April 18, 2018
Via electronic mail
Chairman Kevin McIntyre
Commissioners Cheryl LaFleur, Neil Chatterjee, Robert Powelson, and Richard Glick
Federal Energy Regulatory Commission
888 First Street, NE
Washington, DC 20426
RE: FERC Review of the 1999 Natural Gas Policy Statement
Dear Chairman McIntyre and Commissioners LaFleur, Chatterjee, Powelson, and Glick,
We applaud the Commission’s decision to revisit the 1999 Natural Gas Policy Statement.1 While the Policy
Statement is meant to “strike the proper balance between the enhancement of competitive alternatives and
the possibility of over building,”2 FERC’s approach to reviewing pipeline applications is stale. Given the
vast changes between today’s energy landscape and that of 1999, FERC’s approach incentivizes—rather
than limits—overbuilding and poses significant economic and environmental risks. As such, we urge the
Commission to reform its pipeline review process to ensure that—above all else—the public interest
is protected, which is consistent with FERC’s mandate under the Natural Gas Act.
Times Have Changed
Gas production and pipeline construction have increased dramatically since 1999. Between 1999 and 2016,
FERC approved over 400 pipeline projects totaling 180 billion cubic feet per day (Bcf/d) in natural gas
capacity (rejecting only two).3 For the first time since 1957, the United States is a net exporter of natural
gas.4 These changes raise concerns about the impacts of gas production, development, and transportation
on climate and on the health, safety, and property rights of communities where pipelines are built.5 Further,
gains in clean, renewable energy, and energy efficiency6 have raised questions about the need for new
pipelines, particularly given current pipeline underutilization.7
Despite these dramatic changes, FERC still evaluates interstate natural gas pipeline certificate applications
the same way as it did in 1999.8 As noted by former U.S. Department of Energy Assistant Secretary for
Policy and former Massachusetts Department of Public Utilities Commissioner Susan Tierney, Ph.D., the
“changes that have occurred in the nearly two decades since FERC’s 1999 Policy Statement warrant a fresh
look at whether the guidance adopted at that time and applied in certification dockets since then still remains
appropriate[.]”9
We agree. It’s time for a 21st century approach. Accordingly, we write to voice our support for the
following modernizations to the Commission’s pipeline review process.
21st Century Approach to Pipeline Review
Evaluate project need as the threshold question. The Natural Gas Act requires FERC to determine whether
a pipeline project is in the public interest.10 To answer this inquiry, the Policy Statement directs FERC to
first determine whether the proposed pipeline can be paid for without subsidization by existing customers,
followed by an evaluation of the project’s economic interests.11 But the key determinant in deciding whether
a project is in the public interest is whether the project is needed to support energy demands. A project that
is not needed to satisfy energy requirements that also will cause permanent environmental and economic
impacts is antithetical to the public interest. Thus, project need should be the threshold determination
for whether a project is in the public interest.

 Determine project need through an “all relevant factors” approach. The Policy Statement wisely outlines
sample—but not exclusive—factors to be considered when determining whether a project is needed.12
However, in practice, FERC typically relies exclusively on precedent agreements—contracts between
pipeline developers and prospective shippers—to determine project need.13 In addition to contradicting the
language and intent of the Policy Statement, FERC’s reliance on precedent agreements fails to consider that
(1) precedent agreements are not necessarily a good proxy for market need, (2) environmental and/or other
factors may override private contractual interests in determining public need,14 and (3) there may be
alternatives to the proposed capacity to meet the purported demand, such as using underutilized existing
pipeline capacity or alternative, cleaner energy resources. Further, a true “all relevant factors” approach
enables FERC to balance other factors against precedent agreements to determine whether the pipeline is,
in the aggregate, in the public interest. We recommend FERC requiring adherence to the Policy
Statement’s “all relevant factors” approach to determining public need. This ensures that the
Commission makes a reasoned public interest determination based on all pertinent information.
Perform deeper review when proposed projects depend on pipeline affiliate agreements. As noted above,
the Commission’s near exclusive reliance on precedent agreements to demonstrate pipeline need is
problematic, but when these agreements are between pipeline affiliates—which is increasingly the case—
an even more troubling situation arises. Because the pipeline developer essentially is contracting with itself,
the actual market need for the pipeline is questionable at best. Further, when the affiliate shipper is a
monopoly utility, customers end up paying for the pipeline via higher utility bills, despite the Commission
never truly determining whether the project is needed. Simultaneously, the utility will reap lucrative profits
through FERC-approved rates of return. The mismatch between the 40-50-year lifespan of pipeline assets15
with the declining prospect of their long-term usefulness cannot be ignored.16 Thus, as part of an “all
relevant factors” approach, FERC must conduct a deeper review of market need when affiliate
precedent agreements are the pipeline developer’s purported evidence of project need.
Conduct a regionally-focused assessment. The rapid expansion of natural gas production has led pipeline
developers to propose competing projects to satisfy identical market demands. While the Policy Statement
was intended to protect against overbuilding, too often, FERC reviews natural gas pipeline applications in
a bubble, creating the risk of wasteful duplication and infrastructure that is out-of-step with the region’s
needs. Considering each pipeline proposal in isolation also prevents the Commission from understanding
how similar proposals cumulatively affect climate change, natural resources, and consumer prices. An
integrated, more comprehensive review would assess the need for new pipelines based on the energy needs
of the region(s) directly affected by the project. Such an assessment would examine factors such as existing
and proposed pipeline capacity, long-term energy needs, and state policies. FERC also could address the
need for a more regionally-focused review by incorporating some degree of regional planning into FERC’s
analysis. FERC already has a model to draw from, as the electric sector has incorporated regional planning
through the regional transmission organizations (RTOs) and other planning constructs in areas without
RTOs. We recommend FERC’s adoption of a regionally-focused review.
Fully evaluate climate pollution and other environmental impacts. FERC’s current approach discounts
the quantitative and qualitative relevance of downstream environmental impacts. Last year, the D.C. Circuit
vacated a FERC certificate due to FERC failing to quantify and consider downstream indirect greenhouse
gas effects.17 Fortunately, scientifically tested tools (such as the Social Cost of Carbon and the Social Cost
of Methane) exist today that allow the Commission to monetize environmental impacts and neatly
incorporate them into a public interest analysis. Further, as climate change “is the single most significant
threat to humanity, fundamentally threatening our environment, economy, national security and human
health,” it is “difficult to understand how” FERC can satisfy its “hard look” requirements under the National
Environmental Policy Act (NEPA) 18 without using every available tool to consider all direct, indirect, and
cumulative environmental impacts, including downstream effects. FERC must consider these
environmental impacts in its “all relevant factors” and NEPA reviews.

2

 Ensure meaningful opportunities for public participation. Given that FERC is responsible for determining
whether a project is in the public interest, it is critical to ensure that every stakeholder—regardless of
resources—has the tools to fully participate in FERC proceedings. The Commission has recognized the
importance of maintaining public confidence in FERC.19 Public confidence could be strengthened by
holding hearings when there are disputed issues of material fact and through the creation and funding of a
FERC Office of Public Participation.20 Ensuring meaningful public participation also includes developing
deliberate, concrete methods to (1) incorporate the voices of environmental justice communities as required
by Executive Order 12,898,21 and (2) consult and collaborate with all tribal communities.22 FERC should
adopt these and other ways to ensure public participation in pipeline certificate application reviews.
Conclusion
We again applaud the Commission for deciding to initiate this important review. We look forward to a
robust process that gives careful, thorough consideration to the critical issues presented by the
Commission’s review of proposed pipelines and provides sufficient time and meaningful opportunity for
all stakeholders to present their views. We also welcome any opportunity to meet with you and Commission
staff to discuss these proposals. Thank you for your attention to this matter.
Sincerely,
Montina M. Cole
Senior Attorney
Natural Resources Defense Council

Kelly Martin
Director, Beyond Dirty Fuels Campaign
Sierra Club

Moneen Nasmith
Staff Attorney
Earthjustice

Rev. Fletcher Harper
Executive Director
GreenFaith

Gregory Buppert
Senior Attorney
Southern Environmental Law Center

David Ismay
Senior Attorney
Conservation Law Foundation

Tyson Slocum
Director, Energy Program
Public Citizen

Wes Gillingham
Associate Director
Catskill Mountainkeeper

Alison Mitchell
Director of Policy
New Jersey Conservation Foundation

Michael Dulong
Senior Staff Attorney
Riverkeeper, Inc.

Amy Boyd
Senior Attorney
Acadia Center
                                                            
1

News Release, FERC, FERC to Review its 1999 Pipeline Policy Statement (Dec. 21, 2017),
https://www.ferc.gov/media/news-releases/2017/2017-4/12-21-17.asp#.WsY1WojwaUk.
2
Notice of Proposed Rulemaking, Regulation of Short-Term Natural Gas Trans. Servs., at 161 (July 29, 1998),
FERC Docket No. RM98-10-000.

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3

Susan Tierney, Natural Gas Pipeline Certification: Policy Considerations for a Changing Industry, ANALYSIS
GROUP (Nov. 6, 2017), at 12. In fact, while coal historically has been the dominant electricity source, in 2016,
natural gas took over. Natural gas expected to surpass coal in mix of fuel used for U.S. power generation in 2016,
EIA (Mar. 16, 2016) https://www.eia.gov/todayinenergy/detail.php?id=25392.
4
Naureen S. Malik, U.S. Becomes a Net Gas Exporter for the First Time in 60 Years, BLOOMBERG (Jan. 11, 2018),
https://www.bloomberg.com/news/articles/2018-01-10/u-s-became-a-net-gas-exporter-for-the-first-time-in-60-years.
5
See, e.g., Janet Currie, Michael Greenstone, & Katherine Meckel, Hydraulic fracturing and infant health: New
evidence from Pennsylvania, SCIENCE ADVANCES (Dec. 13, 2017),
http://advances.sciencemag.org/content/3/12/e1603021.full (concluding that fracking reduces the health of infants
born to mothers who live within 3 km of a well-site during pregnancy).
6
See, e.g., Tierney, supra note 3, at 27-28 (noting the expansion of renewable generation since 1999). The U.S.
Energy Information Association (EIA) projects that, by 2019, wind- and solar-powered generation will increase by
81,000 and 83,000 megawatt hours per day (MWh/d), respectively. Short-Term Energy Outlook, EIA (Mar. 6,
2018), https://www.eia.gov/outlooks/steo/.
7
Natural Gas Infrastructure Implications of Increased Demand from the Electric Power Sector, DOE (Feb. 2015),
at vi (“Higher utilization of existing interstate natural gas pipeline infrastructure will reduce the need for new
pipelines.”)
8
Statement of Policy, Certificate of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999).
9
Tierney, supra note 3, at 36.
10
15 U.S.C. § 717f (2012).
11
Statement of Policy, supra note 8, at 18-19, 23.
12
Statement of Policy, supra note 8, at 23.
13
E.g., National Fuel Gas Supply Corp., 158 FERC ¶ 61,145, at 3 (2017) (Commissioner Bay, separate statement);
Emily Pitlick Mallen & Katy Lukaszewski, Pipeline Outlook: How FERC Reliance on Precedent Agreements Could
Change, TEXAS LAWYER (Mar. 1, 2018), https://www.law.com/texaslawyer/2018/03/01/pipeline-outlook-how-fercreliance-on-precedent-agreements-could-change/.
14
For example, the environmental consequences of new natural gas infrastructure—both in the ground and in the
atmosphere—far surpass the expiration of initial shipper contracts. Compare, e.g., Tennessee Gas Pipeline Co.,
L.L.C., 157 FERC ¶ 61,208, at P 4 (2016) (noting that the precedent agreements upon which FERC evaluated need
were for 20-year initial terms) with The Interstate Natural Gas Transmission System: Scale, Physical Complexity
and Business Model, INGAA (Jan. 1, 2010), at 1 (“Given the dedication to routine and robust maintenance, it is not
unusual for pipelines and equipment installed 50 or more years ago to still be in operation.”).
15
See Interstate Natural Gas Transmission System, supra note 14, at 1.
16
See Tierney, supra note 3, at 29 (noting that “the increasing penetration of large-scale renewable projects, smallscale non-fossil distributed energy resources, operational controls on the system, and flat demand … may have the
effect of dampening, offsetting, and/or significantly altering the shape of the demand for natural gas in the years
ahead.”).
17
Sierra Club v. FERC, 867 F.3d 1357, 1374-75 (D.C. Cir. 2017).
18
Florida Southeast Connection, LLC, 162 FERC ¶ 61,233, at 2-3 (2018) (Commissioner Glick, dissenting); see,
e.g., Town of Orangetown v. Gorsuch, 718 F.2d 29, 35 (2d Cir. 1983), cert. denied, 465 U.S. 1099 (1984) (outlining
the “hard look” standard under NEPA).
19
See Commissioners LaFleur & Glick’s comments in DTE Midstream Appalachia, LLC, 162 FERC ¶ 61,238, at 2
(2018) (Commissioners LaFleur & Glick, dissenting). See also Robert Walton, New FERC chair wants to make
agency more transparent, UTILITYDIVE (Dec. 21, 2017), https://www.utilitydive.com/news/new-ferc-chair-wantsto-make-agency-more-transparent/513605/.
20
See generally Petition to Initiate a Rulemaking to Establish The Office of Public Participation As Established By
Congress And To Fund Its Work (Mar. 7, 2016), FERC Docket No. RM16-9-000; see also Marie Cusick, Groups
ask FERC for public participation office, STATEIMPACT (Mar. 16, 2016, 4:00 p.m.),
https://stateimpact.npr.org/pennsylvania/2016/03/16/groups-ask-ferc-for-public-participation-office/.
21
Exec. Order 12,898, Fed. Actions to Address Envtl. Justice in Minority Populations and Low-Income Populations,
59 Fed. Reg. 32 (Feb. 16, 1994).
22
See, e.g., Guide on Consultation and Collaboration with Indian Tribal Governments and the Public Participation
of Indigenous Groups and Tribal Members in Envtl. Decision Making, NAT’L ENVTL. JUSTICE ADVISORY COUNCIL,
INDIGENOUS PEOPLE’S SUBCOMMITTEE (Nov. 2000), https://www.epa.gov/sites/production/files/201503/documents/ips-consultation-guide_0.pdf.

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