On August 22, 2014, FERC authorized construction, operation and abandonment under a blanket certificate for Columbia Gas Transmission, LLC’s (“Columbia Gas”) proposed Line 1655 North Project in Cumberland County, Pennsylvania.  FERC rejected arguments that its Environmental Assessment (“EA”) of the project improperly segmented the project and failed to consider the cumulative impacts of projects regarding Columbia Gas’ Modernization Program.  In doing so, FERC distinguished the facts and circumstances surrounding the Line 1655 North Project from a recent U.S. Court of Appeals for the District of Columbia decision that held that FERC had violated the National Environmental Policy Act for segmenting Tennessee Gas Pipeline Company, L.L.C. projects in its respective EA and failed to provide a meaningful analysis of the cumulative impacts of four interconnected upgrade projects on one mainline (see June 10, 2014 edition of the WER).

With regard to the Line 1655 North Project, in 2013 FERC approved a settlement creating a capital cost recovery mechanism for Columbia Gas’ Modernization Program (“Settlement”) – a program to upgrade aging portions of Columbia Gas’ pipeline system for reliability and safety purposes.  Within that settlement, Columbia Gas identified its Line 1655 North Project as an eligible facility for upgrades.  On March 6, 2014, Columbia Gas filed a prior notice request to abandon a portion of its Line 1655 North pipeline and construct replacement lines and facilities.  Eventually, Allegheny Defense Project (“Allegheny”) filed a protest to Columbia Gas’ request.  While such prior notice requests are often automatically authorized, timely-filed protests to the proposed activity that are not later withdrawn require case-specific authorization under section 7 of the Natural Gas Act.  Accordingly, FERC prepared an EA in response to the protest.  After the EA was issued, Allegheny submitted comments that the Line 1655 North Project was impermissibly segmented from other projects in Columbia Gas’ Modernization Program, and that FERC failed to consider the cumulative impacts of the project.

In rejecting Allegheny’s comments filed on the EA, FERC held that it never approved the Modernization Program or any specific pipeline projects under the Settlement, only the capital cost recovery mechanism.  Furthermore, FERC determined that the projects in the Modernization Program were not “connected” because they did not trigger other actions that required environmental impact statements, were not dependent on other actions, and were not interdependent parts of a larger project or dependent on the larger project for their justification.  FERC reasoned that the projects in the Modernization Program shared no common purpose, other than being upgrades for safety and reliability, because they are separated by both geography and time.  FERC noted that these projects span six states, are on different mainlines, might be implemented over 10 to 15 years, and may be removed or substituted from the Modernization Program.  Moreover, FERC noted that a cumulative impact statement is not required when projects are only contemplated, which FERC stated was the case herein.

In addition to rejecting the improper segmentation argument, FERC rejected the claim that it must address the cumulative impacts of all regional shale gas drilling and the entire list of Modernization Program projects.  FERC noted that to address the regional cumulative impacts of Marcellus Shale development and all potential Modernization Program projects would result in speculation, an approach the courts have previously rejected.  FERC stated this would result in speculation because the activities associated with Marcellus Shale development are widespread and uncertain with regard to scope and design.  Furthermore, FERC noted that the projects associated with the Modernization Program are also speculative because they are only being considered at this point in time, may never come to fruition, and are subject to change in time, scope and location. 

A copy of the order is available here.