The Sabal Trail Pipeline And The Role Of FERC In American Energy Infrastructure

If you’re in the hunt for a highly charged topic where energy resources, environmental needs and big business seem to be explosively interwoven; look no further than pipeline politics. The challenges of transporting natural gas or oil across vast expanses, conjures up images of Russian energy flowing into Europe or Middle Eastern oil being piped out to nearby ports for worldwide delivery. But closer to home in the United States, the $3.5 billion Southeast Market Pipelines Project has come to a head pitting environmental proponents against pipeline operators in a show of force that’s setting the tone for future energy projects. The issue at hand is how to build out American infrastructure for regional energy needs, while upholding long held environmental protection standards.

Made up of a network of three pipelines, the Southeast Market Pipelines Project, which includes the 515-mile Sabal Trail pipeline, has been several years in the making. As with any complicated interstate pipeline, the devil really has been in the details. But calling them details would understate the potentially adverse human and environmental impacts of the project. Here, the Federal Energy Regulatory Commission missed key aspects of the downstream emissions environmental impact analysis required in the approval of a project of this size and scope.

“What FERC did not do was look at what happens to gas when it gets to the end of the pipeline,” says Fred Jauss, a partner at international law firm Dorsey & Whitney and one of the nation’s foremost experts in licensing and permits.

“The court criticized FERC for not doing any analysis of the greenhouse gases that could be emitted by the end users of the gas transported on the pipeline. The analysis could have been as simple as noting that the pipeline could carry “X” amount of gas, and a typical natural gas power generation plant produces “Y” amount of emissions, so the downstream impacts would be “Z”.”

That’s what Sierra Club said FERC should have done, in order to see what CO2 and greenhouse gas emissions could be.

“The court, in a 2 to 1 ruling, found Sierra Club’s argument to be persuasive. FERC’s failure to analyze any of the downstream greenhouse gas impacts of the project was a violation of NEPA (National Environmental Policy Act), and as a result, the underlying certificates (from February 2016) to construct and operate the pipeline would be vacated,” says Jauss. Officially the court vacated FERC’s approval of the project and remanded to the agency with instructions to prepare an environmental impact statement consistent with the court’s opinion.

The August 2017 ruling from the DC Circuit Court of Appeals has served as a temporary win not just for the Sierra Club but also for those communities in close proximity to the pipeline and those most likely to feel the brunt of any technical failures that may occur. Unfortunately, Florida residents along the Sabal Trail pipeline path have already had to endure mercaptan leaks in both July and August of this year. Foul smelling mercaptan is often mixed with odorless natural gas to act as an alarm when there is an actual gas leak. Even though there was no natural gas leak, local hazmat teams in Marion County detected mercaptan at more than ten times the level the government says is “immediately dangerous to life or health.”

But the order of the court is not final. Such an order will become final 45 days after issuance (the order was issued on August 22nd) and according to Jauss, either FERC or the pipeline operators can choose to ask for a rehearing en banc and potentially appeal to the US Supreme Court.

“There could be a rehearing en banc in which a larger panel of judges on the DC Circuit would review the case. It’s common for parties to ask for a rehearing en banc, but it is unlikely to be granted. The odds of getting an appeal heard by the Supreme Court are low,” states Jauss.

“If the court order becomes final, then the pipeline could likely have to cease operations until a new certificate order comes out of FERC, which entails supplementing the record with additional data to quantify the downstream effects of greenhouse gases.”

As the legal proceedings play out, the Sabal Trail pipeline will likely continue to move up to 830,000 Dth/day (dekatherms) of natural gas across its entire reach powering the Florida Power and Light and Duke Energy power plants linked to it. In turn, this will cause those plants to emit more than the permitted amount of greenhouse gases into the atmosphere. Mitigation steps to reduce harmful emissions for a pipeline already in full swing are limited.

“FERC doesn’t have a lot of good options. Projects are sensitive to timing for entering markets. Whenever possible, pipeline applicants will put the best case forward to paint a picture that will get their application approved,” says Jauss. “Mitigation steps are unclear at this time short of limiting the quantity of gas that can be transported under their license.”

But taken as a whole, natural gas pipelines themselves are not a losing enterprise. They remain a viable piece in the energy infrastructure of the United States and aren’t going away anytime soon. Just in 2016, FERC approved almost 40 major pipeline projects across the country “covering 1,200 miles, over 14 Bcf/d of new capacity and $10 billion in new investment. Though natural gas may not be as clean and green as solar or wind power, it remains the fossil fuel of choice. CO2 emissions are 50 to 60 percent lower than coal or oil when combusted in newer efficient gas power plant. Through all the political strife on how to tackle infrastructure problems, Democrats and Republicans alike have deep concerns about America’s aging infrastructure and the need to make upgrades. The Trump administration has even made it a key pillar of what success in this country should look like. If government and concerned stakeholders are serious about building out energy infrastructure, basic roadblocks to doing so must be removed. The administration took nearly 6 months to appoint new commissioners to FERC putting overall pipeline and other energy project permitting on hold. With the organization able to reach quorum on key matters, the glaring environmental oversights of the Sabal Trail permitting process is all the more disheartening.

“Now that new commissioners have been sworn in and FERC can resume permitting natural gas projects, pipeline developers may have to go back to the drawing board to prepare revised applications estimating the greenhouse gas impacts of new pipeline construction. Ultimately, this decision complicates the Administration’s drive to promote infrastructure development and injects additional uncertainty into natural gas markets,” Jauss says.

Whatever the results of the Sabal Trail pipeline deliberations, the procedures for permitting these massive projects need to be respected. The efficiency with which FERC can review and approve projects will undoubtedly serve as a catalyst for more pipeline projects in the future. But when downstream environmental standards are left out of the review process everyone suffers. A better way is to use regulatory structures already in place to spur infrastructure growth while preserving the delicate balance of the ecosystem around us.

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