Property rights, environment, or safety? 14% pipeline company profit is more important! said FERC. But this fight is not over.
Without ever appearing on FERC’s public calendar, and a month in advance of when FERC previously said, FERC yesterday issued certificates for Sabal Trail, the Transco Hillabee Expansion Project, and Florida Southeast Connection. Trial-style evidentiary hearing? Nope, FERC believes Sabal Trail. Consolidation of the three dockets into one? Nope, everybody should have opposed all three, says FERC. Environmental justice? Hey, demographics don’t matter, pipeline siting is all about engineering and “environmental” issues. And profit. Don’t forget profit for the pipeline companies. Solar power? Nevermind, the applicants can profit by selling fracked methane! Didn’t say where they’re going to get the gas? That’s just how it’s done! Too bad, Pennsylvania! What about all those LNG export projects at the end of this pipeline chain? Not us, says FERC, FPL, and Sabal Trail. Nevermind with open access Sabal Trail and FSC can ship to any old or new LNG operations they like without any further approval by FERC. Need? See above about they can profit by selling the gas; that’s all the need FERC wants! Environmental issues? Profit outweighs springs, rivers, and aquifers! But don’t worry! Sabal Trail will monitor drilling under the Suwannee River. Safety? FERC routinely grants certificates anyway! All those open houses and FERC Scoping Meetings and comments and interventions? Just so many statistics cited while saying FERC believes the invading pipeline companies over the local people whose land, air, and water are at stake.
This fight is not over. There are multiple state and local permits still outstanding, as well as the Army Corps of Engineers permits, and the EPA could still intervene, among other methods of opposition.
Filed with FERC 2 February 2016 as Accession Number 20160202-3056: “Order issuing certificates and approving abandonment re Florida Southeast Connection, LLC et al under CP14-554 et al.”,
44. … Although the Commission’s Rules of Practice and Procedure generally do not permit answers to protests, 1 we will accept Sabal Trail’s answers because they clarify the concerns raised and provide information that has assisted in our decision making.
55. … Sabal Trail omitted Exhibit H, which provides for information on total gas supply, specifically a description of the production areas accessible that contain existing or potential supplies for the proposed project.
It’s probably going to come from the Marcellus Shale, but hey, Sabal Trail omitted that.
86. Allegations that the projects will be used to export gas also do not persuade us to find that the applicants have not demonstrated project need. Neither Sabal Trail nor Florida Southeast has proposed to connect to any LNG export facilities. In addition, Florida Power & Light stated that it lacks legal authority to export natural gas, and that it is contracting for capacity to serve its natural gas plants. Florida Power & Light adds that it is not an owner of the Floridian LNG project in Martin County, Florida, nor is any of its affiliates.64 Moreover, the Commission does not have jurisdiction over the exportation and importation of natural gas. Such jurisdiction resides with the U.S. Department of Energy (DOE), which must act on any applications for natural gas export and import authority.65
64 Florida Power & Light December 23, 2014 Motion to Intervene and Comments in Docket No. CP15-17-000 at 6.
65 Id. at 4, 6.
87. As discussed above, 93 percent of the total design capacity of the Sabal Trail project is subscribed under precedent agreements with initial terms of 25 years. This is persuasive evidence of market need for this project. Even though the market, in its consideration of alternative means for addressing energy needs, could have selected renewable energy alternatives and energy efficiency gains, we find that the precedent agreements sufficiently demonstrate the need for the project.66
66 Final EIS at 4-1 to 4-2.
90. Kiokee-Flint et al. requests that the Commission deny Sabal Trail’s request for a blanket certificate pursuant to Part 157, Subpart F because Sabal Trail is a new pipeline with no proven safety or reliability record. Kiokee-Flint et al. also requests that the Commission consider the environmental impacts, including cumulative effects, of the blanket certificate and require mitigation of such impacts in its environmental review pursuant to the National Environmental Policy Act of 1969 (NEPA).67
67 Kiokee-Flint et al. December 22, 2014 Filing at 26-27. Kiokee-Flint also individually argues that the draft EIS does not sufficiently examine the added impacts of a blanket certificate on landowners along the pipeline route. Kiokee-Flint October 28, 2015 Filing at 22-23.
91. The Commission routinely grants a pipeline company a blanket certificate along with the pipeline’s certificate to construct and operate its initial facilities. Kiokee-Flint et al. provides no adequate explanation for us to depart from Commission practice. In addition, given that Sabal Trail has not proposed to conduct any activity under a Part 157 blanket certificate, it would be premature for Commission staff to assess the environmental impacts of, or require mitigation for, such potential activities. Commission staff has no information regarding the location, scope, or timing of any potential activity on which to base its environmental review. In the event that Sabal Trail proposes to conduct under its blanket certificate an activity that causes ground disturbance or changes to operational air or noise emissions, Sabal Trail must notify landowners and adhere to the guidance set forth in section 380.15(a) and (b) of the Commission’s regulations.68 Therefore, because Sabal Trail and Florida Southeast will become interstate pipelines with the issuance of a certificate to construct and operate the proposed facilities, we will issue to Sabal Trail and Florida Southeast the requested Part 157, Subpart F blanket certificates.
68 Section 380.15(a) and (b) state that siting, construction, and maintenance of facilities shall be undertaken in a way that avoids or minimizes effects on scenic, historic, wildlife, and recreational values, and require a pipeline to take into account the desires of landowners in the planning, location, clearing, and maintenance of rights-of-way and the construction of facilities on their property. 18 C.F.R. § 380.15(a)-(b) (2015).
92. Sabal Trail and Florida Southeast also request Part 284, Subpart G blanket certificates to provide open access transportation services. Under a Part 284 blanket certificate, Sabal Trail and Florida Southeast will not require individual authorizations to provide transportation services to particular customers. Sabal Trail and Florida Southeast each filed a pro forma Part 284 tariff to provide open access transportation services. Since a Part 284 blanket certificate is required for Sabal Trail and Florida Southeast to offer these services, we will grant Sabal Trail and Florida Southeast Part 284 blanket certificates, subject to the conditions imposed in this order.
So Sabal Trail and FSC can ship fracked methane to any LNG export operation somebody (FERC, FE, or MARAD) approves, without any further application by the pipeline companies.
Property rights? Pipeline profit is more important!
115. Sabal Trail proposes a return on equity of 14 percent with a capital structure of 60 percent equity and 40 percent debt. Kiokee-Flint et al. asserts that the Commission should deny the proposed 14 percent return on equity because Sabal Trail will cheaply acquire the necessary land rights and such a return will encourage pipelines to propose greenfield pipelines.87
87 Kiokee-Flint et al. December 22, 2014 Filing at 27.
116. As an initial matter, we deny Kiokee-Flint et al.’s request. The Commission does not use acquisition costs, such as the cost to purchase land, in determining the appropriate return on equity.
Karst, smarsht! Springs? Bling!
243. The final EIS concludes that impacts on groundwater from overland construction will be short term and localized, and mitigated by implementation of the applicants’ construction and restoration plans and adherence to Commission staff recommendations, now included as conditions in Appendix B of this order. Moreover, Commission staff identified only two springs within 0.5 mile of overland pipeline construction in the karst sensitive areas of Georgia and Florida, the nearest of which is about 1,000 feet from the project. Based on these distances and considering that impacts on groundwater resources that could occur in conjunction with overland construction would be temporary, minor, and localized, the final EIS concludes, and we agree, that overland construction would not significantly impact the Floridan Aquifer.
244. Regarding the impacts of HDD crossings over groundwater, Commission staff identified five of the 26 HDDs proposed by Sabal Trail as occurring through karst bedrock within the Floridan Aquifer. Sabal Trail sited these HDDs installations in karst sensitive areas to avoid constructing near major springs and public water supply wells.
245. The final EIS describes the detailed site-specific geotechnical and geophysical studies conducted by Sabal Trail to characterize the karst geology at these five HDD crossings.210 None of the five HDD crossings will occur in a public wellhead protection area, encounter mapped cave systems, or occur within 0.5 mile of 1st, 2nd, or 3rd magnitude springs.211 The HDD crossings will be located within 0.5 miles of two 4th magnitude springs, one of which is hydrologically upgradient from the proposed HDD and, therefore, is unlikely to be affected by HDD activity. The other 4th magnitude spring is approximately 0.2 mile downgradient from the HDD crossing of the Suwannee River in Hamilton and Suwannee Counties, Florida, and will be subject to a site-specific monitoring plan during construction.
210 Id. [FEIS] at 3-4 to 3-12.
211 Springs are classified according to the volume of flow per unit time. A 1st magnitude spring discharges more than 64.6 million gallons of water per day (mgpd); a 2nd magnitude spring discharges between 6.46 and 64.6 mgpd; a 3rd magnitude spring discharges between 0.646 and 6.46 mgpd; and a 4th magnitude spring discharges between 100 and 448 gallons per minute. See final EIS at 3-30.
Your property values? A pittance from the pipeline company takes care of that.
254. Numerous commentors expressed concerns about the projects’ potential impacts on property values. Specifically, they are concerned that if their property is encumbered by a pipeline easement, their property will be devalued and they will sustain negative economic effects resulting from such land use changes. Some commentors argue that the devaluation of their property constitutes a taking under the Fifth and Fourteenth Amendments of the U.S. Constitution.
255. Although the applicants will acquire new temporary and permanent easements for the project, the majority of the pipeline segments, roughly 65 percent, will be installed adjacent to an existing utility right-of-way.218 Where new easements on private property are required, the final EIS states that the applicants will compensate landowners for the easements, the temporary loss of land use, and any damages.219
256. Section 7(h) of the NGA confers the right to obtain property easements through the power of eminent domain if the certificate holder cannot reach an agreement with the property owner. The courts have uniformly held that a certificate holder’s use of eminent domain to acquire necessary property easements does not violate a landowner’s constitutional rights.220 Issues of an unconstitutional taking arise only when the government acts in a way to deprive a citizen of its property without just compensation. Landowners will be compensated through easement negotiations or in an eminent domain proceeding where a court will determine the fair compensation landowners will receive for the use of their lands. We therefore are not persuaded by commentors’ argument that the purported devaluation of private property, if it were substantiated, violates either the Fifth or Fourteenth Amendment of the Constitution.
218 Id. at 3-184.
220 See, e.g., Thatcher v. Tennessee Gas Transmission Co., 180 F.2d 644 (5th Cir. 1950), cert. denied 340 U.S. 829 (1950); Williams v. Transcontinental Gas Pipe Line Corp., 89 F. Supp. 485 (W.D. S. C. 1950).
Environmental justice? Even a presidential executive order isn’t binding on FERC, says FERC. Oh, and FERC doesn’t care anyway:
262. As we have stated in prior cases, the siting of linear facilities between two fixed end points is generally based on environmental and engineering factors with no regard to demographics.222 The final EIS explains that a majority of the Sabal Trail Project’s facilities will be within or adjacent to existing pipeline and utility rights-of-way. While the pipeline segment through Dougherty County will not be colocated with an existing right-of-way, the final EIS explains that the segment was sited to avoid and minimize impacts on residences.223
222 See, e.g., Trunkline Gas Co., 94 FERC ¶ 61,381, at p.16 (2001).
223 Final EIS at 3-218.
Safety? FERC likes pipelines!
Therefore, the final EIS concludes that pipelines are one of the safest means for transporting hazardous substances.232
And there’s your problem, FERC. Stop approving fossil fuel projects, and get on with far safer, cleaner, cheaper, and faster solar and wind power!
293. Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. The Commission encourages cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.245
245 See, e.g., Schneidewind v. ANR Pipeline Co., 485 U.S. 293 (1988); Dominion Transmission, Inc. v. Summers, 723 F.3d 238, 243 (D.C. Cir. 2013) (holding state and local regulation is preempted by the NGA to the extent they conflict with federal regulation, or would delay the construction and operation of facilities approved by the Commission); Iroquois Gas Transmission System, L.P., 52 FERC ¶ 61,091 (1990) and 59 FERC ¶ 61,094 (1992).
Yeah, but that doesn’t say state or local laws cannot reasonably delay the construction of the pipeline.