Press Release

Attorney General Taylor Joins 21 State Coalition Opposing Use of "Social Cost" Analysis in Certification of Natural Gas Developments

April 27, 2021

(Anchorage, AK) – Today, Attorney General Treg Taylor joined with 21 states in filing a comment letter opposing the use of “Social Cost of Carbon” analysis by the Federal Energy Regulatory Commission (FERC) in certification decisions related to interstate natural gas pipeline construction.

“This executive order has potentially devastating impacts on Alaska's people, businesses, and government by allowing the federal government to assign vague and arbitrary costs to everyday regulatory and business activity,” said Attorney General Treg Taylor. “I will continue to push back on this unlawful expansion of federal regulations and federal overreach.”
The comment letter, which was filed yesterday evening, argues that neither the Natural Gas Act (NGA) or the National Environmental Policy Act (NEPA) authorizes FERC to use the “Social Cost of Carbon” in consideration of certification applications, that the “Social Cost of Carbon” analysis is speculative and scientifically flawed, and that FERC should adhere to its previous position that “Social Cost of Carbon” analysis is not appropriate for NEPA analysis.

FERC is charged by Congress with reviewing and certifying applications for interstate natural gas pipeline projects proposed by private companies.

The letter argues that FERC applying “Social Cost of Carbon” analysis to certifications is not authorized by the NGA. The letter states, “Congress’s subsequent actions further show that the ‘public interest’ in the NGA is concerned with keeping natural gas widely available and affordable.” To that point, the letter says, “In the NGA, Congress did not vest FERC with the authority of an international commission to mitigate global climate change, and certainly no statute contains a ‘clear’ statement of such an extraordinary delegation of authority. Utilizing the SCC or SCM is not authorized under the NGA because it would only serve to increase costs (whether regulatory burdens or other costs) based on speculation about future global damages, instead of rendering natural gas abundant and affordable.”

Similarly, as it relates to NEPA, the letter contends, “Likewise, NEPA does not mandate or permit FERC to use the SCC for pipeline certifications. Like the NGA, NEPA does not contain any clear statement of Congress delegating authority to FERC to anticipate and mitigate global climate change under the aegis of promoting abundant and affordable natural gas,” and states later, “NEPA does not authorize the Commission to use the SCC values because NEPA’s hard look requirement and proximate cause standard does not permit agencies to rely on speculative conclusions or conclusions that the agency knows reflect substandard and outdated science.

Additionally, the letter states that “Social Cost of Carbon” analysis is speculative and not based on science, specifically because the letter contends that:

Global damages are not reasonably foreseeable and do not have a close causal relationship to any project
Damages from the year 2300 are too speculative, attenuated, and arbitrary to survive hard-look review under NEPA
The SCC’s choice of discount rates is arbitrary and lacks a scientific basis
The SCC is based on outdated scenarios and ignores science without justification

The comment letter was also joined by attorneys general in Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, and West Virginia.

# # #

Department Media Contacts: Communications Director Patty Sullivan at patty.sullivan@alaska.gov or (907) 269-6368. Information Officer Sam Curtis at sam.curtis@alaska.gov or (907) 269-6269.