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Agencies with power to approve pipelines need a reality check

August 31, 2022
Suzanne Mattei
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Key Findings

In 2 pending pipeline cases, regulators including FERC have relied on predictions, even though actual data contradicts their conclusions. Taking such shortcuts today can have adverse effects tomorrow.

Pipeline infrastructure is costly and the effects of a pipeline typically last for 40 years or more. FERC decisions to approve or deny gas pipelines will lack credibility if they’re not based on rigorous analysis.

When real-world data comes in that contradicts the predictions of pipeline applicants, federal regulators ought to reevaluate their decisions in the light of new facts. But they don’t always do that.

By basing its analysis in balancing a gas pipeline’s harmful effects against its benefits on predictions instead of actual data, FERC calls into question the validity of final permitting decisions.

Executive Summary

Will a new pipeline erode farmland or harm a waterway? How much methane will leak?

Regulators are often called on to make judgments about such questions. In the absence of hard data, they often turn to theoretical models or the applicant’s projections to inform their decisions. When real-world data contradicts the predictions, regulators should reevaluate their decisions in the light of new facts.

But they don’t always do that. 

In two pending pipeline cases, federal regulators have continued to rely on predictions, even though real-world facts conflict with their conclusions. This type of conduct distorts an agency’s analysis in balancing the adverse impacts of a project against its purported benefits, and calls into question the validity of the final decision. Pipeline infrastructure is costly and the effects of a pipeline typically last for 40 years or more. The permitting agency must conduct a robust analysis, and it must not dismiss relevant facts out of hand.

Farmers to FERC:  Please Look at the Impact on Our Land

Farmers are challenging the Federal Energy Regulatory Commission (FERC) for its failure to consider the actual effects on their land from the 65-mile Spire STL pipeline as it evaluates whether to allow the pipeline to continue to operate. 

Six landowners represented by the Niskanen Center are objecting to FERC conclusions about land and agricultural impacts that are based on the project’s pre-construction predictions—not the actual, observable issues that have occurred. In their appeal, they describe severe erosion, ranging from 28 inches to five feet in certain areas, as well as harmful mixing of topsoil with subsoil, and crushed and clogged drain tiles that the farmers report are causing serious drainage issues. They assert crop and livestock production have suffered.

Their concerns are backed by the Illinois Department of Agriculture (IDOA) and the Illinois Farm Bureau. The IDOA informed FERC that the Spire STL pipeline has caused “long term impacts to land use,” resulting in crop yield disparities and other issues. The Illinois Farm Bureau complains, “The DSEIS [Draft Supplemental Environmental Impact Statement] reads as if pipeline construction has yet to occur and fails to consider any impacts on the farmland caused by construction of the pipeline.” 

FERC approved the certificate for construction of the Spire STL pipeline in 2018. The pipeline was built at a reported cost of $287 million, and began operating in late 2019. In 2021, however, the U.S. Court of Appeals for the D.C. Circuit revoked FERC’s certificate, based on a lawsuit by the Environmental Defense Fund. The appeals court had criticized FERC’s reliance on a single precedent agreement between corporate affiliates as conclusive proof of need, and held that FERC’s “cursory balancing of public benefits and adverse impacts was arbitrary and capricious.” 

The agency must now complete a more comprehensive evaluation of the Spire STL pipeline and decide whether to grant it a new certificate to operate. FERC’s draft supplemental EIS, issued in June, concludes that continued pipeline operation would have “less than significant” environmental impacts in most respects. Its conclusion relied on the pre-construction predictions in the original 2017 EIS, based largely on the applicant’s promises. FERC did not examine the changed circumstances—the effects on the land. 

Ignoring reality in this case, when reality has already occurred, is unreasonable and unjustified.

Suzanne Mattei

Suzanne Mattei is an attorney with over 30 years of experience in public interest law and policy. She has analyzed the Federal Energy Regulatory Commission’s policies related to interstate pipeline approval. She has also conducted research on blue hydrogen, petrochemical projects, gas flaring and fossil fuel extraction on public lands.

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