The following letter relates specifically to the Natural Gas Act (NGA) and is not about FERC directly. However, because the NGA is a primary source of FERC’s authority, fixing FERC implicitly requires fixing the NGA. Thus, we feel the letter is pertinent to this site. —Ed.
Dear Senators Schumer, Gillibrand, Shaheen, Ayotte, Warren, Markey, Murphy, Blumenthal, Collins, King, and Franken, and Representatives Gibson, Maloney, Tonko, Kuster, Guinta, Neal, McGovern, Tsongas, Kennedy, Clark, Moulton, Capuano, Lynch, Keating, Larson, Courtney, DeLauro, Himes, Esty, Pingree, Poliquin, and Schakowsky:
I join the many thousands of your respective constituents with whom I am associated in thanking you for actions that each of you has taken in confronting the need for the federal government to reconsider its energy policy in favor of moving the Nation away from fossil fuels, as reflected in some of you opposing the Northeast Energy Direct (“NED”) and other redundant interstate natural gas pipeline projects and in some of you introducing legislation that, if enacted into law, would require the Nation to more aggressively protect human health and the environment in the context of decisionmaking on which energy choices to pursue and which to set aside.
This note focuses on matters to consider when thinking about revising the Natural Gas Act, and I respectfully request that you collaborate in this effort in order to reach a united position.
Natural gas consumers enjoy the energy that natural gas provides their appliances and enjoy it more nowadays since the price they pay to their provider is lower than it has been in the past. Few of them, though, think about what it took to get that gas to their homes or how that provision of natural gas reflects national energy policy. Fewer still even realize, or perhaps even care, that provision of that gas has a price beyond what is paid to the gas company. That additional price comes in two forms:
- The first form is that which others bear in terms of, among other things, adverse health impacts, decreased enjoyment of their land and in some cases even having some of their lands actually taken against their will and restrictions imposed on the use of what is left, lost property values, and, for as long as the pipeline conveys natural gas, property burdened by the threat of damage or destruction and lives burdened by the threat of injury or death – all suffered in the cause to get the gas extracted and delivered to consumers’ homes and, frankly, all suffered mainly to allow a certain few to gain tremendous fortunes.Exporting domestically extracted natural gas compounds this first form of price since Americans suffer the burdens to benefit foreigners, not other Americans.
- The second, certainly more pernicious, form is the price inflicted on our shared environment brought on by the natural gas extraction, transport, and consumption processes themselves: the emission of greenhouse gases that patiently harm the planet’s various climate regimes and that decay the quality of our environmental legacy to our children and grandchildren.
But you as the Nation’s policy shapers should care, and your actions to date reflect that you do care. You know that those “others” who pay the first form of price are not in some far off land and so, can be easily forgotten. They are fellow citizens living where the gas is extracted; they are citizens living or working along the pipeline path; they are neighbors. And, but for a fortuitous choice some engineer made in drawing a path on a map, those “others” could have included you and my family. Those who pay the second form of price are all of us, too — whether or not we consume natural gas or other fossil fuel — and all those who succeed us.
Today’s technology already allows us not to have to pay such steep environmental and health prices for the energy we need. We already have real-world examples of the means to drastically reduce energy demand through greater energy conservation and increased energy use efficiency. We already have real-world examples of the means to generate electric energy supply on a grand scale that does not involve fossil fuel consumption.
What the Nation lacks, and badly needs, is persistent determination on the part of Congress and the Executive to substitute more environmentally benign energy sources (such as solar and wind power) for fossil fuel-based energy sources. To satisfy this need, federal policy and legislation must be revised to buttress business and consumer decisions supporting this determination. Because of the sheer complexity of our society and of the interstate impacts associated with energy usage, much of this legislation and government policy necessarily must come from the federal government.
Congress already recognizes the well-documented adverse health and environmental impacts associated with fossil fuel extraction and transport leading to consumption. With that recognition in mind, it needs to revise federal energy policy and legislation to eliminate any present incentives to continue fossil fuel consumption and thereby eliminate the continuation of those impacts.
One major component of national energy legislation is the Natural Gas Act with its clear intention to facilitate the extraction, transport, and consumption of natural gas. While that law may have been seen as appropriate when first enacted in 1938, scientific understanding of the consequences of continued fossil fuel consumption on this Nation and on the planet should cause re-examination of the basis for that law resulting in its significant substantive revision.
I respectfully provide you with several recommendations for your consideration:
Recommendation One: While S.3012 proposes a customer advocate within FERC, please consider including a provision to give an opportunity for citizen opponents to receive applicant-supplied funding to evaluate a proposed project. This is not a new idea: — USEPA uses what it calls Citizen Advisory Groups for its Superfund projects. I worked with the one for the Hudson River remediation project for a number of years as an attorney for the New York State Department of Environmental Conservation and later as a project manager for the National Park Service; and I can tell you that the contributions the CAG members made to the project were substantive and significant.
Recommendation Two: Revise 15 USC 717(a). As presently drafted, the provision declares that “the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest.” However, in view of the environmental and health impacts associated with extraction, transportation, and consumption of fossil fuels such as natural gas, the quoted provision can no longer continue to justify FERC’s regulation of such transport and sale in a manner that does not pass on the consumer need for a project and that pays mere lip service to environmental protection by trying to minimize inconvenience to those residents and businesses in the near a given project’s path. Present FERC policy is to approve projects unless manifestly unsupported by market forces.
A suggested revision follows, which intends to have Congress continuing to view provision of natural gas to existing domestic consumers and to existing overseas customers as being in the public interest, pending substitution of another, non-polluting energy source for natural gas (existing language to be stricken is [bracketed]; suggested new language is UPPERCASED):
[As disclosed in reports of the Federal Trade Commission made pursuant to S. Res. 83 (Seventieth Congress, first session) and other reports made pursuant to the authority of Congress, it] IT is declared that [the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that] WHILE Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce USING NATURAL GAS INFRASTRUCTURE EXISTING ON THE EFFECTIVE DATE OF THIS ACT REMAINS [is] necessary in the public interest, IT IS NO LONGER IN THE PUBLIC INTEREST TO EXPAND SUCH INFRASTRUCTURE OR TO AUTHORIZE NEW NATURAL GAS TRANSPORT INFRASTRUCTURE. IT ALSO IS DECLARED THAT THE TRANSPORTATION OF NATURAL GAS AND THE SALE THEREOF IN INTERSTATE AND FOREIGN COMMERCE SHALL BE AGAINST THE PUBLIC INTEREST, AND THEREFORE PROHIBITED, TEN YEARS AFTER THE EFFECTIVE DATE OF THIS ACT.
Recommendation Three: Revise 15 USC 717o to require FERC to undertake true coordinated environmental and human health and safety review in close cooperation with other federal agencies and with affected state and local governments and with citizen participation. This would go beyond mere consultation with those other entities and with the citizenry: FERC would have to engage in a collaborative assessment of the need for a given project and its impacts, incorporating into its project assessment all regulatory, environmental, economic, social, and human health impact analyses provided by those other entities and by the public. Its assessment also would have to evaluate the sufficiency and appropriateness of other federal agency regulatory requirements (such as those of the Pipeline and Hazardous Materials Safety Administration) in protecting the economy, the public health and safety and economic well-being, and the environment in the context of a proposed project’s specifics. FERC’s final decision on the project then would have to eliminate, or mitigate to the maximum extent practicable, all environmental, economic, social well-being, and health impacts analyzed, with the mandate that if all identified significant adverse impacts cannot be eliminated, the project must be denied. Further, since state and local governments are better poised than is FERC to protect their respective residents and environmental resources from a proposed project’s impacts, FERC’s analysis must receive state and local government concurrence, without which the project cannot proceed.
Suggested language to effectuate the above follows:
The Commission shall have power to perform any and all acts, and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of this chapter. Among other things, such rules and regulations may define accounting, technical, and trade terms used in this chapter; and may prescribe the form or forms of all statements, declarations, applications, and reports to be filed with the Commission, the information which they shall contain, and the time within which they shall be filed. Unless a different date is specified therein, rules and regulations of the Commission shall be effective thirty days after publication in the manner which the Commission shall prescribe. Orders of the Commission shall be effective on the date and in the manner which the Commission shall prescribe. For the purposes of its rules and regulations, the Commission may classify persons and matters within its jurisdiction and prescribe different requirements for different classes of persons or matters. All rules and regulations of the Commission shall be filed with its secretary and shall be kept open in convenient form for public inspection and examination during reasonable business hours.
THE COMMISSION SHALL COMPLY WITH, AND ALL DECISIONS, ORDERS, RULES, AND REGULATIONS OF THE COMMISSION SHALL REFLECT, THE FOLLOWING:
A. THE COMMISSION SHALL NOT APPROVE ANY APPLICATION TO CONSTRUCT OR OPERATE A NEW FACILITY OR TO EXTEND OR MODIFY AN EXISTING FACILITY IN A MANNER THAT SHALL INCREASE ITS CAPACITY OR THAT SHALL EXTEND ITS SERVICE AREA OR THAT SHALL RESULT IN SERVICE TO AN AREA ALREADY BEING SERVED BY ANOTHER NATURAL-GAS COMPANY.
B. ALL DELIBERATIONS OVER APPLICATIONS BEFORE THE COMMISSION SHALL BE MADE WITH THE FULL AND ACTIVE PARTICIPATION OF, AND FULL AND CLOSE COLLABORATION WITH, ALL NATIVE AMERICAN TRIBES, ALASKA NATIVE CORPORATIONS, NATIVE HAWAIIAN ORGANIZATIONS, AND STATE AND LOCAL GOVERNMENTS THROUGH THE RESPECTIVE JURISDICTIONS OR LANDS OF WHICH A PROJECT THAT IS THE SUBJECT OF AN APPLICATION IS PROPOSED TO PASS. THE COMMISSION SHALL NOT APPROVE A PROPOSED PROJECT IN THE EVENT THAT ANY SUCH NATIVE AMERICAN TRIBE, ALASKA NATIVE CORPORATION, NATIVE HAWAIIAN ORGANIZATION, OR STATE OR LOCAL GOVERNMENT RAISES WHAT SUCH ENTITY IDENTIFIES THROUGH ITS OWN PROCESSES AS A SIGNIFICANT SUBSTANTIVE HUMAN HEALTH OR ENVIRONMENTAL IMPACT THAT CANNOT BE ELIMINATED THROUGH REVISION OF THE PROJECT. THE COMMISSION SHALL NOT ISSUE A DECISION OR ORDER APPROVING A PROPOSED PROJECT THAT SHALL NOT HAVE RECEIVED THE CONCURRENCE OF ALL NATIVE AMERICAN TRIBES, ALASKA NATIVE CORPORATIONS, NATIVE HAWAIIAN ORGANIZATIONS, STATE GOVERNMENTS, AND LOCAL GOVERNMENTS THROUGH THE RESPECTIVE JURISDICTION OR LANDS OF WHICH A PROJECT THAT IS THE SUBJECT OF AN APPLICATION IS PROPOSED TO PASS.
C. ALL DELIBERATIONS OVER APPLICATIONS BEFORE THE COMMISSION SHALL BE MADE WITH THE FULL AND ACTIVE PARTICIPATION OF, AND FULL AND CLOSE COLLABORATION WITH, ALL FEDERAL AGENCIES HAVING A RESPONSIBILITY TO ASSESS ANY ASPECT OF SUCH PROPOSED PROJECT. THE COMMISSION SHALL NOT APPROVE A PROPOSED PROJECT IN THE EVENT THAT ANY SUCH FEDERAL AGENCY IDENTIFIES THROUGH ITS OWN PROCESSES AS A SIGNIFICANT SUBSTANTIVE HUMAN HEALTH OR ENVIRONMENTAL IMPACT THAT CANNOT BE ELIMINATED THROUGH REVISION OF THE PROJECT.
D. THE COMMISSION SHALL NOT APPROVE A PROPOSED PROJECT WITHOUT FIRST HAVING PROVIDED FOR THE OPPORTUNITY FOR PUBLIC COMMENT ON THE APPLICATION. THE COMMISSION ALSO SHALL NOT APPROVE A PROPOSED PROJECT IN THE EVENT THAT IT RECEIVES INFORMATION FROM THE PUBLIC OR FROM ANY OTHER SOURCE, INCLUDING COMMISSION STAFF AND THE APPLICANT, THAT IDENTIFIES A SIGNIFICANT SUBSTANTIVE HUMAN HEALTH OR ENVIRONMENTAL IMPACT THAT CANNOT BE ELIMINATED THROUGH REVISION OF THE PROJECT.
E. IT IS DECLARED THAT NATIVE AMERICAN TRIBES, ALASKA NATIVE CORPORATIONS, NATIVE HAWAIIAN ORGANIZATIONS, STATE GOVERNMENTS, AND LOCAL GOVERNMENTS RETAIN FULL AUTHORITY UNDER THEIR RESPECTIVE SUBSTANTIVE AND PROCEDURAL LAWS, RULES, AND REGULATIONS TO EVALUATE THE PUBLIC NEED FOR, AND HUMAN HEALTH, ECONOMIC, SOCIAL, AND ENVIRONMENTAL IMPACTS ASSOCIATED WITH, A PROJECT PROPOSED TO PASS THROUGH THEIR RESPECTIVE JURISDICTIONS OR LANDS AND TO IMPOSE, AND ENFORCE UNDER THEIR RESPECTIVE LAWS, AND UNDER THE LAWS OF ANY STATE IN WHICH SUCH TRIBE, CORPORATION, ORGANIZATION, OR LOCAL GOVERNMENT IS LOCATED, ANY CONDITIONS SUCH TRIBE, CORPORATION, ORGANIZATION, STATE GOVERNMENT, OR LOCAL GOVERNMENT DEEMS NECESSARY OR DESIRABLE TO ENSURE THAT THE HUMAN HEALTH OF THOSE WITHIN ITS RESPECTIVE JURISDICTION AND THE ECONOMY, SOCIAL WELL-BEING, AND ENVIRONMENT WITHIN ITS RESPECTIVE JURISDICTION IS FULLY PROTECTED UNDER THE REQUIREMENTS OF ITS RESPECTIVE LAWS, RULES, AND REGULATIONS. ADDITIONALLY, THE COMMISSION SHALL INCLUDE WITHIN ANY ORDER IT MAY ISSUE CONCERNING A PROPOSED PROJECT, AND SHALL ENFORCE, ANY AND ALL CONDITIONS THAT ANY NATIVE AMERICAN TRIBE, ALASKA NATIVE CORPORATION, NATIVE HAWAIIAN ORGANIZATION, STATE GOVERNMENT, OR LOCAL GOVERNMENT THROUGH THE RESPECTIVE JURISDICTIONS OR LANDS OF WHICH A PROJECT THAT IS THE SUBJECT OF AN APPLICATION IS PROPOSED TO PASS ANY CONDITION SUCH NATIVE AMERICAN TRIBE, ALASKA NATIVE CORPORATION, NATIVE HAWAIIAN ORGANIZATION, STATE GOVERNMENT, OR LOCAL GOVERNMENT MAY IMPOSE IN ORDER TO ENSURE THAT THE HUMAN HEALTH OF THOSE WITHIN ITS RESPECTIVE JURISDICTION AND THE ECONOMY, SOCIAL WELL-BEING, AND ENVIRONMENT WITHIN ITS RESPECTIVE JURISDICTION IS FULLY PROTECTED UNDER THE REQUIREMENTS OF ITS RESPECTIVE LAWS, RULES, AND REGULATIONS.
Recommendation Four: Require FERC to employ human health impact assessment in its environmental impact review of any natural gas project. For an in-depth discussion of what this is, please go to http://www.humanimpact.org/new-to-hia/. The federal Centers for Disease Control and Prevention sees HIA as a recommended planning resource for implementing project “Healthy People 2020,” https://www.cdc.gov/healthyplaces/hia.htm; — USEPA has even recommended that FERC employ HIA in a recent project under FERC consideration. See — USEPA Region 2 (Grace Musumeci, Chief, Environmental Review Section) to FERC (Kimberly D. Bose, Secretary) letter dated June 10, 2016, Subject: Docket Nos. PF16-3, Eastern System Upgrade Project, Recommendation 8.
Recommendation Five: Unless President issues a publicly disclosed written national security finding that national security considerations set out in the findings statement require installation of natural gas infrastructure, eminent domain can only be exercised for a project providing natural gas exclusively to domestic consumers, with the natural gas being transported not being allowed to provide extra natural gas that could then be exported. (Note: this provision intends to balance the fact that eminent domain cannot be exercised in the case of installation of an LNG terminal: if the developer of an LNG terminal used for export cannot exercise eminent domain, then the developer of the pipeline infrastructure going to that terminal should not be allowed to exercise eminent domain, either.)
Recommendation Six: When exercising eminent domain under 15 USC 717f(c), the holder of the certificate of public convenience and necessity:
- Must buy out the landowner’s entire parcel, not just an easement, and the buy-out value must be to the pipeline infrastructure developer and not to the landowner. This intends to allow the landowner to share in the economic benefits the developer will gain from the project. Present law bases compensation on the value to the landowner, which typically is chump change as compared with the value to the developer;
- Must compensate the landowner for all relocation costs should the landowner elect to move rather than remain near the pipeline infrastructure. This provision recognizes the disruption of the quiet enjoyment of one’s property that location of a pipeline in a neighborhood creates; and
- Must compensate all landowners, businesses, and residents within blast zone, up front, for any property value loss, for loss of enjoyment of their property, and for worry over potential property damage and personal injury. The developer also must pay to the owner of property within the blast zone the pre-pipeline announcement fair market value of the owner’s property should the owner elect to relocate instead of staying within the blast zone. This provision intends to provide advance compensation to those within the blast zone for having their property and lives involuntarily placed into a position of threat of loss.
Suggested language to effectuate the above follows: Revise 15 USC 717f(e) to read as follows:
(e) Granting of certificate of public convenience and necessity Except in the cases governed by the provisos contained in subsection (c)(1) of this section, a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied.
ADDITIONALLY, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW, SUCH CERTIFICATE SHALL BE DENIED UNLESS THE APPLICANT:
(1) SHALL IMMEDIATELY COMPENSATE THE OWNER OF THE FEE INTEREST OF, AND THE POSSESSOR OF ANY OTHER INTEREST IN, EACH PARCEL OVER WHICH SUCH OPERATION, CONSTRUCTION, EXTENSION, OR ACQUISITION WILL OCCUR, WITH THE MEASURE OF SUCH COMPENSATION BEING THE HIGHER OF (I) THE VALUE OF EACH SUCH INTEREST TO A READY, WILLING, AND ABLE PURCHASER OR ACQUIRER WHO WOULD HAVE PURCHASED SUCH PARCEL, OR WHO WOULD HAVE ACQUIRED AN INTEREST IN SUCH PARCEL, BEFORE THE APPLICATION WAS SUBMITTED TO THE COMMISSION AND MADE AVAILABLE TO THE PUBLIC; OR (II) THE VALUE OF SUCH PARCEL, OR SUCH INTEREST, TO SUCH QUALIFIED APPLICANT;
(2) SHALL TIMELY COMPENSATE THE OWNER OF THE FEE INTEREST OF, AND THE POSSESSOR OF ANY OTHER INTEREST IN, EACH PARCEL OVER WHICH SUCH OPERATION, CONSTRUCTION, EXTENSION, OR ACQUISITION WILL OCCUR FOR ALL RELOCATION COSTS SHOULD SUCH OWNER, OR POSSESSOR, ELECT TO RELOCATE RATHER THAN REMAIN NEAR SUCH OPERATION, CONSTRUCTION, EXTENSION, OR ACQUISITION; AND
(3) SHALL COMPENSATE ALL OWNERS IN FEE OF, AND ALL POSSESSORS OF INTERESTS IN, LANDS THAT COULD BE DETRIMENTALLY AFFECTED BY THE RELEASE OF NATURAL GAS FROM THE FACILITY THAT IS THE SUBJECT OF THE APPLICATION FOR ANY PROPERTY VALUE LOSS, FOR ANY AND ALL LOSS OF ENJOYMENT OF THE FEE, OR INTEREST, AND FOR WORRY OVER POTENTIAL PROPERTY DAMAGE AND PERSONAL INJURY THAT SUCH A RELEASE COULD OCCASION. THE MEASUREMENT OF SUCH COMPENSATION SHALL BE THE VALUE OF EACH SUCH INTEREST TO A READY, WILLING, AND ABLE PURCHASER OR ACQUIRER WHO WOULD HAVE PURCHASED SUCH PARCEL, OR WHO WOULD HAVE ACQUIRED AN INTEREST IN SUCH PARCEL, BEFORE THE APPLICATION WAS SUBMITTED TO THE COMMISSION AND MADE AVAILABLE TO THE PUBLIC.
The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.
Recommendation Seven: Revise 15 USC 717f(g) to read as follows. While subsection 717f(g) may have been added to promote competition, its effect is to explicitly authorize redundant projects that disturb the right to the quiet enjoyment of property, and that place at risk the loss of lives and property, of more of the Nation’s citizenry than is needed:
(g) Certificate of public convenience and necessity for service of area already being served [Nothing contained in this section shall be construed as a limitation upon the power of] NOTWITHSTANDING ANY OTHER PROVISION OF LAW, the Commission SHALL NOT [to] grant certificates of public convenience and necessity for service of an area already being served by another natural-gas company.
Recommendation Eight: Simply put, the lives and property of citizens are affected by a taking; their rights should be protected by the legislation and common law of the State within which they acquired the property and not by some body of federal cobbled together by judicial decisionmaking. The following revision seeks to restore the original Congressional intent in having State substantive and procedural law apply to Natural Gas Act eminent domain proceedings:
(h) Right of eminent domain for construction of pipelines, etc.
When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas, and the necessary land or other property, in addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE [The] practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform [as nearly as may be] with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds [$3,000] TWENTY-FIVE THOUSAND DOLLARS.
Recommendation Nine: Repeal 15 USC 717b(c), which requires FERC to virtually automatically approve applications for the importation of the natural gas, or the exportation of natural gas to a nation with which there is in effect a free trade agreement requiring national treatment for trade in natural gas.
Recommendation Ten: Repeal 15 USC 717b(d)(1), which notes that FERC has exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG terminal. States need to have concurrent jurisdiction, to ensure that local concerns are adequately addressed.
Recommendation Eleven: Revise 15 USC 717f(b) to include a provision prohibiting abandonment-in-place of any pipeline infrastructure, including buried pipe: all such must be removed and properly disposed of.
Recommendation Twelve: Have all revisions take effect immediately and cover all new proceedings and proceedings pending before FERC.
I am ready to meet with any of your staff to discuss these, and other, recommendations leading to the drafting of legislation intended to address the need for the Nation to move away from natural gas consumption while giving existing natural gas consumers a period of time to convert to a non-polluting energy source.
Charles E. Sullivan, Jr., Esq.
Averill Park, New York