On December 6, 2017, FERC denied requests for rehearing of its prior order (“February Order”) authorizing Transcontinental Gas Pipe Line Company (“Transco”) to build and operate its Atlantic Sunrise Project.  A variety of protestors raised several claims in their requests for rehearing, including that the assessment of the public purpose and need of the project was incorrect and that the analysis regarding the project’s effect on climate change was inadequate.  FERC rejected all challenges to its February Order for several reasons, concluding that the claims were meritless.

FERC originally authorized Transco to construct and operate the Atlantic Sunrise Pipeline on February 3, 2017.  As described in the February Order, the project will include 200 miles of new interstate pipeline, the bulk of which will be built in Pennsylvania.  The project is designed to add approximately 1.7 million dekatherms per day of pipeline capacity to Transco’s existing pipeline system for delivery to Mid-Atlantic and southeastern states.

On rehearing at FERC, various protestors argued that FERC was wrong in its conclusion that the pipeline would serve a “public purpose” or “public use” for purposes of exercising eminent domain.  With regard to public purpose, FERC explained that the Supreme Court has broadly defined “public purpose” and that Congress had already found that “the business of transporting and selling natural gas for ultimate distribution to the public” was sufficient.  Furthermore, FERC stated that, consistent with well-established precedent, because Transco had secured long-term contracts from shippers on the project, there was significant evidence of public need for the pipeline project.  FERC also determined that with regard to public use there was no need to determine whether the project would be “used” for the public because the Commission already addressed that issue and found that there was a need for the project.  Instead, FERC stated that “finding [a public purpose] is equivalent to a public use determination.”

FERC also addressed arguments claiming that because most of the natural gas to be transported by the pipeline would be ultimately exported, rather than distributed to the public, Transco could not exercise eminent domain authority.  FERC countered that it could not give Transco eminent domain authority; it only determines if a proposed pipeline is in the public convenience and necessity and confers a Natural Gas Act (“NGA”) section 7(c) certificate.  FERC stated that the NGA itself grants Transco the right to use eminent domain once FERC issues its certificate, adding that no additional “public use” test under section 7 of the NGA is necessary.

FERC also addressed several claims regarding the environmental assessment of the project, including arguments that FERC failed to fully address the project’s downstream impacts on greenhouse gas (“GHG”) emissions and climate change.  Specifically, some protestors claimed that FERC did not quantify the GHG emissions that might be reduced by the project offsetting other fuels currently being used.  In response, FERC noted that it already provided the upper limit of the project’s potential GHG emissions, and compared those figures to the 16 states that the project could serve, as well as national GHG inventory totals.  According to FERC, attempting to estimate GHG emission offsets as a result of the project would be too uncertain and therefore dismissed the claims requesting otherwise.

FERC’s December 6 Order can be found here.