A major part of President Trump's infrastructure agenda suffered a setback when a federal appeals court ruled that regulators must examine the effects of climate change when they review proposed natural gas pipelines.
On its face, the Aug. 22 D.C. Circuit Court of Appeals decision applies to a single project, the Southeast Market Pipelines Project, a network that includes the Sabal Trail pipeline to move natural gas across a number of states for delivery at Florida power plants.
The court said the Federal Energy Regulatory Commission did not properly evaluate the effects of greenhouse gas emissions from the natural gas shipped by the pipeline.
But the ruling could have a broader impact, providing a precedent to block pipelines based on improper climate change analysis, a possibility that counteracts Trump's effort to streamline the approval of infrastructure projects. Trump on Aug. 15 signed an executive order to establish a process to remove permitting regulations and speed up approvals of roads, bridges and pipelines.
Industry players who support Trump's infrastructure and "Energy Dominance" agendas are expressing concern that the court ruling instead could lengthen FERC's approval process for planned and future pipeline projects.
"We believe FERC properly evaluated and permitted the natural gas infrastructure projects at issue in this case," said Mike Tadeo, a spokesman with the American Petroleum Institute, in a statement to the Washington Examiner. "Regulatory certainty is critical to ensuring that infrastructure is constructed efficiently. Further delays due to needless regulatory hurdles will slow consumer access to reliable, affordable natural gas and opportunities for job creation."
FERC approves $500 billion in infrastructure projects each year, with more than 1,500 cases coming through the commission. FERC approves and regulates the interstate transmission of electricity, natural gas, and oil.
With the boom in fracking natural gas in newfound shale regions, energy companies are eager to build pipelines to transport the gas to markets around the country. The industry is facing a lack of pipeline capacity that has limited their ability to transport oil and natural gas from the Marcellus and Utica shale fields in the Appalachian region, in particular.
In the past, FERC has had minimal obligations in considering greenhouse gas emissions and the effect on climate change when reviewing pipeline permits. Environmental groups have struggled for years to get the commission to take climate change into consideration in its environmental reviews.
"It's a very significant victory for environmentalists because FERC has had a long history of rubber stamping these pipelines, but I hope this decision will spur it to examine its responsibilities more closely when it makes decisions," said Elly Benson, an attorney with the Sierra Club, the plaintiff in the lawsuit.
"This court opinion signals that even if the executive branch under President Trump wants to do away with these analysis of burning fossil fuels, the courts are going to hold agencies to their obligations under federal environmental law," Benson said in an interview with the Washington Examiner.
The recent 2-1 D.C. circuit court decision directs FERC to review the climate change impacts of the Southeast Market pipelines or offer a compelling reason to not do so.
That means FERC's environmental impact statement for the project should quantify the emissions from the power plants that ultimately burn natural gas delivered by the pipelines, a process the court said is required under the National Environmental Policy Act.
FERC approved the nearly 700-mile long Southwest Market pipelines in 2016, but it hasn't been built.
A FERC representative told the Washington Examiner it has not decided whether to appeal the court ruling.
The developers of the Sabal Trail portion of the pipeline network say the court ruling does not impact its "operations."
"While we won't comment further on pending litigation, we do not anticipate that the court's decision will have an adverse effect Sabal Trail's operations at this time," said Andrea Grover, a spokeswoman for the consortium of companies behind the project.
Observers of FERC argue the ruling will have minimal impact on the regulator's permitting process.
"This is one more hurdle the developer has to go through, one more set of data you can litigate and further delay projects," said Tony Clark, a Republican who served as a FERC commissioner from 2001 to 2012. "But I don't think this in itself is a showstopper," Clark told the Washington Examiner.
Yet, Clark conceded the court ruling amounted to progress for opponents of pipelines, including high-profile battles waged recently against the Keystone and Dakota Access pipelines.
"No doubt it is a win for the anti-pipeline groups, but it probably won't have the effect of blocking projects," Clark said. "With that said, from a strategic standpoint, the tactic most opponents follow is not outright defeat in courts or in front of permitting agencies, but trying to throw as many hurdles in front of projects as they can to drag out the permitting timeline."
Legal experts note the National Environmental Policy Act is a procedural law, meaning FERC, under the recent court ruling, is simply required to undertake the process of quantifying greenhouse emissions. It does not have to take a specific action, such as accepting or rejecting a permit for the project, based on the result of that analysis. Many scientists blame greenhouse gases emittee from burning fossil fuels for driving manmade climate change.
"The D.C. Circuit decision — if FERC abides by it rather than appeals it — will not impact FERC's ability to approve pipelines," said Michael Burger, executive director of the Sabin Center for Climate Change Law, in a statement to the Washington Examiner. "In any reading, the decision requires disclosure of a number that can be easily calculated. It does not direct any outcome in FERC's approval process. It only requires the agency to disclose information."
Tom Russo, a former analyst at FERC specializing in natural gas, says the ruling could open the door to future legal challenges that seek to further enhance FERC's responsibilities.
"The real issue is not so much the downstream climate change effects, but whether the next logical step in a legal judgment is OK, don't you also need to evaluate upstream impacts, meaning reviewing the emissions from the drilling and fracking of the natural gas that goes into the pipeline," Russo said in an interview with the Washington Examiner. "You get to the point where it becomes how much of the world do we need to analyze, and what does it mean."