Sierra Club & Galveston Baykeeper v. Fed. Energy Regulatory Comm'n, No. 14-1275

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtMillett, Circuit Judge
PartiesSierra Club and Galveston Baykeeper, Petitioners v. Federal Energy Regulatory Commission, Respondent American Petroleum Institute, et al., Intervenors.
Docket NumberNo. 14-1275
Decision Date28 June 2016

827 F.3d 36

Sierra Club and Galveston Baykeeper, Petitioners
v.
Federal Energy Regulatory Commission, Respondent

American Petroleum Institute, et al., Intervenors.

No. 14-1275

United States Court of Appeals, District of Columbia Circuit.

Argued November 13, 2015
Decided June 28, 2016


Nathan Matthews argued the cause for petitioners. With him on the briefs was Sanjay Narayan, New York, NY.

Robert H. Solomon, Solicitor, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief were David L. Morenoff, General Counsel, and Karin L. Larson, Attorney, Washington, DC.

Jonathan S. Franklin, Washington, DC, argued the cause for respondent-intervenors Freeport LNG Development, L.P., et al. With him on the brief were Lisa M. Tonery, New York, NY, and Charles R. Scott, Shreveport, LA.

827 F.3d 40

Catherine E. Stetson, Washington, DC, was on the brief for intervenor American Petroleum Institute in support of respondent. Stacy R. Linden and Benjamin Norris IV entered appearances.

Before: Rogers, Griffith, and Millett, Circuit Judges.

Millett, Circuit Judge :

The Sierra Club and Galveston Baykeeper (the “Associations”) take issue with the Federal Energy Regulatory Commission's decision authorizing Freeport LNG Development, L.P. to redesign its liquefied natural gas terminal in Texas to support export operations. Specifically, the Associations argue that the Commission's analysis of the proposal's impact on the environment ran afoul of the National Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321 et seq. We hold that the Associations have standing to press their challenges to the Commission's orders and that their case is not moot, but we deny the petition for review on the merits. To the extent the Associations complain about the environmental consequences of exporting natural gas from Freeport's terminal, those objections should be raised in the pending challenge to the Department of Energy's order authorizing Freeport to export natural gas. On the narrower question of whether the Commission's analysis of the non-export-related environmental consequences of Freeport's proposal itself complied with NEPA, we find no error in the Commission's analysis that would rise to the level of arbitrary or capricious decision-making.

I

A

Export authorizations for natural gas implicate a tangled web of regulatory processes. The Department of Energy maintains exclusive authority over the export of natural gas as a commodity. 42 U.S.C. § 7151(b). The Natural Gas Act, though, authorizes the exportation of natural gas from the United States unless the Department specifically determines that doing so “will not be consistent with the public interest.” 15 U.S.C. § 717b(a). In addition, the Department of Energy's determination of the public interest in the export of natural gas depends on the country to which the gas will be exported. If it is a country with which the United States has a “free trade agreement requiring national treatment for trade in natural gas,” the Natural Gas Act makes the decision for the Department, because the Act “deem[s]” export “to be consistent with the public interest, and applications for such * * * exportation shall be granted without modification or delay.” Id. § 717b(c). On the other hand, if the gas will be exported to a country with which the United States does not have such a trade agreement, the Department must independently determine whether such exports would be inconsistent with the public interest. See id. § 717b(a).1

The Department has delegated to the Federal Energy Regulatory Commission the authority to “[a]pprove or disapprove the construction and operation of particular [export] facilities, the site at which such

827 F.3d 41

facilities shall be located, and with respect to natural gas that involves the construction of new domestic facilities, the place of * * * exit for [natural gas] exports.” U.S. Department of Energy, Delegation Order No. 00-004.00A, § 1.21.A (May 16, 2006); cf. 15 U.S.C. § 717b(e)(1) (“The [Federal Power] Commission shall have the exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG [liquefied natural gas] terminal.”). As a result, if an operator of a natural gas terminal like Freeport wants to export natural gas and has to construct or modify facilities to do so, it must obtain authorizations from both the Department of Energy (to export) and the Commission (to construct and to operate the necessary facilities). And if the export will be to a natural gas free-trade country, the only potential public-interest analysis ever made is the Commission's when approving the “siting, construction, expansion or operation of an LNG terminal.” 15 U.S.C. § 717b(e)(1).

In addition to those public-interest determinations, authorizations to export natural gas also require an environmental review under NEPA. See 42 U.S.C. § 4332(2)(C). When, as here, the agency determines that the action under review is a “major Federal action[ ]” that will “significantly affect[ ] the quality of the human environment,” the agency must prepare a detailed Environmental Impact Statement that addresses (i) the environmental impact of the proposed action, (ii) any “adverse environmental effects” that “cannot be avoided” if the proposal is implemented, (iii) available alternatives to the proposed action, (iv) the “relationship between local short-term uses of [the] environment and the maintenance and enhancement of long-term productivity,” and (v) any “irreversible and irretrievable commitments of resources” that “would be involved in the proposed action should it be implemented.” Id.

In analyzing the environmental impact of a project, NEPA obligates the agency to consider not just the “direct” environmental effects of the proposed action that “are caused by the action and occur at the same time and place,” but also the action's “indirect” environmental effects that “are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” 40 C.F.R. § 1508.8. The agency must also consider the action's “cumulative impact”—that is, the impact on the environment that would result “from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” Id. § 1508.7.

Notwithstanding the limited scope of the Commission's delegated authority under the Natural Gas Act, that Act designates the Commission to be “the lead agency for the purposes of coordinating all applicable Federal authorizations and for the purposes of complying with the National Environmental Policy Act.” 15 U.S.C. § 717n(b)(1) ; see also 42 U.S.C. § 7172(a)(2)(B). As a result, the Department of Energy participates in the NEPA process only as a “cooperating agency,” 40 C.F.R. § 1501.6(b), while the Commission is ultimately responsible for “supervis[ing] the preparation of [the] environmental impact statement,” id. § 1501.5. That arrangement makes it possible for the Department to adopt the Commission's environmental analysis as its own for purposes of any additional NEPA review triggered by an export-authorization request. But the Department must independently review the Commission's work and conclude that the Department's own

827 F.3d 42

“comments and suggestions have been satisfied.” Id. § 1506.3(c).

B

In 2004, the Commission authorized Freeport to site, construct, and operate a liquefied natural gas import terminal on Quintana Island in Brazoria County, Texas. That facility was placed into service in 2008.

As it happens, an increase in the availability of cheap domestic natural gas during the last decade caused the market for importing gas to decline. As a result, Freeport shifted its operations toward exporting and, in 2009, obtained authorization from the Commission to operate its existing terminal facility for both exporting and importing natural gas on a short-term basis. In 2011 and 2012, Freeport sought authorization from the Commission both to modify its facilities to better support gas exports, and to construct additional gas liquefaction facilities to supplement its export operations. (Throughout this opinion, we refer to those two projects collectively as the “Freeport Projects.”).

As required by the Natural Gas Act and NEPA, the Commission undertook an extensive environmental review of the Freeport Projects. Deeming the two projects to be “connected actions,” 40 C.F.R § 1508.25, the Commission prepared a single Environmental Impact Statement. The Department of Energy, the Environmental Protection Agency, the Department of Transportation, the U.S. Army Corps of Engineers, and the National Oceanic and Atmospheric Administration all participated in that consolidated review as “cooperating agencies.” J.A. 679.

Meanwhile, in 2010 and 2011, Freeport separately sought authorization from the Department of Energy to export natural gas. The Department approved Freeport's request for free-trade agreement countries in February 2011, and conditionally approved Freeport's...

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    ..."de novo factual findings or independent policy judgments better left to agency experts." Sierra Club v. Fed. Energy Regulatory Comm'n , 827 F.3d 36, 49 (D.C. Cir. 2016) ; see Canonsburg Gen. Hosp. v. Burwell , 807 F.3d 295, 305 (D.C. Cir. 2015). But that principle does not apply when the i......
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31 cases
  • WildEarth Guardians v. Bernhardt, Civil Action No. 16-1724 (RC)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • November 13, 2020
    ...The Court's task "is not to ‘flyspeck’ [BLM's] environmental analysis for ‘any deficiency no matter how minor.’ " Sierra Club v. FERC , 827 F.3d 36, 46 (D.C. Cir. 2016) (quoting Theodore Roosevelt Conservation Partnership v. Salazar , 661 F.3d 66, 75 (C.A.D.C. 2011) ). Rather, NEPA's "rule ......
  • Eagle Pharm., Inc. v. Azar, No. 18-5207
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 13, 2020
    ...here, ‘our interpretation of [a statute] and binding Supreme Court precedent’ " (alteration in original) (quoting Sierra Club v. FERC , 827 F.3d 36, 49 (D.C. Cir. 2016) )), we need not decide this issue because even if we consider the FDA’s arguments, we would nevertheless find § 360cc(a) u......
  • Ctr. for Biological Diversity, Manasota-88, Inc. v. U.S. Army Corps of Eng'rs, No. 18-10541
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • November 4, 2019
    ...into account in reaching a decision." See EarthReports, Inc. v. FERC , 828 F.3d 949, 955 (D.C. Cir. 2016) (quoting Sierra Club v. FERC , 827 F.3d 36, 47 (D.C. Cir. 2016) ).The Corps determined that Mosaic’s four mining-related projects had similarities that provided a basis for evaluating t......
  • Mozilla Corp. v. Fed. Commc'ns Comm'n, No. 18-1051
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • October 1, 2019
    ..."de novo factual findings or independent policy judgments better left to agency experts." Sierra Club v. Fed. Energy Regulatory Comm'n , 827 F.3d 36, 49 (D.C. Cir. 2016) ; see Canonsburg Gen. Hosp. v. Burwell , 807 F.3d 295, 305 (D.C. Cir. 2015). But that principle does not apply when the i......
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