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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Comments On Proposed Environmental Assessment for Texas Gas Abandonment Project  Posted: March 18, 2014

Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street NE, Room 1A
Washington D.C. 20426

Re:
Notice of Availability of the Environmental
Assessment for the Proposed Texas Gas Abandonment Project
Docket No. CP13-485-000
79 Federal Register 10140 (February 24, 2014)

Dear Ms. Bose:

These comments are submitted on behalf of the Board and membership of the Kentucky Resources Council, Inc., a nonprofit, membership organization incorporated under the laws of the Commonwealth of Kentucky and dedicated to prudent use and conservation of the natural resources of the Commonwealth. For thirty years, the Council has provided legal and technical assistance without charge to individuals, community groups, conservation organizations and local governments on a wide range of environmental issues, including air, land, and water pollution, and utility and energy policy matters.

Because the FERC offices were closed on March 17, 2014 and e-filing and e-commenting was not available, I respectfully request that these comments be treated as timely filed.

Summary of Comments

For the reasons stated below, the Kentucky Resources Council, Inc. respectfully renews its request that the Federal Energy Regulatory Commission (“the FERC” or “Commission”) withdraw the proposed Environmental Assessment for the Proposed Texas Gas Abandonment Project, and that the Commission, in conjunction with the U.S. Army Corps of Engineers, publish a joint notice announcing the scoping for an Environmental Impact Statement, covering the entire length of the “Bluegrass Pipeline” natural gas liquids pipeline project, (including both that section of pipeline that is identified in the “Texas Gas Abandonment Project” and the new section of pipeline that is proposed to be constructed from the Marcellus and Utica Shale plays in Ohio, West Virginia, and Pennsylvania and south to Louisiana).

Specific Comments

The Council appreciates this opportunity to submit comments in response to the Public Notice published in the February 24, 2014 Federal Register (79 FR 10140).

The nominal proposal before the FERC is the proposal by Texas Gas Transmission LLC (Texas Gas) to “abandon in-place” 567.8 miles of 26-inch pipeline that are currently part of the Mainline System (MLS) 26-2, MLS 26-1, and BAE 26-1 pipelines, as well as numerous associated facilities in Kentucky, Tennessee, Mississippi, Arkansas, and Louisiana. Yet as the public notice reflects, the Commission is well aware that the abandonment of the Texas Gas pipeline as a natural gas pipeline is a first step (and an essential step) of a much larger project involving the “repurposing” of the abandoned Texas Gas Pipeline and significant new pipeline construction for transportation of natural gas liquids from the Marcellus and Utica shale plays, to the Gulf Coast.

Boardwalk Pipeline Partners, the parent of Texas Gas, and the Williams Co. have entered into a joint venture under the name of Bluegrass Pipeline Partners LLC. The Bluegrass Pipeline project includes a proposal to construct some 217 miles of new 20-inch pipeline in West Virginia, Pennsylvania, and Ohio, and approximately 394 miles of 24-inch pipeline in Ohio and Kentucky, where the new pipeline is proposed to connect with the “abandoned” Texas Gas pipeline in Hardinsburg, Kentucky.

In the October 9, 2013 letter that the Kentucky Resources Council (“KRC”) submitted concerning the Notice of Intent to Prepare An Environmental Assessment For The Proposed Texas Gas Abandonment Project And Request For Comments On Environmental Issues, KRC commented that the FERC is obligated under the National Environmental Policy Act to do more than “disclose available information” regarding the impacts of new construction and of the repurposing of the existing pipeline, and was instead obligated by NEPA to assess the direct, indirect, and cumulative effects associated with the abandonment, and of both the repurposing of the existing pipeline, and of the new construction. KRC argued that the FERC and the United States Army Corps of Engineers are requested to undertake a joint Environmental Impact Statement for the entire Bluegrass Pipeline Project, inasmuch as the FERC approval of this abandonment request is the linchpin of the Bluegrass Pipeline project, as is the approval by the Corps of Engineers under the Clean Water Act and the Rivers and Harbors Act for the estimated 700 stream and river crossings that the project proponent has noted will be necessary for the new segments of pipeline. The involvement of either agency in the approval of the new or repurposed portion of the pipeline would be sufficient, KRC asserted, to “federalize” the project under the Council on Environmental Quality’s regulations, the Corps of Engineers’ NEPA guidance, and applicable case law, and the degree of the involvement of both agencies in the project is clearly sufficient.

In response to KRC’s comments, the FERC claims that the announced repurposing of the pipeline for use in transporting natural gas liquids (NGLs) is “not a factor in the Commission’s decision to grant abandonment” and as such the effects are not required to be addressed as indirect effects. Additionally, the FERC argues that since the pipeline would no longer be jurisdictional once abandonment is approved, any future use and impacts of such use would not be under the Commission’s jurisdiction. Finally, the FERC notes that approval of the abandonment request would “allow” rather than “cause” the use of the pipeline for transportation of natural gas liquids.

Respectfully, the Commission cannot compartmentalize the abandonment, which is not merely a condition precedent, but is the linchpin of the Bluegrass Pipeline Project, from the effects that would not occur but for the Commission’s approval of the abandonment. The Commission is not limited to evaluation of those matters within its jurisdiction, but must assess the full range of foreseeable impacts that the decision will allow to occur.

The Commission has the authority, as it has recognized in its citizens guide “An Interstate Natural Gas Facility On My Land?” to require the removal of an abandoned pipelines rather than approving abandonment in place. Specifically, in response to the question “If the pipeline is being abandoned will it be removed from my property?” the FERC noted that

"The Commission may decide there are environmental or other conditions
that should determine the disposition of the pipeline. If not, the easement agreement that you or previous owners of the land signed may stipulate whether the pipeline is to be removed. You may also come to some agreement with the company on what they will do with the pipeline. Usually, above-ground facilities are removed."

The failure of the FERC to analyze the indirect and connected effects of the approval of abandonment in place relative to the approval of abandonment with a requirement to remove the pipeline facilities, (which would preclude future use and avoid the effects of the proposed use of the abandoned pipeline for natural gas liquids transportation), renders the draft Environmental Assessment incomplete and insufficient to satisfy the agency’s obligations under NEPA.

The Degree of Federal Involvement Is Sufficient To “Federalize” The Entire Pipeline Project For Purposes Of The National Environmental Policy Act

As noted in the October 9, 2013 comments, KRC believes that the scope of environmental analysis must include, in addition to the environmental impacts associated with the abandonment, (i.e. the disconnections, reconfiguration of compressor stations, replacement of valves and customer taps, and other activities directly related to the abandonment of the line as a jurisdictional natural gas line), all of the environmental impacts associated with those facilities that will be constructed or reconstructed in order to convert the existing natural gas pipeline to a pipeline for the transporting of natural gas liquids from Hardinsburg, Kentucky to the Louisiana gulf. KRC reasserts its belief that the FERC analysis must include the impacts of the Northeast Connector Project, which is the new sections of pipeline to be constructed to transport NGLs from the producing areas to the Hardinsburg, Kentucky connection.

KRC restates the reasons that the FERC is obligated to include all of these activities in the environmental analysis mandated under the National Environmental Policy Act, which are both because these effects are directly related and integrally connected to the proposed agency action (i.e. approval of abandonment of the Texas Gas Pipeline in place) and because the degree of federal involvement is sufficient to “federalize” the non-federal project since none of the effects would occur but for the FERC approval of the pipeline abandonment. It is not material that the approval would “allow” but not “cause” the later effects, since the abandonment in place is pivotal to any further effects occurring – the “but for” action that is the key to whether any further effects occur or are avoided.

The requirement for undertaking an Environmental Impact Statement arises under 42 USC 4332, which requires such analysis for every major federal action significantly affecting the quality of the human environment. The Council on Environmental Quality’s regulations define “major federal action” to include actions “with effects that may be major and which are potentially subject to Federal control and responsibility.” 40 CFR 1508.18. Such actions include “projects…entirely or partly…regulated, or approved by federal agencies[.]” 40 CFR 1508.18(a).

While there are instances in which the degree of federal control or responsibility over an action contemplated by a nonfederal entity is so limited or marginal as to allow the agency to limit NEPA review to those consequences flowing directly from the requested federal action, such is not the case in this instance. The extent of federal agency involvement by the FERC in the decision to allow a jurisdictional natural gas pipeline to be abandoned in order to facilitate the Bluegrass Pipeline project, is such that the environmental consequences of the entire project must be evaluated by the FERC.

The FERC’s approval of the abandonment request is pivotal to the proposal to construct new and convert existing pipeline segments for the transportation of natural gas liquids. The degree of federal participation is sufficient to make the project a “major federal action” for purposes of NEPA analysis given that the FERC approval will enable the project to be undertaken. See, for example, Scientists’ Institute for Public Information Inc. v. AEC, 481 F.2d 1079 (D.C. Cir. 1973); City of Davis v. Coleman, 521 F.2d 661 (9th Cir. 1975). As noted by the Court of Appeals for the Sixth Circuit in the case of Williamson County Community Association Inc. v. Slater, 243 F.3d 270 (6th Cir. 2001),

"There are two alternative bases for finding that a non-federal project constitutes a “major Federal action” such that NEPA requirements apply: (1) when the non-federal project restricts or limits the statutorily prescribed federal decision-makers’ choice of reasonable alternatives; or (2) when the federal decision-makers have authority to exercise sufficient control or responsibility over the non-federal project so as to influence the outcome of the project. If either test is satisfied, the non-federal project must be considered a major federal action."

Id. at 281.

In this instance, the FERC’s degree of control and responsibility over the project is absolute, inasmuch as a decision approving the abandonment in place of the pipeline will set in motion a series of activities involving both new pipeline construction and reworking of the existing pipeline and associated facilities that could not otherwise ensue. A decision disapproving the abandonment would certainly influence the outcome of the project, since as proposed, the project proponents rely on the ability to abandon and repurpose the pipeline as an integral component of the viability of the overall project.

The FERC assertion that the abandonment decision will allow but not cause the repurposing misses the point entirely. The future intended use of the “abandoned in place” line is not a mere possibility, but is a joint venture for which Boardwalk and partner Williams Company have made significant steps towards development, including the acquisition of numerous easements along the route of the new portion of the pipeline to its terminus connection with the Texas Gas Transmission line in Hardinsburg, Kentucky.

15 USC 717f(b) places the decision-making authority over abandonment, as well as the terms and conditions of abandonment, under FERC control. In this instance, where the difference between requiring removal of the abandoned pipe and approving abandonment in place will result in an additional 611 miles of new pipeline constructed, 7,406 new acres of land affected directly by that construction, with 226 miles of potential karst terrain and 230 miles of landslide prone terrain under the path of that construction, an additional 3,770 acres of agricultural land, 735 new waterbodies, (23 of which are major and 229 already impaired under the Clean Water Act) affected, and an additional 3.8 miles of new wetlands affecting 45.4 acres as well as 401 recorded cultural resource sites listed or eligible for listing on the National Register of Historic Places affected, all of which impacts directly result from the approval of abandonment in place rather than removal, an EA that ignores these impacts cannot stand. FERC cannot avoid the responsibility of evaluating the alternative of abandonment with removal and must more thoroughly explore the impacts it has acknowledged will flow directly from approval of abandonment in place, and the obligation to contrast those effects of approval with abandonment in place against ordered removal of the abandoned pipe. Similarly, the Louisiana Extension Project impacts must be evaluated since without approval of abandonment of the Texas Gas line in place, those impacts would not occur.

The Effects Associated With The New Pipeline Construction And With Repurposing the “Abandoned” Pipeline Are All Within The Scope of the FERC’s Review Obligation Under NEPA

While the FERC apparently believes that the scope of the “federal action” is limited to those activities directly under the jurisdiction of the agency, the scope of analysis under the National Environmental Policy Act must include, in addition to direct effects, both indirect and cumulative effects and connected actions. It is clear that the full range of effects, including the effects that will flow from a FERC decision to allow abandonment of the pipeline, must be evaluated irrespective of whether they may lie outside of the scope of the FERC’s jurisdiction, since they are directly connected to the request to approve abandonment in place rather than abandonment with removal. The proposal to approve abandonment and the proposal to repurpose the abandoned line, if allowed to be abandoned in place, are closely related, and the NGL project cannot proceed absent the previous approval of the abandonment in place. The scope of analysis must, in accordance with CEQ regulations, include the entire project, including the new construction, and the impacts on the existing pipeline from the repurposing for transporting heavier natural gas liquids.

In “scoping” those actions, alternatives, and impacts to be considered, the CEQ regulations demand that the FERC consider three types of actions, three types of alternatives, and three types of impacts. The construction of the new pipeline and the construction associated with the repurposing of the existing pipelines after abandonment are “connected actions” the impacts of which must be assessed in conjunction with the NEPA analysis of the abandonment, since those other activities cannot and will not proceed unless the abandonment request is approved, and because the abandonment request is an interdependent part of a larger proposal. 40 CFR 1508.25(a)(1)(ii), (iii). Additionally, the environmental impacts associated with the new pipeline construction for the Northeast Connector Project and with the reconstruction associated with the Conversion Project are within the scope of “effects” that must be evaluated, since they flow directly and foreseeably from the approval of the abandonment. 40 CFR 1508.8. Absent approval of the abandonment of the Texas Gas pipeline, the new construction to Hardinsburg would have no independent utility or purpose.

KRC believes that both the Council on Environmental Quality regulations and applicable case law require that the full range of impacts associated with the entire Bluegrass Pipeline Project be assessed, and the range of alternatives and mitigation explored in the environmental document (40 CFR 1508.10). KRC believes that the most appropriate and efficient manner in which to assure that the totality of those effects are adequately analyzed and mitigated, is for the FERC to coordinate with the U.S. Army Corps of Engineers in undertaking a comprehensive Environmental Impact Statement.

The Effects To Be Evaluated Should Include Potential Consequences Of Pipeline Leakage Or Rupture On Land, Air, and Water Resources, And Should Evaluate Specific Concerns With Construction of New Pipeline In Karst Terrane

KRC incorporates by reference the entire text of the October 9, 2013 letter, including any appended attachments, and reiterates that the effects must include evaluation of the increased potential for adverse environmental impacts associated with the repurposing of a pipeline designed to transport natural gas, to one transporting heavier natural gas liquids, and including the age, construction standards for the pipeline, and other factors affecting the likelihood and severity of releases from a repurposed line and the public health and safety impacts, as well as environmental impacts, of such a release.

Analysis Of The Alternative Of Abandonment And Removal Is Necessary In Order To Respect Rights of Landowners Whose Property Was Condemned For The Gas Pipeline

Analyzing the alternative of FERC approval of abandonment with a requirement that the pipeline and all related facilities be removed and any environmental contamination remediated, is appropriate and necessary in order to assure first, that the full range of alternatives is evaluated, and second, to protect the legitimate interests of landowners whose property may have been condemned in order to facilitate the siting of the gas pipeline. While, as the FERC has noted, whether an easement would revert to the landowner on abandonment of a pipeline is normally a matter of the terms and conditions of the documents granting the easement, an easement granted as a result of a condemnation petition under 15 USC 717f(h) would not be one in which the terms and conditions were negotiated freely by the landowners, but rather is an easement imposed by force of law.

For any properties that were condemned under the authority granted by 15 USC 717f(h) or its predecessor, the property owner would have a reasonable expectation that, on abandonment, the easement will revert to that property owner, since it was taken involuntarily for public use under the assumption that the pipeline was a matter of “public convenience and necessity.” A determination that the pipeline can be abandoned represents the judgment of the Commission that the pipeline is no longer needed by the “public,” and thus the justification for imposition of the easement has ended.

As part of the evaluation of whether to approve the abandonment in place or to require removal on approval of abandonment, the FERC should evaluate the extent to which the pipeline easements were acquired through eminent domain, and the added burden on those landowners that a decision to approve abandonment in place would create. Landowners whose land was taken for the “convenience and necessity” of the public should not be forced to accept the use of the pipeline for purposes other than those for which the easement was obtained, not to bear the additional risks posed by transportation of NGLs through the pipeline.

Thank you in advance for your consideration of these comments. KRC will be sending a separate letter to the U.S. Army Corps of Engineers outlining why the Council believes that a full Environmental Impact Statement is required by the COE regulations and guidance, and will submit a copy for the FERC docket at that time.

Cordially,
/s/
Tom FitzGerald
Director

Cc:
Lt. General Thomas P. Bostick,
Commanding General and Chief of Engineers

James M. Townsend, Chief, Regulatory Branch
U.S. Army Corps of Engineers, Louisville District

Jeffrey Wiese, Director, Pipeline and Hazardous
Materials Safety Administration

Heather McTeer Toney, Regional Administrator
US Environmental Protection Agency Region 4

Daniel Ashe, Director, U.S. Fish and Wildlife Service
1849 C Street, NW, Washington, DC 20240

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