The Legal Framework Of Environmental Impacts From Pipelines

The Eastern Environmental Law Center (EELC) has been working for a number of years to stop the numerous pipelines proposed to cross New Jersey and bring natural gas from Marcellus shale regions in Pennsylvania to markets in New York City, New England, and beyond.  Our efforts have revolved around representing groups through the Federal Energy Regulatory Commission (FERC) approval process.

On March 27th, EELC Staff Attorney, Alice Baker, presented the legal framework under which pipelines are approved at an event held in Princeton New Jersey and sponsored by the Central Group NJ Sierra Club, Princeton University student group SURGE, Delaware Riverkeeper Network, Stony Brook-Millstone Watershed Association, and Food and Water Watch.  The event focused on informing and empowering the community of the huge impacts these pipelines can have since Transco/Williams has recently proposed a new project, known as the Leidy Line, which will impact the Princeton area.

Pipeline proposals must comply with the Natural Gas Act, which was passed in 1938 and divides control over the natural gas industry between the federal government and the states.  Under the Natural Gas Act, FERC has authority to regulate the transportation of natural gas in interstate commerce, the sale in interstate commerce of natural gas, and natural gas companies engaged in such transport.  In order for a company to construct new natural gas facilities, FERC must issue a Certificate of Public Convenience and Necessity.  FERC will consider whether the applicant has made efforts to eliminate or minimize any adverse effects the project might have on the existing customers of the pipeline proposing the project, existing pipelines in the market and their captive customers, and landowners and communities affected by the route of the new pipeline.  If residual adverse effects are identified, then FERC will evaluate the project by balancing the evidence of public benefit against the residual adverse effects.  This is essentially an economic test.  Only where the benefits outweigh the adverse effects on economic interests will FERC proceed to complete the environmental analysis required.

The environmental analysis required is compliance with the National Environmental Policy Act (NEPA).  NEPA is designed to ensure that environmental factors are considered in the decision making process of federal agencies and accomplishes this goal through an environmental review.  An Environmental Impact Statement (EIS) must be produced for all “major federal actions significantly affecting the quality of the human environment” and must consider the direct, indirect, and cumulative impacts of the project.

If the significance of the project is unclear, the agency will produce a more limited Environmental Assessment (EA) to determine if the impacts are significant enough to require a full EIS.  Significance is determined by the context and intensity of the project.  After the EA is complete, the agency will either issue a Finding of No Significant Impact (FONSI) or a full EIS must be prepared.

FERC has supplemented these NEPA regulations with some of its own.  Under FERC’s regulations, normally an EA is prepared first, but in five situations an EIS will be prepared without first preparing an EA.  The important one for the context of this pipeline is when the proposal is a “major pipeline construction project . . . using right-of-way in which there is no existing gas pipeline.”

Frequently, projects are divided into component parts or temporal phases so that only a segment of the project is considered in determining the need for an EIS.  This is called segmentation.  Segmentation is not per se unlawful, but is frowned upon.  The general rule is that segmentation should be “avoided in order to insure that interrelated projects, the overall effect of which is environmentally significant, not be fractionalized into smaller, less significant actions.”  When examining whether a project has been unlawfully segmented, courts look to whether there is “independent utility” for the segment.  Where an action is hypothetical, or where future stages of a project are indefinite, NEPA does not apply.

Both NEPA and the Natural Gas Act have opportunities for public involvement.  NEPA requires that the EA or EIS be made publically available and that the agency request comments from the public and respond to all of the comments it receives.  It is very important that interested parties submit comments on the environmental review documents for two reasons: the comments submitted become part of the record that the court will review on appeal; and submitting comments preserve the right to appeal the final decision to court.  The Natural Gas Act also has an opportunity for public participation through an intervention process.  Intervention in the FERC process must be made through a motion.  The motion must state, to the extent known, the position taken by the movant and the basis in fact and law for that position.

As more pipelines with destructive impacts are proposed, EELC encourages communities to get involved and participate in the process to have their voices heard.