Opinion ID: 405902
Heading Depth: 3
Heading Rank: 2

Heading: National Need and Public Interest

Text: 102 The lawfulness of the ERA's reliance on a broad national need for increased quantities of natural gas is questionable for reasons other than the failure of substantial evidence. As noted at the outset of our analysis, the ERA's regulation of natural gas imports or exports is limited-as well as guided-by a standard of a consumer-based public interest. It is true that the ultimate standard is consistency with, and not necessarily direct service to, this public interest, and we do not suggest that the ERA necessarily acted outside its statutory power in attempting to satisfy what it perceived to be a broad national interest in greater supplies of natural gas. Certainly there is a broad range of factors besides the ultimate costs to the consumers which must play a part in the ERA's decisions on import applications. These factors include the security of supply, effects on U. S. balance of payments, and national and regional needs, as well as costs. 90 Nevertheless, the delicate balance which must be struck among these several factors does not excuse the basic standard. The very fact that it is in a position to make energy policy and decisions which may impact on broad international relations and economics, or on national interests other than consumer welfare within limited geographic areas, makes it even more important for the ERA to keep at least one eye upon the consumers likely to be affected by a proposed action. That does not mean that the consumers' interests must always prevail. But they must be recognized. There is every indication that this class was ignored altogether in this case. 103 Inherent in the ERA's conclusion that the El Paso LNG would satisfy a national-even if not a regional-energy need, was a presumption that the domestic natural gas turned back by the pipelines purchasing the imported LNG under the Agreement would naturally find its way into areas where there was a need for the natural gas. 91 104 Although the argument is raised by intervenor PCM and others that this presumption is unsupportable on the record, 92 we find greater fault in the ERA's failure either to acknowledge or to justify the effect that the substantial price increases under the new import authorization would have on consumers within at least the Consolidated and Columbia systems. 93 105 Even if we were to adopt the presumption that domestic gas displaced regionally by the imported El Paso LNG would then be made available to meet needs in other areas, the consumers ultimately benefitted by this turn-back-i.e., those who actually need the gas-would bear none of the economic burden of the increased costs of the imports. The ERA's decision thus has the highly inequitable effect of imposing the full cost of the expensive imported gas, not upon those who actually need the increased supplies, but upon consumers in areas where cheaper domestic gas is available. The ERA's attention to a broad national interest simply caused it to ignore its ultimate responsibility to a geographically narrower public interest. 106 In short, the ERA seems to have taken significant liberties with the consuming public in order to preserve the El Paso project, no doubt concerned for the extensive investments made. Of course, the fact of considerable American investment should not be ignored. It is possible, at least in the hypothetical instance, that the amount of the potential loss of investment in such a massive undertaking as the El Paso project, a portion of which may be passed on to consumers in the form of certain fixed costs, 94 may, when added to any adverse effects of losing the supply itself, exceed the burden on those same consumers of increased commodity costs. But if this is to be the rationale for a decision to salvage a project by meeting the supplier's demands, then the agency must say so, and justify it. The potential burdens of project failure are noted in the agency's opinion, but no comparison of these costs with the burdens of increased natural gas prices resulting from the ERA's approval of the renegotiated contract is ever offered.