equipment, work practice, or operational standard, such as add-on
control equipment, fuel cleaning or treatment, or innovative fuel
combustion techniques. Note that BACT for minimizing GHG emissions
at natural gas facilities is limited.
---------------------------------------------------------------------------

    91. Under Step 2, EPA expanded the Tailoring Rule by requiring a
new source or a major modification to an existing source to obtain PSD
and/or Title V permits based on GHG emissions alone. Sources that had
the potential to emit at least 100,000 tons per year of CO2e
would become newly subject to the PSD and/or Title V requirements, even
if they did not exceed the statutory threshold for any other pollutant.
Additionally, modifications to an existing source already subject to
PSD and/or Title V that increased net GHG emissions by at least 75,000
tons per year of CO2e would be subject to PSD requirements
regardless of whether there was an increase in the emissions of any
other pollutant.\220\
---------------------------------------------------------------------------

    \220\ EPA also planned a Step 3 to further reduce the threshold,
although not below 50,000 tons per year of CO2e. The
Supreme Court struck down relevant portions of the Tailoring Rule
before EPA finalized Step 3.
---------------------------------------------------------------------------

    92. In setting the 75,000 tons and 100,000 tons per year of GHGs
thresholds, EPA considered the administrative burden of permitting the
estimated number of additional facilities under each threshold and the
percentage of total national stationary source GHG emissions that would
be covered under the threshold.\221\ For example, under Step 1, EPA
estimated a 5% increase in the total annual cost to run the permitting
programs and that approximately 65% of GHG emissions would be covered.
Under Step 2, EPA estimated that approximately 550 new sources would
become subject to the PSD and Title V programs, increasing total annual
costs to run the programs by 42% and covering 67% of GHG emissions. EPA
further found that lowering the threshold to 50,000 or 25,000 tons per
year of CO2e would drastically increase both the number of
new facilities requiring permits and the cost of administering the
programs but would only marginally increase the percentage of GHG
emissions covered to 70% and 75%, respectively.
---------------------------------------------------------------------------

    \221\ Tailoring Rule, 75 FR at 31533-80.
---------------------------------------------------------------------------

    93. In 2014, the Supreme Court invalidated portions of the
Tailoring Rule, holding that EPA may not use GHG emissions as the sole
basis for determining whether a source is subject to a PSD or Title V
permitting requirements.\222\ While the Supreme Court's ruling struck
down Step 2 of the Tailoring Rule, it upheld Step 1 and allowed EPA to
continue to regulate GHG emissions from ``anyway'' sources. Notably,
the decision did not discuss EPA's methodology for establishing the
thresholds; it only ruled that deviating from the 100 and 250 tons per
year statutory thresholds in the Clean Air Act when requiring sources
to newly obtain PSD or Title V permits based solely on GHG emissions
under Step 2 was impermissible.
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    \222\ Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 320 (2014).
---------------------------------------------------------------------------

    94. Further, at least two agencies in California that are directed
to determine the significance of GHG emissions and climate impacts of
proposed projects under the California Environmental Quality Act have
also proposed or established thresholds of significance based on an
analysis of regulated sources. First, in 2008, the California Air
Resources Board (California ARB) proposed finding a less than
significant impact for a proposed industrial project that, with
mitigation, emits no more than 7,000 metric tons per year of
CO2e from non-transportation sources, including combustion
and fugitive emissions.\223\ Second, the South Coast Air Quality
Management District (South Coast AQMD) adopted an interim GHG
significance threshold of 10,000 metric tons of CO2e per
year for stationary

sources of air pollution in 2008.\224\ Both California ARB and South
Coast AQMD found that their thresholds would capture approximately 90%
of emissions from their respective regulated sources.\225\
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    \223\ California ARB, Preliminary Draft Staff Proposal,
Recommended Approaches for Setting Interim Thresholds for Greenhouse
Gases under the California Environmental Quality Act (Oct. 24, 2008)
(CEQA Proposed Interim Thresholds). In addition, California ARB
proposed to require these projects to meet performance standards for
construction-related emissions and transportation to support a
finding of less than significant impacts. CEQA Proposed Interim
Thresholds at attach. A.
    \224\ South Coast AQMD, Interim CEQA GHG Significance Threshold
for Stationary Sources, Rules and Plans (Dec. 5, 2008), http://www.aqmd.gov/docs/default-source/ceqa/handbook/greenhouse-gases-
(ghg)-ceqa-significance-thresholds/ghgboardsynopsis.pdf?sfvrsn=2.
    \225\ Id. at 4; CEQA Proposed Interim Thresholds at attach. A.
---------------------------------------------------------------------------

    95. Like EPA and the California agencies, we are basing our
threshold on an analysis of regulated sources. Although we are adopting
a conceptually similar methodology in establishing our threshold, we
note that our approach will cover a larger number of emissions than the
threshold established by EPA in the Tailoring Rule. EPA's thresholds of
75,000 and 100,000 tons per year accounted for only 65% and 67% of
emissions from EPA-regulated sources, respectively, whereas our
proposed threshold of 100,000 metric tons per year would deem nearly
three-quarters of Commission-regulated natural gas project, which
collectively account for roughly 99% of GHG emissions from Commission-
regulated natural gas projects, to have a significant impact on climate
change.
3. Other Metrics
    96. As noted above, commenters argue for and against the use of
various existing GHG inventories or goals as a comparison tool to
determine significance. Comparison to an existing GHG inventory or goal
presents substantially different percentages based on the chosen goal
(international, state, regional, or local). Because different projects
may have different potential purposes and the purpose of a project may
be characterized to support or oppose a particular viewpoint, we do not
believe that tying the Commission's significance determination for a
proposed project's GHG emissions to a particular inventory or goal is
appropriate. However, we recognize that this type of comparison can be
helpful to inform the Commission's analysis and the public, especially
when presented using a consistent metric across proposed projects under
consideration by the Commission. We note that many commenters reference
the SC-GHG as one tool. To the extent permitted by law,\226\ the
Commission could consider the SC-GHG in the future.
---------------------------------------------------------------------------

    \226\ Currently, two pending court cases challenge use of the
IWG's interim values by federal agencies. Mo. v. Biden, ---- F.
Supp. 3d ----, 2021 WL 3885590 (E.D. Mo. Aug. 31, 2021), appeal
filed, No. 21-3013 (8th Cir.); La. v. Biden, No. 21-cv-1074-JDC-KK
(W.D. La).
---------------------------------------------------------------------------

C. Mitigation

    97. Federal agencies can use mitigation to minimize the potential
adverse environmental effects of their actions,\227\ and mitigation is
used by the Commission in reviewing NGA sections 3 and 7
proposals.\228\
---------------------------------------------------------------------------

    \227\ Mitigation is measures that avoid, minimize, or
counterbalance effects caused by a proposed action by: (1) Avoiding
the impact altogether by not taking a certain action or parts of an
action; (2) minimizing impacts by limiting the degree or magnitude
of the action and its implementation; (3) rectifying the impact by
repairing, rehabilitating, or restoring the affected environment;
(4) reducing or eliminating the impact over time by preservation and
maintenance operations during the life of the action; and/or (5)
compensating for the impact by replacing or providing substitute
resources or environments. 40 CFR 1508.1.
    \228\ As discussed supra P 26, NEPA contains no substantive
requirement that environmental impacts be mitigated or avoided,
however, the environmental document must include a mitigation
discussion that provides ``sufficient detail'' to indicate that
environmental impacts have been fairly evaluated. S. Fork Band
Couns. of W. Shoshone of Nev. v. U.S. Dep't of Interior, 588 F.3d
718, 727 (9th Cir. 2009); see also Nat'l Parks & Conservation Ass'n
v. U.S. Dep't of Transp., 222 F.3d 677, 681 n.5 (9th Cir. 2000)
(stating that mitigation measures proposed in an EIS ``need not be
legally enforceable, funded, or even in final form to comply with
NEPA's procedural requirements'').
---------------------------------------------------------------------------

    98. The NGA grants the Commission broad authority to attach
reasonable terms and conditions to NGA section 7 certificates of public
convenience and necessity and NGA section 3 authorizations.\229\ The
Commission has consistently exercised this authority to attach
environmental conditions that mitigate the adverse environmental
impacts of a proposed project, and the Commission is not precluded from
utilizing this authority to require a project sponsor to mitigate all,
or a portion of, the impacts related to a proposed project's GHG
emissions. Therefore, consistent with the discussion provided herein,
going forward project proponents are encouraged to propose mitigation
that will minimize climate impacts. The Commission will consider any
mitigation measures proposed by the project sponsor on a case-by-case
basis when balancing the need for a project against its adverse
environmental impacts and may require additional mitigation as a
condition of an NGA section 3 authorization or section 7 certificate.
---------------------------------------------------------------------------

    \229\ See supra P 22; see also 15 U.S.C. 717b(e)(3)(A)
(providing the authority to approve an application for an LNG
Terminal, ``in whole or part, with such modifications and upon such
terms and conditions as the Commission find[s] necessary or
appropriate'').
---------------------------------------------------------------------------

1. Technical Conference on GHG Mitigation
    99. On November 19, 2021, the Commission held a Commission staff-
led technical conference to discuss methods project sponsors may use to
mitigate the effects of direct and indirect greenhouse gas emissions
resulting from Natural Gas Act sections 3 and 7 authorizations.\230\
Representatives from industry, academia, non-governmental
organizations, and state regulatory commissions participated as
panelists, with discussion topics including: How the Commission could
determine the quantity of reasonably foreseeable GHG emissions
resulting from a project proposed under section 3 or 7 of the NGA and
the appropriate level of mitigation for such emissions; types of
mitigation measures a project sponsor could employ to reduce the amount
of GHG emissions associated with a proposed project; and methods for
the continued verification and accounting of GHG mitigation during
project operation, as well as cost impacts to the industry from
implementing GHG mitigation measures and how project sponsors might
recover those costs.
---------------------------------------------------------------------------

    \230\ See Transcript of Greenhouse Gas Mitigation: Natural Gas
Act Sections 3 and 7 Authorizations, Docket No. PL21-3-000 (issued
Dec. 22, 2021) (Technical Conference Transcript).
---------------------------------------------------------------------------

    100. In addition to the panelists' written statements, the
Commission received over 20 comments in response to the technical
conference. The Commission considered these statements and comments in
developing the mitigation policy described below.
2. Authority To Require Mitigation
    101. Some commenters state that the Commission has broad authority
under the NGA to place conditions in certificate authorizations
requiring pipeline companies to mitigate GHG impacts,\231\ while others
argue that the Commission does not have authority under the NGA or NEPA
to impose mitigation measures,\232\ especially

measures to mitigate upstream or downstream GHG emissions.\233\
Specifically, commenters argue that the Commission's authority under
NGA section 7(e) to place conditions on a certificate is limited by the
statutory purpose to regulate interstate transportation to ensure
reliable access to plentiful natural gas at reasonable prices.\234\
Commenters further assert that the Commission has no authority to
establish environmental policy and that the Commission cannot use its
conditioning authority to indirectly mitigate an effect that it has no
authority to directly mitigate.\235\
---------------------------------------------------------------------------

    \231\ See, e.g., Policy Integrity Technical Conference Comments
at 2; Policy Integrity 2021 Comments at 14-15, 21; Public Interest
Organizations 2021 Comments at 71-72; see also American Forest
Technical Conference Comments at 4-5, 7-10 (stating that to the
extent the courts have clarified the Commission's duty to consider
GHG emissions and require mitigation for such impacts, that it
supports the Commission considering mitigation on a case-by-case
basis to avoid the uncertainty posed by the threat of litigation and
the possibility of a court vacating the project's certificate).
    \232\ See, e.g., Boardwalk Technical Conference Comments at 7;
Dr. Jason Scott Johnston Technical Conference Comments at 1; TC
Energy Technical Conference Comments at 4; API 2021 Comments at 29-
30; see also Williams Technical Conference Comments at 17 (claiming
that there is no reasonable basis for the Commission to require
project sponsors to submit mitigation proposals with their
applications because the technical conference demonstrated a lack of
evidentiary support for any specific mitigation methods, offered no
specific proposals regarding the levels of fees, offsets, or caps,
and proposed no concrete and cost-effective means to mitigate
emissions).
    \233\ API Technical Conference Comments at 5; Boardwalk
Technical Conference Comments at 10; Consolidated Edison Company of
New York, Inc. and Orange and Rockland Utilities, Inc.
(collectively, Con Edison) Technical Conference Comments at 5; Hon.
Joseph T. Kelliher Technical Conference Comments at 1; INGAA
Technical Conference Comments at 6-7; TC Energy Technical Conference
Comments at 8; API 2021 Comments at 31; INGAA 2021 Comments at 74-
83; TC Energy 2021 Comments at 56-58.
    \234\ See, e.g., Hon. Joseph T. Kelliher Technical Conference
Comments at 1 (citing NAACP v. FPC, 425 U.S. 662, 669-70 (1976));
id. at 8-9 (asserting that the proper place to consider GHG
emissions (direct only) is under the Commission's balancing test,
where a project sponsor may choose to voluntarily offset emissions);
TC Energy Technical Conference Comments at 8; INGAA 2021 Comments at
74-76.
    \235\ See, e.g., Boardwalk Technical Conference Comments at 11-
13 (arguing that Transco does not authorize the Commission to
indirectly regulate upstream and downstream emissions); Enbridge
Technical Conference Comments at 5, 16, 21; Hon. Joseph T. Kelliher
Technical Conference Comments at 4; INGAA 2021 Comments at 76-77.
---------------------------------------------------------------------------

    102. Commenters also claim that any attempt to mitigate indirect
GHG emissions would infringe on the regulatory authority of other
federal and state agencies and result in back-door regulation of energy
policy.\236\ Specifically, commenters state that any attempt by the
Commission to mitigate upstream or downstream GHG emissions would
interfere with state resource decisions and usurp issues of national
energy and environmental policy that Congress vested in other federal
authorities.\237\ For example, commenters argue that Congress has
delegated authority to the EPA and state agencies to regulate GHGs
under the CAA.\238\ Even if the Commission had the authority to impose
mitigation measures for upstream or downstream GHG emissions,
commenters argue that the Commission must first establish that those
GHG emissions are reasonably foreseeable and have a sufficiently close
causal connection (akin to proximate causation under tort law) \239\ to
the authorization of a project under NEPA, and if not, should not be
considered for mitigation purposes.\240\ Lastly, commenters question
reliance on Sabal Trail to support the Commission's authority to impose
mitigation.\241\
---------------------------------------------------------------------------

    \236\ See, e.g., API Technical Conference Comments at 2, 4;
Edison Electric Institute (EEI) Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 18-19, 23-24; Hon.
Joseph T. Kelliher Technical Conference Comments at 5; Attorneys
General of Missouri et al. Technical Conference Comments at 3
(citing S. Coast Air Quality Mgmt. Dist. v. FERC, 621 F.3d 1085,
1092 (9th Cir, 2010)); TC Energy Technical Conference Comments at 6-
7; Boardwalk 2021 Comments at 10. Commenters further argue that the
NGA was not enacted to comprehensively regulate the natural gas
industry, but instead to fill a regulatory gap over interstate gas
transportation and sales; therefore, Congress left the regulation of
upstream production and downstream consumption to the states.
Enbridge Technical Conference Comments at 16-17; Hon. Joseph T.
Kelliher Technical Conference Comments at 2 (citing NAACP v. FPC,
425 U.S. at 669-70; State of Cal. v. Southland Royalty Co., 436 U.S.
519, 523 (1989); ONEOK, Inc. v. Learjet, Inc., 575 U.S. 373, 378,
384-85 (2015); ANR Pipeline Co. v. FERC, 876 F.2d 124, 132-33 (D.C.
Cir. 1989)).
    \237\ INGAA Technical Conference Comments at 8; Boardwalk 2021
Comments at 107; Con Edison Technical Conference Comments at 6-7
(stating that the state regulators are the best positioned to
determine and impose mitigation measures for upstream and downstream
GHG emissions); INGAA 2021 Comments at 77-79.
    \238\ American Public Gas Association (APGA) Technical
Conference Comments at 5-6; EEI Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 23-24; TC Energy
Technical Conference Comments at 9-10.
    \239\ Specifically, commenters argue that the Commission should
rely on Center for Biological Diversity, which states that ``the
legal analysis in Sabal Trail is questionable at best'' and that
``[i]t fails to take seriously the rule of reason announced in
Public Citizen or to account for the untenable consequences of its
decision.'' Center for Biological Diversity, 941 F.3d at 1300; see
also AGA Technical Conference Comments at 13-14; Boardwalk Technical
Conference Comments at 16-17; Hon. Joseph T. Kelliher Technical
Conference Comments at 3; INGAA Technical Conference Comments at 12-
13; TC Energy Technical Conference Comments at 13-14.
    \240\ API Technical Conference Comments at 4; EEI Technical
Conference Comments at 6; INGAA Technical Conference Comments at 14;
Williams Technical Conference Comments at 5.
    \241\ See AGA Technical Conference Comments at 12-13 (arguing
that the Commission should not rely on this statement of dicta
because the issue of mandatory mitigation was not at issue in this
case; rather, the court only addressed whether the Commission is, in
some circumstances, required by NEPA to include a discussion of
downstream GHG emissions when conducting its environmental review);
Boardwalk Technical Conference Comments at 16 (same); Enbridge
Technical Conference Comments at 20 (same); Hon. Joseph T. Kelliher
Technical Conference Comments at 3-4 (same); TC Energy Technical
Conference Comments at 12 (same).
---------------------------------------------------------------------------

    103. We disagree with contentions that the Commission does not have
the authority under the NGA or NEPA to require mitigation of GHG
emissions by a project sponsor. The D.C. Circuit stated in Sabal Trail,
that ``the [Commission] has legal authority to mitigate'' greenhouse-
gas emissions that are an indirect effect of authorizing a pipeline
project.\242\ And, as early as 1961, the Supreme Court recognized that
the Commission's predecessor, the Federal Power Commission, had the
authority to consider downstream uses, and specifically, the impact of
end-users combusting transported gas on air quality, as part of its
public convenience and necessity determination under the NGA.\243\ Both
NGA sections 3 and 7 authorize the Commission to attach ``such
reasonable terms and conditions as the public convenience and necessity
may require.'' \244\ Pursuant to this authority, the Commission has
conditioned NGA section 7 certificates and section 3 authorizations on
mitigation of impacts of the proposed project.\245\ Moreover, courts
have interpreted this provision broadly and given the Commission
latitude in deciding what types of mitigation to require.\246\
---------------------------------------------------------------------------

    \242\ Sabal Trail, 867 F.3d at 1374.
    \243\ Transco, 365 U.S. at 17; see also NAACP v. FPC, 425 U.S.
at n.6 (stating that the Commission has the authority to consider
conservation and environmental issues under the NGA's public
interest determination). See Certification of New Interstate Natural
Gas Pipeline Facilities, 178 FERC ] 61,107 at PP 71-72.
    \244\ 15 U.S.C. 717f(e); see also id. 717b(e)(3)(A) (providing
the authority to approve an application for an LNG Terminal, ``in
whole or part, with such modifications and upon such terms and
conditions as the Commission find[s] necessary or appropriate.'').
    \245\ For examples where the Commission has conditioned approval
of natural gas projects on mitigation of adverse impacts, see supra
note 69.
    \246\ See Twp. of Bordentown v. FERC, 903 F.3d at 261 n.15
(concluding that the Commission's authority to enforce any required
remediation is amply supported by provisions of the NGA); Sabal
Trail, 867 F.3d at 1374 (holding that the Commission has legal
authority to mitigate reasonably foreseeable indirect effects).
---------------------------------------------------------------------------

    104. Regarding claims that the Commission cannot mandate mitigation
of downstream emissions because those emissions are outside the
Commission's jurisdiction, we recognize, as many commenters assert,
that the Commission does not have the statutory authority to impose
conditions on downstream users or other entities outside the
Commission's jurisdiction, such as production, gathering, and local
distribution entities.\247\ Rather, the Commission encourages each
project sponsor to propose measures to mitigate the impacts of
reasonably foreseeable

GHG emissions associated with its proposed project, and will consider
such mitigation proposals in assessing the extent of a project's
adverse impacts.\248\
---------------------------------------------------------------------------

    \247\ See generally Tex. Pipeline Ass'n v. FERC, 661 F.3d 258,
260 (5th Cir. 2011) (holding that the Commission lacked authority to
require ``major non-interstate pipelines'' to post certain flow
information).
    \248\ As described supra in section III.A.2.b, the Commission
will consider GHG emission mitigation and reduction efforts taken by
non-jurisdictional entities, including downstream users, when
quantifying the reasonably foreseeable project GHG emissions.
However, the project sponsor's GHG mitigation plan should only
include its own proposed mitigation efforts.
---------------------------------------------------------------------------

    105. We note that the Supreme Court's ruling in Public Citizen does
not preclude the Commission from requiring project sponsors to mitigate
reasonably foreseeable upstream or downstream emissions. As discussed
previously,\249\ the Commission may consider downstream GHG emissions
under Public Citizen, which states that ``NEPA requires `a reasonably
close causal relationship' between [an] environmental effect and the
alleged cause,'' analogous to the ``familiar doctrine of proximate
cause from tort law'' and does not require an agency to gather or
consider information regarding environmental harms if it lacks
authority to act on that information.\250\ As directed by Public
Citizen, decisionmakers should ``look to the underlying policies or
legislative intent in order to draw a manageable line between those
causal changes that may make an actor responsible for an effect and
those that do not.'' \251\ Here, the NGA ``broadly instruct[s]'' the
Commission to consider ``the public convenience and necessity'' when
evaluating proposed interstate pipeline applications, balancing public
benefits against adverse effects, including adverse environmental
effects,\252\ and we have noted that the Commission has consistently
exercised its broad conditioning authority under the NGA to attach
environmental conditions that mitigate the adverse environmental
impacts of a proposed project.\253\ NEPA requires an agency to consider
the environmental impacts of its actions, including steps that could be
taken to mitigate adverse environmental consequences,\254\ although it
does not require a federal agency to take action to mitigate those
adverse effects.\255\ As CEQ recognizes, an agency may, however,
require mitigation of impacts under its authority as a condition of its
permitting or approval.\256\ Thus, as the D.C. Circuit held in Sabal
Trail, the Commission can deny a pipeline certificate on the ground
that the pipeline would be too harmful to the environment, because the
agency is the ``legally relevant cause'' of the direct and reasonably
foreseeable environmental effects of the pipelines it approves.\257\
Accordingly, the Commission may consider the end use of gas and the
impact of natural gas combustion on air pollution as a factor in
assessing the public interest.\258\ However, as detailed below, the
Commission's priority is for project sponsors to mitigate, to the
greatest extent possible, a project's direct GHG emissions. The
Commission also encourages project sponsors to propose mitigation of
reasonably foreseeable indirect emissions, and will take such proposals
into account in assessing the extent of a project's adverse impacts.
---------------------------------------------------------------------------

    \249\ See supra section III.A.1.b.
    \250\ Pub. Citizen, 541 U.S. at 767, 770 (quoting Metro. Edison
Co., 460 U.S. at 774); see Sabal Trail, 867 F.3d at 1372.
    \251\ Pub. Citizen, 541 U.S. at 767 (quoting Metro. Edison Co.,
460 U.S. at 774 n.7).
    \252\ Sabal Trail, 867 F.3d at 1373 (citing Minisink Residents
for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 101-02 (D.C. Cir.
2014); Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301,
1309 (D.C. Cir. 2015)).
    \253\ See supra P 97.
    \254\ Robertson v. Methow Valley Citizens Council, 490 U.S. at
351 (``To be sure, one important ingredient of an EIS is the
discussion of steps that can be taken to mitigate adverse
environmental consequences.'').
    \255\ Id. at 352 (``There is a fundamental distinction, however,
between a requirement that mitigation be discussed in sufficient
detail to ensure that environmental consequences have been fairly
evaluated, on the one hand, and a substantive requirement that a
complete mitigation plan be actually formulated and adopted, on the
other.''); S. Fork Band Couns. of W. Shoshone of Nev. v. U.S. Dep't
of Interior, 588 F.3d at 727 (NEPA does not require that agencies
mitigate significant environmental harms).
    \256\ Final Guidance for Federal Departments and Agencies on the
Appropriate Use of Mitigation and Monitoring and Clarifying the
Appropriate use of Mitigated Findings of No Significant Impact, 76
FR 3843, 3848.
    \257\ Sabal Trail, 867 F.3d at 1373 (distinguishing Public
Citizen).
    \258\ See supra P 80.
---------------------------------------------------------------------------

3. Mitigation Measures
    106. The Commission encourages the project sponsor to propose
measures to mitigate the direct GHG emissions of its proposed project
to the extent these emissions have a significant adverse environmental
impact.\259\ INGAA describes three possible levels of mitigation--to
zero, to a level of below significance, and to an amount to be
determined by use of the SCC--but dismisses each as unworkable,
improperly adopting broad policy judgements, and reliant on a one-sided
and imprecise methodology, respectively.\260\ The Commission plans to
evaluate proposed mitigation plans on a case-by-case basis and is not
mandating a standard level of mitigation. We also encourage project
sponsors to proposed measures to mitigate the reasonably foreseeable
upstream or downstream emissions associated with their projects.
---------------------------------------------------------------------------

    \259\ The Attorneys General of Massachusetts, Delaware,
Maryland, Michigan, Minnesota, New Jersey, Rhode Island, and the
District of Columbia (Attorneys General of Massachusetts et al.)
recommends that the Commission include reasonable, binding
mitigation measures that incorporate any applicable state or federal
regulations or permit conditions. Attorneys General of Massachusetts
et al. Technical Conference Comments at 6. The technical conference
commenters are made up of a slightly different group of state
attorneys general than those filing comments in 2018 or 2021. As
explained below, the Commission is only considering mitigation
measures that reduce emissions beyond those associated with
regulatory requirements in this policy statement.
    \260\ INGAA Technical Conference Comments at 21-27; see also
Enbridge Technical Conference Comments at 12-13, 35-38 (recommending
the Commission await direction from Congress in choosing a
mitigation level, especially if requiring project sponsors to
mitigate to less than significant levels and noting that mitigation
to zero is not practicable if downstream or upstream emissions are
included).
---------------------------------------------------------------------------

    107. The Commission will consider the project's impact on climate
change, including the project sponsor's mitigation proposal, as part of
its public interest determination under NGA section 3 or 7.\261\ When
making the public interest determination, the Commission will assess
the adequacy of the project sponsor's proposed mitigation on a case-by-
case basis and will consider the project's impact on climate change as
one of many factors.\262\ Further, the Commission may require
additional mitigation of a project's direct GHG emissions as a
condition of the authorization, should the Commission deem a project
sponsor's proposed mitigation inadequate to support the public interest
determination.
---------------------------------------------------------------------------

    \261\ Attorneys General of Massachusetts et al. urges the
Commission to consider the impacts of any mitigation measures on
environmental justice communities. Attorneys General of
Massachusetts et al. Technical Conference Comments at 5-6.
    \262\ Jennifer Danis, Senior Fellow with the Sabin Center for
Climate Change Law and a panelist at the GHG Technical Conference on
Panel 1, recommends that the Commission should not consider the
effect of any mitigation measures in its public interest
determination but should only consider mitigation measures once the
Commission has determined that public convenience and necessity
absolutely requires the project. Jennifer Danis Technical Conference
Statement at 8-11. As explained in the Certificate Policy Statement,
the Commission considers all factors, including the extent to which
adverse impacts are mitigated, to determine whether a project is in
the public convenience and necessity. Certification of New
Interstate Natural Gas Pipeline Facilities, 178 FERC ] 61,107 at PP
70, 93-95.
---------------------------------------------------------------------------

    108. Also we note that NEPA does not preclude the Commission from
approving a project with significant adverse impacts.\263\ If a
project's emissions equal or exceed the 100,000

metric tons per year significance threshold and the project sponsor's
proposed mitigation will reduce the project's GHG emissions below that
threshold, the Commission will consider that mitigation in determining
whether it can make a finding of no significant impact.
---------------------------------------------------------------------------

    \263\ See supra section II.B.
---------------------------------------------------------------------------

    109. While the Commission has broad authority to require mitigation
of GHG emissions by a project sponsor, we are not mandating here any
particular form of mitigation.\264\ A project sponsor is free to
propose any mechanism to mitigate the project's GHG emissions.\265\
However, in order to ensure that any GHG emissions reduction mechanisms
achieve real, verifiable, and measurable reductions, any proposed
mechanisms should:
---------------------------------------------------------------------------

    \264\ Commenters emphasize the need for flexibility in assessing
mitigation measures. See, e.g., Enbridge Pre-Conference Comments at
9; Enbridge Technical Conference Comments at 46-47 (suggesting that,
depending on a variety of factors, the applicant may or may not be
able to propose appropriate mitigation at the time of the project
application); Hon. Joseph T. Kelliher Technical Conference Comments
at 11 (recommending alternatives to imposing mitigation requirements
such as revising the Commission's 2015 Modernization Policy
Statement, issuing a new GHG policy statement that either allows
limited section 4 rate filings to recover costs or clarifies the
level of shipper support required to support establishment of a
tracker surcharge and recommending that such a policy address lost
and unaccounted-for fuel, or implementing a fast track certificate
process for project sponsors that voluntarily commit to mitigate
direct GHG emissions); INGAA Technical Conference Comments at 30;
Magnolia LNG LLC Technical Conference Comments at 2; TC Energy
Technical Conference Comments at 5, 21 (arguing against the
Commission requiring marked-based mitigation measures). A few
commenters either oppose use of the SCC in determining a required
level of mitigation for project emissions, Enbridge Technical
Conference Comments at 6, 38-39, or urge the Commission to use the
SCC to monetize the impacts of any GHGs that are not able to be
mitigated, Attorneys General of Massachusetts et al. Technical
Conference Comments at 7. As described above, the Commission does
not propose to mandate any particular level or type of mitigation.
    \265\ For example, Mountain Valley Pipeline, LLC, proposed to
offset the operational emissions of the Mountain Valley Pipeline
Project by purchasing carbon offset credits equivalent to 90% of GHG
emissions associated with the project's operations in its first 10
years of service from a new methane abatement project located at a
mine in southwest Virginia. Mountain Valley Pipeline, LLC, Carbon
Offset Commitment for Mountain Valley Pipeline Project Operations,
Docket No. CP21-57-000 (filed July 12, 2021).

    a. Be both real and additional--the emissions reductions would
not have otherwise happened unless the proposed reduction mechanism
was implemented, and the associated reductions occur beyond
regulatory requirements; \266\
---------------------------------------------------------------------------

    \266\ Regulatory requirements include those imposed by the
Commission and other federal and state regulatory agencies. However,
project sponsors may include participation in voluntary regulatory
programs that reduce GHG emissions.
---------------------------------------------------------------------------

    b. be quantifiable--any emissions reductions must be calculated
using a transparent and replicable methodology;
    c. be unencumbered--seller has clear ownership of or exclusive
rights to the benefits of the GHG reduction; and
    d. be trackable--the project sponsor must also propose means for
the Commission to monitor and track compliance with the proposed
mitigation measures for the life of the project.

    110. Commenters express concerns with how the Commission will
determine whether mitigation measures are verifiable or how the
Commission will monitor or track compliance with mitigation measures in
a way that avoids double counting emissions reductions.\267\ Commenters
point out that other federal agencies and states are already monitoring
GHG emissions from certificated projects, such as EPA's GHG Reporting
Rule, so a Commission-designed monitoring scheme would be duplicative
and unnecessary.\268\ EEI recommends that the Commission explore
interagency agreements or memorandums of understanding (MOU) with
agencies like EPA and PHMSA to avoid redundancies and clarify
mitigation responsibilities,\269\ while INGAA states that such
agreements or MOUs would be insufficient.\270\
---------------------------------------------------------------------------

    \267\ See, e.g., INGAA Technical Conference Comments at 38-39.
Dr. Carl Pechman, Director of the National Regulatory Research
Institute and a panelist at the GHG Technical Conference on Panel 3,
provides extensive comments on how the Commission could establish
accounting protocols and offset tracking. Dr. Carl Pechman Technical
Conference Statement at 1-15.
    \268\ APGA Technical Conference Comments at 8-9; Enbridge
Technical Conference Comments at 48-49; INGAA Technical Conference
Comments at 40-41; TC Energy Technical Conference Comments at 5-6,
22-23. Similarly, commenters state that the Commission should defer
to other agencies, such as the EPA and state environmental agencies,
that are already taking regulatory action regarding emissions,
express concern over the potential for inconsistent mitigation
requirements between agencies, and/or point to EPA's methane
regulation proposal to reduce GHG emissions from new, reconstructed,
modified, and existing facilities in the oil and gas source category
under section 111 of the Clean Air Act. APGA Technical Conference
Comments at 5; EEI Technical Conference Comments at 10-11; INGAA
Technical Conference Comments at 30-32; NGSA Technical Conference
Comments at 6-7. Conversely, one commenter encourages the Commission
to use resources from the EPA's pending rulemaking. Attorneys
General of Massachusetts et al. Technical Conference Comments at 6-7
(referencing Standards of Performance for New, Reconstructed, and
Modified Sources and Emissions Guidelines for Existing Sources: Oil
and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021)).
    \269\ EEI Technical Conference Comments at 12-14.
    \270\ INGAA Technical Conference Comments at 40-41.
---------------------------------------------------------------------------

    111. We believe it best not to mandate mitigation based on a
specific volume or proportion of emissions. Encouraging project
sponsors to submit proposed mitigation measures as opposed to mandating
a certain level of mitigation for all projects allows the Commission to
consider a project sponsor's proposed mitigation plan in comparison to
the project's benefits, such as fuel switching or providing reliable
gas service, when making a public interest determination and allows
project sponsors the flexibility to choose what mitigation measures
work best for their individual project. Moreover, we recognize that
determining an appropriate amount of mitigation, particularly for
downstream uses, depends on a variety of complex factors, some of which
may not be known at the time of an application, such as state and local
climate change policies, the interconnected nature of the natural gas
pipeline system, long-term changes in natural gas supply sources,
changes in demand for natural gas over time, individual companies'
long-term goals to reduce GHG emissions, the availability of renewable
energy credits or other carbon offsets, and the potential for future
action by other federal agencies.\271\
---------------------------------------------------------------------------

    \271\ See, e.g., Standards of Performance for New,
Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review, 86 FR
63110 (Nov. 15, 2020).
---------------------------------------------------------------------------

    112. Similarly, we believe it best to allow project sponsors to
demonstrate that their proposed mitigation measures are verifiable and
propose means for the Commission to monitor or track the proposed
measures through the life of the project. This approach allows project
sponsors to take advantage of existing monitoring programs and tailor
verification and tracking to their chosen mitigation proposals and
prevents the Commission from needing to establish a new monitoring
program.
4. Opportunities for Mitigation
    113. While project sponsors are free to propose any type of
mitigation mechanism, the following are examples of mitigation
mechanisms project sponsors may consider.
a. Market-Based Mitigation
    114. Project sponsors may mitigate the GHG emissions of a proposed
project through participation in one (or more) of the various types of
carbon offset markets. Sponsors could, for example, purchase renewable
energy credits, participate in a mandatory compliance market (if
located in a state that requires participation in such a market), or
participate in a voluntary carbon market.
i. Renewable Energy Credits
    115. Renewable energy credits (REC) are tradeable, market-based

commodities that provide proof that one megawatt hour of electricity
was generated from a renewable source and delivered to the grid. RECs
legally convey the attributes of renewable electricity generation to
their owner. While state or regional RECs may be traded on financial
exchanges that typically meet state or regional guidelines, they are
not limited by geographic boundaries--RECs can be purchased
independently from electricity and can be matched with energy
consumption.\272\
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    \272\ For more information, see EPA Green Power Partnership,
Offsets and RECs: What's the Difference (Feb. 2018), https://www.epa.gov/sites/default/files/2018-03/documents/gpp_guide_recs_offsets.pdf.
---------------------------------------------------------------------------

    116. Commenters argue that the Commission may not require RECs
because unlike offsets, RECs pertain only to the use of electric power
and are therefore not appropriate for upstream or downstream
mitigation, do not mitigate or compensate for GHG emissions, and are
not denominated in carbon dioxide (CO2) or CO2e,
thus, they cannot represent any specific amount of avoided or reduced
emissions.\273\ Enbridge also states that in most instances, project
sponsors will not qualify to purchase RECs under existing state
programs.\274\ While RECs may not represent a 100% offset per unit of
GHG emitted, RECs do represent a decrease in GHG emissions from overall
energy use and production, and we will consider them.
---------------------------------------------------------------------------

    \273\ Enbridge Pre-Conference Comments at 6-7; Enbridge
Technical Conference Comments at 42-46; Enbridge 2021 Comments at
145-148; INGAA Technical Conference Comments at 33.
    \274\ Enbridge 2021 Comments at 23, 148 n. 406 (stating that the
lack of a federal REC program coupled with the patchwork of state
and regional, as well as voluntary and mandatory, REC programs
brings into question whether project sponsors could participate in
these existing programs).
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ii. Mandatory Compliance Market Participation
    117. The compliance market is a mandatory offset program regulated
by national, regional, or provincial law and mandates CO2
and GHG emission reduction requirements. Under this framework an
allowance, which is an authorization for an entity to emit GHG
emissions, is created. Allowances are generated and traded for
regulatory compliance and are priced as a commodity based on supply and
demand, regardless of project type.
    118. A prime example of an existing, domestic compliance market is
the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cooperative
effort by eleven Northeast and Mid-Atlantic states \275\ to limit
CO2 emissions at certain electric power generators. Each
region involved in RGGI has an established emissions budget (cap) and
each electric power generator holds allowances covering their GHG
emissions. If a generator is below its established cap, it may trade an
allowance to other entities \276\ that exceed their cap. RGGI has an
established emissions-based auction and trading system where allowances
are bought, sold, and traded.\277\ In addition to allowances, offsets
may be used for compliance purposes, which requires a third-party
certification of that offset for use. RGGI strictly regulates the
quantity and types of offsets. There are five pre-determined types of
RGGI offsets:
---------------------------------------------------------------------------

    \275\ RGGI includes: Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island,
Vermont, and Virginia.
    \276\ Any entity is eligible to participate in CO2
allowance auctions including, but not limited, to corporations,
individuals, non-profit corporations, environmental organizations,
brokers, and other interested parties. The Regional Greenhouse Gas
Initiative, CO2 Allowance Auctions, Frequently Asked Questions 1
(Apr. 6, 2021), https://www.rggi.org/sites/default/files/Uploads/Auction-Materials/54/FAQS_Apr_6_2021.pdf.
    \277\ 23.5 million CO2 allowances (short tons) sold
at RGGI auction in March 2021 at clearing price of $7.60/allowance.

    a. Landfill gas (methane) capture/burning;
    b. sulfur hexafluoride capture/recycling;
    c. afforestation (the establishment of a forest in an area where
there was no previous tree cover);
    d. energy efficiency (end use); and
    e. agricultural manure management operations (avoided
emissions).

    119. In addition to RGGI, California participates in the Western
Climate Initiative with Quebec and Nova Scotia,\278\ covering
industrial production, electricity generation, residential, commercial,
and small industrial combustion, and transportation fuel combustion.
---------------------------------------------------------------------------

    \278\ 54.7 million CO2 allowances (metric tons) sold
at settlement price of $17.8/allowance during a February 2021
auction.
---------------------------------------------------------------------------

    120. If an applicant proposes any method of market-based mitigation
of GHG emissions, such as those described in this section, we encourage
the applicant to inform the Commission of any state or regional
compliance goals or initiatives that may be relevant to our
consideration of such mitigation proposal.
iii. Voluntary Carbon Market Participation
    121. If a project sponsor is not located in a state that
participates in a mandatory compliance market, the voluntary carbon
market offers an opportunity to mitigate project emissions. The
voluntary carbon market transacts with offsets, which are the
instrument representing the reduction, avoidance, or sequestration of
one metric ton of GHG.\279\ The voluntary market funds additional,
external projects that avoid or reduce GHG emissions.\280\ The
voluntary carbon market is open to project sponsors regardless of
location and is more flexible than compliance markets, although each
market has its own standards, registries, and project types. Offset
allowances are issued to project sponsors of qualifying CO2
emissions offset projects.
---------------------------------------------------------------------------

    \279\ EPA Green Power Partnership, supra note 272.
    \280\ In 2019, 104 million metric tons of CO2e
offsets were sold and the price per metric ton CO2e was
$1.40 to $4.30, depending on type of project (renewable energy and
forestry/land use, respectively). S&P Global Platts, Voluntary
Carbon Market Grows 6% on Year in 2019: Ecosystem Marketplace (Sep.
22, 2020), https://www.spglobal.com/platts/en/market-insights/latest-news/coal/092220-voluntary-carbon-market-grows-6-on-year-in-2019-ecosystem-marketplace.
---------------------------------------------------------------------------

    122. Typically, an independent third party qualifies offset
projects and establishes standards to verify offsets; however, not all
offsets available in the voluntary market are certified by a third
party. In order to ensure the additionality and permanence of offsets,
the use of unverified offsets is discouraged. If a project sponsor
proposes to mitigate project emissions through participation in a
voluntary carbon market, the sponsor is encouraged to seek Commission
approval of the third party that would verify the offsets prior to
participation. Examples of existing, acceptable third-party certifiers
include:
    a. Climate Action Reserve; \281\
---------------------------------------------------------------------------

    \281\ Typical offset projects include ozone depleting substances
destruction, landfill gas capture/combustion, livestock gas capture/
combustion, improved forest management, avoided grassland
conversion, and improved forest management, among others. For more
information, see generally https://www.climateactionreserve.org/.
---------------------------------------------------------------------------

    b. Verified Carbon Standard; \282\ and
---------------------------------------------------------------------------

    \282\ Typical offset projects include renewable energy, forest
and wetland conservation and restoration, transport efficiency
improvement, nitrous oxide abatement, clean cookstoves, methane
capture and use/combustion, and waste heat recovery. For more
information, see generally https://verra.org/.
---------------------------------------------------------------------------

    c. American Carbon Registry.\283\
---------------------------------------------------------------------------

    \283\ Typical offset projects include ozone depleting substances
destruction, industrial process emissions, fuel switching, livestock
waste management, transport fleet efficiency, landfill gas capture
and combustion, wetland restoration, forest management, and coal
mine methane capture. For more information, see generally https://americancarbonregistry.org/.
---------------------------------------------------------------------------

    123. Some commenters support allowing project sponsors to purchase
emissions offsets while others oppose it as a mitigation method. For
example, Policy Integrity recommends that the

Commission require certificate holders to purchase emission offsets
from a third party.\284\ Policy Integrity states that carbon offsets
are: (1) Consistent with compensatory mitigation requirements employed
by other federal agencies, such as the Bureau of Land Management, U.S.
Fish and Wildlife Service, and EPA; and (2) included and supported in
CEQ's NEPA regulations and guidance.\285\ Policy Integrity also
recommends that the Commission develop a carbon offset program as
opposed to relying on third-party programs; \286\ however, the
Commission lacks statutory authority to create such a program and
believes that the existing programs and certifiers mentioned above are
sufficient.
---------------------------------------------------------------------------

    \284\ Policy Integrity 2021 Comments at 14-15, 19.
    \285\ Policy Integrity 2021 Comments at 23-26 (citing 40 CFR
1508.1(s)(5)).
    \286\ Policy Integrity 2021 Comments at 20.
---------------------------------------------------------------------------

    124. Conversely, some commenters oppose the Commission requiring
project sponsors to purchase offsets from third parties because it is
difficult to ensure that carbon offsets have the necessary traits of
additionality (the reduction would not have happened but for the
purchased offset), permanence (the reduction persists for the entire
certification period of the offset), absence of leakage (the offset
does not trigger some other activity elsewhere that adds GHG
emissions), and rigorous third-party verification.\287\ INGAA further
comments that it would be difficult or impossible for the Commission to
choose an appropriate level of offsetting because of the variability in
emissions over the life of a project and the risk of over-counting for
a given quantity of gas that might move over multiple jurisdictional
transportation projects, and that not enough high-qualify offsets are
available.\288\ Commissioner Kelliher cautions that the Commission
would have to verify offsets given concerns about fraud and
environmental and accounting integrity.\289\ As previously stated, the
Commission is not requiring project sponsors to purchase offsets or
mandating a certain level of offsetting, and while the Commission
acknowledges the challenges with third-party offsets, we believe the
certifiers mentioned above will sufficiently account for them.
---------------------------------------------------------------------------

    \287\ Enbridge Pre-Conference Comments at 7-8; INGAA 2021
Comments at 79-82.
    \288\ INGAA Technical Conference Comments at 34-36; INGAA 2021
Comments at 79-82; see also Enbridge Pre-Conference Comments at 8-9;
Enbridge Technical Conference Comments at 46-47.
    \289\ Hon. Joseph T. Kelliher Technical Conference Comments at
7; see also id. (asserting that this process would be complicated
because credits could originate outside the U.S. and the Commission
has no verification expertise).
---------------------------------------------------------------------------

b. Physical Mitigation
    125. In addition to purchasing RECs or emissions offsets, project
sponsors could also propose to mitigate and/or offset GHG emissions
through the use of physical, on- or off-site mitigation measures.
Physical mitigation measures could include smaller-scale efforts
including reducing a project's fugitive methane emissions or
incorporating renewable energy or other energy efficient technologies
to reduce a project's GHG emissions from compressor stations, or
larger-scale undertakings such as carbon capture and storage, or direct
air CO2 capture. Project sponsors could also propose
environmentally based measures, such as planting trees along the right-
of-way or in other locations to offset carbon emissions or restoring
wetlands to provide additional carbon storage; however, the scale
needed for such measures to meaningfully mitigate GHG emissions may
render them impractical. In addition, project sponsors could propose to
reduce GHG emissions from their existing facilities, including those
with no direct connection to the proposed project, as mitigation for
project-related emissions.
    126. Commenters detail a host of mitigation measures they are
currently undertaking or propose to implement to reduce direct project
emissions, such as: Installing vent gas recovery systems and optimizing
operations to reduce venting and blowdowns, replacing cast iron/
unprotected steel pipes with polyethylene or protected steel pipes to
minimize leaks, employing a variety of technologies and methods to
identify and reduce leaks, and replacing natural gas-fired horsepower
at compressor stations.\290\ Other commenters echo some of those
suggestions \291\ and recommend operational limits on construction
equipment, such as limited idle time when engines are not in use.\292\
Other commenters criticize any mitigation measures, especially carbon
capture and sequestration and offsets, and recommend that the
Commission achieve ``real zero'' emissions that accounts for air and
water pollution and focuses on environmental justice communities and
workers impacted by the negative externalities associated with project
operation and jobs that are being phased out.\293\ Some commenters
assert that direct emissions are already substantially mitigated
pursuant to the regulatory authority exercised by other agencies.\294\
With regard to methane leaks, Dr. Anna Scott explains that its
independent certification and measurement program verifies that a
company's operations meet regulatory standards and incentivize
companies to go beyond the standards by using an engineering-based
review process that assesses development through to operations, as well
as continuous monitoring of emissions along the supply chain.\295\ On a
policy level, Gary

Choquette of Pipeline Research Council International (PRCI) argues for
a centralized funding mechanism for pipeline research to establish gas
quality requirements with the aim of maximizing supply and reducing
emissions and notes that PRCI has developed a tool that provides a
method for prioritizing alternatives to reduce emissions based on
effectiveness and associated capital and operating costs.\296\
---------------------------------------------------------------------------

    \290\ E.g., AGA Technical Conference Comments at 28-30; API
Technical Conference Comments at 6-8; Boardwalk Technical Conference
Comments at 5-6; Con Edison Technical Conference Comments at 7-10
(detailing other efforts reduce emissions using renewable natural
gas, certified natural gas, and hydrogen); Enbridge Pre-Conference
Comments at 5; Enbridge Technical Conference Comments at 13-14, 39-
41; INGAA Technical Conference Comments at 28-30 (citing its 2021
Climate Report); Magnolia LNG LLC Technical Conference Comments at 2
(describing its proprietary technology to reduce emissions during
the liquefaction process); Scott A. Hallam Technical Conference
Statement at 2 (Scott A. Hallam, Senior Vice President of
Transmission and Gulf of Mexico at Williams, was a panelist at the
GHG Technical Conference on Panel 1.); Stephen Mayfield Technical
Conference Statement at 1-2 (Stephen Mayfield, AGM of Gas Operations
at City of Tallahassee, was a panelist at the GHG Technical
Conference on Panel 3.); Texas LNG Brownsville LLC Technical
Conference Comments at 6; William F. Donahue Technical Conference
Statement at 3 (William F. Donahue, Manager of Natural Gas Resources
at Puget Sound Energy, was a panelist at the GHG Technical
Conference on Panel 2.); INGAA 2021 Comments at 79-82. Some
commenters note, however, that use of electric compressors may
increase indirect emissions depending on the generation mix and
existing infrastructure or cite concerns about the impact to the
reliability of gas service during power outages. E.g., American
Forest Technical Conference Comments at 13; Enbridge Pre-Conference
Comments at 5-6; Enbridge Technical Conference Comments at 41;
Kinder Morgan Technical Conference Comments at 22-23.
    \291\ Delaware Riverkeeper 2021 Comments at 66; Kirk Frost 2021
Comments at 11.
    \292\ Delaware Riverkeeper 2021 Comments at 66.
    \293\ Rachel Dawn Davis, the Public Policy and Justice Organizer
at Waterspirit, was a panelist at the GHG Technical Conference on
Panel 3. Rachel Dawn Davis Technical Conference Statement at 1;
Waterspirit Technical Conference Comments at 1-2; see also Technical
Conference Transcript at 106-107 (transcribing remarks made by Dr.
Nicky Sheats, Director of the Center for Urban Environment at the
John S. Watson Institute for Public Policy and panelist on Panel 2).
    \294\ E.g., TC Energy Technical Conference Comments at 20.
    \295\ Dr. Anna Scott, Co-Founder and Chief Science Officer of
Project Canary, was a panelist at the GHG Technical Conference on
Panel 2. Dr. Anna Scott Technical Conference Statement at 1-2, 5
(mentioning key engineering components such as operational venting
or flaring, electrification of facilities and equipment, low bleed
and/or zero bleed process controls, leak detection and repair
programs, produced water treatment and reuse, and infrastructure and
facility efficiency investments and describing how the company uses
on-site sensors and algorithm technology to provide continuous
monitoring). Along with pursuing carbon capture and storage
solutions, Ivan Van der Walt, Chief Operating Officer at NextDecade
Corporation and a panelist at the GHG Technical Conference on Panel
2, describes the joint pilot project NextDecade has formed with
Project Canary for measuring and certifying the GHG intensity of LNG
sold from the Rio Grande LNG Project export facility. Ivan Van der
Walt Technical Conference Statement at 2-3.
    \296\ Gary Choquette, Executive Director of Research and IT at
PRCI, was a panelist at the GHG Technical Conference on Panel 2.
Gary Choquette Technical Conference Statement at 3-4.
---------------------------------------------------------------------------

    127. Commenters also recommend that the Commission consider a
project sponsor's participation in programs that help shippers
voluntarily reduce emissions and other voluntary emissions reductions
programs when evaluating mitigation measures, such as the ONE Future
Coalition, Oil and Gas Climate Initiative, Climate and Clean Air
Coalition Oil and Gas Methane Partnership, EPA Natural Gas STAR Program
and Natural Gas STAR Methane Challenge Program, Methane Guiding
Principles, the Natural Gas Sustainability Initiative, and The
Environmental Partnership.\297\ The Commission encourages project
sponsors to detail their participation in such programs and any other
voluntary measures as part of their mitigation plan for the Commission
to consider as part of its public interest determination.
---------------------------------------------------------------------------

    \297\ See, e.g., AGA Technical Conference Comments at 17-20; API
Technical Conference Comments at 7-8; Boardwalk Technical Conference
Comments at 5-6; NGSA Technical Conference Comments at 5; Scott A.
Hallam Technical Conference Statement at 2-3; Stephen Mayfield
Technical Conference Statement at 1; William F. Donahue Technical
Conference Statement at 3-4; BHE Pipeline Group 2021 Comments at 12-
14; Cheniere Energy Inc. 2021 Comments at 17.
---------------------------------------------------------------------------

c. Cost Recovery
    128. Commenters request that the Commission allow full cost
recovery for any GHG mitigation measures through either the section 7
process or a general section 4 rate case for capitalized mitigation
costs but caution the Commission to ensure that mitigation efforts are
verified and the consumer's interest in low prices are balanced with a
project sponsor's right to recover costs and earn a fair rate of return
under the NGA.\298\ Alternatively, for periodic purchases of market-
based mitigation measures specifically, commenters state that pipelines
could propose a tracker through a limited section 4 filing.\299\
Conversely, other commenters oppose passing mitigation costs along to
shippers, especially if it would increase rates for end-users,
particularly low-income communities, who may not directly reap any
local environmental benefits.\300\ In the event mitigation costs are
passed to shippers, American Forest supports establishing a baseline
from which to judge emissions reductions and supports having an
independent entity monitor and measure those reductions.\301\ The
Commission has previously considered and approved a proposal by a
pipeline proponent to recover the costs of purchasing carbon offsets.
In 2010, Ruby Pipeline, L.L.C., proposed to voluntarily purchase GHG
offsets for the direct emissions associated with its compressor units
(approximately 523,000 metric tons of GHG per year).\302\ Going
forward, project sponsors wishing to purchase offsets or proposing
other measures to mitigate their project's GHG emissions may propose to
recover the costs of these measures through their proposed rates.
Applicants are encouraged to submit detailed cost estimates of GHG
mitigation in their application and to clearly state how they propose
to recover those costs. Pipelines may seek to recover GHG emissions
mitigation costs through their rates, similarly to how they seek to
recover other costs associated with constructing and operating a
project, such as the cost of other construction mitigation requirements
or the cost of fuel. Additionally, the Commission's process for section
7 and section 4 rate cases is designed to protect shippers from unjust
or unreasonable rates and will continue to do so with respect to the
recovery of costs for mitigation measures.
---------------------------------------------------------------------------

    \298\ Boardwalk Technical Conference Comments at 3; Enbridge
Technical Conference Comments at 15, 49; INGAA Technical Conference
Comments at 42-45; TC Energy Technical Conference Comments at 6.
    \299\ Enbridge Technical Conference Comments at 15, 49; INGAA
Technical Conference Comments at 45 (noting that the Commission
should be clear that ``recovery of costs related to an ongoing
obligation to purchase market-based mitigation is akin to a fuel
tracker and would not be subject to the modernization cost recovery
tracker policy or the Commission's policy against cost recovery
trackers for regulatory compliance costs,'' and incremental
operating costs to reduce GHG emissions should also be recoverable
through a tracker); see also Hon. Joseph T. Kelliher Technical
Conference Comments at 7 (suggesting that, while burdensome to
stakeholders, the Commission could adopt a true-up mechanism
requiring project sponsors to deposit offsets, which would later be
compared to actual emissions).
    \300\ American Forest Technical Conference Comments at 15-16;
APGA Technical Conference Comments at 6-8 (urging the Commission to
consider the effects of cost-recovery on end-users, particularly
low-income communities, who may not directly reap any local
environmental benefits); American Forest and Paper Association et
al. 2021 Comments at 26.
    \301\ American Forest Technical Conference Comments at 14
(asserting that there is little transparency for customers with
respect to Lost and Unaccounted for Fuel Charges, which are
recoverable by shippers).
    \302\ Ruby Pipeline, LLC, 131 FERC ] 61,007, at P 34 (2010).
---------------------------------------------------------------------------

D. Application of Policy Statement

    129. We will apply this interim policy statement to both pending
and new NGA section 3 and 7 applications.\303\ As noted above, doing so
will allow the Commission to evaluate and act on such applications
without undue delay. Applicants with pending applications will be given
the opportunity to supplement the record and explain how their
proposals are consistent with this policy statement, and stakeholders
will have an opportunity to respond to any such filings. A project
sponsor for any new natural gas infrastructure project is encouraged to
include the following in its NGA section 3 or 7 application:
---------------------------------------------------------------------------

    \303\ Unless required by law or regulation, the Commission will
not apply a presumptive significance threshold below 100,000 metric
tons of CO2e to applications filed prior to issuance of a final
policy statement. If the Commission adopts a new lower threshold in
a final policy statement, that threshold will only apply to
applications filed after issuance of that statement.
---------------------------------------------------------------------------

     The project's projected utilization rate and supporting
information;
     an estimate of reasonably foreseeable project GHG
emissions;
     if upstream and downstream emissions are not quantified,
evidence to support why those emissions are not reasonably foreseeable
project emissions;
     evidence, if any, that impacts the quantification of the
project's reasonably foreseeable GHG emissions;
     a description of its proposed GHG mitigation measures,
including the percent of the project's direct and indirect GHG
emissions that will be mitigated and, if applicable, a tracking
mechanism for tracking mitigation of GHG emissions; and
     a detailed cost estimate of its proposed GHG mitigation
and a proposal for recovering those costs.
    130. As explained above, the Commission will then consider the
project's impact on climate change, including the project sponsor's
mitigation proposal to reduce direct GHG emissions and, to the extent
practicable, to reduce any reasonably foreseeable project emissions, as
part of its determination under NEPA and its public interest
determination under NGA section 3 or 7.\304\
---------------------------------------------------------------------------

    \304\ Certification of New Interstate Natural Gas Pipeline
Facilities, 178 FERC ] 61,107 at PP 70-72, 93-95.

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V. Information Collection Statement

    131. The collection of information discussed in the Policy
Statement is being submitted to the Office of Management and Budget
(OMB) for review under section 3507(d) of the Paperwork Reduction Act
of 1995 \305\ and OMB's implementing regulations.\306\ OMB must approve
information collection requirements imposed by agency rules.\307\
Respondents will not be subject to any penalty for failing to comply
with a collection of information if the collection does not display a
valid OMB control number.
---------------------------------------------------------------------------

    \305\ 44 U.S.C. 3507(d).
    \306\ 5 CFR 1320.
    \307\ This policy statement does not require the collection of
any information, but rather discusses information that entities may
elect to provide. The Commission is following Paperwork Reduction
Act procedures to ensure compliance with that act.
---------------------------------------------------------------------------

    132. The Commission solicits comments from the public on the
Commission's need for this information, whether the information will
have practical utility, the accuracy of the burden estimates,
recommendations to enhance the quality, utility, and clarity of the
information to be collected, and any suggested methods for minimizing
respondents' burden, including the use of automated information
techniques. PUBLIC COMMENTS ARE DUE May 10, 2022. The burden estimates
are focused on implementing the voluntary information collection
pursuant to this Policy Statement. The Commission asks that any revised
burden estimates submitted by commenters include the details and
assumptions used to generate the estimates.
    133. The following estimate of reporting burden is related only to
this Policy Statement.
    134. Public Reporting Burden: The collection of information related
to this Policy Statement falls under FERC-577 and impacts the burden
estimates associated with the ``Gas Pipeline Certificates'' component
of FERC-577. The Policy Statement will not impact the burden estimates
related to any other component of FERC-577. The estimated annual burden
\308\ and cost \309\ follow.
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    \308\ Burden is defined as the total time, effort, or financial
resources expended by persons to generate, maintain, retain, or
disclose or provide information to or for a federal agency. See 5
CFR 1320 for additional information on the definition of information
collection burden.
    \309\ Commission staff estimates that the industry's average
hourly cost for this information collection is approximated by the
Commission's average hourly cost (for wages and benefits) for 2021,
or $87.00/hour.

                            FERC-577 (Natural Gas Facilities: Environmental Review and Compliance) as a Result of PL21-3-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Annual number                                          Total annual burden
                                        Number of     of responses    Total number   Average burden & cost   hours & total annual   Cost per respondent
                                       respondents   per respondent   of responses      ($) per response           cost ($)                 ($)
                                                (1)             (2)     (1) * (2) =  (4)..................  (3) * (4) = (5)......  (5) / (1)
                                                                                (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Pipeline Certificates..........              40               1              40  1,520 hrs; $132,240    60,800 hrs;            $132,240 Increase.
                                                                                Increase.              $5,289,600 Increase.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    135. Title: FERC-577, Natural Gas Facilities: Environmental Review
and Compliance
    136. Action: Proposed revisions to an existing information
collection.
    137. OMB Control No.: 1902-0128
    138. Respondents: Entities proposing natural gas projects.
    139. Frequency of Information Collection: On occasion.
    140. Necessity of Voluntary Information Collection: The
Commission's existing FERC-577 information collection pertains to
regulations implementing NEPA and reporting requirements for landowner
notifications. The information collected pursuant to this Policy
Statement should help the Commission in assessing natural gas
infrastructure projects.
    141. Internal Review: The opportunity to file the information
conforms to the Commission's plan for efficient information collection,
communication, and management within the natural gas pipeline industry.
The Commission has assured itself, by means of its internal review,
that there is specific, objective support for the burden estimates
associated with the opportunity to file the information.
    142. Interested persons may provide comments on this information-
collection by one of the following methods:
     Electronic Filing (preferred): Documents must be filed in
acceptable native applications and print-to-PDF, but not in scanned or
picture format.
     USPS: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street NE, Washington, DC 20426
     Hard copy other than USPS: Federal Energy Regulatory
Commission, Office of the Secretary, 12225 Wilkins Avenue, Rockville,
Maryland 20852.

VI. Comment Procedures

    143. The Commission invites comments on the interim policy
statement by April 4, 2022. Comments must refer to Docket No. PL21-3-
000 and must include the commenter's name, the organization they
represent, if applicable, and their address in their comments.
    144. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    145. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    146. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VII. Document Availability

    147. In addition to publishing the full text of this document in
the Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov). At
this time, the Commission has suspended access to the Commission's
Public Reference Room due to the President's March 13, 2020
proclamation declaring a National

Emergency concerning the Novel Coronavirus Disease (COVID-19).
    148. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
    149. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
[email protected].

    By the Commission.

    Commissioner Danly is dissenting with a separate statement
attached.
    Commissioner Christie is dissenting with a separate statement
attached.

    Issued: February 18, 2022.
Kimberly D. Bose,
Secretary.

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure
Project Reviews

Docket No. PL21-3-000
    DANLY, Commissioner, dissenting:
    1. I dissent in full from today's Interim Greenhouse Gas (GHG)
Policy Statement which purports to set forth the Commission's
procedures to evaluate the climate change impacts of proposed natural
gas projects under the National Environmental Policy Act (NEPA) and to
incorporate climate change considerations into the Commission's
determinations under sections 3 and 7 of the Natural Gas Act (NGA).\1\
---------------------------------------------------------------------------

    \1\ Consideration of Greenhouse Gas Emissions in Natural Gas
Infrastructure Project Reviews, 178 FERC ] 61,108 (2022) (Interim
Policy Statement).
---------------------------------------------------------------------------

    2. This policy statement is irredeemably flawed. It is practically
unworkable because it establishes a standardless standard. Its
universal application to all projects, both new and pending (some for
over two years), is an affront to basic fairness and is unjustifiable,
especially in light of the many unnecessary delays already suffered by
applicants. It is unlawful because it is illogical, it arrogates to the
Commission power it does not have, and it violates the NGA, NEPA and
the Commission's and the Council on Environmental Quality's (CEQ)
regulations. It is also deliberately drafted so as to evade judicial
review. Lastly, it will sow confusion throughout an industry that
already suffers profound uncertainty. This issuance does not know what
it is and neither will affected entities: It is immediately applicable,
but also seeks comments, and it is allegedly not a draft policy
statement, but an ``interim'' one. How can stakeholders have any
confidence in its contents at all? \2\
---------------------------------------------------------------------------

    \2\ But see Chairman Glick September 24, 2021 Response to
Senator Barrasso September 15, 2021 Letter, Docket Nos. CP17-40-000,
et al., at 1 (``When courts find flaws in the Commission's analysis,
it can lead to lengthy delays and cost developers substantially more
than they originally forecasted.'') (Accession No. 20210927-4003);
id. at 9 (``Ultimately, I believe that performing thorough
permitting reviews and providing developers with legally durable
certificates on which they can rely will do more than just about
anything else to satisfy the purposes of the Natural Gas Act.'');
Chairman Glick May 21, 2021 Response to Senator Hoeven April 29,
2021 Letter, Docket No. PL18-1-000, at 1 (``I believe we can make
changes to the Certificate Process that enhance our efficiency in
processing applications and better address various directives we
have received from the appellate courts.'') (Accession No. 20210524-
4014).
---------------------------------------------------------------------------

    3. When reading this policy statement, it is nearly impossible to
credit the majority with actually believing that ``minimiz[ing] our
litigation risk,'' making Commission decisions ``legally durable,'' and
``increas[ing], not reduc[ing], customer and investor confidence,'' are
truly the goals of this proceeding.\3\ Rather, the purpose of this
Interim Policy Statement, like several of the Commission's other recent
Natural Gas Act issuances, appears to be to actively discourage the
submission of section 3 or section 7 applications by intentionally
making the process more expensive, more time-consuming, and riskier.\4\
---------------------------------------------------------------------------

    \3\ Chairman Glick February 2, 2022 Response to Senator Barrasso
December 15, 2021 Letter at 4 (Accession No. 20220202-4003); see
also Commissioner Clements February 2, 2022 Response to Senator
Barrasso December 15, 2021 Letter at 2 (Accession No. 20220202-4000)
(``I will do my part to assure that the updated policy will be a
legally durable framework for fairly and efficiently considering
certificate applications--one that serves the public interest and
increases regulatory certainty for all stakeholders.'').
    \4\ See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ]
61,126 (2021) (Danly and Christie, Comm'rs, dissenting) (Briefing
Order), terminated, 178 FERC ] 61,029 (2022) (Danly and Christie,
Comm'rs, concurring in part and dissenting in part); see also
Commission Staff May 27, 2021 Notice in Tenn. Gas Pipeline Co.,
L.L.C., Docket No. CP20-493-000 (Accession No. 20210527-3054)
(announcing schedule for Environmental Impact Statement (EIS) for
project with previously prepared Environmental Assessment (EA));
Commission Staff May 27, 2021 Notice in North Baja Pipeline, LLC,
Docket No. CP20-27-000 (Accession No. 20210527-3052) (same);
Commission Staff May 27, 2021 Notice in Columbia Gulf Transmission,
LLC, Docket No. CP20-527-000 (Accession No. 20210527-3049) (same);
Commission Staff May 27, 2021 Notice in Iroquois Gas Transmission
System, L.P., Docket No. CP20-48-000 (Accession No. 20210527-3047)
(same).
---------------------------------------------------------------------------

I. Overview of the Interim Policy Statement's Contents

    4. The Interim Policy Statement begins by explaining it will apply
upon issuance while at the same time being subject to comment and
revision.\5\ The majority explains this is necessary to ``act on
pending applications under sections 3 and 7 of the NGA without undue
delay and with an eye toward greater certainty and predictability for
all stakeholders.'' \6\
---------------------------------------------------------------------------

    \5\ Interim Policy Statement, 178 FERC ] 61,108 at P 1.
    \6\ Id.
---------------------------------------------------------------------------

    5. Next, it provides a historical background on past court,
Commission, and CEQ issuances. For the sake of brevity, I will not
describe this background discussion other than to note it is frequently
misleading.\7\
---------------------------------------------------------------------------

    \7\ For example, the D.C. Circuit in Vecinos para Bienestar de
la Comunidad Costera v. FERC (Vecinos) found that the Commission
failed to ``respond to significant opposing viewpoints'' regarding
its analysis of GHG emissions. Vecinos, 6 F.4th 1321, 1329 (D.C.
Cir. 2021). It did not find ``that the Commission failed to
appropriately analyze the significance of three natural gas
projects' contribution to climate change . . . .'' Interim Policy
Statement, 178 FERC ] 61,108 at P 14.
---------------------------------------------------------------------------

    6. Then the Interim Policy Statement announces that ``the
Commission will quantify a project's GHG emissions that are reasonably
foreseeable and have a reasonably close causal relationship to the
proposed action.'' \8\ This, it seems, will be fairly broad: the
majority goes on to say that ``[t]his will include GHG emissions
resulting from construction and operation of the project as well as, in
most cases, GHG emissions resulting from the downstream combustion of
transported natural gas.'' \9\
---------------------------------------------------------------------------

    \8\ Interim Policy Statement, 178 FERC ] 61,108 at P 28.
    \9\ Id. (emphasis added) (footnotes omitted). I interpret ``in
most cases'' as meaning the Commission will quantify and consider
downstream emissions for NGA section 7 projects unless it is shown
that the gas will not be burned. See id. P 28 n.72.
---------------------------------------------------------------------------

    7. The majority also states that it will continue to consider
whether upstream emissions are a reasonably foreseeable effect for NGA
section 7 projects on a case-by-case basis.\10\ Notably missing,
though, is any discussion of how upstream emissions could have a
reasonably close causal relationship to an NGA section 7 project.\11\
---------------------------------------------------------------------------

    \10\ See id. P 43.
    \11\ It should be noted that the majority cites Sierra Club v.
FERC (Sabal Trail) to argue downstream emissions have a reasonably
close causal relationship to NGA section 7 projects. Id. P 39 &
n.103 (citing 867 F.3d 1357, 1372-73 (D.C. Cir. 2017) (Brown, J.,
concurring in part and dissenting in part)). Below I explain how
Sabal Trail must not be given too much weight.

---------------------------------------------------------------------------

    8. The Interim Policy Statement then describes how the quantity of
project's emissions will be determined: By using a projected
utilization rate for the project and considering ``other factors that
might impact a project's net emissions.'' \12\ This raises more
questions than it answers. Do these other factors include consideration
of whether the natural gas being transported will actually reduce
overall emissions or simply replace existing emissions; for example by
powering natural gas generation that permits the retirement of higher-
emitting generation or by serving an end use need that will turn to a
different--and perhaps higher emitting--energy source if the pipeline
is not constructed? \13\ What does this mean for projects where the end
use is unknown? Does the Commission have the expertise to evaluate a
project sponsor's evidence and resolve any factual disputes? Will the
majority send these issues to an Administrative Law Judge as it
recently did to resolve a dispute over what constituted appropriate
post-construction right-of-way restoration (a subject matter with which
the Commission presumably has some expertise)? \14\
---------------------------------------------------------------------------

    \12\ Id. P 45.
    \13\ See id. P 52.
    \14\ See Midship Pipeline Co., LLC (Midship), 177 FERC ] 61,186
(2021) (Danly, Comm'r, dissenting at P 5) (``I, for one, am willing
to consider the parties' arguments and make a decision.'').
---------------------------------------------------------------------------

    9. I would suspect most attentive readers would have been
interested to then learn how, having determined the means by which to
arrive at these numbers, the Commission plans to weigh emissions among
all of the other factors to be considered in its NGA determination. But
the majority does not say.
    10. Next, the Interim Policy Statement explains ``the Commission is
establishing a significance threshold of 100,000 metric tons or more
per year [(tpy)] of CO2e'' \15\ and will presume that the
impact of a proposed project exceeding that threshold is significant
unless refuted by record evidence.\16\ According to Commission staff,
of the 214 projects with direct \17\ and downstream emissions
authorized from January 2017 through June 2021, this policy would have
applied to 72% of them. This means that, as of the issuance of this
Interim Policy Statement, the EIS is now our default environmental
document.\18\
---------------------------------------------------------------------------

    \15\ Interim Policy Statement, 178 FERC ] 61,108 at P 79.
    \16\ See id. P 81.
    \17\ Despite the fact that CEQ's regulations no longer
distinguish between ``direct'' and ``indirect'' effects, in order to
reduce confusion I use the term ``direct'' to be consistent with the
Interim Policy Statement. See Update to the Regulations Implementing
the Procedural Provisions of the National Environmental Policy Act,
85 FR 43304, 43343 (Jul. 16, 2020).
    \18\ But see 18 CFR. Sec. Sec.  380.5-380.6 (setting forth when
the Commission will prepare an EIS).
---------------------------------------------------------------------------

    11. The Interim Policy Statement says the Commission has authority
to impose GHG mitigation for both direct emissions and downstream
emissions.\19\ This is a sweeping claim of jurisdiction and one that
drastically departs from the Commission's historic employment of its
conditioning authority. But right on the heels of that jurisdictional
declaration, instead of ordering mitigation, the majority
``encourages'' project sponsors to ``propose measures to mitigate the
direct GHG emissions of its proposed project to the extent these
emissions have a significant adverse environmental impact'' and ``to
mitigate the reasonably foreseeable upstream or downstream emissions
associated with their projects.'' \20\ The majority states the
Commission will consider these mitigation measures in its public
interest determinations.\21\ This whole maneuver is odd--how often does
one declare hitherto unasserted jurisdiction and then not employ it? Be
warned: this is not restraint, it is foreshadowing.\22\
---------------------------------------------------------------------------

    \19\ See Interim Policy Statement, 178 FERC ] 61,108 at PP 104-
06.
    \20\ Id. P 107; see also id. (``The Commission plans to evaluate
proposed mitigation plans on a case-by-case basis . . . .'').
    \21\ See id. P 108.
    \22\ See id. P 106 (``However, as detailed below, the
Commission's priority is for project sponsors to mitigate, to the
greatest extent possible, a project's direct GHG emissions.'').
---------------------------------------------------------------------------

    12. The majority tells project sponsors they are ``free to propose
any mechanism to mitigate the project's GHG emissions'' \23\ and offers
some suggestions. Plant trees.\24\ Incorporate renewable energy or
other energy efficiency technologies.\25\ And, with the faint echo of
Johann Tetzel, the majority also suggests purchasing \26\ renewable
energy offsets.\27\
---------------------------------------------------------------------------

    \23\ Id. P 110.
    \24\ See id. P 126.
    \25\ See id.
    \26\ See id. PP 115-26; see also id. P 129 (``project sponsors
wishing to purchase offsets'') (emphasis added).
    \27\ ``As soon as the coin in the coffer rings, the soul from
purgatory springs.'' See Robert King, Only in America: Tax Patents
and the New Sale of Indulgences, 60 Tax Law 761, 761 (2007) (citing
Ronald H. Bainton, Here I Stand: A Life of Martin Luther 60 (1950)).
---------------------------------------------------------------------------

    13. The majority's guidance ends there, leaving the project sponsor
to figure out how much they should mitigate by these measures,\28\ some
of which, it ought be pointed out, do not appear to have a discernable
connection to the reduction of carbon emissions.\29\ Nor does the
majority explain how the Commission can verify and track any such
mitigation throughout the life of the project.\30\ The majority offers
no general framework but says only that it wants project sponsors to
mitigate ``to the greatest extent possible.'' \31\ One wonders why no
mechanism is set forth. Could it be that we learned nothing of value
from soliciting comments on GHG mitigation,\32\ holding a technical
conference on the subject,\33\ and soliciting a second round of
comments following that technical conference? \34\ And think of where
this leaves project sponsors. Often, they seek guidance from Commission
staff. But for the 30 applications that are currently pending, such
communication is potentially barred by the Commission's ex parte
rules.\35\ And even for those who are not so disadvantaged, absent
direction from the Commission, staff can offer no more than this: You
must roll the dice and cross your fingers that the Commission will act
on, and maybe even grant, the requested authorization.\36\
---------------------------------------------------------------------------

    \28\ See Interim Policy Statement, 178 FERC ] 61,108 at P 107
(``The Commission plans to evaluate proposed mitigation plans on a
case-by-case basis and is not mandating a standard level of
mitigation.'').
    \29\ For example, the Commission does not explain how the
construction of a renewable energy or energy efficiency project
reduces carbon emissions unless it could be shown that such
construction will cause the retirement of, or prevent the
construction of, a specific carbon emitting generation facility. Nor
does the Commission describe how, in the absence of the
identification of a specific facility to be displaced, it would be
possible to determine the amount of mitigation provided by renewable
energy or energy efficiency projects.
    \30\ See Interim Policy Statement, 178 FERC ] 61,108 at P 113
(``[W]e believe it best to allow project sponsors to demonstrate
that their proposed mitigation measures are verifiable and propose
means for the Commission to monitor or track the proposed measures
through the life of the project.'').
    \31\ Id. P 106.
    \32\ See Certification of New Interstate Nat. Gas Facilities,
174 FERC ] 61,125, at P 17 (2021) (``C10. How could the Commission
impose GHG emission limits or mitigation to reduce the significance
of impacts from a proposed project on climate change? . . . If the
Commission decides to impose GHG emission limits, how would the
Commission determine what limit, if any, is appropriate?'').
    \33\ See Greenhouse Gas Mitigation, Technical Conference
Transcript, Docket No. PL21-3-000 (Nov. 19, 2021).
    \34\ See Commission Staff November 16, 2021 Notice Inviting
Technical Conference Comments, Docket No. PL21-3-000.
    \35\ 18 CFR. Sec.  385.2201.
    \36\ I have anticipated a couple possible questions and will
hazard answers that may be of interest: Will an EIS assess the
adequacy of GHG mitigation or recommend GHG mitigation measures? My
understanding is no. The Commission will determine the adequacy of
mitigation on a case-by-case basis in its orders. Will mitigation
that was not considered in an environmental document require the
Commission to supplement its environmental review? A clear answer
was not provided. It is worth noting that section 1502.9(d)(1)(i) of
CEQ's regulations state ``Agencies . . . [s]hall prepare supplements
to either draft or final environmental impact statements if a major
Federal action remains to occur, and . . . [t]he agency makes
substantial changes to the proposed action that are relevant to
environmental concerns . . . .'' 40 CFR. Sec.  1502.9(d)(1)(i).

---------------------------------------------------------------------------

    14. But the mitigation requirements may not end there. The majority
states it ``may require additional mitigation as a condition of an NGA
section 3 authorization or section 7 certificate.'' \37\ Using what
standard? Not stated. Perhaps, it will become a good-behavior approach
akin to how the Commission has considered landowner impacts, stating:
``We are satisfied that [project sponsor] has taken appropriate steps
to minimize [GHG emissions].'' \38\ And this encumbrance is perpetual:
Mitigation, the majority says, will span ``the life of the project.''
\39\ That is long time. Ample opportunity for invasive oversight,
enforcement actions, and novel, as yet unpredictable, employments of
the Commission's authority.\40\
---------------------------------------------------------------------------

    \37\ Interim Policy Statement, 178 FERC ] 61,108 at P 99.
    \38\ Double E Pipeline, LLC, 173 FERC ] 61,074, at P 32 (2020).
    \39\ Interim Policy Statement, 178 FERC ] 61,108 at P 110.
    \40\ See, e.g., Algonquin Gas Transmission, LLC, 174 FERC ]
61,126 (2021) (Danly and Christie, Comm'rs, dissenting) (order
establishing briefing to reopen final, non-appealable certificate
order); Algonquin Gas Transmission, LLC, 178 FERC ] 61,029 (2022)
(Danly and Christie, Comm'rs, concurring in part and dissenting in
part) (order terminating briefing order but suggesting can reopen
certificates to impose new terms).
---------------------------------------------------------------------------

    15. Next, we reach the majority's guidance on cost recovery. The
majority states ``[p]ipelines may seek to recover mitigation costs
through their rates,'' and are ``encouraged to submit detailed cost
estimates of GHG mitigation in their application and to clearly state
how they propose to recover those costs.'' \41\ Pipelines may recover
costs? On what possible basis could the Commission deny recovery? The
majority declines to say. Then, presumably in response to comments
about increasing rates for low-income communities and requests to
balance the cost of mitigation with its environmental benefit, the
majority states that ``the Commission's process for section 7 and
section 4 rate cases is designed to protect shippers from unjust or
unreasonable rates and will continue to do so with respect to the
recovery of costs for mitigation measures.'' \42\ How can that be true
when the Commission will issue a certificate only when it determines
that proposed mitigation measures are required for a pipeline project
to be deemed in the public convenience and necessity? Is the Commission
really suggesting that it will deny the recovery of costs that it
determines are necessary to satisfy the public interest?
---------------------------------------------------------------------------

    \41\ Id. P 129.
    \42\ Id.
---------------------------------------------------------------------------

    16. The Interim Policy Statement concludes by informing project
sponsors with pending applications that they ``will be given the
opportunity to supplement the record and explain how their proposals
are consistent with this policy statement'' and that those filings will
be subject to a reply comment period.\43\ Future applicants are also
``encouraged'' to include a list of information in their filings.\44\
What happens if a project sponsor supplements its record and the
Commission revises the Interim Policy Statement once again before
acting on that project sponsor's application? I can imagine that
occurring as the comment deadline is six weeks away. And how can future
applicants reasonably rely on interim guidance that may or may not
change? What ``certainty and predictability'' \45\ does this policy
provide?
---------------------------------------------------------------------------

    \43\ Id. P 130.
    \44\ Id.
    \45\ Id. P 1.
---------------------------------------------------------------------------

    17. In sum, the Commission will weigh direct GHG emissions and, in
most cases, downstream emissions in its NGA determinations. It will not
tell you how these emissions will be assessed other than to say that
project sponsors are encouraged to mitigate them. It will not tell you
how project shippers will be protected from imprudently incurred costs.
This is the tyranny of vagueness. It is also a threat. Imagine the fear
that will animate the mitigation ``voluntarily'' proposed by those
project sponsors with pending applications who are facing millions of
dollars in sunk costs and with shippers that have relied on projects
being placed into service and now only have higher cost and less
reliable options available. This policy statement cannot rightly be
described as ``encouraging'' anything.\46\
---------------------------------------------------------------------------

    \46\ But see Voltaire, Candide 125 (J.H. Brumfitt ed., Oxford
Univ. Press 1968) (1759) (``. . . pour encourager les autres.'').
---------------------------------------------------------------------------

II. Interim Policy Statement Proposes, and Takes, Unlawful Actions

A. The Interim Policy Statement, in Its Entirety, Is Based on the Wrong
Premise

    18. It is worth pausing to consider the underlying premise of the
majority's policy for considering GHG emissions, establishing a GHG
emission threshold for preparing EISs, and requiring GHG emission
mitigation. All are based on the presumption that GHG emissions are an
``effect'' of the proposed action.
    19. In order to constitute an ``effect,'' three elements must be
met: (1) There is a ``change[ ] in the human environment,'' that change
(2) is ``reasonably foreseeable,'' and (3) it ``has a reasonably close
causal relationship to the proposed action or alternatives.'' \47\ The
majority, however, does not allege that the change in the human
environment at issue is the release of GHG emissions themselves. That
makes sense, given that it would be like the Commission saying, in the
hydropower context, that the flow of water from the powerhouse is a
change in the human environment. While this would be an effect, it is
not the kind of effect that is at issue in an environmental review.
Instead, the effect we would care about would be the change to the
quality or quantity of the body of water through which the water flows
and any resultant further changes caused to species, vegetation, etc.
---------------------------------------------------------------------------

    \47\ 40 CFR. Sec.  1508.1(g).
---------------------------------------------------------------------------

    20. No, the majority is concerned about the changes in the human
environment caused, not by the existence of GHG emissions themselves,
but by climate change. The Interim Policy Statement is absolutely clear
that this is its animating purpose: ``The Commission is issuing this
interim policy statement to explain how the Commission will assess the
impacts of natural gas infrastructure projects on climate change'';
\48\ ``Climate change is the variation in the Earth's climate
(including temperature, humidity, wind, and other meteorological
variables) over time''; \49\ ``[C]limate change has resulted in a wide
range of impacts across every region of the country and the globe.
Those impacts extend beyond atmospheric climate change and include
changes to water resources, agriculture, ecosystems, human health, and
ocean systems.'' \50\
---------------------------------------------------------------------------

    \48\ Interim Policy Statement, 178 FERC ] 61,108 at P 1.
    \49\ Id. P 6.
    \50\ Id. P 7 (citation omitted).
---------------------------------------------------------------------------

    21. The question therefore is not whether GHG emissions are
reasonably foreseeable but whether climate change and its resulting
effects are reasonably foreseeable and have a reasonably close causal
relationship to the proposed action. And if so, whether those effects
are significant and can be mitigated by the Commission.
    22. While determining the environmental impacts of a project is
done on a case-by-case basis, the

construction of a natural gas pipeline and transportation of natural
gas in that pipeline are unlikely, on a project-by-project basis, to
have a reasonably foreseeable (which is to say traceable and
calculable) effect on climate change ``in most cases.'' \51\ Were
climate change a reasonably foreseeable effect (as this term is used in
environmental reviews) of a particular project, we would be able to
examine the cause (here, the construction and the transportation of
gas) and then determine some articulable and quantifiable effect (here,
the amount of additional climate change) for which the project itself
is causally responsible. We have never been able to do that. And while
it is not acknowledged at all in the Interim Policy Statement's
procedural history, the Commission has repeatedly stated that ``it
cannot determine a project's incremental physical impacts on the
environment caused by GHG emissions,'' \52\ and CEQ has made similar
statements.\53\ Nothing in the Interim Policy Statement suggests this
has changed nor has any new reasoning been offered to explain how we
can better determine a quantifiable connection between the two.
---------------------------------------------------------------------------

    \51\ Id. P 28. It is worth recalling that the Court has likened
NEPA's ``reasonably close causal relationship'' requirement to the
``familiar doctrine of proximate cause from tort law,'' Dep't of
Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (Public Citizen),
and that a federal district court has found effects of climate
change too attenuated for tort liability under state law. See Comer
v. Murphy Oil USA, Inc., 839 F. Supp. 2d 849, 868 (S.D. Miss. 2012)
(``The assertion that the defendants' emissions combined over a
period of decades or centuries with other natural and man-made gases
to cause or strengthen a hurricane and damage personal property is
precisely the type of remote, improbable, and extraordinary
occurrence that is excluded from liability.'').
    \52\ See, e.g., Trans-Foreland Pipeline Co. LLC, 173 FERC ]
61,253, at P 31 (2020).
    \53\ See CEQ, Draft NEPA Guidance on Consideration of the
Effects of Climate Change and Greenhouse Gas Emissions, at P 3
(2010), https://obamawhitehouse.archives.gov/sites/default/files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.
---------------------------------------------------------------------------

    23. The chain of causation is too attenuated for the cause and
effect in this case to be considered to have a ``reasonably close
causal relationship.'' The reasoning goes as follows: ``Changes to
water resources, agriculture, ecosystems, human health, and ocean
systems'' occurring throughout the world result from global atmospheric
changes that themselves result from the warming that itself results
from increases in the world-wide concentration of GHGs that enter the
atmosphere as the emissions released by using natural gas, that in the
case of end uses (that is, not pipeline operational uses), results from
the transportation of natural gas. The logical sequence is clear, but
the causation is quite attenuated. And this attenuation cannot be
shortened through the ploy of employing GHG emissions as a proxy for
climate change.

B. Consideration of Effects on Climate Change From Non-Jurisdictional
Entities Violates the NGA and CEQ Regulations

    24. The consideration of effects resulting from the upstream
production or downstream use of natural gas violates the NGA and CEQ's
regulations.
    25. The NGA authorizes the Commission to consider only those
factors bearing on the ``public convenience and necessity.'' \54\ The
phrase ``public convenience and necessity'' is not ``a broad license to
promote the general public welfare.'' \55\ It does not permit the
majority to conjure up its own meanings. As a ```creature of statute,'
'' \56\ the Commission must ``look to the purposes for which the
[Natural Gas Act] was adopted'' to give it content and meaning.\57\
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    \54\ 15 U.S.C. 717f(e).
    \55\ NAACP v. FPC, 425 U.S. 662, 669 (1976).
    \56\ Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002)
(quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)).
    \57\ NAACP v. FPC, 425 U.S. at 669; see also FPC v. Transcon.
Gas Pipe Line Corp., 365 U.S. 1, 17 (1961) (Transco) (``[I]t must be
realized that the Commission's powers under Sec.  7 are, by
definition, limited.'') (citing H.T. Koplin, Conservation and
Regulation: The Natural Gas Allocation Policy of the Federal Power
Commission, 64 Yale L.J. 840, 862 (1955)).
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    26. As the Court explained in NAACP v. FPC, ``public convenience
and necessity'' means ``a charge to promote the orderly production of
plentiful supplies of electric energy and natural gas at just and
reasonable rates.'' \58\ Simply put, the production and use of natural
gas were not only presumed but were presumed to be in the public
interest. Congress put its thumb on the scale in favor of gas and
charged the Commission with ensuring that there would be adequate
infrastructure in place to provide an abundant supply of natural gas
available at reasonable prices for all Americans to use. The purpose of
the NGA is narrow and clear. And it is a mousehole through which the
elephant of addressing the climate change impacts of the entire
natural-gas industry cannot pass.\59\
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    \58\ NAACP v. FPC, 425 U.S. at 670 (emphasis added) (footnote
omitted). As noted by Former Commissioner Bernard L. McNamee, this
purpose was affirmed by later acts of Congress. See Adelphia
Gateway, LLC, 169 FERC ] 61,220 (2019) (McNamee, Comm'r, concurring
at PP 32-40).
    \59\ See Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 468
(2001).
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    27. And while there were ``subsidiary purposes'' for the passage of
the Natural Gas Act,\60\ addressing the effects of climate change
caused by using natural gas could not have been one of them. And even
if it were, it is obvious that something that is ``subsidiary'' cannot,
definitionally, override that which is primary. The majority cannot
flip the NGA's presumptions and consider the use of natural gas as
intrinsically harmful, thus requiring mitigation. And it certainly
cannot abandon our charge under the NGA to ``promote the orderly
production of plentiful supplies of . . . natural gas at just and
reasonable rates'' \61\ by then weighing their determination that
natural gas is harmful against the public interest when adjudicating
section 3 and section 7 applications. This is directly contrary to the
purpose Congress established the Commission to serve and supplants the
judgment of Congress with that of the Commission. If that were not
reason enough, it also invades jurisdictional territory that the courts
have repeatedly held that Congress has reserved to the States.\62\
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    \60\ NAACP v. FPC, 425 U.S. at 670 (``While there are
undoubtedly other subsidiary purposes contained in these Acts . . .
.'') (footnote omitted); see also id. at 670 n.6.
    \61\ NAACP v. FPC, 425 U.S. at 670 (emphasis added).
    \62\ See Transco, 365 U.S. at 8 (``However, respondents
correctly point out that Congress, in enacting the Natural Gas Act,
did not give the Commission comprehensive powers over every incident
of gas production, transportation, and sale. Rather, Congress was
`meticulous' only to invest the Commission with authority over
certain aspects of this field leaving the residue for state
regulation. Therefore, it is necessary to consider with care
whether, despite the accepted meaning of the term `public
convenience and necessity,' the Commission has trod on forbidden
ground in making its decision.'') (citation omitted); FPC v.
Panhandle E. Pipe Line Co., 337 U.S. 498, 503 (1949) (``Congress . .
. not only prescribed the intended reach of the Commission's power,
but also specified the areas into which this power was not to
extend.''), accord ExxonMobil Gas Mktg. Co. v. FERC, 297 F.3d 1071,
1076 (D.C. Cir. 2002); S. Coast Air Quality Mgmt. Dist. v. FERC, 621
F.3d 1085, 1092 (9th Cir. 2010) (``In sum, the history and judicial
construction of the Natural Gas Act suggest that all aspects related
to the direct consumption of gas--such as passing tariffs that set
the quality of gas to be burned by direct end-users--remain within
the exclusive purview of the states.''); Pub. Utils. Comm'n. of Cal.
v. FERC, 900 F.2d 269, 277 (D.C. Cir. 1990) (``[T]he state . . . has
authority over the gas once it moves beyond the high-pressure mains
into the hands of an end user.'').
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    28. The majority cannot turn to the Supreme Court's holding in
Transco as authority.\63\ In that case, the Court held that the Federal
Power Commission lawfully denied a certificate based on two factors:
First, that using natural gas to alleviate air pollution from burning
coal was an inferior use, and second, the

proposal would increase future prices.\64\ It does not stand for the
proposition that the Commission can consider adverse effects of air
pollution, and thus climate change impacts, of using natural gas as the
majority implies.\65\
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    \63\ See Interim Policy Statement, 178 FERC ] 61,108 at P 104
n.243 (discussing Transco, 365 U.S. at 17).
    \64\ Transco, 365 U.S. at 4-7. In discussing whether
consideration of end use was proper in the context of conservation,
the Court also noted, ``[t]he Commission said that it had not been
given `comprehensive' authority to deal with `the end uses for which
natural gas is consumed' and that it would not deny certification on
that ground alone.'' Id. at 15-16 (discussing F.P.C., The First Five
Years Under the Natural Gas Act).
    \65\ Interim Policy Statement, 178 FERC ] 61,108 at P 104. Nor
does the Federal Power Commission precedent, which the majority
cites, support this proposition. See Adelphia Gateway, LLC, 169 FERC
] 61,220 (McNamee, Comm'r, concurring at P 29 n.64).
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    29. Nor is the D.C. Circuit's outlier opinion, Sabal Trail, as
instructive as the majority seems to believe. It is very much in
tension with prevailing Supreme Court precedent in Public Citizen,
which held that agencies are only obligated to consider environmental
effects to which their actions are the proximate cause.\66\ Public
Citizen explained that courts must look to the ``underlying policies or
legislative intent'' of an agency's organic statute to determine
whether an agency is obligated to consider environmental effects.\67\
The D.C. Circuit has also characterized Public Citizen as ``explicit''
that an agency is ``not obligated to consider those effects . . . that
could only occur after intervening action'' by some other actor ``and
that only [that] actor[ ] . . . had the authority to prevent.'' \68\ In
other words, when any potential effects are the result of the actions
of third parties such as retail consumers, upstream production
companies, and power generators, who may be several degrees of
separation removed from the jurisdictional pipeline, those effects are
outside the scope of what the agency must consider.
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    \66\ 541 U.S. 752, 767-69.
    \67\ Id. at 767.
    \68\ Sierra Club v. FERC, 827 F.3d 36, 49 (D.C. Cir. 2016).
---------------------------------------------------------------------------

    30. Thus, we should not rest too much weight upon Sabal Trail. Not
only is the holding narrower than the majority seems to believe and was
roundly criticized by the accompanying dissent,\69\ its reasoning has
since been called into question by another appellate court and I expect
it will soon be challenged in the Supreme Court.\70\
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    \69\ See 867 F.3d at 1380 (Brown, J., concurring in part and
dissenting in part) (``More significantly, today's opinion
completely omits any discussion of the role Florida's state agencies
play in the construction and expansion of power plans within the
state--a question that should be dispositive.'').
    \70\ See Ctr. for Biological Diversity v. U.S. Army Corps of
Eng's, 941 F.3d 1288, 1299-1300 (11th Cir. 2019).
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    31. In sum, environmental effects resulting from the upstream
production and downstream use of gas are not factors bearing on the
public convenience and necessity under the Natural Gas Act. Further,
the CEQ's regulations affirmatively prohibit those effects from being
considered in an agency's compliance with NEPA.\71\
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    \71\ 40 CFR. Sec.  1508.1(g)(3) (``An agency's analysis of
effects shall be consistent with this paragraph (g).''); id. Sec.
1508.1(g)(2) (``A `but for' causal relationship is insufficient to
make an agency responsible for a particular effect under NEPA.
Effects should generally not be considered if they are remote in
time, geographically remote, or the product of a lengthy causal
chain. Effects do not include those effects that the agency has no
ability to prevent due to its limited statutory authority or would
occur regardless of the proposed action.'').
---------------------------------------------------------------------------

C. The Significance Threshold Is Illogical and Violates Regulations

    32. In addition, the majority's presumption that project emissions
exceeding 100,000 tpy of CO2e will have a significant effect
on the human environment is illogical and inconsistent with CEQ and
Commission regulations.
    33. The majority offers three irrelevant rationales for this
presumption: \72\ first, the threshold is administratively workable;
\73\ second, other agencies have established thresholds under different
statutory schemes that are not based on a project's effect on the
climate; \74\ and third, the threshold will ``capture'' \75\ ``99% of
GHG emissions from Commission-regulated natural gas projects.'' \76\ It
is worth noting that according to Commission staff, a 1 million tpy
threshold would have covered 98.909% of emissions from natural gas
projects authorized from 2017 through 2021, making the unsupported
selection of the lower threshold both arbitrary and capricious.
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    \72\ The relevant question on whether the Commission should
prepare an EIS is whether the proposed action ``[i]s likely to have
significant effects.'' 40 CFR. Sec.  1501.3(a)(3).
    \73\ Interim Policy Statement, 178 FERC ] 61,108 at P 87
(``Establishing such a threshold will provide the Commission a
workable and consistent path forward to analyze proposed projects.
Further, a numerical threshold is a clear, consistent standard that
can be easily understood and applied by the regulated community and
interested stakeholders.'').
    \74\ Id. PP 90-95.
    \75\ Id. P 80.
    \76\ Id. P 95.
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    34. The majority also states ``even relatively minor GHG emissions
pose a significant threat'' ``[b]ecause of the dire effects at stake.''
\77\ This rationale, however, is not supported by the evidence offered.
The Commission does not explain how minor GHG emissions could lead to
``dire effects.'' We cannot just assume--this is administrative law--we
must show evidence. More importantly, the rationale does not link a
proposed project to effects on climate change. And for good reason. As
CEQ declared: ``it is not currently useful for the NEPA analysis to
attempt to link specific climatological changes, or the environmental
impacts thereof, to the particular project or emissions, as such direct
linkage is difficult to isolate and to understand.'' \78\ The
Commission has repeatedly agreed.\79\
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    \77\ Id. P 88.
    \78\ CEQ, Draft NEPA Guidance on Consideration of the Effects of
Climate Change and Greenhouse Gas Emissions, at P 3 (2010), https://obamawhitehouse.archives.gov/sites/default/files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.
    \79\ See supra P 22 n.52.
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    35. On top of being illogical, the Interim Policy Statement
effectively amends the Commission's NEPA regulations without undergoing
notice-and-comment procedures as required by the Administrative
Procedure Act.\80\ The Interim Policy Statement provides that an EIS
will be prepared when the threshold is exceeded at full burn.\81\ The
Commission's NEPA regulations, however, set forth specific categories
of projects where an EA and EIS ``will normally be prepared,'' \82\
with no mention of GHG emissions. And in a case where an EA is normally
prepared, the Commission ``may in specific circumstances''--meaning a
case-by-case determination--decide whether to prepare an EIS
``depending on the location or scope of the proposed action, or
resources affected.'' \83\
---------------------------------------------------------------------------

    \80\ 5 U.S.C. 553; see also Shell Offshore Inc. v. Babbitt, 238
F.3d 622, 629 (5th Cir. 2001) (``[T]he APA requires an agency to
provide an opportunity for notice and comment before substantially
altering a well established regulatory interpretation.'').
    \81\ Interim Policy Statement, 178 FERC ] 61,108 at P 3.
    \82\ 18 CFR 380.5-380.6; see also Commissioner Danly November
29, 2021 Response to Senator Barrasso September 15, 2021 Letter,
Docket Nos. CP20-27-000, et al., at 12, Fig. 2 (Accession No.
20211214-4001).
    \83\ 18 CFR. Sec.  380.5(a) (emphasis added).
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    36. Given these fatal flaws, it is no wonder the majority seeks
comment ``in particular, on the approach to assessing the significance
of the proposed project's contribution to climate change.'' \84\
---------------------------------------------------------------------------

    \84\ Interim Policy Statement, 178 FERC ] 61,108 at P 1; see
also id. P 81.
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D. GHG Mitigation

1. Claims of Authority To Mitigate
    37. Next, the majority states that the Commission's conditioning
power gives it authority to require a pipeline to mitigate GHGs emitted
by its operations

and reasonably foreseeable indirect effects.\85\ The majority is
incorrect.
---------------------------------------------------------------------------

    \85\ Id. P 106.
---------------------------------------------------------------------------

    38. As commenters explain,\86\ without any response from the
majority, the Supreme Court has held that ``Congress delegated to EPA
the decision whether and how to regulate carbon-dioxide emissions''
from stationary sources.\87\ By claiming the authority to mitigate
these same emissions as part of the Natural Gas Act certification
process, the majority are attempting to usurp the statutory authority
the Court found Congress has delegated to EPA and which cannot be
reassigned absent Congressional action.\88\ If the EPA were to regulate
GHG emissions from pipeline facilities, which it is contemplating
doing,\89\ the Commission could possibly require project sponsors to
comply with those requirements. But one would not say that the
Commission could on its own require project sponsors to mitigate, for
example, sulfur dioxide because the EPA had chosen not to do so, or the
Commission believed its regulations to be inadequate.
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    \86\ Id. P 103 (``For example, commenters argue that Congress
has delegated authority to the EPA and state agencies to regulate
GHGs under the [Clean Air Act].'') (citation omitted); see also id.
P 103 n.238 (citing American Public Gas Association Technical
Conference Comments at 5-6; EEI Technical Conference Comments at 9-
10; Enbridge Technical Conference Comments at 23-24; TC Energy
Technical Conference Comments at 9-10).
    \87\ Am. Elec. Power Co., Inc. v. Connecticut, 564 U.S. 410, 426
(2011) (emphasis added) (discussing in the context of power plants
but would apply equally here); see also Adelphia Gateway, LLC, 169
FERC ] 61,220 (2019) (McNamee, Comm'r, concurring at PP 52-61).
    \88\ Whether EPA or CEQ have raised ``objections'' is not
relevant. See Interim Policy Statement, 178 FERC ] 61,108 at P 85.
    \89\ Standards of Performance for New, Reconstructed, and
Modified Sources and Emissions Guidelines for Existing Sources: Oil
and Natural Gas Sector Climate Review, 86 FR 63110 (Nov. 15, 2021).