Fuel Safe Washington v. F.E.R.C., No. 03-9577.
| Citation | 389 F.3d 1313 |
| Decision Date | 01 December 2004 |
| Docket Number | No. 03-9577. |
| Parties | FUEL SAFE WASHINGTON, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Powerex Corp. and Georgia Strait Crossing Pipeline LP, Intervenors, Whatcom County, Amicus Curiae. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Angela Coats, Student Intern, Brett Durbin, Student Intern, and Michael J. Robinson-Dorn, Assistant Professor of Law & Director, Kathy and Steve Berman Environmental Law Clinic, University of Washington, School of Law, Seattle, WA, for Petitioner.
Judith A. Albert, Attorney (Cynthia A. Marlette, General Counsel, and Dennis Lane, Solicitor, with her on the brief), Federal Energy Regulatory Commission, Washington, DC, for Respondent.
Steven W. Snarr, Georgia Strait Crossing Pipeline LP, Salt Lake City, Utah (Charles H. Shoneman and Jacqueline R. Java, Bracewell & Patterson, L.L.P., Washington, DC, with him on the brief), for Intervenors, Georgia Strait Crossing Pipeline LP and Powerex Corp.
Randall J. Watts, Chief Civil Deputy Prosecuting Attorney for Whatcom County, Bellingham, WA, filed an amicus curiae brief for Whatcom County.
Before LUCERO, ANDERSON, and McCONNELL, Circuit Judges.
Petitioner Fuel Safe Washington ("FSW") seeks review of two orders by the Federal Energy Regulatory Commission ("FERC") granting a Certificate of Public Convenience and Necessity ("CPCN") to Georgia Strait Crossing Pipeline LP ("GSX"), permitting GSX to build a new natural gas pipeline and ancillary facilities in northwest Washington state, and denying requests for rehearing. FSW asks us either to vacate FERC's final orders or, alternatively, to remand this matter to FERC for further proceedings. We decline to vacate FERC's orders or remand for further proceedings. The petition for review is therefore denied.
Pursuant to the Natural Gas Act, FERC has plenary jurisdiction over (1) "the transportation of natural gas in interstate commerce"; (2) "the sale in interstate commerce of natural gas for resale for ultimate public consumption"; and (3) "natural-gas companies engaged in such transportation or sale." 15 U.S.C. § 717(b). See City of Fort Morgan v. FERC, 181 F.3d 1155, 1159 (10th Cir.1999). There is an exception from FERC jurisdiction, called the Hinshaw Amendment exception, which excludes from FERC's jurisdiction a natural gas company's activities if (1) the company receives all gas "within or at the boundary of a State"; (2) "all the natural gas so received is ultimately consumed within such State"; and (3) the service of that intra-state gas, and the accompanying facilities and rates, are "subject to regulation" by the state. 15 U.S.C. § 717(c); see also City of Fort Morgan, 181 F.3d at 1159.
Prior to constructing or operating any natural gas pipeline and related facilities, a company subject to FERC's jurisdiction must obtain from FERC "a certificate of public convenience and necessity," 15 U.S.C. § 717f(c)(1)(A), indicating FERC's determination that the proposed service "is or will be required by the present or future public convenience or necessity." 15 U.S.C. § 717f(e).
As a part of its review process before issuing a CPCN, FERC conducts an environmental analysis under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321-70f, which" `prescribes the necessary process' by which federal agencies must `take a hard look at the environmental consequences' of their proposed actions." Lee v. U.S. Air Force, 354 F.3d 1229, 1237 (). In contemplating" `major Federal actions significantly affecting the quality of the human environment,' agencies must prepare an environmental impact statement ("EIS") in which they consider the environmental impact of the proposed action and compare this impact with that of `alternatives to the proposed action.'" Id. (quoting 42 U.S.C. § 4332(2)(C)).
On April 24, 2001, GSX applied for CPCNs to construct and operate a natural gas pipeline and accompanying facilities in Whatcom and San Juan Counties, Washington. The proposed pipeline would
carry gas east to west, from the Canadian border near Sumas, Washington, overland across Whatcom and San Juan Counties, Washington, then underwater across the Strait of Georgia, to a subsea interconnection mid-channel in the Boundary Pass at the international border between the United States and Canada. The onshore facilities will consist of approximately 32.1 miles of 20-inch pipe, 1.4 miles of 16-inch pipe, a 10,302 horsepower (ISO-rated) compressor station at Cherry Point, Washington, and a receipt point meter station at the border near Sumas. The offshore facilities will consist of approximately 14 miles of 16-inch pipe, with a subsea tap valve assembly near the San Juan Islands.
Georgia Strait Crossing Pipeline LP, 100 F.E.R.C. ¶ 61,280, at 62,191, 2002 WL 31975732 (2002) (footnote omitted). At Sumas, the east terminus of the pipeline, the proposed line would interconnect with a Canadian pipeline, Westcoast Energy Inc. and with a United States pipeline, Northwest Pipeline Corporation. At its west subsea terminus, the pipeline would interconnect with a new pipeline to be built and operated by Georgia Strait Crossing Pipeline Ltd. ("GSX-Canada") which would transport gas from the interconnection point to Vancouver Island, British Columbia. While it was clear that the pipeline was primarily designed to transport Canadian gas to Canadian consumers on Vancouver island, the system was designed from the beginning to permit as much as 10% of its capacity to, at times, be transported through the Northwest connection to United States markets.1 GSX proposed that Powerex, a British Columbian corporation, would be the initial transportation service customer.
On June 1, 2001, FERC sent a "Notice of Intent to Prepare an Environmental Impact Statement for the Proposed Georgia Strait Crossing Project, Request for Comments on Environmental Issues, and Notice of Public Scoping Meetings and Site Visit" ("NOI") to 339 interested parties. FERC held two public meetings in Washington State and received comments on the proposed project throughout the summer of 2001.
On December 10, 2001, FERC's staff filed its draft EIS ("DEIS") with the Environmental Protection Agency ("EPA"), announced it in the Federal Register, and mailed it to individuals and organizations on a mailing list created for the project. Under Council on Environmental Quality ("CEQ") regulations implementing NEPA, 40 C.F.R. §§ 1500-08, the public had until February 4, 2002, to comment on the DEIS. The Commission held another public meeting in Washington on February 26, at which twenty-five people made statements. The Commission received comments on the DEIS from four federal agencies, five state agencies, five local agencies and elected officials, two Native American groups, six companies and organizations, ten individuals, and the applicant, GSX.
Meanwhile, the Commission proceeded with its review of the non-environmental aspects of the project. It published notice of GSX's application in the Federal Register on May 4, 2001. Twenty-four parties filed motions to intervene. On March 13, 2002, FERC issued a Preliminary Determination, concluding that, subject to completion of the environmental review process, the benefits of the proposed project outweighed the potential adverse effects. None of the parties to this case requested a rehearing of the Preliminary Determination. On June 17, 2002, Whatcom County filed a motion to dismiss GSX's application, or alternatively seeking an evidentiary hearing, arguing that FERC lacked jurisdiction over the pipeline under § 7 of the NGA because the gas supply sources and end consumers were Canadian, and there was therefore no interstate transportation of the gas. On July 17, 2002, FERC issued the FEIS. Following the issuance of the FEIS, FERC received further comments from two individuals, the EPA, and the United States Public Health Services, Department of Health and Human Services ("HHS").
On September 20, 2002, FERC issued a final order denying Whatcom County's motion to dismiss, analyzing the environmental issues and issuing a CPCN authorizing the construction and operation of the proposed pipeline. In that order, FERC responded to the comments made on the FEIS by the EPA, HHS and the two individuals. Whatcom County did not seek rehearing of the final order and FSW only requested rehearing of the environmental issues. The Commission addressed the environmental issues in its rehearing order, and rejected FSW's arguments.
On March 17, 2003, FSW petitioned for review in the Ninth Circuit. FERC filed a motion to dismiss on the ground of improper venue. On July 30, 2003, the Ninth Circuit transferred the case to this court and, on October 17, 2003, the Commission filed the certified index to the record. Georgia Strait and Powerex intervened in the proceedings before this court. Meanwhile, on September 3, FSW had requested the Commission to reopen the evidentiary record and prepare a supplemental EIS. FERC denied the request. This petition for review followed.
As indicated above, FERC has plenary jurisdiction over the transportation of natural gas in interstate commerce. FSW argues that FERC improperly exercised jurisdiction over the proposed pipeline because the pipeline will not transport gas in interstate commerce. To the contrary, FSW argues, the GSX pipeline will transport only Canadian gas to Canadian consumers.2 Alternatively, FSW argues that the state of Washington may properly regulate the pipeline because the pipeline is subject to the Hinshaw Amendment exception to FERC regulation.
FERC responds by arguing that, because FSW failed to challenge FERC's jurisdiction in its rehearing...
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