The Federal Energy Regulatory Commission (FERC) has strenuously resisted considering environmental externalities (think pollution and climate change) when they consider the necessity and convenience of new pipelines. On a couple of occasions, the DC Court of Appeals has insisted that they consider externalities, but they have always interpreted the court’s requirements in the narrowest possible way.
The court is getting tired of their refusal to consider the elephant in the room and has put them on notice that they must at least collect the information on externalities so they have the information with which to make a decision, and they must explain why they cannot use the information if they do not consider it.
The court hasn’t gone all the way to requiring all externalities to be considered, but they are moving in that direction. They haven’t required FERC consider the Social Cost of Carbon (SC-CO2) so long as the Commission provides an explanation for why it has elected not to do so. Requiring a full examination of externalities and calculation of SC-CO2 would create a barrier that very few natural gas pipelines could pass, and, if FERC is required to consider externalities, how long before the states who regulate crude oil pipelines would be forced to follow suit?
For a legal analysis of the situation, please download ‘Pipeline Projects – The Evolving Role Of Greenhouse Gas Emissions Analyses Under NEPA.’