Commissioner Richard Glick Statement
May 21, 2020

Docket Nos. CP17-495-001 and CP17-494-001
Order: C-8 PDF

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Dissent Regarding Jordan Cove Energy Project L.P. (Jordan Cove LNG Terminal)

I dissent from today’s order because it violates both the Natural Gas Act 1 (NGA) and the National Environmental Policy Act 2 (NEPA).  Rather than wrestling with the Project’s 3 significant adverse impacts, today’s order makes clear that the Commission will not allow these impacts to get in the way of its outcome-oriented desire to approve the Project. 4 

As an initial matter, the Commission continues to treat climate change differently than all other environmental impacts.  The Commission steadfastly refuses to assess whether the impact of the Project’s greenhouse gas (GHG) emissions on climate change is significant, even though it quantifies the GHG emissions caused by the Project’s construction and operation. 5  That refusal to assess the significance of the Project’s contribution to the harm caused by climate change is what allows the Commission to perfunctorily conclude that “the environmental impacts associated with the Project are “acceptable” 6 and, as a result, conclude that the Project satisfies the NGA’s public interest standards. 7  Claiming that a project’s environmental impacts are acceptable while at the same time refusing to assess the significance of the project’s impact on the most important environmental issue of our time is not reasoned decisionmaking.

Moreover, the Commission’s public interest analysis still does not adequately wrestle with the Project’s adverse environmental impacts.  The Project will significantly and adversely affect several threatened and endangered species, and historic properties, and it will limit the supply of short-term housing near the Project.  It will also cause elevated noise levels during construction and impair the visual character of the local community.  Although the Commission recites those adverse impacts, at no point does it explain how it considered them in making its public interest determination or why it finds that the Project satisfies the relevant public interest standards notwithstanding those substantial impacts.  Simply asserting that the Project is in the public interest without any discussion why is not reasoned decisionmaking.

It is also important to briefly mention landowners.  The underlying order approved a significant change to the route of the pipeline, taking it across new properties and affecting new landowners.  Recognizing that this was a possibility early on, those landowners intervened in the proceeding.  And following the underlying order, they filed a rehearing request.  The Commission rejected this rehearing request for two reasons.  First, as the Commission notes, the request was received at 7:54 p.m. Eastern Time (4:54 p.m. Pacific Time) on April 20, the last day to seek rehearing of that underlying order.  Under the Commission’s regulations, filings received after 5:00 p.m. Eastern Time are deemed filed the next day. 8  Second, the rehearing request did not contain a detailed set of arguments as is also required by our regulations.  As a result, today’s order leaves these landowners with no option to pursue judicial review and leaves this proceeding with no entity capable of fully representing their interests.  Under those circumstances and given the considerable issues at stake—as a result of underlying order, their property is now subject to condemnation—I would have waived the relevant regulations for good cause, rather than effectively snuffing any chance they may have to vindicate their rights on judicial review.  We’ve heard a lot recently about how the Commission is willing to bend over backwards to accommodate landowners.  Except we never actually see it. 

The Commission’s Public Interest Determinations Are Not the Product of Reasoned Decisionmaking

The NGA’s regulation of LNG import and export facilities “implicate[s] a tangled web of regulatory processes” split between the U.S. Department of Energy (DOE) and the Commission. 9  The NGA establishes a general presumption favoring the import and export of LNG unless there is an affirmative finding that the import or export “will not be consistent with the public interest.” 10   Section 3 of the NGA provides for two independent public interest determinations:  One regarding the import or export of LNG itself and one regarding the facilities used for that import or export. 

DOE determines whether the import or export of LNG is consistent with the public interest, with transactions among free trade countries legislatively deemed to be “consistent with the public interest.” 11   The Commission evaluates whether “an application for the siting, construction, expansion, or operation of an LNG terminal” is itself consistent with the public interest. 12  Pursuant to that authority, the Commission must approve a proposed LNG facility unless the record shows that the facility would be inconsistent with the public interest. 13  In addition, section 7 of the NGA requires the Commission to determine whether the pipeline component of the Project is required by the public convenience and necessity, 14 a standard the courts have likened to the public interest standard. 15  Today’s order fails to satisfy these standard in multiple respects.

The Commission’s Public Interest Determination Does Not Adequately Consider Climate Change

In making its public interest determination, the Commission examines a proposed facility’s impact on the environment and public safety.  A facility’s impact on climate change is one of the environmental impacts that must be part of a public interest determination under the NGA. 16  Nevertheless, the Commission maintains that it need not consider whether the Project’s contribution to climate change is significant in this order because it lacks a means to do so—or at least so it claims. 17  However, the most troubling part of the Commission’s rationale is what comes next.  Based on this alleged inability to assess the significance of the Project’s impact on climate change, the Commission still summarily concludes that all of the Project’s environmental impacts would be “acceptable. 18  Think about that.  With that “logical hopscotch,” 19 the Commission is simultaneously stating that it cannot assess the significance of the Project’s impact on climate change 20 while concluding that all environmental impacts are acceptable to the public interest. 21  That is unreasoned and an abdication of our responsibility to give climate change the “hard look” that the law demands. 22

It also means that the Project’s impact on climate change does not play a meaningful role in the Commission’s public interest determination, no matter how often the Commission assures us that it does.  Using the approach in today’s order, the Commission will always conclude that a project will not have a significant environmental impact irrespective of that project’s actual GHG emissions or those emissions’ impact on climate change.  If the Commission’s conclusion will not change no matter how many GHG emissions a project causes, those emissions cannot, as a logical matter, play a meaningful role in the Commission’s public interest determination.  A public interest determination that systematically excludes the most important environmental consideration of our time is contrary to law, arbitrary and capricious, and not the product of reasoned decisionmaking.

The failure to meaningfully consider the Project’s GHG emissions is all-the-more indefensible given the volume of GHG emissions at issue in this proceeding.  The Project will directly release over 2 million tons of GHG emissions per year. 23  The Commission recognizes that climate change is “driven by accumulation of GHG in the atmosphere through combustion of fossil fuels (coal, petroleum, and natural gas), combined with agriculture, clearing of forests, and other natural sources” 24 and that the “GHG emissions from the construction and operation of the projects will contribute incrementally to climate change.” 25  In light of this undisputed relationship between anthropogenic GHG emissions and climate change, the Commission must carefully consider the Project’s contribution to climate change when determining whether the Project is consistent with the public interest—a task that it entirely fails to accomplish in today’s order.

The Commission’s Consideration of the Project’s Other Adverse Impacts Is Also Arbitrary and Capricious

In addition, the Project will have a significant adverse effect on more than 20 Federally-listed threatened and endangered species—including whale, fish, and bird species 26—as well as historic properties along the Pipeline route 27 and short-term housing in Coos County. 28  It will also cause harmful noise levels in the area 29 and impair the visual character of the surrounding community. 30  Although the Commission discloses the adverse impacts throughout the EIS and mentions them in today’s order, 31 it does not appear that they factor meaningfully, if at all, into the Commission’s public interest analysis.  Simply deeming those adverse impacts to be “acceptable” without any explanation of how that conclusory finding supports the Commission’s public interest determination is a far cry from reasoned decisionmaking. 32

Rehearing parties make this very point, arguing the Commission’s public interest determinations fails to account for adverse environmental impacts. 33  The Commission’s only response is to regurgitate its usual boilerplate that “balancing of adverse impacts and public benefits is an economic test, not an environmental analysis” and that it will consider environmental impacts if the Project’s benefits outweigh the adverse effect on economic interests. 34  That response certainly does nothing to clarify how environmental impacts are considered in the Commission’s public interest determination, if they are considered at all.  

The Commission also points us to a series statements about the purported need for the Project 35 and its public benefits, assuring us that, as a result, all environmental impact are “acceptable.” 36  But that again does not explain how the Commission considered those impacts or why the benefits rendered them “acceptable.” 37  Taken seriously, the Commission’s rationale, and the absence of any actual explanation for why the Project satisfies the relevant public interest standards despite the significant environmental impacts, suggests that environmental impacts cannot meaningfully factor into the Commission’s application of the public interest.  Indeed, if serious impacts are on more than 20 threatened and endangered species are not even worth a mention in the Commission’s public interest analysis, one cannot help but doubt that they play a role in the Commission’s decisionmaking process.  The failure to explain how the Commission considered those adverse impacts in making its decision would seem to conflict with the Supreme Court’s guidance that it must consider “all factors bearing on the public interest,” 38 not to mention basic principles of reasoned decisionmaking.   

This Record Demanded a More Thorough Review of the Need for the Pipeline

In addition to the above failures, the Commission finds that Pacific Connector Pipeline is needed based solely on its agreement with Jordan Cove, an affiliate of the same corporate parent, Pembina.  As I have previously explained, precedent agreements between affiliates—e.g., a pipeline developer and a shipper that are part of the same larger enterprise—are not necessarily sufficient to show that a proposed project is “needed” for the purposes of a certificate of public convenience and necessity under section 7 of the NGA. 39  That is because, unlike ordinary precedent agreements, agreements between affiliates are not necessarily the product of arms-length negotiations and may reflect the best interests of their shared corporate parent, without indicating a genuine need for the pipeline.  That does not, however, mean that precedent agreements between affiliates are irrelevant when evaluating the need for proposed pipeline.  Instead, the absence of arms-length negotiations underscores the importance of considering all evidence that may bear on the need for the proposed pipeline, which is, after all, exactly what the Commission’s 1999 Certificate Policy Statement contemplates. 40 

A proposed pipeline that will serve as an LNG export facility’s sole source of supply can often make the need showing without too much difficulty.  After all, as the Commission has previously explained, an LNG export facility cannot go forward without a source of natural gas.  But where there is serious doubt about whether the export facility will actually be developed, the Commission must both take a harder look at whether putative export facility is sufficient to establish a need for the pipeline or support a finding that the project is required by the public convenience and necessity.  After all, a section 7 certificate conveys the authority to exercise eminent domain, and it would be unconscionable for this Commission to permit a developer to seize private land for a project that has little chance of ever being completed.  

This case demands that sort of hard look.  The evidence suggests a number of reasons to doubt whether the Project will ever be developed.  For one thing, the LNG market was on the decline when the Commission issued the certificate order and the intervening months have not provided much reason to hope that things will turn around. 41 A global downturn in the market, coupled with uncertain prospects in the months and years ahead, ought to compel the Commission to at least examine the assumption that the LNG export facility will be built and create the only conceivable need for the pipeline.  That is especially so here because, unlike some of the LNG export facilities that the Commission has certificated over the last year, Jordan Cove does not have any contracts for its putative LNG output. 42  Moreover, the state of Oregon has consistently raised concerns about Project and its ability to satisfy various outstanding permitting requirements, including section 401 of the Clean Water Act, 43 state air quality permits 44—not to mention the outstanding questions regarding the Coastal Zone Management Authorization (which Oregon has already rejected) 45 and the pending requests for Forest Service authorization to cross federal lands. 46  Finally, Jordan Cove has been attempting to develop this Project for roughly 15 years at this point.  While not dispositive on its own, the long and winding road that the project has taken to date ought to cause the Commission to exercise a little caution before assuming the next step will clear the way for its eventual development, meaning that the time has come to permit Jordan Cove to take private property. 47

On their own, none of those factors would necessarily require a hard look at the LNG facility’s prospects as part of the Commission’s section 7 review.  But, together, they cannot be ignored.  There is simply too much uncertainty in this record to justify the Commission’s finding that the project is needed, that it is required by the public convenience, or that conveying the authority to exercise eminent domain is appropriate at this time.  At the very least, the Commission should stay the operation of the certificate, and, with it, the authority to exercise eminent domain, pending a resolution of the numerous pending state proceedings or a showing that Jordan Cove is prepared to actually begin developing the Project.

Unfortunately, today’s order doubles down on the conclusion that the single precedent agreement is a sufficient basis—and the sole basis—for finding that the pipeline project is needed and required by the public convenience and necessity. 48  The Commission’s 1999 Certificate Policy statement, however, contemplates more holistic inquiry that weighs the extent of the need for a project against its adverse impacts. Today’s order, however, makes no effort to discuss the considerable uncertainty clouding the need for the Project or how that uncertainty factors into its weighing of the adverse impacts, including the exercise of eminent domain 49 and the effects on environmental and cultural resources that lie along the pipeline’s 229-mile path. 50  Especially given the Commission’s increasingly frequent and fervent assurances of its concern for landowners, one would have thought that the Commission would have at least taken into account the considerable uncertainty surrounding the project before enabling the use of eminent domain for a project that may never be built.  The absence of any such discussion is hard to square with that purported concern.  

The Commission Fails to Satisfy Its Obligations under NEPA

The Commission’s NEPA analysis of the Project’s GHG emissions is similarly flawed.  As an initial matter, in order to evaluate the environmental consequences of the Project under NEPA, the Commission must consider the harm caused by its GHG emissions and “evaluate the ‘incremental impact’ that those emissions will have on climate change or the environment more generally.” 51  As noted, the operation of the Project will emit more than 2 million tons of GHG emissions per year. 52  Although quantifying the Project’s GHG emissions is a necessary step toward meeting the Commission’s NEPA obligations, listing the volume of emissions alone is insufficient. 53  Identifying the consequences that those emissions will have for climate change is essential if NEPA is to play the disclosure and good government roles for which it was designed.  The Supreme Court has explained that NEPA’s purpose is to “ensure[] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts” and to “guarantee[] that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.” 54  It is hard to see how hiding the ball by refusing to assess the significance of the Project’s climate impacts is consistent with either of those purposes. 

In addition, under NEPA, a finding of significance informs the Commission’s inquiry into potential ways of mitigating environmental impacts. 55  An environmental review document must “contain a detailed discussion of possible mitigation measures” to address adverse environmental impacts. 56  “Without such a discussion, neither the agency nor other interested groups and individuals can properly evaluate the severity of the adverse effects” of a project, meaning that an examination of possible mitigation measures is necessary to ensure that the agency has taken a “hard look” at the environmental consequences of the action at issue. 57 

The Commission responds that it need not determine whether the Project’s contribution to climate change is significant because “[t]here is no universally accepted methodology” for assessing the harms caused by the Project’s contribution to climate change. 58  But the lack of a single consensus methodology does not prevent the Commission from adopting a methodology, even if it is not universally accepted.  The Commission could, for example, select one methodology to inform its reasoning while also disclosing its potential limitations or the Commission could employ multiple methodologies to identify a range of potential impacts on climate change.  In refusing to assess a project’s climate impacts without a perfect model for doing so, the Commission sets a standard for its climate analysis that is higher than it requires for any other environmental impact. 

Furthermore, even without any formal tool or methodology, the Commission can consider all factors and determine, quantitatively or qualitatively, whether the Project’s GHG emissions will have a significant impact on climate change.  After all, that is precisely what the Commission does in other aspects of its environmental review, where the Commission makes several significance determinations based on subjective assessments of the extent of the Project’s impact on the environment. 59  The Commission’s refusal to similarly analyze the Project’s impact on climate change is arbitrary and capricious. 

The Commission also suggests that it cannot determine the significance GHG emissions because it “has no way to . . . assess how that amount contributes to climate change” without a way to “link physical effects caused by the projects’ GHG emissions.”  Nonsense.  The Commission acknowledges that every single ton of GHG emissions, including those from the Project, 60 contributes to climate change, which causes discrete adverse effects across the globe and in the Project region. 61  That is more than enough of a basis to evaluate the effects of the Project’s GHG emissions on climate change.  After all, even the recent Council on Environmental Quality draft NEPA guidance on consideration of GHG emissions—hardly a radical environmental manifesto—recognizes that the quantity of GHG emissions “may be used as a proxy for assessing potential climate effects.” 62  And yet, contrary to even that guidance, today’s order insists that a quantity of GHG emissions cannot be used to tell us anything about the Project’s effects on climate change or the significance thereof. 63  That proposition makes sense only if you do not believe that there is a direct relationship between GHG emissions and climate change.

In any case, as noted, the Commission does not apply this same standard when assessing the significance of the Project’s other environmental impacts.  For example, consider how the Commission discusses the Project’s impact on upland vegetation, particularly forested land.  It finds that the forested land affected by the Project supports “multiple interacting layers of organisms that include plants, animals, fungi, and bacteria” 64 and that the loss of an acre of forested land causes adverse effects on the supported organisms.  In evaluating whether the Project’s impact on forested land is significant, the Commission relies on acreage as the proxy for actual adverse environmental impacts, and concludes that the 2,750 acres of lost forested land would not be significant. 65  The Commission does not attempt to link those specific 2,750 acres of forested land to direct or quantifiable adverse effects for the purpose of assessing significance.  Yet, this is exactly the standard the Commission suggests it must meet to assess the significance the quantity of GHG emissions on climate change.  The Commission’s insistence on applying a dramatically higher standard before it can assess the Project’s climate change impacts is arbitrary and capricious. 

In addition, the Commission has repeatedly justified its refusal to consider the significance of a Project’s impact on climate change on the basis that it lacks “any GHG emission reduction goals established either at the federal level or by the [state]” with which to compare the Project’s emissions. 66  Oregon, however, has an established “GHG emission reduction goal[]” in the form a legislative goal of reducing GHG emissions 10 percent below 1990 levels by 2020 and 75 percent below 1990 levels by 2050. 67  As NRDC noted on rehearing, the emissions from the Project would represent an eighth of the entire state-wide emissions allowable under the state’s 2050 goal. 68  That is exactly the type of significance analysis that the Commission has been suggesting it could perform in order after order over the past couple of years.       

Recognizing that, under its own standard, it might have to finally consider climate change, the Commission moves the goal posts once again, this time suggesting that Oregon’s goals cannot inform a significance determination because they are aspirational and the legislature “did not create any additional regulatory authority to meet its goals.” 69  More nonsense.  The issue before us is whether the emissions from the Project are significant, not whether the state has the authority to enforce its goals.  A comparison with state targets is relevant because it provides the context that the Commission has repeatedly claimed it needs to assess significance.  The enforceability of those standards is irrelevant for the purposes of that exercise. 

In any case, as noted, the Commission has repeatedly, including again today, suggested that these “goals” or “targets” are what it needs in order to assess the significance of a project’s GHG emissions. 70  It is hard to imagine a more arbitrary and capricious action than an agency excusing itself from considering a Project’s impact on climate change because there is no goal or target to compare the emissions with and then on the same day, when presented with such a goal, assertingthat it cannot use that goal or target because, in the Commission’s judgment, the state lacks adequate to realize that goal.

It is clear what is going on.  The Commission will say whatever it needs to in order to avoid having to evaluate whether a project’s GHG emissions are significant or whether the impact of those emissions on climate change is itself significant.  For the better part of the last two years, the Commission has made excuse after excuse for why it does not need to consider climate change in its decisionmaking process.  Today’s contradictory LNG orders are just a particularly clear example of the Commission’s serial attempts to duck its responsibilities.  That will continue until a court steps in to set things right.    

In any event, even if the Commission were to find that the Project’s GHG emissions are significant, that is not the end of the analysis.  Instead, as noted above, the Commission could blunt those impacts through mitigation—as the Commission often does with regard to other environmental impacts.  The Supreme Court has held that an environmental review must “contain a detailed discussion of possible mitigation measures” to address adverse environmental impacts. 71  As noted above, “[w]ithout such a discussion, neither the agency nor other interested groups and individuals can properly evaluate the severity of the adverse effects.” 72 

Consistent with this obligation, the EIS discusses mitigation measures to ensure that the Project’s adverse environmental impacts (other than its GHG emissions) are reduced to less-than-significant levels. 73  And throughout today’s order, the Commissions uses its broad conditioning authority under section 3 and section 7 of the NGA 74 to implement these mitigation measures, which support its public interest finding. 75  For example, the Commission uses this broad conditioning authority to mitigate the impact on short-term housing in Coos County caused by the influx of workers during construction of the LNG Terminal and Pipeline.  The Commission concludes that the influx of workers will not only create a short-term rental shortage during the peak tourist season, but this impact would be acutely felt by low-income households. 76  To mitigate this significant impact, the Commission requires Jordan Cove to designate a Construction Housing Coordinator to address these housing concerns.  Despite this use of our conditioning authority to mitigate adverse impacts, the Project’s climate impacts continue to be treated differently, as the Commission refuses to identify any potential climate mitigation measures or discuss how such measures might affect the magnitude of the Project’s impact on climate change.

Finally, the Commission’s refusal to seriously consider the significance of the impact of the Project’s GHG emissions is even more mystifying because NEPA “does not dictate particular decisional outcomes.” 77  NEPA “‘merely prohibits uninformed—rather than unwise—agency action.’” 78  The Commission could find that a project contributes significantly to climate change, but that it is nevertheless in the public interest because its benefits outweigh its adverse impacts, including on climate change.  In other words, taking the matter seriously—and rigorously examining a project’s impacts on climate change—does not necessarily prevent any of my colleagues from ultimately concluding that a project satisfies the relevant public interest standard.  

For these reasons, I respectfully dissent.