On remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), FERC reaffirmed that Rio Grande LNG, LLC’s proposed liquified natural gas (“LNG”) terminal project (“Rio Grande LNG Terminal”) was not inconsistent with the public interest, and that the Rio Bravo Pipeline Company, LLC’s proposed pipeline project (“Rio Bravo Pipeline Project”), as amended, was required by the public convenience and necessity. In doing so, FERC addressed a variety of highly-contested issues, including whether it must apply the social cost of carbon and expand its prior environmental justice analysis. Chairman Phillips concurred, and Commissioner Clements dissented from FERC’s decision.

In 2019, FERC authorized, under section 3 of the Natural Gas Act (“NGA”), the construction and operation of the Rio Grande LNG Terminal, an LNG export facility in Texas (“Authorization Order”). The Authorization Order also issued a certificate of public convenience and necessity under section 7 of the NGA for the Rio Bravo Pipeline Project, a new interstate natural gas pipeline system that will provide natural gas to the Rio Grande LNG Terminal. In the Authorization Order, FERC determined, among other things, that based on the findings in the final Environmental Impact Statement (“EIS”), FERC could not determine the impacts of the Rio Grande LNG Terminal or the Rio Bravo Pipeline Project (together, the “Projects”) on the environment caused by greenhouse gas (“GHG”) emissions, nor could it determine the significance of the Projects’ contribution to climate change. FERC also found that neither the construction nor operation of the Projects would result in disproportionately high or adverse environmental and human health impacts on environmental justice communities.

Certain intervenors sought rehearing of the Authorization Order, raising various concerns regarding environmental justice impacts, GHG emissions, and FERC’s public interest determination. FERC denied rehearing and intervenors subsequently petitioned for review of the Authorization Order and rehearing orders in the D.C. Circuit. On appeal, the D.C. Circuit remanded the Authorization Order and the rehearing orders approving the Projects, holding that FERC’s analyses of the Projects’ impacts on climate change and environmental justice communities were deficient and that FERC must revisit its determinations of public interest and convenience under sections 3 and 7 of the NGA. Specifically, the D.C. Circuit directed FERC to (1) explain whether it is required to apply the social cost of carbon protocol; (2) explain why it chose to analyze the Projects’ impacts only on environmental justice communities within two miles from each Project site; and (3) to revisit its public interest determination under sections 3 and 7 of the NGA.

On remand, FERC concluded that because the social cost of GHGs is an administrative tool that was not developed for project-level review and does not enable FERC to credibly determine whether the GHG emissions are significant, FERC is not required to use it in this proceeding. FERC explained that calculating the social cost of GHGs does not enable it to credibly determine whether the reasonably foreseeable GHG emissions associated with a project are significant or not in terms of their impact on global climate change. FERC stated that because there are no criteria to identify what monetized values are significant and because it is not aware of any other currently scientifically accepted method that would enable FERC to determine the significance of reasonably foreseeable GHG emissions, FERC is unable to characterize the Projects’ emissions as significant or insignificant and is therefore only including them for informational purposes.

Additionally, on the issue of environmental justice, FERC conducted a new environmental justice analysis using a radius of 50 kilometers. FERC concluded that the impacts on environmental justice populations from the Projects would be disproportionately high and adverse because they would be predominately borne by the environmental justice communities identified and, specifically, communities in the areas near the Rio Grande LNG Terminal may experience significant cumulative visual impacts; however, all other impacts (e.g., wetlands, surface water, traffic) would be less than significant for the Projects. Accordingly, FERC continued to find that the Projects are environmentally acceptable actions, that the Rio Grande LNG Terminal is in the public interest, and that the Rio Bravo Pipeline Project is required by the public convenience and necessity.

In his concurring opinion, Chairman Phillips commented on how the order took an unprecedented and bipartisan approach to protect environmental justice communities from potential concerns about the Projects’ effects on air quality. Chairman Phillips also commented on FERC’s decision requiring that a plan be filed to ensure that overlapping construction and operation of the Projects will not cause any exceedance of National Ambient Air Quality Standards, which it required on its own initiative for the first time.

Commissioner Clements dissented, arguing that (1) FERC was required to prepare a supplemental EIS and its failure to do so renders the order’s significance determinations unsupportable; (2) FERC should have granted requests to hold public meetings addressing its new analyses of environmental and other impacts; and (3) the order’s explanation for why FERC is not determining the significance of GHG emissions associated with the projects was insufficient.

A copy of the order can be found here.