Silentman v. Federal Power Com'n, 76-1192

• Decision Date: 25 October 1977
• Docket Number: No. 76-1192,76-1192
• Citation: 566 F.2d 237
• Parties: , 184 U.S.App.D.C. 345, 7 Envtl. L. Rep. 20,758 George SILENTMAN and Mary Silentman, Petitioners, v. FEDERAL POWER COMMISSION, Respondent, San Diego Gas & Electric Co., Southwest Gas Corporation, Transwestern Pipeline Company, et al., and Navajo Tribal Utility Authority, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 237

566 F.2d 237

10 ERC 1796, 184 U.S.App.D.C. 345, 7

Envtl. L. Rep. 20,758

George SILENTMAN and Mary Silentman, Petitioners, v. FEDERAL POWER COMMISSION, Respondent,

San Diego Gas & Electric Co., Southwest Gas Corporation,

Transwestern Pipeline Company, et al., and Navajo

Tribal Utility Authority, Intervenors.

No. 76-1192.

United States Court of Appeals, District of Columbia Circuit.

Argued June 10, 1977.

Decided Aug. 26, 1977.

Rehearing Denied Oct. 25, 1977.

Richard W. Hughes, Window Rock, Ariz., for petitioners.

Thomas M. Walsh, Atty., Federal Power Commission, Washington, D. C., with whom Drexel D. Journey, Gen. Counsel, Robert W. Perdue, Deputy Gen. Counsel, and Allan Abbot Tuttle, Sol., Federal Power Commission, Washington, D. C., were on the brief, for respondent. D. Jane Drennan, Atty., Federal Power Commission, Washington, D. C., also entered an appearance for respondent.

P. M. Schenkkan, Austin, Tex., with whom James W. McCartney, Norman D. Radford, Houston, Tex., and Thomas D. Clarke, Los Angeles, Cal., were on the brief, for intervenors, Transwestern Pipeline Co., et al.

Constance L. Howard, San Diego, Cal., entered an appearance for intervenor, Southwest Gas Corp.

Walter F. Wolf, Jr., Gallup, N. M., entered an appearance for intervenor, Navajo Tribal Utility Authority.

Donald J. Richardson, San Francisco, Cal., entered an appearance for intervenor, San Diego Gas & Elec. Co.

Before WRIGHT and MacKINNON, Circuit Judges, and HOWARD T. MARKEY, ^* Chief Judge, United States Court of Customs and Patent Appeals.

Opinion for the Court filed by MacKINNON, Circuit Judge.

Opinion filed by J. SKELLY WRIGHT, Circuit Judge, concurring in the result.

MacKINNON, Circuit Judge:

The National Environmental Policy Act, 42 U.S.C. § 4321 et seq. (1970) ("NEPA"), has undoubtedly had a tremendous influence on the conduct of governmental functions, but seldom has the degree of that influence approached closer to actual interference than in this case. Petitioners have skillfully employed the most subtle provisions of the Act to retard the approval of construction of a coal gasification plant, at a cost estimated at $5.5 million per month of delay. ¹ The premise for the delay is not that environmental consequences are being or will be ignored, but that error in the manner, and particularly in the timing, with which the Commission has undertaken to explore those consequences constitutes an insurmountable barrier to the granting of a certificate of public convenience and necessity. ²

Transwestern Coal Gasification Co., Pacific Coal Gasification Co., and Western Gasification Co. filed an application in February of 1973 for a certificate of public convenience and necessity with the FPC. Permission was sought to construct a coal gasification plant in San Juan County, New Mexico, and to transport the natural gas derived from that plant by pipeline to connect with an interstate natural gas pipeline. Such a project requires the approval of many federal agencies, including the Department of the Interior's Bureau of Reclamation (which was designated the "lead agency" on the project) as well as the Federal Power Commission.

In September of 1973, ³ the Commission ruled that its jurisdiction was limited to the relatively minor aspect of the project encompassed by the "tap and valve" which connected with the interstate pipeline. Hearings proceeded on that issue alone, and part of the evidence received was a comprehensive document prepared by Battelle Columbus Laboratories, entitled Detailed Environmental Analysis Concerning A Proposed Coal Gasification Plant, which analyzed the environmental impact of the entire project. Had the Commission considered that document as a preliminary environmental impact statement, there would have been no basis for this appeal.

The administrative law judge ruled to approve the certificate of public convenience and necessity on June 13, 1974, and on April 21, 1975, the Commission affirmed in Opinion No. 728. That opinion held that the FPC's jurisdiction over the "tap and valve facility" in the New Mexico project was not sufficient to constitute "major federal action warranting the preparation of an environmental impact statement under the National Environmental Policy Act." Opinion No. 728 at 5, Rec. at 3576. Hence, even though there was ample evidence in the record of the environmental consequences of the project, the Commission essentially precluded itself from asserting that it had, in actuality, given that evidence proper attention. ⁴

On July 28, 1975, the opinion of this court in Henry v. FPC, 168 U.S.App.D.C. 137, 513 F.2d 395 (1975), was handed down. Henry involved the appeal of the Commission's September, 1973, order which had established a narrow basis for the Federal Power Commission's jurisdiction on this project. While sustaining the Commission's decision that it had no jurisdiction beyond the pipeline connection facility, we held that NEPA required consideration by the FPC to "encompass an evaluation of all the elements of the gasification project" and that this required an environmental impact statement to be issued by the FPC (and all the other governmental agencies involved as well) that would address the environmental consequences of the entire project. See 168 U.S.App.D.C. at 148-49, 513 F.2d at 406-07.

On October 3, 1975, the Silentmans petitioned to intervene in the proceedings before the FPC, which were in the process of rehearing. The Commission permitted their entry into the hearings. On November 21, 1975, the Commission released Opinion No. 728A, which granted a conditional certificate of public convenience and necessity as a means of adding some certainty to the project that would assist it in securing the necessary financing. The two conditions imposed before an unqualified certificate would issue were that (1) the Commission approve of the environmental consequences, after studying the final EIS to be issued by the Department of Interior, and that (2) the proposed financing terms for the pipeline linkage be approved.

The Commission's attempt to implement our Henry opinion is now challenged by the Silentmans. Specifically, petitioners raise three major arguments. First, it is contended that the FPC's conditional certificate of public convenience and necessity is the type of final agency action that requires an environmental impact statement under the Supreme Court's opinion in Aberdeen & Rockfish v. SCRAP, 422 U.S. 289, 95 S.Ct. 2336, 45 L.Ed.2d 191 (1975) ("SCRAP II" ). Second, the Council on Environmental Quality has promulgated guidelines for environmental statements, and under 40 C.F.R. § 1500.7(a), "draft statements on administrative actions should be prepared and circulated for comment prior to the first significant point of decision in the agency review process." Petitioners claim that the conditional certification, and, indeed, even the administrative law judge's opinion, constituted such a "significant point of decision" that the FPC should have issued a draft statement. Third, the Silentmans argue that the FPC's own regulations require that "the initial decision of the presiding administrative law judge . . . include an evaluation of . . . environmental factors." ⁵

The application of NEPA to major governmental action is complicated where several federal agencies are involved in the same project. We have already held in Henry that it is impermissible for any one agency to avoid addressing the environmental consequences of an entire federal project because its own involvement was small. But we also held in Henry that

(T)he FPC is not necessarily required to prepare a full environmental impact statement for the gasification project. It can rely on the Statement prepared by the lead agency. What is required is that the FPC . . . take into account the environmental costs of the gasification projects as a whole. It may do this by accepting, rejecting, or modifying the analysis of the lead agency.

168 U.S.App.D.C. at 149, 513 F.2d at 407.

The "lead agency" concept is explained in the Council on Environmental Quality's regulations, 40 C.F.R. § 1500.7(b) (1977):

Where more than one agency (1) directly sponsors an action, or is directly involved in an action through funding, licenses, or permits, or (2) is involved in a group of actions directly related to each other because of their functional interdependence and geographical proximity, consideration should be given to preparing one statement for all the Federal actions involved . . . . Agencies in such cases should consider the possibility of joint preparation of a statement by all agencies concerned, or designation of a single "lead agency" to assume supervisory responsibility for preparation of the statement. Where a lead agency prepares the statement, the other agencies involved should provide assistance with respect to their areas of jurisdiction and expertise. In either case, the statement should contain an environmental assessment of the full range of Federal actions involved, should reflect the views of all participating agencies, and should be prepared before major or irreversible actions have been taken by any of the participating agencies. Factors relevant in determining an appropriate lead agency include the time sequence in which the agencies become involved, the magnitude of their respective involvement, and their relative expertise with respect to the project's environmental effects.

(Emphasis added.)

It is quite clear from the foregoing and from Henry that individual agencies may rely on a lead agency's environmental statement. It is also inferable from the factors deemed relevant in selecting the lead agency that the expectation is for the lead agency to be ready with its statement before the other agencies have progressed very far in their own proceedings. But this cannot always be the case, and is not the case here. It is little comfort for an agency to have the right to rely...