[00:00:01] Speaker 00: Case number 20-1132, Food and Water Watch and Berkshire Environmental Action Team petitioners versus Federal Energy Regulatory Commission. [00:00:10] Speaker 00: Mr. Carlesco for the petitioners, Ms. [00:00:12] Speaker 00: Chu for the respondent, Mr. O'Neill for the interveners. [00:00:17] Speaker 01: Good morning, council. [00:00:18] Speaker 01: Mr. Carlesco, please proceed when you're ready. [00:00:21] Speaker 01: Good morning. [00:00:22] Speaker 03: May it please the court, Adam Carlesco for petitioners, Food and Water Watch and Berkshire Environmental Action Team. [00:00:27] Speaker 03: I'd like to reserve three minutes for rebuttal. [00:00:29] Speaker 03: This case involves the Federal Energy Regulatory Commission's failure to review the full scope of environmental impacts and the near doubling of gas capacity through the now primary delivery point for the Springfield, Massachusetts local distribution grid. [00:00:43] Speaker 03: The project involves installation of a new compressor station that is significantly larger than its predecessors at a critical juncture point between one of the largest interstate transmission operators in the country and a local distributor of gas. [00:00:55] Speaker 03: This project was specifically designed to facilitate increase in residential and commercial burning of gas in the fourth largest city in New England. [00:01:03] Speaker 03: The commission found that the large operating project would not have any significant impact and this required no further environmental review, but it did so only because it ignored all reasonably foreseeable upstream downstream impacts, the indirect effects underneath which would be induced production and combustion of gas. [00:01:21] Speaker 03: These effects have potentially significant impacts on Springfield's air quality, public health, public safety, and of course the global climate. [00:01:29] Speaker 03: And now the Commission asks this Court to approve its dereliction of its statutory duty under NEPA and the Natural Gas Act by setting an impossibly high preservation standard that finds no support in the law of the Natural Gas Act or the Circuit. [00:01:41] Speaker 03: This court should vacate the commission's certificate of public convenience and necessity for three reasons. [00:01:47] Speaker 03: The commission failed to take a required hard look at the reasonably foreseeable downstream impacts of increased combustion of gas facilitated by this project, despite having known upgrade capacity, known contracted volume, known purchaser, and known end-use. [00:02:01] Speaker 03: Second, the commission failed to evaluate the reasonably foreseeable upstream gas extraction effects of expanding transmission capacity. [00:02:10] Speaker 03: And third, the commission failed to evaluate the significance of this project's emissions as required by NEPA, dismissively stating that every model available to it is fatally flawed because none is universally accepted. [00:02:23] Speaker 03: This is an impossible standard. [00:02:25] Speaker 03: So first, I would like to direct this court's attention to the downstream emissions. [00:02:30] Speaker 03: FERC refused to take NEPA's required hard look at reasonably foreseeable downstream gas combustion, so did by this project. [00:02:37] Speaker 03: Commissioner Glick stated in his dissent at Joint Appendix 504 and 505 that because there was a known upgrade capacity, a known contracted volume, a purchaser, and known end use, and that 97% of gas use in the US is through combustion, he noted that this makes a relatively easy case to determine that the downstream impacts were reasonably foreseeable. [00:03:00] Speaker 03: So FERC could have reasonably predicted downstream gas emissions, but chose not to. [00:03:04] Speaker 03: Under Friends of Capital Crescent Trail, the Federal Transportation Administration, a 2007 DC Circuit case, this court found that NEPA requires calculation of downstream effects when a project's capacity and transported volumes are known, even if the precise destination or method is not necessary, despite the fact that we know that the destination is the Springfield local distribution grid and that consumption will be used through commercial and residential combustion. [00:03:29] Speaker 03: Second, [00:03:30] Speaker 03: The regulation 40 CFR 1508.8 B states that indirect effects may include growth inducing effects. [00:03:40] Speaker 03: Moreover, the ninth circuits recognize that it's completely inadequate for the commission to ignore growth inducing effects where the project has a potential to spur demand. [00:03:48] Speaker 03: In this case, both [00:03:51] Speaker 03: Tennessee Gas and Columbia Gas with an advertising material have recognized that the development of this infrastructure specifically to address future demand and potentially lift moratoriums of gas expansion within the Springfield distribution network. [00:04:07] Speaker 03: This is a reasonably foreseeable growth inducing impact. [00:04:12] Speaker 03: Further, the commission argues that the variability over the lifespan of this project would [00:04:18] Speaker 03: make this unforeseeable. [00:04:21] Speaker 03: However, this court has rejected this within Sierra Club. [00:04:23] Speaker 03: They've tried, Sierra Club v. FERC, which dealt with a small trail project. [00:04:29] Speaker 03: They found there were a relatively, there were a legally relevant cause of these emissions, where there was variability over the lifespan of two power plants that were burning gas, despite there being a variability in demand for that electricity coming from those power plants. [00:04:45] Speaker 03: And so we would note that the commission also argues that they lack the authority to look at these downstream effects, because they argue that they cannot deny a project due to upstream or downstream impacts. [00:05:00] Speaker 03: However, the squarely rejected that argument. [00:05:02] Speaker 03: Can I ask one question? [00:05:03] Speaker 06: Yes. [00:05:04] Speaker 06: On this upstream effect. [00:05:06] Speaker 06: Yes. [00:05:07] Speaker 06: One of your arguments was about sort of the glut in gas, the surplus in gas that is now out in the markets. [00:05:18] Speaker 06: And I assume you made that argument at the time. [00:05:21] Speaker 06: So how do we know even if there's increased demand that it will increase production rather than use surplus? [00:05:29] Speaker 03: So the standard here is that, and it's an argument we raised with our rehearing order, is that the Eighth Circuit's found that if the nature of an effect is reasonable for C. opal, which would be extracted use, extraction on the whole, but its extent is not, an agency can't simply ignore that effect. [00:05:48] Speaker 03: In this case, the commission said that upstream impacts of extraction generally are fully unforeseeable. [00:05:53] Speaker 03: But moreover, this project allows for a 20-year contract agreement between Tennessee Gas and distributor of this gas. [00:06:03] Speaker 03: Over the course of a lifespan of this project, the gas has to come from somewhere. [00:06:07] Speaker 03: And if you look at Joint Appendix 296 and 297, you'll see a map of Tennessee gas pipelines assets that run from this project in Agawa, Massachusetts, down through Connecticut, directly into Marcellus and Utica Shales. [00:06:22] Speaker 03: as well as another pipeline run by Tennessee Gas that runs through New York, directly to the Marcellus and Utica shales. [00:06:28] Speaker 06: The standard here is a reasonably- Does that mean that they would, sorry, does that mean that they would be using, sourcing the gas from those particular fields or- This is, Tennessee makes the argument- A bunch of old ones in a pipeline. [00:06:42] Speaker 03: My apologies. [00:06:44] Speaker 03: So Tennessee makes the argument that it's unreasonable for them to predict where this gas might come from because they might be over the course of the lifetime, over 20 years, purchasing this from other different pipelines throughout the region. [00:06:57] Speaker 03: But in this case, all roads lead to Rome here. [00:07:00] Speaker 03: The Marcellus and Eucachale is the principal development territory within the Northeast. [00:07:05] Speaker 03: Tennessee owns gas pipelines that run directly from it to this compressor station territory. [00:07:10] Speaker 03: And moreover, they make an argument that they might be getting gas from a Drockett, Massachusetts connection. [00:07:16] Speaker 03: If you look at the maps at 297, you'll also see that the pipeline that leads directly to Drockett, Massachusetts on the eastern side of the state comes from the Marcellus and Utica Shales. [00:07:25] Speaker 06: Do you have to show things with this level of particularity? [00:07:27] Speaker 06: I mean, another FERC said you didn't identify what new wells were going to be drilled. [00:07:35] Speaker 06: But I'm just trying to ask in, and I appreciate the answers you provided here, [00:07:39] Speaker 06: Does NEPA only kick in if you have that level of knowledge that, you know, it's going to cause a new well to be drilled, or it's going to come from here versus there, as opposed to the gas system? [00:07:53] Speaker 06: Generally, it's going to require some sort of incremental increase in the production of gas from wherever that increase may come. [00:08:02] Speaker 06: And it's that incremental increase in production of gas that NEPA should be analyzing. [00:08:07] Speaker 03: From my understanding with NEPA, does it require that sort of detail? [00:08:10] Speaker 03: Does NEPA require the detail? [00:08:13] Speaker 03: It does not require that level of detail. [00:08:15] Speaker 03: The reason that the Commission used here for this being fully unforeseeable, despite just the nature of extraction being known, [00:08:22] Speaker 03: is that they say that if they don't know the specific source, i.e. [00:08:26] Speaker 03: the specific well it's coming from, that it's not a reasonably foreseeable consequence. [00:08:31] Speaker 03: However, when they make this argument at Joint Appendix 389, they only cite themselves. [00:08:36] Speaker 03: They cite no relevant case law of this circuit whatsoever. [00:08:41] Speaker 03: Moreover, there are other tools that are available to other agencies in the federal government, such as the Bureau of Ocean Energy Management, the Bureau of Land Management, that are able to assess upstream impacts based upon supply and demand areas. [00:08:55] Speaker 03: And this was raised within NYU's amicus brief at page 11 and 12. [00:08:59] Speaker 06: I know, but there's some question about whether you preserved rehearing an objection to using any particular [00:09:06] Speaker 06: test by FERC. [00:09:09] Speaker 06: So I'm just trying to get into a more general question of whether FERC asked the right question. [00:09:14] Speaker 03: So we specifically did raise the foreseeability of upstream impacts. [00:09:20] Speaker 03: And that's really the issue here is that the Natural Gas Act requires you to raise the arguments that you would be raising [00:09:26] Speaker 03: before this panel here. [00:09:29] Speaker 03: However, the specificity of it is not necessary. [00:09:32] Speaker 03: This court said in Consolidated Edison Company of New York, which is a 2003 case, that it has to be brought clearly to the attention of the commission. [00:09:41] Speaker 03: And that's exactly what happened here. [00:09:44] Speaker 03: The commission addressed this at Nagium, within their rehearing order, at Joint Appendix 492. [00:09:50] Speaker 03: They noted that we raised upstream production issues. [00:09:54] Speaker 03: And the difference here between this case and Birkhead is that Birkhead made an argument that the record was fairly undeveloped, but they failed to raise that development issue within their rehearing order. [00:10:06] Speaker 03: We argue here that the nature of the upstream impact is known, even if the extent or particularities may not be, they still can't ignore that effect entirely. [00:10:18] Speaker 01: Did you make the argument that they needed to gather more information? [00:10:22] Speaker 03: We did not raise that argument for upstream impacts because they had a list of pipelines that would be coming from and they had a number of maps that showed Tennessee gas pipelines that they run into the region. [00:10:36] Speaker 01: So you're talking about the analysis that should have been made on the existing record? [00:10:39] Speaker 03: Yes. [00:10:43] Speaker 03: And so I'd like to turn. [00:10:45] Speaker 03: What I view is one of the larger failings within the commission here which is the assessment of significance. [00:10:51] Speaker 03: Sierra club the first decision from 2017 state clearly that NEPA requires agencies to include a discussion of the significance of greenhouse gas emissions. [00:11:00] Speaker 03: In this case, the commission has categorically excluded all consideration of greenhouse gas emissions. [00:11:06] Speaker 03: Not just in this case, but if this principle were applied, it would exclude consideration of greenhouse gas emissions across any agency decision, because they argue that there is no universally accepted methodology. [00:11:19] Speaker 03: This is an impossible standard here, and they raised the standard significantly higher than they did in the Earth Reports case in 2016. [00:11:29] Speaker 03: There they argue that there's no standard methodology. [00:11:32] Speaker 03: Here they're raising the bar to something that no methodology within scientific literature could ever really meet. [00:11:38] Speaker 03: And in doing so, they've reached the decision that this project would have no significant impacts because they categorically ignore those impacts on the whole. [00:11:48] Speaker 03: And we would argue, too, that there are tools that are available to it. [00:11:54] Speaker 03: The commission here has kind of put the cart before the horse and has instead argued that they need not look at this issue at all. [00:12:03] Speaker 03: And Commissioner Glick notes that, not Commissioner Glick, but by categorically excluding greenhouse gas significance on the project level, which is where FERC regulates the largest gas industry on the planet, at least on the transmission side, every single individual project impacts on climate change is functionally zero. [00:12:22] Speaker 03: And the Ninth Circuit has found that in the Center for Biological Diversity versus the National Highway and Transportation Safety Administration that while there are a range of cost figures for greenhouse gas emissions, they are most certainly not zero. [00:12:38] Speaker 03: And the reason that the commission is able to reach its insignificance decision here in denying further environmental review is specifically because they completely mark all greenhouse gas emissions significance as zero, despite doing no significance evaluation whatsoever. [00:12:57] Speaker 03: And so in many respects, the commission is speaking out of two sides of its mouth and saying that this is insignificant, while also refusing to do any sort of significance assessment here. [00:13:08] Speaker 03: Additionally, I'd like to raise the issue of segmentation here. [00:13:13] Speaker 03: Under this course precedent, Sierra Club versus Army Corps of Engineers, to show that segmentation has occurred, you have to demonstrate contemporaneous construction schedules, closely related utility, and interrelated nature. [00:13:25] Speaker 03: In this case, we meet all three. [00:13:27] Speaker 03: Both the 261 Upgrade Project from Presser Station on the west side of the Connecticut River and the Long Meadow Metering Station on the east side of the Connecticut River are built in tandem. [00:13:38] Speaker 03: The metering station was constructed first and while a metering station can be installed without additional capacity, this was specifically designed to anticipate the additional capacity that's facilitated by this compressor station and the compressor station. [00:13:52] Speaker 03: And Long Meadow have overlapping construction schedules, and their utility here is to move additional gas capacity into the Springfield distribution grid. [00:14:01] Speaker 03: They are both supplied this gas under the same contract agreement between Tennessee Gas and Columbia Gas distribution. [00:14:09] Speaker 06: Christian found, though, that the Long Meadow project has independent role, independent utility that it's serving, and that it would go forward with or without a 261 upgrade. [00:14:20] Speaker 06: That's at least a relevant consideration in the segmentation analysis, isn't it? [00:14:25] Speaker 03: You can technically build a metering station without a compressor station, but when you're building it to anticipate the increased volume that's facilitated by the compressor station, the independent utility of it is de minimis. [00:14:38] Speaker 03: It will really just be [00:14:40] Speaker 03: Because a metering station is meant to measure the volume and flow that would be coming through it. [00:14:46] Speaker 03: If you aren't increasing the capacity of what is being pushed through it, then it doesn't need to be upgraded to a meter that increased capacity. [00:14:54] Speaker 03: So they have similar utility here. [00:14:57] Speaker 03: They're meant to work in tandem. [00:14:58] Speaker 03: And as this court said in the Delaware Riverkeeper case, in that this is, what's the quote, [00:15:06] Speaker 03: they are meant to function together seamlessly, which is exactly what happens here. [00:15:10] Speaker 03: Moreover, both Tennessee Gas and Columbia advertise this as addressing interrelated challenges for needed additional capacity. [00:15:19] Speaker 03: With that, I see that my time is up unless you have further questions, Robert. [00:15:24] Speaker 01: OK, thank you, Mr. Carlesco. [00:15:26] Speaker 01: We'll hear from for Council now, Ms. [00:15:28] Speaker 01: Chu. [00:15:30] Speaker 05: Good morning, Your Honors. [00:15:32] Speaker 05: Susanna Chu for the Federal Energy Regulatory Commission. [00:15:35] Speaker 05: In this case, the commission made a record based fact specific determination that this particular reliability project designed to address local reliability needs would have minimal emissions and minimal environmental impacts. [00:15:51] Speaker 05: My colleagues arguments are not tethered to the record in this case. [00:15:56] Speaker 05: Going to a question that Judge Bolette asked about the standard that should be applied to whether upstream induced gas production could be reasonably foreseeable as a result of a particular pipeline project. [00:16:12] Speaker 05: The answer is the standard is not relevant in this particular case. [00:16:16] Speaker 05: Here, the commission made a decision. [00:16:18] Speaker 05: It made a record-based decision that any induced production was not reasonably foreseeable because this particular project, which involves a two-mile pipeline loop located adjacent to existing pipeline and upgrades to aging compressor station units, that this particular project is taking gas from other interstate pipelines [00:16:43] Speaker 05: That's in a certificate order at paragraph 61 through 62, JA 389 to 90. [00:16:49] Speaker 05: And of course, we have to remember that as chief judge- Is it going to move more gas or the same gas? [00:16:57] Speaker 05: Your honor, first, the petitioners did not raise the specific issue. [00:17:02] Speaker 05: And on the record- Can that raise the specific issue of what? [00:17:05] Speaker 06: I'm just asking a fact question. [00:17:06] Speaker 06: I thought the whole reason FERC authorized this is that it's going to move more gas. [00:17:10] Speaker 06: Is that a disputed fact? [00:17:12] Speaker 05: No, no, I mean, actually, no. [00:17:14] Speaker 05: Let me clarify. [00:17:15] Speaker 06: Sorry, so the question agrees that the point of this is to move more gas. [00:17:20] Speaker 05: No, that's wrong, Your Honor. [00:17:22] Speaker 05: Okay. [00:17:23] Speaker 05: The record shows that actually the reason for this particular contract [00:17:28] Speaker 05: between Tennessee Gas and Columbia Gas, the local distribution company, is to enhance the reliability of the Columbia system. [00:17:39] Speaker 05: The project was designed to serve existing customers of Columbia Gas. [00:17:43] Speaker 05: And in fact, what they were doing was replacing their less reliable, interruptible service with firm transportation. [00:17:51] Speaker 06: I thought either Columbia or Tennessee Gas or both, most of them had said that this was going to lead to increase. [00:17:57] Speaker 06: increase provision of gas? [00:18:01] Speaker 05: I don't believe so, Your Honor. [00:18:02] Speaker 05: I think that Columbia Gas actually participated as a party in the FIRC proceeding and submitted some statements where they said that their [00:18:13] Speaker 05: their existing interruptible service was not reliable and extremely costly. [00:18:20] Speaker 05: And they were trying to replace that interruptible service, the secondary capacity, with firm transmission capacity, which would enable them to meet winter heating demands in the New England region, which, as your honors are probably aware, is a serious issue in that region. [00:18:35] Speaker 06: So JA 113, Columbia Gas says that the additional capacity will be used in large part to serve new customers. [00:18:43] Speaker 06: Converting from oil heating to natural gas. [00:18:48] Speaker 05: Your honor, I believe this is a part of the Massachusetts DPU's order approving the contract between Tennessee and Columbia Gas. [00:19:04] Speaker 05: But later in that same order, or earlier in that same order rather, [00:19:14] Speaker 05: What about the replacement capacity? [00:19:16] Speaker 06: Well, they can do both. [00:19:18] Speaker 06: You can have replacement and you can increase. [00:19:20] Speaker 06: All I'm asking you is, this is on the record, Columbia Gas said this, and I thought you were disputing that there was going to be any increased amount of gas. [00:19:33] Speaker 05: Your Honor, sorry, that was the Massachusetts CPU. [00:19:36] Speaker 05: Columbia Gas, I believe there were [00:19:42] Speaker 05: effectively two reasons. [00:19:43] Speaker 05: There was the replacement capacity primarily, but Columbia Gas also said that to the extent that new customers would be served, these new customers would be transitioning from oil heat to natural gas. [00:19:56] Speaker 05: That's more gas. [00:19:57] Speaker 05: Possibly, but the record doesn't show what portion might be new customers. [00:20:03] Speaker 05: The record shows that the primary reason, the driving force for this contract was the replacement of secondary capacity. [00:20:10] Speaker 05: So I think if you look at the Columbia guest statement itself is more clear because, Your Honor, the JA 113 site is the Massachusetts DPU order, which may have some statements that are a little [00:20:23] Speaker 05: that appear inconsistent, but it's the Columbia gas statement that is more clear. [00:20:35] Speaker 06: So did FERC find that there would be no increase in gas, the amount of gas moving through this pipeline? [00:20:41] Speaker 06: Did FERC make that fact-finding? [00:20:43] Speaker 06: That's why it couldn't assess, there were no upstream effects because there was going to be no change in the volume of gas produced as a result of this upgrade? [00:20:52] Speaker 05: No, Your Honor. [00:20:52] Speaker 05: The Commission did not have an opportunity to make that finding. [00:20:55] Speaker 05: Well, it didn't make the finding and it wasn't raised on rehearing, so it didn't have an opportunity to more closely address its finding. [00:21:03] Speaker 06: Sorry, what I understood it to say was you can't tell us which wells will be drilled as a result of this. [00:21:12] Speaker 06: I did not understand it and please correct me if there's a fact finding that I've missed where it says we don't think there's going to be any increase in volume of gas and that's why we don't need to analyze upstream effects, please tell me that. [00:21:24] Speaker 06: My understanding from the decision was that they said you haven't shown us which well will be dug as a result, new well will be dug as a result of this project. [00:21:33] Speaker 05: Right, Your Honor. [00:21:34] Speaker 05: The commission did say that. [00:21:36] Speaker 06: Did it say the former? [00:21:38] Speaker 06: Did it say there's no upstream effect because there's not going to be any change in the volume of gas? [00:21:44] Speaker 05: The commission did not say that there would be no change in volume, but it wasn't... Did the commission recognize that there would be some change in volume? [00:21:51] Speaker 06: Some increase in volume? [00:21:54] Speaker 05: There may be. [00:21:55] Speaker 05: I think there may be, but there's no finding as to whether or not there would be a change in volume as a result of this particular [00:22:02] Speaker 06: The question have to figure that out before if it's if it knows it has to analyze upstream effects, whether. [00:22:08] Speaker 06: Whether someone argues in a particular way or not, it knows it has to analyze upstream effects, if it can, and so, if it knows there's going doesn't need to first figure out if there's going to be any increase in gas. [00:22:21] Speaker 05: Well, Your Honor, the Commission has to decide whether upstream induced production might be reasonably foreseeable. [00:22:30] Speaker 05: So the standard is the reasonably foreseeable standard, and that is necessarily a fact-based determination. [00:22:36] Speaker 05: And the Commission reasonably found here that it could not determine whether [00:22:43] Speaker 05: increased production might be reasonably foreseeable on the basis of this record, because again, we're talking about a two mile pipeline loop. [00:22:53] Speaker 06: And I guess I get it again, if maybe I'm, I apologize if I just missed it. [00:22:58] Speaker 06: Where did they say, would you keep characterizing as this is just this little two mile thing, there's not going to be any increase. [00:23:05] Speaker 06: I had read their decision as saying, because you haven't shown us new wells would be dug. [00:23:13] Speaker 05: Right. [00:23:14] Speaker 05: I mean, that is part of the analysis that the commission generally applies that it needs to know a source. [00:23:23] Speaker 05: But I'll say that in this case, it's a small project that's taking gas from other interstate pipelines. [00:23:30] Speaker 05: And as Your Honor was saying, the gas in these pipelines is fungible. [00:23:34] Speaker 05: There is record evidence that some of this pipeline gas might actually come from the Dawn Hub. [00:23:42] Speaker 05: That's at J.A. [00:23:43] Speaker 05: 66. [00:23:45] Speaker 05: And so whether it comes to the Dawn Hub or the Marcellus Shell, these are different sources. [00:23:50] Speaker 05: I mean, the Dawn Hub. [00:23:51] Speaker 06: I don't understand why different sources. [00:23:54] Speaker 06: I'm not sure, since you just said they're fungible. [00:23:56] Speaker 06: It matters what the source is. [00:23:57] Speaker 06: The question is whether there's been an increase. [00:24:00] Speaker 05: Right, but well, I mean, the Commission didn't know if there'd be an increase in wells drilled to supply this particular. [00:24:08] Speaker 06: Again, why does there have to be a new well drilled if there's existing wells that are going to produce more? [00:24:12] Speaker 06: I just didn't, I did not understand. [00:24:13] Speaker 06: I'm just telling you, I really struggled to try and understand why on earth the Commission thought that was the relevant. [00:24:20] Speaker 06: Inquiry as opposed to whether there's going to be an increase in volume and then they will assess whether it's sort of a material one with environmental impacts but they didn't I didn't see them even doing that first thing of is there going to be an increase in volume they said you haven't shown us that a new well is going to be done. [00:24:38] Speaker 05: I think it's more than just whether the well is going to be done, Your Honor. [00:24:42] Speaker 05: If you look at JA 389, for example, that's in a certificate order. [00:24:47] Speaker 05: Paragraph 61, the commission is saying that the specific source of natural gas to be transported via this upgrade has not been identified with any precision and will likely change throughout the project's operation. [00:25:01] Speaker 05: That's exactly my concern. [00:25:06] Speaker 06: They're focused on the specific source of the gas having to be identified. [00:25:11] Speaker 06: And I don't understand [00:25:14] Speaker 06: I think that's what I'm asking you. [00:25:16] Speaker 06: That seems to me the wrong question. [00:25:18] Speaker 06: The question is whether there's going to be a change in the amount of production, whatever the source, the environmental effects. [00:25:27] Speaker 06: There can be environmental effects, whatever the source. [00:25:30] Speaker 05: I understand, your honor. [00:25:31] Speaker 05: I think that this is the standard that commission usually applies, that it needs to determine a source and it needs to be concrete. [00:25:42] Speaker 05: I think that's the commission's understanding and using the standard. [00:25:45] Speaker 06: But I will say, I don't think it's- Has any court decision said that unless a specific source of gas is identified, [00:25:57] Speaker 06: then you don't have to analyze upstream effects. [00:26:00] Speaker 06: Is that how NEPA works? [00:26:02] Speaker 06: Is there any case that says that? [00:26:05] Speaker 05: Your honor, the commission has been upheld before on its analysis of upstream impacts. [00:26:11] Speaker 05: The specific source inquiry? [00:26:12] Speaker 05: I'm not sure, your honor. [00:26:15] Speaker 05: I could find out and submit a letter if you would like that. [00:26:21] Speaker 06: You have a case where we have said that [00:26:24] Speaker 06: There's no obligation to analyze upstream effects unless in a gas context, the specific source can be identified. [00:26:30] Speaker 06: That would be of interest to me. [00:26:33] Speaker 06: I couldn't. [00:26:33] Speaker 06: I didn't. [00:26:33] Speaker 06: I didn't find it, but I might have missed it. [00:26:36] Speaker 06: I understand your ability of gas. [00:26:37] Speaker 06: It would say it seems an odd inquiry to me. [00:26:40] Speaker 05: Let me look into that and we will submit that information to you. [00:26:44] Speaker 05: But I'll say that I don't think that that we'll look into it, but that standard isn't determinative in this case. [00:26:50] Speaker 05: I mean, in this case, there's just no record evidence of induced additional production that could be reasonably foreseeable as a result of this particular pipeline. [00:27:02] Speaker 06: Can I ask you about downstream effects? [00:27:05] Speaker 06: Sure, Your Honor. [00:27:08] Speaker 06: We should talk about, you know, you don't have enough information about end use. [00:27:13] Speaker 06: And if I read the record correctly, the day before it issued its environmental assessment, the commission asked Tennessee Gas to provide more information about the intended uses. [00:27:26] Speaker 05: Right, Your Honor. [00:27:26] Speaker 06: And then it issued the environmental assessment without waiting for Tennessee Gas to respond. [00:27:32] Speaker 06: because they only asked the day before. [00:27:33] Speaker 06: So how can the commission then reasonably say it lacks sufficient information about the end use if it waited until too late to ask Tennessee Gas for that information? [00:27:45] Speaker 06: Is that the behavior by the commission? [00:27:51] Speaker 05: Uh, I think, I think the commission did at least then in that case, the commission had the response before it in advance of the certificate order and the hearing order being issued. [00:28:01] Speaker 06: Even the environmental assessment. [00:28:03] Speaker 06: And so there's not going to be environmental concept. [00:28:05] Speaker 06: We can't, we can't figure out, we don't, we haven't identified any material downstream, uh, consequence. [00:28:11] Speaker 06: It didn't write the environmental assessment and a certificate order, did it? [00:28:15] Speaker 05: I know I don't believe so, but it could have it could have your honor and you know any responses received before the certificate order issued before the hearing order issued the commission could have addressed any change that would be warranted by the response. [00:28:31] Speaker 05: But I think it's important in this regard to note that the the Commission made the inquiry [00:28:36] Speaker 05: It asked Tennessee about the ultimate end use. [00:28:41] Speaker 05: It wasn't just one data request. [00:28:42] Speaker 05: It was actually two data requests. [00:28:46] Speaker 05: Actually, Your Honor, there are two data requests. [00:28:48] Speaker 05: And I'm sorry, I'm not sure which one now that you were referring to. [00:28:52] Speaker 05: But there is one issued in December of 2018. [00:28:54] Speaker 05: And then there was the other one issued in May of 2019. [00:28:59] Speaker 06: JA 175 to 77. [00:29:02] Speaker 06: It just struck me as quite unusual to see an agency ask for information that's critical to evaluating downstream effects the day before its environmental assessment and then not wait for a response before doing it. [00:29:16] Speaker 06: I don't think I've ever seen that before. [00:29:19] Speaker 06: Well, I think your honor, that was the second data request. [00:29:22] Speaker 06: The data that they thought was relevant to evaluating downstream effects or not? [00:29:27] Speaker 06: I assume they asked because they thought it was relevant. [00:29:30] Speaker 05: It probably was. [00:29:30] Speaker 05: But it may have been additional information that came up as staff was preparing the environmental assessment. [00:29:37] Speaker 05: And if it changed. [00:29:38] Speaker 06: They issued the assessment the next day. [00:29:40] Speaker 05: Right. [00:29:41] Speaker 05: But they could have supplemented the assessment if the answer changed their minds about something. [00:29:49] Speaker 05: And that was, again, that was the second data request. [00:29:52] Speaker 05: The first one was issued December 20. [00:29:53] Speaker 06: Yeah, that's the first one. [00:29:54] Speaker 06: He didn't get much response from Tennessee Gas. [00:29:56] Speaker 06: I think that's why he did the second one. [00:29:57] Speaker 06: One more need to assess the downstream effect here, right? [00:30:02] Speaker 06: You know, you know, there's going to be upgrade capacity, you know, exactly what it is, you know, the producer, you know, exactly the who the end users are. [00:30:11] Speaker 06: And you know that 97% of gas is combusted. [00:30:15] Speaker 06: What additional piece of information was needed and was missing to make an educated estimate of the downstream effect here? [00:30:29] Speaker 05: Well, Your Honor, the commission found that it didn't know the ultimate end users, the specific end users, because Columbia Gas is a local distribution company and it has different kinds of customers, has different classes of customers. [00:30:46] Speaker 05: Some may purchase gas from marketers rather than directly from the distribution company. [00:30:50] Speaker 05: You can make estimates. [00:30:51] Speaker 06: I mean, it can't be that the downstream effects are only analyzed when you have [00:30:57] Speaker 06: you know, customer, customer, individualized reports on usage. [00:31:02] Speaker 06: We were pretty clear in the Sabal trail case that educated estimates are done here. [00:31:08] Speaker 06: And it seems to me, it's not going to be many cases that you're going to have this sort of close set of how much is coming out and how much increased capacity is coming in. [00:31:17] Speaker 06: We know exactly where it's going. [00:31:19] Speaker 05: Right, your honor. [00:31:20] Speaker 05: I mean, of course, the agency can make educated estimates and it does. [00:31:26] Speaker 05: But in this particular case, petitioners did not ask the commission to make specific estimates on rehearing. [00:31:34] Speaker 05: And the argument was not raised with specificity to the agency. [00:31:38] Speaker 05: And specificity is required. [00:31:40] Speaker 06: Doesn't the agency have to make, at some point, kind of do its own job and say, if it says we can't [00:31:49] Speaker 06: If it said, we can't analyze downstream effects on this record. [00:31:54] Speaker 06: And they said, yes, you can. [00:31:56] Speaker 06: That disputes before us. [00:32:00] Speaker 06: And they have to have a reasonable explanation for why they couldn't do it. [00:32:04] Speaker 06: And to say that, well, there could always be more information doesn't seem to me responsive to the question of whether you could have made an educated estimate on this record, this existing record. [00:32:15] Speaker 05: Well, your honor that the Commission always it can make estimates, but I guess in on this particular record an educated estimate here. [00:32:22] Speaker 05: But it well, I think the agency decided that here, it wouldn't be meaningful to make estimates or that into that it perhaps it wouldn't be. [00:32:31] Speaker 05: a truly educated estimate because of the specific facts of the case. [00:32:35] Speaker 05: We have this local distribution company that's subscribing to this project for replacement capacity. [00:32:44] Speaker 05: And we have people transitioning from oil heat to gas heat. [00:32:48] Speaker 05: There are specific facts in this case that make it appear that an estimate would not be meaningful. [00:32:54] Speaker 05: Why? [00:32:54] Speaker 06: First of all, the answer earlier was that this really isn't about [00:33:01] Speaker 06: people transitioning from oil to gas. [00:33:03] Speaker 06: If they are, that'll be a small amount. [00:33:04] Speaker 06: So you can, that can certainly be addressed through mathematics in the adjustment. [00:33:10] Speaker 06: And if you know you're going to have increased capacity, you know where it's going, you know it's going to be burned to be used for residential and customer usage. [00:33:19] Speaker 06: Again, we're not, we're looking for educated estimates here. [00:33:23] Speaker 06: We're not looking for pinpoint precision. [00:33:26] Speaker 05: Right, Your Honor. [00:33:27] Speaker 05: I think the record is just showing that there may not be increased consumption here because we're replacing a certain amount of capacity with another, the same amount of capacity, just more reliable capacity. [00:33:43] Speaker 05: And that's just in the record. [00:33:45] Speaker 05: And the commission decided that it wouldn't have been meaningful to make an estimate in this particular case. [00:33:53] Speaker 01: Can I just ask, in the petition for a hearing, [00:33:57] Speaker 01: The following sentence appears. [00:34:00] Speaker 01: It said, JA 468, FERC cannot ignore the fact that adding firm transportation capacity is likely to spur demand for natural gas. [00:34:06] Speaker 01: And for that reason, the commission must at least examine the effects that an expansion of pipeline capacity might have on consumption and production. [00:34:13] Speaker 01: So doesn't that flag the necessary question? [00:34:15] Speaker 01: Because I thought part of your response was that the commission wasn't put on notice in the petition for a hearing of the need to look into this. [00:34:21] Speaker 01: And it seems like that's what's being asked here. [00:34:26] Speaker 05: Right here and I think that's a it's a generalized argument it doesn't that particular argument doesn't, for example, ask the commission to do a full burn estimate. [00:34:38] Speaker 05: I mean it's, that's a very generalized argument that it doesn't engage with the facts of what the. [00:34:45] Speaker 05: What the commission was doing in terms of the date, the data requests, the data requests are not mentioned in the hearing request. [00:34:53] Speaker 05: And in the commission's conclusions based on the data request was not challenged on rehearing. [00:35:00] Speaker 05: So that's where if the commission. [00:35:04] Speaker 05: had been alerted with specificity that its interpretation of these data requests was being challenged, then the commission could have addressed it more specifically in the rehearing order. [00:35:17] Speaker 05: But we didn't have that opportunity because it wasn't raised on rehearing, not specifically. [00:35:25] Speaker 02: Can I ask you, with regard to downstream effects, why do you even need to know [00:35:34] Speaker 02: the end users. [00:35:37] Speaker 02: And I assume as a matter of science, there's just some equation which tells you that when you burn a cubic foot of natural gas, you're gonna get a certain amount of carbon dioxide or whatever. [00:35:53] Speaker 02: And that won't change depending on whether the person burning the gas is an individual home [00:36:04] Speaker 02: for heat or a power plant or whatever. [00:36:07] Speaker 02: So what does it matter who's burning the gas as long as you know how much gas is going through the pipeline and the overwhelming majority of it will in fact be burned? [00:36:20] Speaker 05: Well, your honor, I think it depends on the facts of each case. [00:36:25] Speaker 05: There may be the broad general estimate that 97% of gas that is transported is consumed. [00:36:32] Speaker 05: But some gas isn't consumed. [00:36:36] Speaker 05: I mean, local distribution companies sometimes release excess capacity. [00:36:42] Speaker 05: There are cases where the gas is not consumed. [00:36:45] Speaker 05: And so I think the commission's view is that it [00:36:50] Speaker 05: it needs more information about the burning of the gas, at least the commission's view as reflected in this order. [00:36:57] Speaker 02: What else would you do with the gas other than burn it? [00:37:01] Speaker 02: Does it have any other use? [00:37:05] Speaker 05: Not that I'm aware, your honor, apart from selling it. [00:37:09] Speaker 05: I mean, I guess one could resell it if you're a marketer or a local distribution company. [00:37:13] Speaker 05: I mean, that would be the other use that I can think of. [00:37:18] Speaker 06: Does FERC dispute that 97% statistic? [00:37:23] Speaker 05: Not that I'm aware of, Your Honor. [00:37:24] Speaker 05: I don't know that it was addressed in the order itself. [00:37:29] Speaker 05: I don't think the order itself addresses the 97% statistic, at least not the majority order. [00:37:35] Speaker 06: FERC is the expert agency here. [00:37:37] Speaker 06: I should think they would know the statistic. [00:37:39] Speaker 06: And so they could just discount any number by 3% if they felt they needed to. [00:37:46] Speaker 06: That would seem to be part of an educated estimate. [00:37:51] Speaker 05: That is possible, Your Honor. [00:37:53] Speaker 05: I don't think that it was necessary to do that on the record of this case, but that's possible, Your Honor. [00:38:01] Speaker 06: Because why wasn't it necessary? [00:38:05] Speaker 05: Well, I think in the record of this case, because we're talking about a project where there are specific findings that the project itself would have minimal emissions and minimal environmental impacts. [00:38:16] Speaker 06: And finding a minimal environmental impact was after they said, we can't figure anything out. [00:38:21] Speaker 06: So that seems less helpful. [00:38:23] Speaker 05: Well, that was based on direct emissions from the project. [00:38:28] Speaker 06: Can I ask one other thing? [00:38:32] Speaker 06: And that is, what's the status of this project? [00:38:37] Speaker 06: Then I'm talking about the 261 upgrade here. [00:38:42] Speaker 06: Is it completed? [00:38:43] Speaker 06: Is it already providing in service? [00:38:45] Speaker 06: Is it still, I know there was a construction order. [00:38:47] Speaker 06: Is the construction still underway? [00:38:50] Speaker 05: Yes, your honor. [00:38:52] Speaker 05: I believe council for the pipeline will also have additional information, but my understanding is that the pipeline loop is complete and in service and the compressor station upgrades have been delayed because of the pandemic. [00:39:06] Speaker 05: But I believe that that's in process. [00:39:09] Speaker 06: Okay, so this new compression, this new compressor system is not up and operating. [00:39:14] Speaker 05: I think so, yes. [00:39:17] Speaker 01: Unless my colleagues have further questions for you, we'll hear from Interveners Council. [00:39:22] Speaker 01: Thank you, Ms. [00:39:22] Speaker 01: Chu. [00:39:23] Speaker 01: Thank you, O'Neill. [00:39:28] Speaker 01: Mr. O'Neill, you're muted. [00:39:35] Speaker 04: Thank you, your honor. [00:39:36] Speaker 04: May it please the court. [00:39:37] Speaker 04: I'm Brian O'Neill. [00:39:38] Speaker 04: I appear on behalf of Intervener Tennessee Gas Pipeline Company. [00:39:42] Speaker 04: We've followed a joint brief with the other intervener, in this case, Columbia Gas. [00:39:49] Speaker 04: And to respond to the questions that have come up, first of all, the status of the projects, Ms. [00:39:57] Speaker 04: Chu got it spot on, the 261 looping [00:40:02] Speaker 04: the two miles of looping is complete. [00:40:04] Speaker 04: However, the compression station upgrade has been delayed primarily because of pandemic related issues. [00:40:16] Speaker 04: I begin by saying this, first of all, this is a reliability project. [00:40:20] Speaker 06: Well, I apologize. [00:40:21] Speaker 06: Can I ask one more just fact question? [00:40:22] Speaker 06: Sure. [00:40:23] Speaker 06: Is a long meter, sorry, long meadow meter station, is that completed? [00:40:28] Speaker 04: That is not completed, will be completed later this year. [00:40:32] Speaker 04: Once again, it was delayed because of the situations. [00:40:35] Speaker 06: Sure, I apologize, go ahead. [00:40:37] Speaker 04: That's all right. [00:40:39] Speaker 04: This is a reliability project and we can't lose sight of that. [00:40:43] Speaker 04: It's a relatively minor project from Tennessee's perspective, but it's a critical one for Columbia Gas. [00:40:52] Speaker 04: It's a replacement capacity issue we found. [00:40:57] Speaker 04: while its new capacity, certainly off of the Tennessee system, it's replacing capacity on the Columbia gas system that they have been using, secondary point capacity, which is interruptible. [00:41:10] Speaker 04: The new capacity is firm. [00:41:12] Speaker 04: They can rely upon it year round and don't have to have any concern about it being interrupted. [00:41:18] Speaker 04: In addition, they are replacing antiquated propane peaking capacity, which is not as useful and operationally [00:41:27] Speaker 04: it's not as good and it is more costly. [00:41:31] Speaker 04: With respect to your reference of the statement at JA 113, Judge Miller, that is a statement that was made by the Massachusetts Department of Public Utilities. [00:41:47] Speaker 04: The statement in the record on behalf of Columbia Gas is it JA 87, [00:41:57] Speaker 04: overwhelming majority of this capacity is necessary to replace the capacity that I just described, the unreliable, interruptible capacity. [00:42:08] Speaker 06: To have firm capacity, it has to absolutely be there when they need it. [00:42:14] Speaker 04: That's correct. [00:42:18] Speaker 06: Is there going to be any increased capacity or not? [00:42:20] Speaker 06: Any increased capacity moving through this pipeline? [00:42:25] Speaker 04: to the extent that there's no increase in the, as I understand, no increase in the demand or even in supply as far as we know from Columbia Gases perspective. [00:42:36] Speaker 04: However, there may be the ability to reconnect or to have additional connections where there are customers who are switching from fuel oil. [00:42:45] Speaker 04: So the way we view it from the standpoint of greenhouse gas emissions, that it's either a wash or it's a benefit. [00:42:52] Speaker 04: There's no detriment here from the standpoint [00:42:55] Speaker 04: emissions. [00:42:57] Speaker 04: Finally, I'd point out... My question wasn't about emissions. [00:42:59] Speaker 06: My question was simply increased volume of gas moving through this project than you had before. [00:43:09] Speaker 06: Are you able to move and expected to move more gas? [00:43:13] Speaker 06: I don't know how you can have a firm, reliable, can meet a firm commitment when you have it there. [00:43:19] Speaker 04: That's correct. [00:43:20] Speaker 04: As I said, this is additional capacity from Tennessee's perspective. [00:43:25] Speaker 04: But from Columbia Gas' perspective, it's replacing unreliable capacity. [00:43:30] Speaker 04: So in that regard, from Columbia Gas' perspective, it's a wash, at least from the standpoint of their gas needs. [00:43:40] Speaker 06: From Tennessee Gas, it's an increase. [00:43:43] Speaker 04: Pardon me? [00:43:44] Speaker 06: From Tennessee Gas' perspective, it's an increase in the volume. [00:43:47] Speaker 04: It is, indeed. [00:43:48] Speaker 04: No, Tennessee gas is happy to have the business. [00:43:54] Speaker 04: Also, very quickly. [00:43:57] Speaker 04: Council for petitioners referred to a pamphlet at JA 296 as being an indication that there is increased demand here. [00:44:09] Speaker 04: If you take a look at that pamphlet, you'll see that the reference that council is referring to has to do with something called the alternate backfeed project to serve a different market, the Northampton market, and that project has not gone forward. [00:44:27] Speaker 01: Thank you, Mr. O'Neill. [00:44:28] Speaker 01: Let me make sure my colleagues don't have additional questions for you. [00:44:32] Speaker 01: Mr. Carlesco, we'll give you your two minutes for rebuttal. [00:44:35] Speaker 01: Thank you, Your Honor. [00:44:36] Speaker 03: First, I would like to address the increased capacity. [00:44:39] Speaker 03: Commissioner Gullick acknowledged that this contract increases about 40,000 deck of terms a day over prior agreements with Columbia Gas. [00:44:50] Speaker 03: Moreover, [00:44:52] Speaker 03: Tennessee and FERC make the argument that because this is replacing oil heating within the area, that they could somehow disregard this. [00:45:01] Speaker 03: But this court directly admonished the commission for that same position in Berkhead at page 591. [00:45:07] Speaker 03: They said that if downstream greenhouse gas emissions are otherwise an indirect effect, the possibility that a project's overall emissions calculation will offset somewhere else does not excuse the commission from [00:45:19] Speaker 03: failing to do estimates in the first place. [00:45:21] Speaker 03: And that's exactly what we're seeing here. [00:45:23] Speaker 03: Additionally, I would like to touch on [00:45:27] Speaker 03: the commission's argument that this is solely a reliability increase. [00:45:33] Speaker 03: It is a reliability increase in that it increases the amount of gas that can come into the area. [00:45:38] Speaker 03: The issue with their reliability is that the pipeline capacity is constricted, so they increase the capacity so they can get more gas flowing through there. [00:45:46] Speaker 03: Moreover, interveners acknowledge as much, not interveners, [00:45:50] Speaker 03: Amicus American Gas Association acknowledges that this is very much and if you build it, they will come approach and Food and Water Watch address that at Joint Appendix 462. [00:46:01] Speaker 03: They say that gas distribution companies will [00:46:06] Speaker 03: employ detailed long-term supply agreements that meet reasonably expected future demand. [00:46:13] Speaker 03: This is very much meant to anticipate additional growth. [00:46:17] Speaker 03: They also state that this is a prerequisite for increased gas expansion through their distribution network. [00:46:23] Speaker 03: So this is very much seen as an additional capacity. [00:46:27] Speaker 03: Moreover, we ask this court to vacate this order, because we see this is analogous to your recent order at Standing Rock Sea Tribe. [00:46:34] Speaker 03: versus Army Corps of Engineers, in that this is an inadequate NEPA review of a pipeline with glaring deficiencies that would lack the disruptive consequences, and vacatur would address the seriousness of the order's deficiencies. [00:46:49] Speaker 03: And this is the standard that the court employs an allied signal BNRC, the DC Circuit case from 1993. [00:46:57] Speaker 03: With that, I request that you vacate the order, and thank you for your time. [00:47:01] Speaker 01: Thank you, counsel. [00:47:02] Speaker 01: Thank you to all counsel. [00:47:03] Speaker 01: We'll take this case under submission.