EarthReports, Inc. v. Fed. Energy Regulatory Comm'n

• Decision Date: 15 July 2016
• Docket Number: No. 15–1127,15–1127
• Citation: 828 F.3d 949
• Parties: EarthReports, Inc., doing business as Patuxent Riverkeeper, et al., Petitioners v. Federal Energy Regulatory Commission, Respondent Dominion Cove Point LNG, LP, et al., Intervenors
• Court: U.S. Court of Appeals — District of Columbia Circuit

828 F.3d 949

EarthReports, Inc., doing business as Patuxent Riverkeeper, et al., Petitioners

v.Federal Energy Regulatory Commission, Respondent

Dominion Cove Point LNG, LP, et al., Intervenors

No. 15–1127

United States Court of Appeals, District of Columbia Circuit.

Argued April 19, 2016

Decided July 15, 2016

Deborah Goldberg argued the cause for petitioner EarthReports, Inc., et al. With her on the briefs were Moneen Nasmith and Anne Havemann.

Hope M. Babcock, Daniel H. Lutz, and Sarah J. Fox were on the brief for amici curiae Waterkeepers Chesapeake, et al. in support of petitioners EarthReports, Inc., et al.

Karin L. Larson, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With her on the brief were Robert H. Solomon, Solicitor, and Susanna Y. Chu, Attorney. Lisa B. Luftig, Attorney, entered an appearance.

Catherine E. Stetson argued the cause for intervenors Dominion Cove Point LNG, LP and Statoil Natural Gas, LLC. With her on the brief were J. Patrick Nevins, Sean Marotta, and Kirstin E. Gibbs. Christopher M. Heywood entered an appearance.

Ben Norris argued the cause for respondent-intervenor American Petroleum Institute. With him on the brief were John Longstreth, David L. Wochner, and Stacy Linden.

Before: Rogers, Griffith and Kavanaugh, Circuit Judges.

Rogers

, Circuit Judge:

Several environmental organizations petition for review of the Federal Energy Regulatory Commission's conditional authorization of the conversion of the Cove Point liquefied natural gas (“LNG”) facility from an import maritime terminal to a mixed-use, import and export terminal. Petitioners contend that the Commission failed to consider several possible environmental impacts that the Cove Point conversion project may have, and thus did not satisfy its obligations under the National Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321 et seq.

We deny the petition. For the reasons set forth in Sierra Club v. FERC (Freeport) , No. 14–1275, 827 F.3d 36, 2016 WL 3524262 (D.C. Cir. June 28, 2016), the Commission was not required under NEPA to consider indirect effects of increased natural gas exports through the Cove Point facility, including climate impacts. Petitioners' remaining challenges—to the Commission's NEPA analysis of the impacts of ballast water on water quality, maritime traffic on the North Atlantic right whale, and the Cove Point facility's operations on public safety—fail to show that the Commission did not adequately address these concerns.

I.

The Cove Point LNG facility is located in Maryland on the western shore of the Chesapeake Bay. It is owned by Dominion Cove Point LNG, LP. The facility was originally constructed to serve as an import terminal for maritime LNG shipments: Cove Point would receive maritime shipments of LNG, vaporize the LNG into conventional natural gas, and transport it through a dedicated pipeline to facilities in Virginia. From there, the natural gas could be transferred into national pipeline networks for delivery to consumers. Due to changes in market conditions, Cove Point was largely dormant from 1980 until 1994. In 1994, the Commission authorized the reactivation of Cove Point's vaporization and storage facilities and the construction of a liquefaction facility that could turn conventional natural gas into LNG for storage. See Cove Point LNG Ltd. Partnership , 68 F.E.R.C. ¶ 61,377 (1994)

. A further reactivation of Cove Point's import terminal facilities was authorized in 2001, see

Cove Point LNG Ltd. Partnership , 97 F.E.R.C. ¶ 61,043 (2001), and projects to expand and modernize its facilities were authorized in 2006 and 2009, see

Dominion Cove Point LNG, LP , 128 F.E.R.C. ¶ 61,037 (2009), on reh'g , 129 F.E.R.C. ¶ 61,137 (2009) ; Dominion Cove Point LNG, LP , 115 F.E.R.C. ¶ 61,337 (2006), on reh'g , 118 F.E.R.C. ¶ 61,007 (2007).

In April 2013, Dominion filed an application for authorization to convert its Cove Point LNG facility from a facility for maritime LNG imports to a dual-use facility for maritime LNG exports and imports. It sought authorization to construct and operate liquefaction facilities for the export of LNG under section 3 of the Natural Gas Act (“NGA”), 15 U.S.C. § 717b

, and pipeline-related compressor facilities for the transport of the natural gas under NGA § 7, id. § 717f. The project called for the construction of an additional liquefaction facility within the Cove Point facility's existing footprint as well as modifications to Cove Point's marine terminal facilities and compressors on its dedicated pipeline in Virginia. The project did not include the addition of any LNG storage tanks or any increase in the size or frequency of LNG marine traffic previously authorized for the Cove Point LNG terminal.

Under the NGA, regulatory oversight for the export of LNG and supporting facilities is divided between the Commission and the Department of Energy (“DOE”). Section 3(a) of the NGA, 15 U.S.C. § 717b(a)

, bars exportation of any natural gas from the United States to a foreign country without “first having secured an order ... authorizing it to do so.” In 1977, Congress transferred the regulatory functions of NGA § 3 to DOE. See 42 U.S.C. § 7151(b). DOE, in turn, delegated to the Commission authority to approve or deny an application for the siting, construction, expansion, or operation of a LNG terminal, 15 U.S.C. § 717b(e), while retaining exclusive authority over the export of natural gas as a commodity, id. § 717b(a)

. See DOE Delegation Order No. 00-004.00A (effective May 16, 2006); see also 42 U.S.C. § 7172(e). Section 7 of the NGA vests the Commission with authority over the construction and operation of interstate natural gas pipelines and related facilities. See 15 U.S.C. § 717f(c)(1)(A) ; see also 42 U.S.C. §§ 7151(b) & 7172(a)(1) ; Consol. Edison Co. of N.Y., Inc. v. FERC , 315 F.3d 316, 319 (D.C. Cir. 2003). Under NGA § 3, an LNG proposal “shall” be authorized unless the proposal “will not be consistent with the public interest[,]” 15 U.S.C. § 717b(a), while under NGA § 7 a finding must be made that a proposal “is or will be required by the present or future public convenience and necessity[,]” id. § 717f(e) ; NGA § 3, unlike § 7, “sets out a general presumption favoring such authorization.” W. Va. Pub. Servs. Comm'n v. Dep't of Energy , 681 F.2d 847, 856 (D.C. Cir. 1982).

NEPA requires federal agencies to include an environmental impact statement (“EIS”) in “every recommendation or report on proposals for ... major Federal actions significantly affecting the quality of the human environment....” 42 U.S.C. § 4332(2)(C)

; see also 40 C.F.R. § 1508.11. Under regulations promulgated by the Council on Environmental Quality, agencies whose procedures do not require preparation of an EIS must first prepare an environmental assessment. See 40 C.F.R. § 1501.4. An environmental assessment “[b]riefly provide[s] sufficient evidence and analysis for determining whether to prepare an [EIS][,]” including discussion of “the environmental impacts of the proposed action and alternatives.” Id. § 1508.9. Such assessments are to include consideration of both “[i]ndirect effects” that are “caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable,” id. § 1508.8(b), and the “[c]umulative impact” that “results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions[,]” id. § 1508.7. If the agency concludes on the basis of the environmental assessment that an EIS is not required because the proposed actions “will not have a significant effect on the human environment[,]” it must issue a finding of no significant impact (“FONSI”) to fulfill NEPA's documentation requirements. Id. § 1508.13; see

id. §§ 1501.4(e) & 1508.9(a)(1) ; Taxpayers of Mich. Against Casinos v. Norton , 433 F.3d 852, 857 (D.C. Cir. 2006). Congress has designated the Commission as “the lead agency for the purposes of coordinating all applicable Federal authorizations and for the purposes of complying with [NEPA].” 15 U.S.C. § 717n(b)(1) ; see also 42 U.S.C. § 7172(a)(2).

The Commission devoted almost two years to preparing an environmental assessment of over 200 pages for the Cove Point expansion project. See Office of Energy Projects, Fed. Energy Regulatory Comm'n, Environmental Assessment for the Cove Point Liquefaction Project (May 2014) (“Environmental Assessment”). (In June 2012, Dominion had obtained authorization from the Commission to begin pre-filing procedures for a proposed project to convert the Cove Point LNG facility to a dual-use facility so as to obtain timely review and approval of its application.) Commission staff reviewed numerous public comments, including petitioners', and considered the direct, indirect, and cumulative impacts of new liquefaction facilities at Cove Point and the modification of pipeline and related facilities in Virginia. The Environmental Assessment prepared by Commission staff concluded that the Cove Point conversion project “would not constitute a major federal action significantly affecting the quality of the human environment,” provided Dominion complied with specific mitigation measures, and recommended that the Commission issue a FONSI. Id. at 186–198.

Following another period of public comment, the Commission adopted the Environmental Assessment's findings, issued a FONSI, and conditionally authorized the Cove Point conversion project. See Dominion Cove Point LNG, LP , 148 F.E.R.C. ¶ 61,244

at P 281 (2014) (“2014 Authorization Order”). The Commission determined that an EIS was not required because the new facilities would be “within the footprint of the existing LNG terminal,” and the environmental issues were “relatively small in number and well-defined.” Id. ¶ 275. Petitioners, among others, requested rehearing and moved for a stay. On rehearing, the Commission rejected petitioners' challenges to the FONSI and denied requests for a...