Segmentation: A Conduit to Conflict

NEPA's Permanently Hard Question

The pipeline boom has many in the environmental community on alert against a perennial bugbear NEPA veterans know well.  In any infrastructural “system” built and maintained piecemeal, doubts and questions will arise over the measurable or practical units under “consideration” or construction at any one time.  If NEPA’s ideal is to analyze and weigh the environmental impacts of our actions before we take them, the question is always thus: what is the “action” under consideration at a given juncture and how will its decision affect future choices.  Highways and railroads dominated this legal field in NEPA’s early days, but energy conduits have taken over the ‘pole’ position today.

One early precedent held that preparing an impact statement regarding the entire 1800+ mile state highway system didn’t make sense because the system as a whole, though always theoretically under development and consideration for future expansions and enhancements, was simply too unformed at any given time to serve as a good subject for NEPA analysis.  See Indian Lookout Alliance v. Volpe, 484 F.2d 11, 14-15 (8th Cir. 1973).  From that extreme, though, lay the inevitable suspicions that decision-makers are chopping up their actions to make each increment appear insignificant.  Distrust of those decision-makers only increases the suspicions.

Although devious intent has been obvious when a highway segment to nowhere takes up the environmental impact analysis, see, e.g., San Antonio Conserv. Soc. v. Texas Highway Dept., 446 F.2d 1013 (5th Cir. 1971) (highway segments leading to park boundary but excluding connection traversing park), more common is the case where a proposed road terminates where it makes some sense—but a further, farther terminus is readily imaginable and simply awaiting (predicted) future growth.  See, e.g., Daly v. Volpe, 514 F.2d 1106 (9th Cir. 1975) (highway running west of Seattle to small town terminus but in the direction of a ski mountain).  These are the hard cases and they are hard not just because they involve the mutual distrust of environmental advocates and government.  They are hard because they test the plausibility of thinking before acting as a collective ideal.

Delaware Riverkeeper

This past June, a panel of the D.C. Circuit decided Delaware Riverkeeper Network v. Federal Energy Regulatory Comm’n, 753 F.3d 1304 (D.C. Cir. 2014), a segmentation case involving FERC’s approval of a pipeline upgrade in Pennsylvania.  The pipeline, known basically as 300, spans the state east/west.  A Google Map of it can be found here.  When it was installed in the 1950s, it consisted of 24-inch pipe.  The pipeline owner/operator, Tennessee Gas, undertook four nominally separate enhancement projects beginning in 2010 to accommodate newly “diversified” gas sources in Western Pennsylvania, e.g., Marcellus Shale fracking, as it flows to consumers in the New York Metro region.  As Tennessee Gas explained its plan to the trade press, the total expansion was to consist of ~127 miles of 30-inch pipeline and the addition of ~55,000 horsepower of additional compression to push the gas at two new compressor stations and upgrades at seven other existing stations.  The project Tennessee Gas brought to FERC was a fraction of that plan and, on that application, FERC prepared an environmental assessment that recommended a finding of no significant impact (FONSI)—on the project described in the applicant’s filing.

{Dec.2014 Update: Pennsylvania found multiple violations of the state’s Clean Streams Law in Tennessee Gas’s construction of the upgrade, fining the company for disposal of its fill in wetlands and other sensitive areas.  See the DEP’s press release here.}

Judge Edwards held that the 300 project was “physically, functionally, and financially connected and interdependent” with the three other Tennessee Gas projects.  Id. at 1318.  As Tennessee Gas approached FERC, the expansion of 300 in total was its plan and the individuated projects were simply “inextricably intertwined.”  Id. at 1317.  (An interesting question might be posed by the two concurrences, one of which joined Edwards’ opinion in full, one of which only joined the holding on other grounds: should there be a rehearing en banc?)

As described by the panel, the plaintiffs’ are

concerned with habitat fragmentation [the pipeline entailed widening an existing corridor by 25 feet], hydrology impacts to wetlands and groundwater, and “edge effects” of deforestation.  Riverkeeper claims [one of the other three related projects] alone cleared 265 acres of forest and impacted 50 acres of wetlands, and that the four projects together permanently deforested 628 acres.

And these are serious concerns.  But one wonders whether opposition to the tide—the building of more infrastructure supporting unconventional gas development across the Marcellus—rather than to the particular swell (this pipeline) best captured the plaintiffs’ motives.  By a kind of “totality of the circumstances” analysis, the D.C. Circuit found that the bit FERC analyzed in and of itself had no “independent utility” and, thus, was an impermissible segmentation under NEPA.  Another panel and another totality of circumstances might’ve tilted in a different direction, though.

Segmentation as an Issue: The Collective Action Problem

Segmentation is so hard because of how we make our collective decisions and because of how much distrust inheres in our system for doing so.  With broadly worded, delegative statutes our legislatures empower administrative agencies to balance relevant factors and make decisions based on the best information they can obtain.  NEPA adds environmental costs and risks as relevant factors but otherwise leaves the system intact. With so many factors to balance, so many factual uncertainties attending their judgments, and only delegated authority with which to govern, agencies like FERC often find themselves having to: (1) referee the individuated initiatives brought to them by others (like Tennessee Gas v. Riverkeeper); (2) rely on those others for the information necessary to the judgment; (3) continuously amend the stable of “relevant” factors being considered (which can feel like having to reinvent the wheel every time another decision is due); and (4) cope with a hyper-polarized Congress bearing little resemblance to the one which legislated the governing statute with the former deciding the agency’s annual funding.

Was FERC of the mind that continued development of the Marcellus is inevitable, good, efficient, all of the above—unlike the plaintiffs?  Probably.  Will FERC make a different substantive judgment from a full impact statement analyzing the 300 upgrade as a whole?  Not likely—not unless FERC leadership changes its mind (or personnel) substantially beforehand (and withdraws approval of already-completed projects).  But the plaintiffs are obviously willing to run that risk because a NEPA segmentation claim was their best legal option here.  And pipelines make good enemies from a fund-raising standpoint.

What advocates like Riverkeeper must so often argue—rightly in many cases—is that the subject action being considered by the agency is just more investment in ‘business as usual’ at a moment when investment in transformative or corrective technologies would be best.  More investment in ‘business as usual’ can often make more of that status quo appear most justified, all things considered, long after it is.  But the variables involved in such calculations are vast and uncertain. To the Tennessee Gases of the world (or the KinderMorgans!), fights like this are just part of a $700M wager that the investment will pay its shareholders back.  If I were on the hook for that kind of financial risk, I’d fight hard to give it the best chance to work I could, too.  But will this pipeline enhancement contribute to future “unconventional” gas development in Pennsylvania (or elsewhere)?  The thread of gas pipelines, after all, extends in every direction here, as the Energy Information Administration gleefully noted in 2012 when enhanced capacities were being put on line.NENatGasPipelines  More investment in these sunk costs and highly specific assets makes more development of the fossil fuels they move that much more cost justified at future decision points.  So agencies like FERC face mission impossible: represent the “public” interest with resources barely adequate to grasp and pursue narrowly defined, short-term private interests (or at least the estimates thereof).  And that makes segmentation the flashpoint in what will surely be more pipeline proposals down the line.

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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