Document claims federal regulators were ‘overly sympathetic’ to gas industry desires, ignored law

The federal agency charged with regulating pipelines in the U.S. did a “grave disservice to the health and welfare” of people living near Tennessee Gas Pipeline No. 1 when it essentially green-lighted repurposing of the line to carry byproducts of fracking, according to arguments made in a 30-page document filed Oct. 30.

The Federal Energy Regulatory Commission ignored its responsibilities under the law in approving “abandonment-in-place” of the 964-mile pipeline, part of which runs through Boyle County, and it should re-hear the case, argues the Allegheny Defense Project, a non-profit environmental organization based in Pennsylvania.

Allegheny filed its “request for rehearing and motion for stay of order” with FERC on Oct. 30. The document lays out Allegheny’s arguments that FERC misinterpreted the law and took the pipeline industry’s side over residents’ in its Sept. 29 order.

The order concerns a plan by Houston-based energy giant Kinder-Morgan to repurpose Tennessee Gas Pipeline No. 1 to carry “natural gas liquids,” or NGLs, which are produced by oil fracking in northeast shale fields. Kinder Morgan wants to make the pipeline available to transport NGLs, which can be used in production of plastic, to the gulf coast. That requires first “abandoning” the pipeline for purposes of transporting natural gas, then selling the pipeline from one Kinder Morgan subsidiary (Tennessee Gas Pipeline Company LLC) to another (Utica Marcellus Texas Pipeline LLC or UMTP). The flow of the pipeline would then be reversed from north to south and NGLs could be piped through it.

Kinder Morgan first applied for abandonment-in-place — a technical term meaning the pipeline could no longer be used for natural gas and FERC would no longer regulate its contents — in February 2015. 

Opponents of the plan in Boyle County have argued that NGLs are more explosive, heavier and more toxic than natural gas, and that a leak in the pipeline could be devastating.

A major focus of opponents’ efforts last year was on demanding that FERC conduct an “environmental impact assessment” (EIS) before approving abandonment, in order to thoroughly assess the condition of the pipeline and possible risks.

In its September order, FERC rejected the idea of an EIS, arguing that it was only concerned with the first step of Tennessee Gas abandoning the line, not the next of UMTP using it for NGLs.

“Because we have no jurisdiction over whether or not UMTP can use Tennessee’s abandoned pipeline to transport NGLs, and because the project before us is independent of the UMTP project, we will not undertake an EIS to assess UMTP project impacts,” the FERC order reads.

It’s this reasoning — that approving abandonment can be considered separately from allowing the flow of NGLs — that the Allegheny Defense Project takes issue with in its filing.

“Throughout the certificate order, (FERC) vainly attempted to create a ‘bright line’ between the extent of its jurisdiction over the pipeline as a natural gas pipeline under the Natural Gas Act, and the subsequent use of the pipeline once abandoned for NGL transport,” Allegheny’s filing reads, arguing that the National Environmental Policy Act (NEPA) does in fact require FERC to consider what will be done with the pipeline after abandonment.

“(FERC) improperly segmented and limited its review of the impacts of the conversion … thus dodging a complete, rigorous environmental study of the total project impacts,” the document reads. “Under applicable NEPA regulations, FERC is required to include ‘connected actions,’ ‘cumulative actions,’ and ‘similar actions’ (in its analysis).”

Allegheny argues FERC made the wrong ruling in part because it is “overly sympathetic” to what the energy industry wants. It references a famous dissenting opinion from U.S. Supreme Court Justice William O. Douglas in 1972 concerning the tendency of federal regulators to become friendly with the entities they regulate.

“(FERC’s) efforts to facilitate Tennessee’s repurposing of this natural gas line while limiting its scope of environmental review is precisely why Justice Douglas cautioned that federal agencies ‘are notoriously under the control of the powerful interests who manipulate them through advisory committees, or friendly working relations, or who have that natural affinity with the agency which in time develops between the regulator and the regulated,'” Allegheny’s filing reads. “Just as Justice Douglas used the example of the former Interstate Commerce Commission being overly sympathetic ‘to take the business and railroad view of things,’ so too is the Federal Energy Regulatory Commission overly sympathetic ‘to take the business and (natural gas) view of things.'”

In supporting its arguments, Allegheny cites a different case from 2014 that also involved the Tennessee Gas Pipeline Company, Delaware Riverkeeper Network v. FERC.

“In Delaware Riverkeeper, the court held that FERC improperly segmented four pipeline looping projects located along Tennessee’s 300 line,” Allegheny’s filing reads. “The court stated that the four projects were ‘indisputably related and significantly connected’ to each other.

“… Instead of bringing its … review policies into conformity with the court’s decision in Delaware Riverkeeper, FERC continues to review connected, cumulative and similar pipeline expansion projects independently, as though Delaware Reiverkeeper was never decided.”

Allegheny also rejects an argument in FERC’s order that the U.S. Army Corps of Engineers would be the appropriate agency to regulate the flow of NGLs.

“Reliance on the Corps of Engineers to conduct the comprehensive environmental review that NEPA demands of (FERC) is disingenuous, since (FERC) must be fully aware that through nationwide permits, the applicant might avoid project-specific environmental review by the Corps,” Allegheny’s filing reads.

Allegheny’s filing asks for rehearing of the case and a full environmental impact study to be completed. And it makes a motion for a stay on FERC’s order, which would delay any further progress on the project until a rehearing can be held.

“(FERC) cannot artificially wall itself off from the effects that will flow directly from the certificate order approving abandonment in place, and having proposed to do so, has violated the letter and spirit of NEPA, and done a grave disservice to the health and welfare of individuals and communities that will be placed in harm’s way due entirely by the approval of the requested abandonment-in-place,” the filing reads.

Ryan Talbott, executive director of the Allegheny Defense Project, did not immediately respond to a call asking for comment Wednesday. A spokesperson for Kinder Morgan said Wednesday afternoon the company is aware of Allegheny’s filing and is “reviewing the rehearing and stay request.”

Kinder Morgan filed a letter with FERC the same day as Allegheny, formally accepting FERC’s order in its favor, but noting that it isn’t ready yet to begin using the pipeline for NGLs.

“Due to the length of time that has passed since Tennessee (Gas Pipeline Company) filed its application and uncertainty in current market conditions, Tennessee is working to confirm the degree of market interest in the project,” FERC’s letter reads. “As a result, Tennessee is not in a position to prepare and file its implementation plan at this time.”