What is FERC?
“The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects.” Definition from the FERC website, www.ferc.gov.
Comments made by FERC Chairman Wellinghoff and Commissioner LaFleur explaining their dissenting vote position on the Minisink compressor station project.
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
|Millennium Pipeline Company, L.L.C.||Docket No.||CP11-515-000|
(Issued July 17, 2012)
WELLINGHOFF, Chairman, dissenting:
The majority today grants Millennium Pipeline a certificate of public convenience and necessity to construct and operate a new 12,260 horsepower compressor station and related facilities in the Town of Minisink, in New York. However, in light of the preferable alternatives to the Minisink proposal, I dissent from today’s order.
The Minisink proposal would consist of two 6,130 horsepower natural gas-fired compressor units, totaling 12,260 horsepower and related facilities. As noted in the order, the Wagoner Alternative would result in construction of a smaller, 5,100 horsepower compressor station adjacent to its existing Wagoner Meter Station, and replacement of the existing Neversink segment of pipeline, a 7.2 mile 24-inch pipeline, with a 30-inch diameter pipeline. Millennium’s system is comprised of 250 miles of 30-inch diameter pipe, which was constructed in 2007, and the 7.2-mile Neversink Segment, a 24-inch pipe constructed by Columbia Pipeline in 1987 and acquired by Millennium in 2006.
Construction of the Wagoner Alternative would provide numerous benefits beyond those provided by the Minisink proposal, with significantly fewer emissions. Moreover, because the fuel requirements of the two options were not considered, the cost estimates used to compare the two proposals were not fully realized. A full evaluation of the long-term benefits and costs of the two options shows that the Wagoner Alternative is the most efficient proposal for expanding capacity on the Millennium system.
Due to the difference in size of the compressors, the smaller compressor station at Wagoner would likely release approximately 44 percent of the emissions related with the operation of the new Minisink compressor station. The EA notes that the smaller alternative compressor station at Wagoner would result in lower emissions than the Minisink proposal, thereby reducing the effects on the local air quality.
The EA further notes that Millennium’s proposed compressor station would have greater impacts on air quality and visual resources than the Wagoner Alternative due to the less desirable location of the Minisink station.
Further, comparison of the two options indicates that the smaller compressor station at Wagoner would consume about 44 percent of the natural gas required to fuel the station. A compressor station at Wagoner would require roughly 438,000 Mcf in comparison to 1,000,100 Mcf in annual fuel consumption at the proposed Minisink compressor station, based on the amount of fuel required to operate the Minisink station in accordance with Clean Air Act permit issued by the State of New York. At a price of $2.89 per MMBtu, it would cost approximately $1,261,502 to provide fuel for the Wagoner Alternative, compared to $2,890,289 in fuel per year for the Minisink station.
The EA notes that, although the Wagoner Alternative “has some advantages” over the Minisink proposal, “the greater environmental issues and landowner impacts of replacing the Neversink Segment cause us to conclude that the Wagoner Alternative does not provide a significant environmental advantage over the” Minisink proposal.
Again, I disagree that the upgrades to the Neversink Segment should be viewed in a negative light. Not only does upgrading the Neversink Segment result in the need for decreased compression, and the corresponding decreased emissions and fuel requirements, it will also provide for greater capacity on the Millennium system in the long term. In evaluating the alternatives, the EA notes that in replacing the Neversink segment, the effect on agricultural land would consist of a temporary loss of crops for one growing season, and after construction is completed, most agricultural land uses would revert to previous uses within the permanent rights-of-way. It is also noteworthy that, the State of New York Department of Agriculture and Markets commented in support of the Wagoner Alternative because the Minisink proposal would result in the permanent loss of agricultural land. Moreover, the EA states that eliminating the bottleneck created by the Neversink Segment could enhance the reliability of the Millennium pipeline system and allow Millennium wider options for expansion of its system.
Based on a review of all of the evidence, I believe that Millennium Pipeline should have considered the long-term effects of improved reliability, greater impact on capacity, reduced emissions, and reduced fuel costs offered by the Wagoner Alternative, and proposed that comprehensive solution in lieu of the short-term fix presented by the Minisink proposal.
For these reasons, I respectfully dissent from today’s order.
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
|Millennium Pipeline Company, LLC||Docket No.||CP11-515-000|
(Issued July 17, 2012)
LaFLEUR, Commissioner, dissenting:
The United States is currently experiencing a substantial increase in the supply of domestic natural gas and a sharp increase in demand for that gas, particularly for electric generation. These developments are creating an acute need for new natural gas infrastructure to transport gas to serve customers. Siting that infrastructure is frequently difficult, and requires a careful balancing of the need for a proposed project and its environmental and community impacts.
This balancing is reflected in the Commission’s Certificate Policy Statement, which has long governed the Commission’s consideration of proposed projects under Section 7 of the Natural Gas Act.
The Certificate Policy Statement requires an applicant to demonstrate that a specific proposal is in the public convenience and necessity by showing that the project’s public benefits are proportional to its adverse impacts.
Once an applicant has satisfied the threshold requirement of showing that its project is financially viable without subsidies, the Certificate Policy Statement directs the Commission to consider the effects of the project on three major interests that may be adversely affected by approval of the project: the interests of the applicants’ existing customers, the interests of competing existing facilities and their captive customers, and the interests of landowners and surrounding communities.
As the Commission has stated, this is a proportional approach, where the amount of evidence required to establish need will depend on the potential adverse effects of the proposed project.
I am dissenting in this case because I do not believe the majority has correctly applied the standards set forth in the Certificate Policy Statement to the facts in the record before us. Based upon that record, I believe that the serious adverse consequences of the Minisink compressor facility outweigh its public benefits, particularly given the existence of the environmentally preferable Wagoner Alternative.
The majority rests its approval of the Minisink facility on the Environmental Assessment’s conclusion that the residual impacts of the Minisink project, after required mitigation, would not be significant. These residual impacts include the effects of visual impacts, noise, and vibration, as well as the impact on the value of residences located in close proximity to the facility.
The residual impacts of the Millenium facility must, under the Certificate Policy Statement, be balanced against the need for the project. However, the record does not demonstrate that the “specific project” is needed in light of the availability of an environmentally and operationally preferable alternative, the Wagoner Alternative.
As the EA acknowledges, the Wagoner Alternative involves construction of a smaller compressor station adjacent to an existing Wagoner Meter Station that was previously used as a site for natural gas compression activities and replacement of the Neversink segment (7.2 miles of 24-inch-diameter pipeline with a 30-inch-diameter pipeline) to remove a bottleneck on the system. The EA concedes that the smaller compressor needed under the Wagoner Alternative would result in lower emissions in comparison to the proposed site, thereby reducing the effects on local air quality.
The EA also concedes that the visual impacts of the Wagoner Compressor Station would be negligible considering the dense forested area surrounding the meter station and the lack of residences within a half mile of the existing Wagoner Meter Station.
I believe the EA’s finding that the Wagoner Alternative “does not provide a significant environmental advantage over the proposed project,” is incorrect. This conclusion incorrectly equates temporary environmental impacts due to construction of the Wagoner Alternative with permanent residual impacts of the Minisink proposal, and therefore makes an invalid comparison. The EA also ignores that, during initial scoping of the Wagoner Alternative, none of the 58 landowners directly impacted by the project opposed it. In fact, two supported the Wagoner Alternative over the proposed project. These omissions from the environmental analysis are inconsistent with previous environmental analyses performed by Commission staff.
When these findings are corrected, the Wagoner Alternative demonstrates a significant environmental advantage over the proposed project, and the EA should have found as much.
I do not lightly question the conclusions of an Environmental Assessment prepared by Commission Staff. In particular, I recognize that any decision to reject a proposed project can lead to delay as alternative projects are considered. However, the prospect of delay does not relieve the Commission of its obligation to carefully carry out its responsibilities under the Natural Gas Act, and to reject projects whose adverse impacts are not outweighed by public benefits. In addition, it is not only legally required but prudent to consider carefully issues raised by a project prior to construction, given the long-term nature of infrastructure projects and the greater difficulty of addressing adverse impacts once they are created.
I also note that the Commission’s ongoing application of its Certificate Policy Statement will continue to require case-by-case analysis of the facts and alternatives presented in each case. I fully expect that there will be instances where it may be appropriate, and indeed imperative, to approve a natural gas facility with characteristics and residual adverse impacts similar to the Minisink facility because those impacts are outweighed by the public benefits of the project. However, that is not the case here.
Accordingly, I respectfully dissent.
Cheryl A. LaFleur