Responding to increased production and resulting pipeline congestion, Tennessee Gas Pipeline, L.L.C. (Tennessee), a Kinder Morgan subsidiary, proposes to construct what is called the Northeast Upgrade Project, a five-part expansion of its “300 Line” natural gas pipeline between Pennsylvania and New Jersey. If completed on schedule in November 2013, the Northeast Upgrade will provide a significant additional amount of natural gas transmission capacity between the Marcellus shale region and the East Coast. It will be enough gas to feed roughly 2,650 megawatts of continuous electrical generation to the electrical grid.
The Northeast Upgrade Project is an interstate gas pipeline project meeting the jurisdictional criteria of the Natural Gas Act and subject to approval by the Federal Energy Regulatory Commission. FERC must review the environmental impacts of the project under Section 102 of NEPA. NEPA § 102 requires federal agencies to prepare a “detailed statement” of environmental impacts (an Environmental Impact Statement, or EIS) for all “major Federal actions significantly affecting the quality of the human environment.” This, in turn, requires an agency to decide whether the impacts of the action under consideration will be “significant” enough to warrant a full environmental review. Under regulations developed by the Council on Environmental Quality (CEQ), the determination of significance is accomplished through an Environmental Assessment (an EA), and an EIS must be prepared only if significance criteria thresholds are exceeded.
In November 2011, FERC published a 272 page long EA for the Northeast Upgrade Project, concluding that the proposal, as mitigated, would not entail significant environmental effects. As relevant here, the EA did not discuss increased natural gas development as a direct or indirect impact of the proposed project. Rather, it included a discussion of recent and forecast natural gas development in the Marcellus shale as part of its cumulative impacts analysis.
On May 29, 2012, relying on its EA, FERC issued a certificate for public convenience and necessity (CPCN) for the Northeast Upgrade Project. The CPCN Order included a lengthy response to demands from project opponents that FERC should have conducted an EIS on broader Marcellus shale impacts. On June 28, 2012, project opponents Delaware Riverkeeper, New Jersey Highlands Coalition, and the Sierra Club filed a request for rehearing outlining the contours of their disagreement with FERC. In sum, the fight is over whether the EA should have dug deeper into the impacts of increased natural gas development, and, having done so, concluded that those impacts were significant, warranting an EIS.
FERC disagrees, arguing that the data lacks specificity and certainty for purposes of cumulative impact review. For example, FERC states, it cannot determine which wells will actually be developed, and the location of associated infrastructure such as roads. Thus, “the factors necessary for meaningful analysis of when, where, and how Marcellus Shale development will occur are ultimately unknowable and not reasonably foreseeable at this time.” Conclusion
On July 9, 2012, FERC took the unusual step of “granting” the Request for Rehearing, but only to afford additional time for consideration of the request. A successful challenge could have a significant impact on the scope and depth of environmental review of natural gas infrastructure, particularly where hydraulic fracturing is involved. If no challenge is brought or the challengers are not successful, more such projects are likely to follow: Tennessee has already sold out the capacity created by the Northeast Upgrade. (Marten Law, 9/25/2012)