Week Ending February 2, 2018

D.C. Circuit Denies Rehearing in Sabal Trail Case, Pipeline Shut Down Possible

This Article Appears as Published in Foster Report No 3184
D.C. Circuit Denies Rehearing in Sabal Trail Case, Pipeline Shut Down Possible

Whether the Sabal Trail pipeline will have to shut down was the question raised by the U.S. Court of Appeals for the D.C. Circuit’s January 31 orders denying a request for rehearing and a request for rehearing en banc of the court’s decision to vacate the pipeline’s certificates (Sierra Club v. FERC, No. 16-1329).

On 8/22/17, the D.C. Circuit vacated and remanded FERC’s approval of the three pipelines that make up the project, some segments of which are operating, while other segments are still under construction. The court found that FERC’s final environmental impact statement (EIS) for the project did not examine the amount of carbon dioxide emissions the natural gas-fired power plants in Florida that would be fed by the pipelines might produce by burning natural gas.[1]

The Commission has few options following the court’s denial of rehearing, including filing a request for a stay with the court to allow the pipeline to continue operating or issuing new certificates.

“We haven’t ruled out the possibility that Sabal Trail would need to halt construction for a month or two while new certificates are issued in the event the court issues its mandate and the current certificates are vacated. It is far less clear to us what loss of a valid certificate means for the components of the pipeline already operating,” said Christine Tezak, managing director at Clear View Energy Partners LLC.

Sierra Club issued a statement by staff attorney Elly Benson, who said, “The D.C. Circuit’s orders confirm what we already knew: when a fracked gas pipeline has been constructed without its threats being fully considered, the pipeline should not be allowed to continue operating.” Benson added that, “The court already rejected FERC’s failure to consider the greenhouse gas pollution from burning the gas transported by the pipeline” and that the pipeline should be shut down until FERC does a review of the climate impacts.

Former FERC general counsel William Scherman observed that, “in the 35 years I have been involved with FERC practice, I can’t remember a single time where an operating FERC pipeline has been shut down under these circumstances.”

Scherman, who is chair of the energy, regulation and litigation practice at Gibson, Dunn & Crutcher LLP, noted that “This is an interesting case since under controlling case law, in deciding whether to vacate the certificate here, the court will usually determine whether there is at least a serious possibility that the FERC will be able to substantiate its decision on remand, and consider whether remand with vacatur will lead to impermissibly disruptive consequences in the interim while the remand analysis occurs.”

In its initial August 2017 ruling, the D.C. Circuit said an EIS must look not only at the direct effects of a pipeline but the indirect effects that are reasonably foreseeable, and because the primary purpose of the Southeast Market project is to deliver gas to power plants, FERC should have considered the greenhouse gas (GHG) emissions of the power plants in its EIS. In response, FERC staff prepared a draft EIS for the project in September 2017, that includes GHG emission estimates.

The three pipelines in the project are Sabal Trail Transmission LLC (CP15-17), the Hillabee Expansion of Transcontinental Gas Pipe Line Corp. LLC (CP15-16) and Florida Southeast Connection LLC (CP14-554).

By Denise Ryan DRyan@fosterreport.com

 

[1]   For more information, see, FERC Issues Draft EIS on Southeast Market Pipelines with GHG Emission Estimate, FR No. 3167, pp. 5-7.

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