FERC Formally Axes its Draft Policy Statement on Greenhouse Gas Emission Considerations for Natural Gas Act Projects

On January 24, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued an Order Terminating Proceeding in Docket No. PL21-3, Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews (the Order),^[i] which formally closed a docket it had initiated in 2021 to reconsider and supplement the Commission’s 1999 policy statement on the certification of new interstate natural gas transportation facilities (the 1999 Certificate Policy Statement). The 1999 Certificate Policy Statement establishes the criteria and balancing test used to determine whether a natural gas pipeline project is required by the public convenience and necessity, which is the responsibility of the Commission under Section 7 of the Natural Gas Act (NGA), sometimes referred to as the “public interest” test. Prior to initiating Docket No. PL21-3, FERC had been under pressure from certain environmental organizations to formally include the greenhouse gas emissions (GHGs) of pipeline construction and operation, as well as upstream natural gas production and downstream natural gas combustion into its “public interest” test, and to apply a similar test to liquefied natural gas (LNG) terminal infrastructure approved under NGA section 3.

The Commission explains in the Order that, upon review of the lengthy record it developed over the course of the proceeding, it has determined that greenhouse gas emissions are generally better considered on a case-by-case basis, when raised by parties to individual proceedings. While the Order was unanimous, Democratic Commissioners Phillips, Rosner and Chang filed a separate joint concurrence setting forth their views on what FERC’s current policy is on accounting for GHG emissions based on a series of Commission orders of subsequent federal court decisions.

The Order terminates a lengthy and controversial proceeding. On February 18, 2022, following an initial Notice of Inquiry and public comment period, the Commission released two policy statements, the Updated Policy Statement on Certification of New Interstate Natural Gas Facilities (the Updated Policy Statement)^[ii] and the Interim Policy Statement on the Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews (the Interim GHG Policy Statement). Together, these policy statements significantly revised the 1999 Certificate Policy Statement. Notably, the statements incorporated two additional factors into the Commission’s analysis of natural gas pipeline projects: the Updated Policy Statement required the Commission to account for a project’s impacts on environmental justice communities in determining whether a pipeline project is in the public interest, and the Interim GHG Policy Statement established that the Commission would assess a proposed project’s contribution to climate change. The Interim GHG Policy Statement established an annual maximum threshold of 100,000 metric tons of greenhouse gas emissions for new pipeline and LNG projects, stipulating that any projects above that level would require an environmental impact statement as part of the certification process. It further provided that the Commission could condition its approval of a pipeline project upon mitigation of climate change impacts.

Both policy statements were issued with strong dissents from the then-sitting Republican Commissioners on grounds that they exceeded FERC’s statutory mandate under the NGA, which did not extend to considerations of global climate change. That criticism was echoed by natural gas industry stakeholders, and the policies were deemed drafts in March 2022, shortly after a bipartisan Senate Committee on Energy and Natural Resources convened a hearing critical of the Commission’s actions. Hence, the Interim GHG Policy Statement never took legal effect as Commission policy, but the docket remained open until recently following the ascendance of Mark Christie, one of the Republican Commissioners critical of the policy statements, as FERC Chairman.

The speedy termination of the Interim GHG Policy Statement reflects the priorities of the Trump administration, which has emphasized its commitments to minimizing regulatory obstacles to the development of new domestic natural gas infrastructure and rescinded Biden administration policies that required an all-of-government approach to addressing climate change. It is possible that Chairman Christie will seek to close the Updated Certificate Policy Statement docket as well, given the recission of policies related to environmental justice. Doing so would require the internal support of the other FERC Commissioners, which is currently comprised of a three-seat-to-two-seat Democratic majority. Here, the concurrence by the three sitting Democratic Commissioners on the Interim GHG Policy Statement suggests that they are assuaged by the growing body of federal court case law dictating that the agency consider GHG emissions during natural gas infrastructure reviews in compliance with the NGA and the National Environmental Policy Act (NEPA). The concurrence may be intended to caution the remaining Commissioners from abandoning efforts to consider GHG emissions entirely in NGA proceedings if they seek their votes on future orders.

Akin’s energy regulatory team continues to monitor the Commission’s orders and guidance affecting natural gas infrastructure and expects to provide updates and insights on Speaking Energy as further developments are announced.

^{[i] Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 190 FERC ¶ 61,049 (2025).}

^{[ii] This proceeding was opened in Docket No. PL18-1-000. The Order states that “[it] does not affect the Updated Certificate Policy proceeding, which remains pending.”}