FERC Overrules Northern Natural and Finds It Does Not Need to Identify Whether a Natural Gas Project’s Greenhouse Gas Emissions are ‘Significant’
December 5, 2024Energy Regulation, Markets & Enforcement, Environment, Energy, FERC/Regulatory, Projects & Energy Transition, Energy Transition
On November 27, 2024, in Venture Global, CP2 LNG, LLC,1 the Federal Energy Regulatory Commission’s (FERC or Commission) explicitly overruled precedent set in Northern Natural Gas Co.,2 a 2021 decision in which FERC made an affirmative finding that an interstate natural gas pipeline project it was certificating under section 7 of the Natural Gas Act (NGA) would not make a “significant” contribution to global climate change. Northern Natural is the only FERC decision in which a so-called significance determination was made with respect to greenhouse gas emissions (GHG) arising from a FERC-regulated natural gas infrastructure project. In Venture Global, FERC rejected arguments that it needed to follow Northern Natural and assess the significance of GHG emissions in all NGA certificate proceedings to comply with the National Environmental Policy Act (NEPA). NEPA requires federal agencies, including FERC, that perform “major federal actions,” which include issuing NGA section 7 certificates, to prepare an environmental impact statement (EIS) if the action will “significantly affect[] the quality of the human environment.”3 FERC has been under pressure to fully explain why it has chosen not to apply Northern Natural’s significance analysis in subsequent cases, and that issue is currently before FERC on remand from the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) in Healthy Gulf et al. v. FERC, which reviewed FERC’s approval of a liquefied natural gas (LNG) terminal under NGA section 3.
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