New FERC Rule Presumes Gas Projects Over 100K Tons CO2 Are 'Significant,' Mandates Environmental Justice Review

The FERC Greenhouse Gas and Environmental Justice Policy Act of 2025 is a major shake-up for anyone building or regulating natural gas pipelines. Essentially, this bill forces the Federal Energy Regulatory Commission (FERC)—the agency that approves these projects—to hit the brakes and run a much deeper environmental check before saying yes. It changes the core test FERC uses, called "public convenience and necessity," by adding three non-negotiable questions: Are the environmental effects significant? Do those effects outweigh the benefits? And is the project truly necessary for reliable, affordable energy?

The Climate Carbon Counter

For the first time, FERC would be required to quantify a project's total greenhouse gas (GHG) emissions, and they can’t just look at the pipes themselves. They have to calculate the full lifecycle: emissions from construction and operation, leaks (upstream), and emissions from the gas being burned after it leaves the pipe (downstream). This is a big deal because it ties the climate impact directly to the approval process. The bill sets a clear line in the sand: if a project is projected to emit 100,000 metric tons of carbon dioxide equivalent (CO2e) per year or more, it is presumed to have a significant effect on climate change. To put that in perspective, that’s roughly the annual emissions of over 21,000 passenger cars. If a project hits that threshold, the developers have a much higher bar to clear.

Putting Environmental Justice on the Map

This act also mandates a deep dive into how new pipelines affect Environmental Justice (EJ) communities—defined here as low-income, Indigenous, or communities of color that already suffer disproportionately from pollution. FERC must evaluate the project’s impact on these communities, specifically looking at existing public health stressors and the cumulative effects of adding more pollution. The underlying principle is clear: it’s against the public interest for any community to bear a disproportionate share of adverse impacts. This means a proposed pipeline route through an area already struggling with high asthma rates due to industrial pollution would face intense scrutiny and likely require significant mitigation.

The Cost of Doing Business: Mitigation and Trade-offs

If a project is found to have significant environmental or EJ effects, the company applying for the permit must submit a detailed plan to mitigate those harms. FERC is then required to attach conditions to its approval to make sure this mitigation happens. This is where things get tricky. If FERC approves a project despite significant, un-mitigated environmental harm, they must provide a detailed written explanation justifying that decision. For developers, this means the regulatory hurdles just got taller and more expensive. For energy consumers, this could translate into higher costs if pipeline construction is delayed or if the new compliance requirements are passed along. The balancing act—weighing the project's benefits against significant environmental harm—is now a formal, documented process that forces FERC to show its work, making it harder to greenlight projects that sacrifice local health or climate goals for the sake of energy transport.