The D.C. Circuit Confirms: FERC Shouldn’t Just Ignore Downstream Emissions in its NEPA Documents

To quantify or not to quantify. That is not the question.

The big word from the D.C. Circuit just out yesterday in Sierra Club v. Federal Energy Regulatory Commission, 2017 WL 3597014 (D.C. Cir. 2017), is this: “downstream” emissions in pipeline approvals—the emissions that will or may occur as a result of the pipeline’s operation—cannot just be categorically excluded from Federal Energy Regulatory Commission (FERC) NEPA documents. It takes at least some reason to decide that the combustion of the gas to be delivered by the pipeline(s) and its resultant greenhouse gas (GHG) emissions aren’t sufficiently “foreseeable” to count in the impact statement. As hedgy as that sounds, believe it or not, things just got interesting.

What Did FERC Refuse to Consider?

In its EIS for the “Southeast Market” pipelines at issue, FERC excluded consideration of the GHG emissions that will/probably/possibly result once the pipeline is operating and delivering natural gas to electricity generating stations within its geographic reach. FERC gave a variety of reasons for doing this, each of them more legal than practical.

It first said it couldn’t do anything about those emissions in any event—a surefire way to exclude considerations from a NEPA document after Dept. of Transp. v. Public Citizen, 541 U.S. 752 (2004). But that isn’t quite right given the broad ambit of FERC authority to grant or deny certificates of “public convenience and necessity” under the Natural Gas Act. FERC is to “balance the public benefits against the adverse effects” of a project under the law. See Minisink Residents for Pres. & Safety v. FERC, 783 F.3d 97, 101-02 (D.C. Cir. 2014). Clearly, if FERC could refuse the pipeline a certificate because it was bad for the environment (which, despite FERC’s contentions to the contrary over the years, it can), then it has the discretion to weigh the GHG implications of its actions.

The dissent from Judge Brown argued that expanded electricity generation in the service region is a matter of state control—Florida will have to decide to permit expansion and/or new construction itself.  Thus, the argument goes, the FERC-granted pipeline permission won’t be the “legal cause” of any resultant expansion of emissions. But this argument, which takes a few forms we’ve explored and rejected here before, rings hollow in a proceeding where the agency—in judging the merits of the application itself—must first estimate the demand and supply of the fuels at issue.

Are the Emissions ‘Reasonably Foreseeable’?

Think of it this way: for its own approval purposes, FERC normally has to estimate about how much gas will be delivered through the proposed pipeline(s). But it then turns around moments later and says: “there’s no telling how much gas will be delivered in this pipeline so we’ll just ignore the [fill in the environmental concern] issue in our environmental impact statement.” Makes perfect sense, right? Not so much.

The Sierra Club panel’s response: no dice. How they threaded the needle is of special interest to students of NEPA and GHG issues, though. Here’s what they say:

We do not hold that quantification of greenhouse-gas emissions is required every time those emissions are an indirect effect of an agency action. We understand that in some cases quantification may not be feasible. But FERC has not provided a satisfactory explanation for why this is such a case. We understand that “emission estimates would be largely influenced by assumptions rather than direct parameters about the project,” but some educated assumptions are inevitable in the NEPA process. And the effects of assumptions on estimates can be checked by disclosing those assumptions so that readers can take the resulting estimates with the appropriate amount of salt.

Sierra Club, 2017 WL 3597014, at *10 (internal citations omitted).

This is clearly more nuanced than saying ‘quantify however you can.’ But it is also a deft and potentially powerful connection between NEPA’s “hard look” mandate and the demands of rational (not arbitrary) decision-making more generally.  The D.C. Circuit has lately shown itself to be acutely aware of the informational and procedural niceties of that intersection. See, e.g., Sierra Club v. U.S. Dept. of Energy, 2017 WL 3480707 (D.C. Cir. 2017). This latest Sierra Club opinion is no exception. See id. (“Quantification would permit the agency to compare the emissions from this project to emissions from other projects, to total emissions from the state or the region, or to regional or national emissions-control goals. Without such comparisons, it is difficult to see how FERC could engage in “informed decision making” with respect to the [GHG] effects of this project, or how “informed public comment” could be possible.”).

“Indirect” effects analysis remains challenging. But where those effects are reasonably foreseeable, at least to a first approximation, they cannot just be shoved aside in NEPA documents. Agency lawyers take note.

I teach environmental, natural resources, and administrative law at Penn State Law. Before teaching I was an enforcement lawyer at U.S. EPA. Along the way I've done work for environmental nonprofits and written a fair bit about NEPA.
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