On October 15, 2026, the Federal Energy Regulatory Commission (FERC) issued a draft Policy Statement revamping FERC’s consideration of air quality effects for natural gas and liquified natural gas (LNG) infrastructure projects under both the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA).  The draft Policy Statement proposes to no longer request air dispersion modeling from applicants for NGA projects or rely on this modeling in assessing operational air quality effects under NEPA.  The legal underpinning for the proposed policy change is the Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County (Seven County), which affords a federal agency substantial deference when determining the scope and content of its environmental review under NEPA.  The draft Policy Statement is part of a broader FERC effort to shorten permitting timelines and reduce litigation risk associated with its NEPA reviews for gas pipeline projects.  If ultimately adopted, the policy could make environmental reviews more predictable and, for project sponsors, potentially lessen the scope of information requests concerning the proposed project’s effects on air quality.

For the past decade, air dispersion modelling has been the bread and butter of FERC’s environmental review of a project’s effects on air quality under NEPA.  FERC used the dispersion modeling results to compare the project’s projected emissions to the Environmental Protection Agency’s (EPA) National Ambient Air Quality Standards (NAAQS) for certain “criteria pollutants,” to determine whether a proposed project’s criteria pollutant emissions are “significant” within NEPA’s meaning, thus triggering the preparation of a lengthier environmental impact statement.  Modelling that showed no NAAQS violations supported FERC’s preparation of a shorter environmental assessment document and finding of no significant impact under NEPA.

While modelling is not a regulatory requirement, it is part of the information FERC staff expects pursuant to its Guidance Manual for Environmental Report Preparation (Guidance Manual), last revised in February 2017.  In most project cases, the applicant’s failure to provide dispersion modelling resulted in staff-issued data requests requiring submittal of the information.  The draft Policy Statement finds that this air dispersion modeling does not add utility to FERC’s decision-making beyond the information already inherent in compliance with the Clean Air Act.  

FERC notes that it will continue to analyze proposed projects’ direct effects on air by relying on applicant-provided information on the manufacturer’s specifications for any emitting equipment at proposed facilities, including emission factors for criteria pollutants as described in the Guidance Manual, as well as any Best Available Control Technology the applicant commits to implementing (through air permitting or voluntarily) to mitigate air quality effects.  FERC did not detail what its revamped analysis would entail, but a November 2025 order issuing a certificate to Florida Gas Transmission Company, LLC (Florida Gas) (Docket No. CP25-30-000) might provide a possible preview.  In that case, Florida Gas declined to provide more detailed air modelling requested by FERC staff for the proposed addition of compressor units at two existing compression stations.  FERC’s order acknowledged possible air impacts on local communities from the operation of the enlarged compressor stations but concluded that project operation “would not result in any significant effect to regional air quality as Florida Gas would continue to operate the compressor stations in compliance with federal and state air regulations and state permit requirements.”  Fla. Gas Transmission Co., LLC, 193 FERC ¶ 61,155, at P 29 (2025).      

Importantly, for project sponsors looking to mitigate its litigation risks, the Policy Statement allows applicants to voluntarily provide FERC with air dispersion modeling for its project, which would be “analyzed in the NEPA document to provide additional context.”  The draft Policy Statement does not, however, clarify whether any voluntarily submitted modelling would be used by FERC as an alternative basis to support a finding of no significant impact under NEPA or finding of public convenience and necessity under the NGA.

The draft Policy Statement would significantly change how FERC evaluates operational air emissions from proposed natural gas pipelines, compressor stations, and LNG facilities under NEPA, making its implementation in an individual project proceeding ripe for judicial challenge.  Litigants likely would latch on to Commissioner Chang’s admonishment that FERC should not take any analytical tools off the table.  With this context, one area ripe for industry comment on implementation of the Policy Statement is FERC’s approach in cases where a project sponsor voluntarily provides air modelling that shows compliance with EPA’s NAAQS.  The Chairman noted her intention to issue a final Policy Statement on an aggressive timeline and set November 16th as the deadline for filing comments.

For more information, please contact Karin Larson or Ryan Collins.