Riverkeeper v. U.S. Coast Guard, 12–73385.

• Decision Date: 05 August 2014
• Docket Number: No. 12–73385.,12–73385.
• Citation: 761 F.3d 1084
• Parties: COLUMBIA RIVERKEEPER; Columbia–Pacific Commonsense; Wahkiakum Friends of the River, Petitioners, v. UNITED STATES COAST GUARD, Respondent, LNG Development Company, LLC, DBA Oregon LNG, Respondent–Intervenor.
• Court: U.S. Court of Appeals — Ninth Circuit

761 F.3d 1084

COLUMBIA RIVERKEEPER; Columbia–Pacific Commonsense; Wahkiakum Friends of the River, Petitioners,

v. UNITED STATES COAST GUARD, Respondent,LNG Development Company, LLC, DBA Oregon LNG, Respondent–Intervenor.

No. 12–73385.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 12, 2014.

Filed Aug. 5, 2014.

Thomas C. Buchele (argued) and Aubrey Baldwin, Earthrise Law Center, Portland, OR; Lauren Goldberg, Columbia Riverkeeper, Hood River, OR, for Petitioners.

Brian C. Toth (argued) and Robert J. Lundman, Attorneys, Appellate Section; Robert G. Dreher, Acting Assistant Attorney General, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C.; John T. Dewey, Curtis E. Borland, Frank G. Nolan, and Bronwyn Douglass, United States Coast Guard, Washington, D.C., for Respondent.

Charles Scott, Fulbright & Jaworski, New York, NY, for Respondent–Intervenor.

On Petition for Review of an Order of the United States Coast Guard.

Before: ARTHUR L. ALARCÓN, A. WALLACE TASHIMA, and SANDRA S. IKUTA, Circuit Judges.

OPINION

IKUTA, Circuit Judge:

This appeal addresses one of the several administrative proceedings in which Columbia Riverkeeper, Columbia–Pacific Common Sense, and Wahkiakum Friends of the River (collectively Riverkeeper) have attempted to intervene in an effort to prevent LNG Development Company, LLC (doing business as Oregon LNG), from constructing a liquefied natural gas facility and pipeline along the Columbia River in Oregon. As part of the lengthy terminal siting process, the Coast Guard provided the Federal Energy Regulatory Commission (FERC) with a letter of recommendation (sometimes referred to as a LOR) regarding the suitability of the waterway for vessel traffic associated with the proposed facility. Riverkeeper petitions for review of the Coast Guard's issuance of the letter of recommendation, contending that we have jurisdiction under 15 U.S.C. § 717r(d)(1), which authorizes judicial review of agency orders and actions that “issue, condition, or deny any permit, license, concurrence, or approval.” Because the letter of recommendation is not such an order or action, we conclude we lack jurisdiction and dismiss the petition for review.

I

Liquefied natural gas (LNG) is natural gas that has been “supercooled into liquid form” and “reheated back into gas form at natural gas terminals” for transport to customers. Wash. Gas Light Co. v. FERC, 532 F.3d 928, 929 n. 1 (D.C.Cir.2008). Although the process for liquefying natural gas has been known since the 19th Century and used commercially since the 1950s, interest in transporting LNG for commercial use increased first in the 1970s due to declines in gas reserves, and again more recently. See Jacob Dweck, David Wochner, & Michael Brooks, Liquefied Natural Gas (LNG) Litigation After the Energy Policy Act of 2005: State Powers in LNG Terminal Siting, 27 Energy L.J. 473, 473 (2006). The supercooling process reduces the volume of the natural gas to 1/600th of natural gas in vapor form, and, according to the Coast Guard, makes transporting liquefied natural gas “the most economical way to import natural gas from overseas.” Once natural gas has been liquefied, it can be transported in an LNG tanker to an LNG import terminal, which receives, stores and processes the LNG. These facilities are “typically sited in coastal areas with shipping access.” AES Sparrows Point LNG, LLC v. Smith, 527 F.3d 120, 124 (4th Cir.2008). Because activities involving LNG have a potential for explosions, fires, and spills, federal, state, and local governments have taken steps to regulate the siting and operation of LNG terminal facilities.

A

To understand the role of the Coast Guard's letter of recommendation in the regulatory process, it is necessary to review the historical development of the legal framework for siting LNG terminal facilities. Prior to 2005, different federal agencies allocated responsibility for regulating LNG terminal facilities amongst themselves by means of interagency agreements, with little guidance from Congress. The Natural Gas Act of 1938 (NGA) authorized FERC's predecessor agency (the Federal Power Commission) to approve the import and export of natural gas, 15 U.S.C. § 717b (1938), and the extension and improvement of transportation facilities, 15 U.S.C. § 717f (1938), but did not reference LNG terminal facility siting responsibility. Beginning in 1968, Congress enacted a series of pipeline safety statutes that gave the Department of Transportation (DOT) authority to issue minimum safety standards for siting new liquefied natural gas pipeline facilities, 49 U.S.C. § 60103. DOT and FERC ultimately entered into an interagency agreement to allocate their respective responsibilities. See Memorandum of Understanding between the Department of Transportation and the Federal Energy Regulatory Commission regarding Liquefied Natural Gas Transportation Facilities (1985).

In addition, the Coast Guard asserted authority over siting decisions affecting the safety and security of port areas and navigable waterways under the Ports and Waterways Safety Act, 33 U.S.C. §§ 1221–1236, the Magnuson Act of 1950, 50 U.S.C. § 191, and Executive Order No. 10173, 15 Fed.Reg. 7005 (Oct. 18, 1950). In early 1978, the Coast Guard and a DOT subagency (the Office of Pipeline Safety Operation of the Materials Transportation Bureau) entered into a memorandum of understanding regarding the division of regulatory responsibility over LNG terminals. Believing that the agreement gave it broad regulatory authority, the Coast Guard commenced a rulemaking proceeding and proposed regulations that would require any person siting an LNG facility to obtain a “use permit” from the Coast Guard. Liquefied Natural Gas Facilities, 43 Fed.Reg. 34362, 34365 (Aug. 3, 1978) (proposed 33 C.F.R. § 126.2012). After further congressional action suggested that the Coast Guard's view of its regulatory authority was too broad, the Coast Guard reduced its ambition. Pursuant to a revised memorandum of understanding with DOT, signed in 1986, the Coast Guard proposed revised regulations replacing its proposed “use permit” requirement with a requirement that a project proponent merely secure a letter of recommendation from the Coast Guard. Liquefied Natural Gas Waterfront Facilities, 53 Fed.Reg. 3370, 3377 (Feb. 5, 1988) (proposed 33 C.F.R. § 127.009).

Beginning in the 1990s, there was a rapid increase in efforts to site LNG import terminals. In response to growing safety and environmental concerns, a number of states claimed authority to regulate LNG facilities under specific state LNG statutes or under general environmental, zoning, or construction laws. See Parfomake & Vann, Congressional Research Service, Liquefied Natural Gas (LNG) Import Terminals: Siting, Safety, and Regulation, at 16–17 (Dec. 14, 2009); see also, e.g., Weaver's Cove Energy, LLC v. R.I. Coastal Res. Mgmt. Council, 589 F.3d 458, 472–73 (1st Cir.2009); AES Sparrows Point LNG, 527 F.3d at 124. California also asserted exclusive authority to regulate LNG facilities that did not impact interstate commerce, claiming that FERC lacked authority under the NGA to regulate such sites. See, e.g., Re: Sound Energy Solutions, Notice of Intervention and Protest of the Public Utilities Commission of the State of California, at 7–9, FERC Docket No. CP04–58–000 (Feb. 23, 2004).

In 2004, FERC, the Coast Guard, and a DOT subagency (the Research and Special Programs Administration) responded to the terrorist events of September 11, 2001 by entering into another interagency agreement to divide regulatory responsibility for the safety and security review of waterfront LNG facilities. This agreement confirmed that FERC had lead regulatory authority for the siting and construction of onshore LNG facilities. The agencies also agreed that FERC would be the lead agency for preparing an environmental impact statement (EIS) under the National Environmental Policy Act (NEPA),¹42 U.S.C. §§ 4321– 4370h.

In 2005, consistent with this 2004 interagency agreement, the Coast Guard issued a “Navigation and Vessel Inspection Circular,” NVIC 05–05, providing guidance for persons “seeking a permit to build and operate a shore-side LNG terminal.” The circular confirmed that FERC was responsible for authorizing the siting and construction of onshore LNG facilities, and was the lead agency for the NEPA process. The circular stated that the Coast Guard would serve as a cooperating agency under NEPA, see40 C.F.R. § 1501.6, and would provide FERC with a letter of recommendation (as required in the Coast Guard's 1988 regulations) that set forth its formal evaluation of the suitability of the waterway for LNG marine traffic. According to the Coast Guard, issuing such a letter of recommendation was a “federal action which requires compliance with NEPA” to the same extent as FERC's authorization for construction and operation of an LNG facility.

Just a few months later, Congress enacted the Energy Policy Act (EPAct) of 2005, Pub.L. No. 109–58, 119 Stat. 594, which finally clarified Congress's intent regarding the division of responsibility for siting and operating LNG terminal facilities. The EPAct resolved a number of important issues. First, the Act amended the applicable section of the Natural Gas Act to give FERC “the exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG terminal,” id., § 311, 119 Stat. at 686, codified at 15 U.S.C. § 717b(e)(1) (emphasis added), thereby precluding other federal or state agencies from asserting such authority.

Second, in response to the states' interest in having some control over LNG import terminals within their jurisdiction, Congress took a compromise position. Although Congress's grant of “exclusive authority” to FERC in siting decisions precluded the states' imposition of state law requirements, the EPAct preserved...