline: "If the environmental analysis following a preliminary determination indicates
a preferred route other than the one proposed by the applicant, the earlier balancing of the
public benefits of the project against its adverse effects would be reopened to take into
account the adverse effects on landowners who would be affected by the changed
route."lo3
46. Further, the Certificate Policy Statement provides, "[i]deally, an applicant will
structure its proposed project to avoid adverse economic, competitive, environmental, or
other effects on the relevant interests from the construction of the new project." 104 And
that is what occurred in this case. Mountain Valley modified its pipeline route to reduce
impacts on various landowners'"' and eliminated a compressor station that had originally
been proposed in pre -filing to be located near milepost 26 in North Carolina.'"6
Additionally, Mountain Valley co -located 49 percent of the proposed pipeline route with
existing utility corridors and rights -of -way. 10' Further, during the pre -filing period,
Mountain Valley assessed numerous route alternatives. Mountain Valley adopted 101
route alternative segments and/or minor route variations into its proposed Project design
for various reasons, including landowner requests, avoidance of sensitive environmental
resources (such as archaeological sites or wetlands), avoidance of areas of steep terrain or
side slopes, and engineering considerations.'"'
47. In sum, the meaning of "public convenience and necessity" does not support
weighing the public need for the project against effects related to the upstream production
or downstream use of natural gas.
D. NEPA does not authorize the Commission to deny a certificate
application based on emissions from the upstream production or
downstream use of transported natural gas
48. The text of the NGA, and the related subsequent acts by Congress, cannot be
revised by NEPA or CEQ regulations to authorize the Commission to deny a certificate
'03 Certificate Policy Statement, 88 FERC ¶ at 61,749.
M Id. at 61,747.
1"' Final EIS at 3-26 to 3-28.
106 Certificate Order, 171 FERC ¶ 61,232 at P 27.
W Id. P 27
'os Final EIS at 3.
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application based on effects from the upstream production and downstream use of natural
gas.
49. The courts have made clear that NEPA does not expand a federal agency's
substantive or jurisdictional powers.109 Nor does NEPA repeal by implication any other
statute."o Rather, NEPA is a merely procedural statute that requires federal agencies to
take a "hard look" at the environmental effects of a proposed action before acting on it.111
NEPA also does not require a particular result. In fact, the Supreme Court has stated,
even if a NEPA analysis identifies an environmental harm, the agency can still approve
the project."'
50. Further, CEQ's regulations on indirect effects cannot make the GHG emissions
from upstream production or downstream use part of the Commission's public
convenience and necessity determination under the NGA. As stated above, an agency's
obligation under NEPA to consider indirect environmental effects is not limitless.
Indirect effects must have "a reasonably close causal relationship" with the alleged cause,
and that relationship is dependent on the "underlying policies or legislative intent.""'
NEPA requires such reasonably close causal relationship because "inherent in NEPA and
109 Nat. Res. Def. Council, Inc. v. EPA, 822 F.2d 104,129 (D.C. Cir. 1987)
("NEPA, as a procedural device, does not work a broadening of the agency's substantive
powers. Whatever action the agency chooses to take must, of course, be within its
province in the first instance.") (citations omitted); Cape May Greene, Inc. v. Warren,
698 F.2d 179, 188 (3d Cir. 1986) ("The National Environmental Policy Act does not
expand the jurisdiction of an agency beyond that set forth in its organic statute."); Gage
v. U.S. Atomic Energy Comm'n, 479 F.2d 1214, 1220 n.19 (D.C. Cir. 1973) ("NEPA does
not mandate action which goes beyond the agency's organic jurisdiction."); see also Flint
Ridge Dev. Co. v. Scenic Rivers Ass'n of Okla., 426 U.S. 776, 788 (1976) ("where a clear
and unavoidable conflict in statutory authority exists, NEPA must give way").
110 U.S. v. Students Challenging Regulatory Agency Procedures, 412 U.S. 669,
694 (1973).
111 Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519,
558 (1978) ("NEPA does set forth significant substantive goals for the Nation, but its
mandate to the agencies is essentially procedural.").
112 Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989)
("Although these procedures are almost certain to affect the agency's substantive
decision, it is now well settled that NEPA itself does not mandate particular results, but
simply prescribes the necessary process.").
11s Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 n.7
(1983).
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its implementing regulations is a `rule of reason,'"114 which "recognizes that it is
pointless to require agencies to consider information they have no power to act on, or
effects they have no power to prevent."us Thus, "where an agency has no ability to
prevent a certain effect due to its limited statutory authority over the relevant actions, the
agency cannot be considered a legally relevant `cause' of the effect. ,116
51. The Commission has no power to deny a certificate for effects related to the
upstream production or downstream use of natural gas. As explained above, the
Commission's consideration of adverse environmental effects is limited to those effects
stemming from the construction and operation of the pipeline facility and the related
right-of-way. For the Commission to deny a pipeline based on GHGs emitted from the
upstream production or downstream use of natural gas would be contrary to the text of
the NGA and subsequent acts by Congress. The NGA reserves such considerations for
the States, and the Commission must respect the jurisdictional boundaries set by
Congress. Suggesting that the Commission can consider such effects not only risks
duplicative regulation but in fact defies Congress.
III. The NGA does not contemplate the Commission establishing mitigation
for GHG emissions from pipeline facilities
52. My colleague has also suggested that the Commission should require the
mitigation of GHG emissions from the certificated pipeline facilities and the upstream
production and downstream use of natural gas transported on those facilities.` I
understand his suggestions as proposing a carbon emissions fee, offsets or tax (similar to
the Corps' compensatory wetland mitigation program), technology requirements (such as
114 Pub. Citizen, 541 U.S. at 767.
11s Ctr. for Biological Diversity, 941 F.3d at 1297; see also Town of Barnstable v.
FAA, 740 F.3d 681, 691 (D.C. Cir. 2014) ("NEPA's `rule of reason' does not require the
FAA to prepare an EIS when it would `serve no purpose."').
116 Pub. Citizen, 541 U.S. at 770; see also Town of Barnstable, 740 F.3d at 691
("Because the FAA `simply lacks the power to act on whatever information might be
contained in the [environmental impact statement (`EIS')],' NEPA does not apply to its
no hazard determinations.") (internal citation omitted); Ohio Valley Envtl. Coal. v.
Aracoma Coal Co., 556 F.3d 177, 196-97 (4th Cir. 2009) (finding that the U.S. Army
Corps of Engineers (Corps) was not required to consider the valley fill projects because
"[West Virginia Department of Environmental Protection], and not the Corps, [had]
`control and responsibility' over all aspects of the valley fill projects beyond the filling of
jurisdictional waters.").
"' Transcontinental Gas Pipe Line Company, LLC, (Transco) 171 FERC ¶ 61,031
(2020) (Comm'r, Glick, dissenting at P 17).
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scrubbers or electric -powered compressor units),118 or emission caps. Some argue that
the Commission can require such mitigation under NGA section 7(e), which provides
"[t]he Commission shall have the power to attach to the issuance of the certificate ...
such reasonable terms and conditions as the public convenience and necessity may
require.""'
53. I disagree. The Commission cannot interpret NGA section 7(e) to allow the
Commission to unilaterally establish measures to mitigate GHG emissions because
Congress, through the Clean Air Act, assigned the EPA and the States exclusive authority
to establish such measures. Congress designated the EPA as the expert agency "best
suited to serve as primary regulator of greenhouse gas emissions," 120 not the
Commission.
54. The Clean Air Act establishes an all -encompassing regulatory program, supervised
by the EPA to deal comprehensively with interstate air pollution."' Congress entrusted
the Administrator of the EPA with significant discretion to determine appropriate
emissions measures. Congress delegated the Administrator the authority to determine
whether pipelines and other stationary sources endanger public health and welfare;
section I I I of the Clean Air Act directs the Administrator of the EPA "to publish (and
from time to time thereafter shall revise) a list of categories of stationary sources. He
shall include a category of sources in such list if in his judgment it causes, or contributes
significantly to, air pollution which may reasonably be anticipated to endanger public
health or welfare"122 and to establish standards of performance for the identified
stationary sources.12' The Clean Air Act requires the Administrator to conduct complex
balancing when determining a standard of performance, taking into consideration what is
technologically achievable and the cost to achieve that standard.124
11s It is also important to consider the impact on reliability that would result from
requiring electric -compressor units on a gas pipeline. In the event of a power outage, a
pipeline with electric -compressor units may be unable to compress and transport gas to
end -users, including power plants and residences for heating and cooking.
11' Id. § 717f(e) (2018).
120 American Elec. Power Co., Inc. v. Conn., 564 U.S. 410, 428 (2011).
121 See id. at 419.
122 42 U.S.C. § 7411(b)(1)(A) (2018).
123Id. § 7411(b)(1)(B).
124 Id. § 7411(a)(1).
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55. In addition, the Clean Air Act allows the Administrator to "distinguish among
classes, types, and sizes within categories of new sources for the purpose of establishing
such standards .121 The Act also permits the Administrator, with the consent of the
Governor of the State in which the source is to be located, to waive its requirements "to
encourage the use of an innovative technological system or systems of continuous
emission reduction."126
56. Congress also intended that States would have a role in establishing measures to
mitigate emissions from stationary sources. Section I I I(f) notes that "[b]efore
promulgating any regulations ... or listing any category of major stationary sources ...
the Administrator shall consult with appropriate representatives of the Governors and of
State air pollution control agencies."127
57. Thus, the text of the Clean Air Act demonstrates it is improbable that
NGA section 7(e) allows the Commission to establish GHG emission standards or
mitigation measures out of whole cloth. To argue otherwise would defeat the significant
discretion and complex balancing that the Clean Air Act entrusts in the EPA
Administrator, and would eliminate the role of the States.
58. Furthermore, to argue that the Commission may use its NGA conditioning
authority to establish GHG emission mitigationa field in which the Commission has no
expertise —and address climate change —an issue that has been subject to profound
debate across our nation for decades —is an extraordinary leap. The Supreme Court's
"major rules" canon advises that agency rules on issues that have vast economic and
political significance must be treated "with a measure of skepticism" and require
Congress to provide clear authorization.12' The Court has articulated this canon because
Congress does not "hide elephants in mouseholes"129 and "Congress is more likely to
have focused upon, and answered, major questions, while leaving interstitial matters to
answer themselves in the course of the statute's daily administration."130
"' Id. § 7411(a)(2).
126Id. § 74110)(1)(A).
127 Id. § 7411(f)(3).
121 Util. Air Regulatory Grp. v. EPA, 573 U.S. 302, 324 (2014); Brown &
Williamson, 529 U.S. at 160 ("Congress could not have intended to delegate a decision of
such economic and political significance to an agency in so cryptic a fashion."); see also
Gonzales v. Oregon, 546 U.S. 243, 267-68 (2006) (finding regulation regarding issue of
profound debate suspect).
121 Whitman v. American Trucking Ass., 531 U.S. 457, 468 (2001).
13" FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 12, 159 (quoting Justice
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59. Courts would undoubtedly treat with skepticism any attempt by the Commission
to establish GHG emission mitigation measures. Congress has introduced climate change
bills since at least 1977,131 over four decades ago. Over the last 15 years, Congress has
introduced and failed to pass 70 legislative bills to reduce GHG emissions-29 of those
were carbon emission fees or taxes.132 For the Commission to suddenly declare such
climate mitigation power resides in the long -extant NGA and that Congress's efforts were
superfluous strains credibility. Establishing a carbon emissions fee or tax, or GHG
mitigation out of whole cloth would be a major rule, and Congress has made no
indication that the Commission has such authority.
60. Some may make the argument that the Commission can develop mitigation
measures without establishing a standard. I disagree. Establishing mitigation measures
requires determining how much mitigation is required — i.e., setting a limit, or
establishing a standard, that quantifies the amount of GHG emissions that will adversely
affect the human environment. Some may also argue that the Commission has
unilaterally established mitigation in other contexts, including wetlands, soil
conservation, and noise. These examples, however, are distinguishable. Congress did
not exclusively assign the authority to establish avoidance or restoration measures for
mitigating effects on wetlands or soil to a specific agency. The Corps and the EPA
developed a wetlands mitigation bank program pursuant to section 404 of the Clean
Water Act. 133 Congress endorsed such mitigation.13' As for noise, the Clean Air Act
Breyer, Judicial Review of Questions of Law and Policy, 38 ADMIN. L. REV. 363, 370
(1986)); see also Abbe R. Gluck & Lisa Schultz Bressman, Statutory Interpretation from
the Inside An Empirical Study of Congressional Drafting, Delegation, and the Canons:
PARTI, 65 STAN. L. REV. 901, 1004 (2013) ("Major policy questions, major economic
questions, major political questions, preemption questions are all the same. Drafters
don't intend to leave them unresolved.").
131 National Climate Program Act, S. 1980, 95th Cong. (1977).
132 CONGRESSIONAL RESEARCH SERVICE, MARKET -BASED GREENHOUSE GAS
EMISSION REDUCTION LEGISLATION: 108TH THROUGH 116TH CONGRESSES at 3 (Oct. 23,
2019), https:Hfas.org/sgp/crs/misc/R45472.pdf. Likewise, the CEQ issued guidance on
the consideration of GHG emissions in 2010, 2014, 2016, and 2019. None of those
documents require, let alone recommend, that an agency establish a carbon emissions fee
or tax.
133 33 U.S.C. § 1344 (2018).
134 See Water Resources Development Act, Pub. L. 110-114, § 2036(c), 121 Stat.
1041, 1094 (2007); National Defense Authorization Act, Pub. L. 108-136, § 314, 117
Stat. 1392, 1430 (2004); Transportation Equity Act for the 21 st Century, Pub. L. 105-
178, § 103 (b)(6)(M), 112 Stat. 107, 133 (1998); Water Resources Development Act of
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assigns the EPA Administrator authority over determining the level of noise that amounts
to a public nuisance and requires federal agencies to consult with the EPA when its
actions exceed the public nuisance standard.131 The Commission complies with the Clean
Air Act by requiring project noise levels in certain areas to not exceed 55 dBA Ldn, as
required by EPA's guidelines.136
61. Accordingly, there is no support that the Commission can use its NGA section 7(e)
authority to establish measures to mitigate GHG emissions from proposed pipeline
facilities or from the upstream production or downstream use of natural gas.137
IV. The Commission has no standard for determining whether GHG
emissions significantly affect the environment
62. My colleague has argued that the Commission violates the NGA and NEPA by not
determining the significance of GHG emissions that are effects of a project.138 He has
challenged the Commission's explanation that it cannot determine significance because
there is no standard for determining the significance of GHG emissions.139 He has argued
that the Commission can adopt the Social Cost of Carbon... to determine whether GHG
emissions are significant or rely on its own expertise as it does for other environmental
1990, Pub. L. 101-640, § (a)(18)(C), 104 Stat. 4604, 4609 (1990).
13142 U.S.C. § 7641(c) ("In any case where any Federal department or agency is
carrying out or sponsoring any activity resulting in noise which the Administrator
determines amounts to a public nuisance or is otherwise objectionable, such department
or agency shall consult with the Administrator to determine possible means of abating
such noise.").
136 See Williams Gas Pipelines Cent., Inc., 93 FERC ¶ 61,159, at 61,531-52
(2000).
137 In addition, requiring a pipeline to mitigate emissions from the upstream
production or downstream use of natural gas would not be "a reasonable term or
condition as the public convenience and necessity may require." 15 U.S.C. § 717f(e)
(2018). It would be unreasonable to require a pipeline to mitigate an effect it has no
control over. Further, as discussed above, emissions from the upstream production and
downstream use of natural gas are not relevant to the NGA's public convenience and
necessity determination.
... Cheyenne Connector PP 2, 7.
131 Id. PP 12-13.
l.. Id. P 13.
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resources, such as soils, groundwater, and wetland resources.14' He has suggested that
the Commission does not make a finding of significance in order to deceptively find that
a project is in the public convenience and necessity. 141
63. I disagree. The Social Cost of Carbon is not a suitable method for determining
whether GHG emissions that are caused by a proposed project will have a significant
effect on climate change, and the Commission has no authority or reasoned basis using its
own expertise to make such determination.
A. Social Cost of Carbon is not a suitable method to determine
significance
64. The Commission has found, and I agree, that the Social Cost of Carbon is not a
suitable method for the Commission to determine significance of GHG emissions.143
Because the courts have repeatedly upheld the Commission's reasoning,144 I will not
restate the Commission's reasoning here.
141 Dominion Energy Transmission, Inc., 169 FERC ¶ 61,229 (2019) (Comm'r,
Glick, dissenting at P 10).
141 Id. P 2. The dissent uses the phrase "public interest"; however, as noted earlier,
the Commission issues certificates when required by the public convenience and
necessity. NGA section 7(e) does not include the phrase "public interest." To the extent
that the courts and the Commission have equated the "public convenience and necessity"
with "public interest," the "public convenience and necessity" is not as broad as some
would argue. See supra P 16.
143 Fla. Se. Connection, LLC, 162 FERC ¶ 61,233, at P 48 (2018); see also
PennEast Pipeline Co., LLC, 164 FERC ¶ 61,098, at P 123 ("Moreover, EPA recently
confirmed to the Commission that the tool, which `no longer represents government
policy,' was developed to assist in rulemakings and `was not designed for, and may not
be appropriate for, analysis of project -level decision -making."') (citing EPA's July 26,
2018 Comments in PL 18-1-000).
144 Appalachian Voices, 2019 WL 847199, *2; EarthReports, Inc. v. FERC, 828
F.3d 949, 956 (D.C. Cir. 2016); Sierra Club v. FERC, 672 F. App'x 38, (D.C. Cir. 2016);
see also 350 Montana v. Bernhardt, No. CV 19-12-M-DWM, 2020 WL 1139674, *6 (D.
Mont. March 9, 2020) (upholding the agency's decision to not use the Social Cost of
Carbon because it is too uncertain and indeterminate to be useful); Citizens for a Healthy
Cmty. v. U.S. Bureau of LandMgmt., 377 F. Supp. 3d 1223, 1239-41 (D. Colo. 2019)
(upholding the agency's decision to not use the Social Cost of Carbon); WildEarth
Guardians v. Zinke, 368 F. Supp. 3d 41, 77-79 (D.D.C. 2019) (upholding the agency's
decision to not use the Social Cost of Carbon); High Country Conservation Advocates v.
U.S. Forest Serv., 333 F. Supp. 3d 1107, 1132 (D. Colo. 2018) vacated and remanded on
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65. However, I will address the suggestion that the Social Cost of Carbon can translate
a project's impact on climate change into "concrete and comprehensible terms" that will
help inform agency decision -makers and the public at large.` The Social Cost of
Carbon, described as an estimate of "the monetized damages associated with an
incremental increase in carbon emissions in a given year,"146 may appear straightforward.
On closer inspection, however, the Social Cost of Carbon and its calculated outputs are
not so simple to interpret or evaluate.141 When the Social Cost of Carbon estimates that
one metric ton of CO2 costs $12 (the 2020 cost using a discount rate of 5 percent),141
agency decision -makers and the public have no reasoned basis or benchmark to
determine whether that cost is significant. Bare numbers standing alone simply cannot
ascribe significance.
other grounds 2020 WL 994988 (loth Cir. March 2, 2020) ("[T]he High
Country decision did not mandate that the Agencies apply the social cost of carbon
protocol in their decisions; the court merely found arbitrary the Agencies' failure to do so
without explanation.").
141 Cheyenne Connector Dissent P 13 n.27.
146 Interagency Working Group on the Social Cost of Greenhouse Gases,
Technical Support Document — Technical Update of the Social Cost of Carbon for
Regulatory impact Analysis — Under Executive Order 12866 at 1 (Aug. 2016), hgps://
www.epa.gov/sites/production/files/2016-12/documents/sc_co2 tsd_august _2016.pdf
(2016 Technical Support Document).
147 In fact, the website for the Climate Framework for Uncertainty Negotiation and
Distribution (FUND) — one of the three integrated assessment models that the Social Cost
of Carbon uses — states "[m]odels are often quite useless in unexperienced hands, and
sometimes misleading. No one is smart enough to master in a short period what took
someone else years to develop. Not -understood models are irrelevant, half -understood
models are treacherous, and mis-understood models dangerous." FUND -Climate
Framework for Uncertainty, Negotiation and Distribution, http://www.fund-model.orgz
(LAST VISITED Nov. 18, 2019).
"I See 2016 Technical Support Document at 4. The Social Cost of Carbon
produces wide-ranging dollar values based upon a chosen discount rate, and the
assumptions made. The Interagency Working Group on Social Cost of Greenhouse
Gases estimated in 2016 that the Social Cost of one ton of carbon dioxide for the year
2020 ranged from $12 to $123. Id.
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B. The Commission has no authority or reasoned basis to establish
its own framework
66. Some argue that the lack of externally established targets does not relieve the
Commission from establishing a framework or targets on its own. Some have suggested
that the Commission can make up its own framework, citing the Commission's
framework for determining return on equity (ROE) as an example. However, they
overlook the fact that Congress designated the EPA, not the Commission, with exclusive
authority to determine the amount of emissions that are harmful to the environment. In
addition, there are no available resources or agency expertise upon which the
Commission could reasonably base a framework or target.
67. As I explain above, Congress enacted the Clean Air Act to establish an all -
encompassing regulatory program, supervised by the EPA to deal comprehensively with
interstate air pollution. Section I I I of the Clean Air Act directs the Administrator of the
EPA to identify stationary sources that "in his judgment cause[], or contribute[]
significantly to, air pollution which may reasonably be anticipated to endanger public
health or welfare"lag and to establish standards of performance for the identified
stationary sources."" Thus, the EPA has exclusive authority for determining whether
emissions from pipeline facilities will have a significant effect on the environment.
68. Further, the Commission is not positioned to unilaterally establish a standard for
determining whether GHG emissions will significantly affect the environment when there
is neither federal guidance nor an accepted scientific consensus on these matters.151 This
inability to find an acceptable methodology is not for a lack of trying. The Commission
149 42 U.S.C. § 741l(b)(1)(A) (2018).
150Id. § 7411(b)(1)(13).
111 The Council on Environmental Quality's 2019 Draft Greenhouse Gas Guidance
states, "[a]gencies need not undertake new research or analysis of potential climate
effects and may rely on available information and relevant scientific literature." CEQ,
Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas
Emissions, 84 Fed. Reg. 30,097, 30,098 (June 26, 2019); see also CEQ FINAL GUIDANCE
FOR FEDERAL DEPARTMENTS AND AGENCIES ON CONSIDERATION OF GREENHOUSE GAS
EMISSIONS AND THE EFFECTS OF CLIMATE CHANGE IN NATIONAL ENVIRONMENTAL
POLICY ACT REVIEWS at 22 (Aug. 1, 2016) ("agencies need not undertake new research
or analysis of potential climate change impacts in the proposed action area, but may
instead summarize and incorporate by reference the relevant scientific literature"),
hLtps://ceq.doe.gov/docs/ceq-regulations-and-guidance/nepa final ghg guidance.pdf.
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reviews the climate science, state and national targets, and climate models that could
inform its decision-making.151
69. Moreover, assessing the significance of project effects on climate change is unlike
the Commission's determination of ROE. Establishing ROE has been one of the core
functions of the Commission since its inception under the FPA as the Federal Power
Commission.113 And, setting ROE has been an activity of state public utility
commissions, even before the creation of the Federal Power Commission.lsa The
Commission's methodology is also founded in established economic theory."' In
contrast, assessing the significance of GHG emissions is not one of the Commission's
core missions and there is no suitable methodology for making such determination.
70. It has been argued that the Commission can establish its own methodology for
determining significance, pointing out that the Commission has determined the
significance of effects on soils, groundwater, and wetland resources, using its own
expertise and without generally accepted significance criteria or a standard methodology.
71. I disagree. As an initial matter, it is important to note that when the Commission
states it has no suitable methodology for determining the significance of GHG emissions,
the Commission means that it has no reasoned basis for making such finding. The
Commission's findings regarding significance for soils, groundwater, and wetland
resources have a reasoned basis. For example, for groundwater resources, using
information provided by the U.S. Geological Service, the Commission identified major
groundwater aquifers, water supply wells, and springs crossed by the project."' The
Commission also used information published by the EPA to identify contaminated
"' Fla. Se. Connection, LLC, 162 FERC ¶ 61,233, at P 36; see also WildEarth
Guardians, 738 F.3d 298, 309 (D.C. Cir. 2013) ("Because current science does not allow
for the specificity demanded by the Appellants, the BLM was not required to identify
specific effects on the climate in order to prepare an adequate EIS.").
153 Hope, 320 U.S. 591 (1944); FPC v. Nat. Gas Pipeline Co. ofAmerica, 315 U.S.
575 (1942).
154 See, e.g., Willcox v. Consol. Gas Co., 212 U.S. 19, 41 (1909) (finding New
York State must provide "a fair return upon the reasonable value of the property at the
time it is being used for the public.").
155 Inquiry Regarding the Commission's Policy for Determining Return on Equity,
166 FERC ¶ 61,207 (2019) (describing the Commission's use of the Discounted Cash
Flow model that was originally developed in the 1950s as a method for investors to
estimate the value of securities).
156 Final EIS at 4-27 to 4-33.
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groundwater resources within .25 miles of the Project.157 Based on this information, the
Commission identified a location nearby the Project with an active or unresolved
contamination concern.158 The Commission found that use of proper spill, containment,
and handling procedures in Mountain Valley's Spill, Prevention, Control, and
Countermeasures Plan would minimize the chance of spills and leaks."' Additionally,
the Commission found that temporary and minor impacts could result during trenching
activities in areas with shallow groundwater but Mountain Valley would implement best
management practices to protect groundwater resources and would adhere to applicable
federal, state, and local requirements to protect groundwater resources.160 Based on this
information, the Commission had a reasoned basis to find that the Project would not
result in significant impacts on groundwater resources.161
72. In contrast, the Commission has no reasoned basis to determine whether a project
has a significant effect on climate change. To assess a project's effect on climate change,
the Commission can only quantify the amount of project emissions and compare that
number to national emissions to calculate a percentage of national emissions. That
calculated number cannot inform the Commission on climate change effects caused by
the project, e.g., increase of sea level rise, effect on weather patterns, or effect on ocean
acidification. Nor are there acceptable scientific models that the Commission may use to
attribute every ton of GHG emissions to a physical climate change effect.
73. Without adequate support or a reasoned target, the Commission cannot ascribe
significance to particular amounts of GHG emissions. To do so would not only exceed
our agency's authority, but would risk reversal upon judicial review. Courts require
agencies to "consider[] the relevant factors and articulate[] a rational connection between
the facts found and the choice made."162 Simply put, stating that an amount of GHG
157 Id. at 4-31.
1ss Id.
159 Id
16" Id. at 4-33.
161 Id
162 City of Tacoma v. FERC, 460 F.3d 53, 76 (D.0 Cir. 2006) (quoting Ariz. Cattle
Growers' Ass'n v. FWS, 273 F.3d 1229, 1235-36 (9th Cir. 2001)); see also American
Rivers v. FERC, 895 F.3d 32, 51 (D.C. Cir. 2018) ("... the Commission's NEPA analysis
was woefully light on reliable data and reasoned analysis and heavy on unsubstantiated
inferences and non sequiturs") (italics in original); Found. for N. Am. Wild Sheep v. U.S.
Dep't ofAgr., 681 F.2d 1172, 1179 (9th Cir. 1982) ("The EA provides no foundation for
the inference that a valid comparison may be drawn between the sheep's reaction to
hikers and their reaction to large, noisy ten -wheel ore trucks.").
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emissions appears significant without any support fails to meet the agency's obligations
under the Administrative Procedure Act (APA).
V. Conclusion
74. This concurrence is intended to assist the Commission, courts, and other parties in
their consideration of the Commission's obligations under the NGA and NEPA. The
Commission cannot act ultra vices and claim more authority than the NGA provides it,
regardless of the importance of the issue sought to be addressed.163 The NGA provides
the Commission no authority to deny a certificate application based on the environmental
effects from the upstream production or downstream use of natural gas. Congress
enacted the NGA, and subsequent legislation, to ensure the Commission provided public
access to natural gas. Further, Congress designed the NGA to preserve States' authority
to regulate the physical effects from the upstream production and downstream use of
natural gas, and did not leave that field unregulated. Congress simply did not authorize
the Commission to judge whether the upstream production or downstream use of gas will
be too environmentally harmful.
75. Nor does the Commission have the ability to establish measures to mitigate GHG
emissions. Pursuant to the Clean Air Act, Congress exclusively assigned that authority to
the EPA and the States. Finally, the Commission has no reasoned basis for determining
whether GHG emissions are significant that would satisfy the Commission's APA
obligations and survive judicial review.
76. I recognize that some believe the Commission should do more to address climate
change. The Commission, an energy agency with a limited statutory authority, is not the
appropriate authority to establish a new regulatory regime.
For these reasons, I respectfully concur.
Bernard L. McNamee
Commissioner
163 Office of Consumers' Counsel, 655 F.2d at 1152 ("[A]ppropriate respect for
legislative authority requires regulatory agencies to refrain from the temptation to stretch
their jurisdiction to decide questions of competing public priorities whose resolution
properly lies with Congress.").
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Document Content(s)
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