A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia has ruled the Federal Energy Regulatory Commission (FERC) failed to adequately assess the merits a 65 mile natural gas pipeline before approving it.
FERC approved the Spire STL Pipeline in 2018 to interconnect to gas flowing from the Rockies Express pipeline, to pipelines throughout St. Louis, Missouri, and to pipelines in the East. The goal was to better secure adequate supplies in natural gas, to hundreds of thousands of natural gas consumers.
Despite the fact that the pipeline has been operating safely for more than two years, a panel of the D.C. Court of Appeals, comprised of judges appointed by Presidents Carter, Clinton, and Obama, ruled FERC had “failed to adequately balance public benefits and adverse impacts” in approving the 65-mile-long pipeline and failed to prove it was needed.
The immediate impact is Spire’s certificate of public convenience and necessity to construct and operate the pipeline is vacated.
The ruling puts pressure on FERC, that’s newly appointed chair Richard Glick had opposed issuance of the Spire permit initially, to act quickly to address the Courts concerns, and absent a second approval, stop the flow of gas through the pipeline, potentially disrupting contracted supplies throughout the region.
Unneeded, Harmful Pipeline
The Environmental Defense Fund (EDF) opposed FERC’s issuance of the certificate, and sued to have it rescinded
EDF argued the pipeline was unnecessary resulting Spire’s ratepayers paying for unneeded infrastructure. They also argued that people in the pathway of the pipeline in both Missouri and Illinois have experienced direct harm to their land.
In his June 22 opinion for the panel, Senior judge Harry T. Edwards said before approving the pipeline FERC was obligated to first assess whether there is a market need for a pipeline. If there was, FERC was obligated to then determine whether the pipeline would result in adverse impacts to “existing customers of the pipeline proposing the project, existing pipelines in the market and their captive customers, or landowners and communities affected by the route of the new pipeline.”
Edwards found the pipeline was unnecessary and did have adverse impacts. As evidence, Edwards cited the fact that by 2016 no natural gas shippers had agreed to enter into preconstruction contracts for the natural gas the STL pipeline was to transport. As a result, Spire STL entered into an agreement with Laciede Gas Company, one of its affiliate companies, for 87.5 percent of the pipeline’s projected capacity, essentially selling gas to itself.
Provides Energy Security
Spire admitted the STL pipeline was not built to serve new load, but rather was justified as a means of enhancing the reliability of the existing system and improving the security of the natural gas supply throughout the region.
The pipeline provided access to new sources of natural gas supply and eliminated gas price spikes resulting from shortages, or “peak shaving,” to the firm’s customers’ during periods of high demand.
Spire’s customers could see much higher prices and energy shortages unless this ruling is reversed or FERC acts quickly to approve a new permit, said Spire Missouri, in a statement.
“You talk about last winter and winter storm Uri and that was a great example of the value of this pipeline, [d]uring that period, our customers saved up to $300 million dollars because we were able to source gas through that infrastructure,” Scott Carter, Spire’s president, said in the statement. “Worst case scenario, as we’ve modeled through it, is the potential in an extreme weather situation of the loss of service to up to 400,000 customers in the St. Louis region.”
To avoid energy shortages, on July 25, the company filed an application keep the STL Pipeline open on a temporary, emergency basis, while its appeals are being considered or until FERC can reconsider its case for approving the pipeline.
“We want to completely take off the table the possibility that there could be gas curtailments in the St. Louis region this coming winter,” said Sean Jamieson, general counsel for the Spire STL Pipeline.
‘War on Pipelines’
EDF is not concerned about ratepayers or the protecting property owners, rather it is about limiting fossil fuel use and burnishing its own credibility among green funders by blocking pipelines, says energy policy writer Robert Bryce.
“EDF and climate activists are fighting pipelines because pipeline projects give them an easily definable target they can use to bolster their anti-hydrocarbon campaigns and raise more money,” Bryce said. “Groups like EDF, Sierra Club, Natural Resources Defense Council, and others are not concerned about energy affordability, societal resilience, or energy security.
“The ongoing war on pipelines may be politically advantageous for these big environmental groups, but their never-ending claims that we can simply replace hydrocarbons with renewable electricity has no basis in reality,” Bryce said.
EDF and similar organizations are bent on limiting economic progress and reversing growth, says Jay Lehr, senior policy analyst at the International Climate Science Coalition.
“EDF stands ready to thwart any use of fossil fuels in order to bring our nation back to the middle of the 19th Century and give government the ability to ration every BTU of energy the public can use in coming years,” Lehr said. “The federal court falls in line with most Leftist thinking here.
“It makes no sense but such policies will continue until we get a new Congress, hopefully in 2022,” said Lehr.
Duggan Flanakin (dflanakin@gmail.com) writes from Austin, Texas.
