896 F.3d 418
D.C. Cir.2018Background
- Trans-Pecos Pipeline, LLC sought FERC authorization under NGA § 3 to construct a 1,093-foot export facility at the U.S.–Mexico border and separately built a 148‑mile intrastate Trans‑Pecos Pipeline in Texas to deliver gas to that export point.
- FERC authorized only the border Export Facility under § 3, concluded the 148‑mile Trans‑Pecos Pipeline is an intrastate facility not subject to NGA § 7, and declined to include the intrastate pipeline in NEPA review.
- FERC issued an Environmental Assessment and a Finding of No Significant Impact for the Export Facility; it did not analyze environmental effects of the intrastate pipeline because it found no federal jurisdiction over it.
- Big Bend Conservation Alliance intervened, arguing (1) the intrastate pipeline is an export facility under § 3, (2) it is an interstate pipeline subject to § 7, and (3) FERC should have included the pipeline in NEPA review (segmentation or federalization theories).
- The D.C. Circuit held Big Bend forfeited its § 3 argument by failing to raise it in its rehearing request to FERC; the court reviewed the remaining § 7 and NEPA claims on the merits and affirmed FERC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Trans‑Pecos Pipeline is an export facility under NGA § 3 | Pipeline functions as part of export project; should be classified under § 3 | Big Bend failed to raise § 3 argument on rehearing to FERC | Forfeited: court lacks jurisdiction to consider the § 3 claim |
| Whether the Trans‑Pecos Pipeline is an interstate pipeline subject to NGA § 7 | Pipeline will carry gas that crossed state lines or will be used to transport out‑of‑state gas, so § 7 applies | Pipeline initially will carry only Texas‑produced gas; substantial evidence supports intrastate classification; possible future § 311 service does not automatically trigger § 7 | Affirmed FERC: pipeline is intrastate and not subject to § 7 |
| Whether potential future use under NGA § 311 renders the pipeline subject to § 7 | Allowing later § 311 use would allow evasion of § 7; § 311 shouldn't apply to new pipelines to prevent circumvention | § 311 lawfully permits intrastate pipelines to provide service on behalf of interstate pipelines without triggering § 7; no present authorization or evidence of evasion here | Rejected plaintiff; FERC’s observation about § 311 simply restated law and did not commit future action |
| Whether NEPA required FERC to include the intrastate pipeline in its environmental review (segmentation or federalization) | Projects are connected/interdependent or FERC’s approval federalized the whole project, so NEPA review should cover the pipeline | Connected‑actions doctrine does not force aggregation of non‑federal actions; federalization theory lacks vitality post‑Karst; FERC applied appropriate control factors and found insufficient federal control | Affirmed FERC: no NEPA review required for the intrastate pipeline (no connected federal actions; federalization rejected) |
Key Cases Cited
- Distrigas Corp. v. Federal Power Comm’n, 495 F.2d 1057 (D.C. Cir. 1974) (construing § 3 to require authorization to construct import/export facilities)
- ASARCO, Inc. v. FERC, 777 F.2d 764 (D.C. Cir. 1985) (rehearing requirement under NGA § 19(a))
- New England Power Generators Ass’n, Inc. v. FERC, 879 F.3d 1192 (D.C. Cir. 2018) (must raise objections in rehearing before judicial review)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard requires reasoned explanation)
- Sierra Club v. U.S. Army Corps of Eng’rs, 803 F.3d 31 (D.C. Cir. 2015) (connected actions doctrine; federal NEPA review does not cover primarily non‑federal projects)
- Del. Riverkeeper Network v. FERC, 753 F.3d 1304 (D.C. Cir. 2014) (improper segmentation where entire interstate project was within FERC jurisdiction)
- Macht v. Skinner, 916 F.2d 13 (D.C. Cir. 1990) (discussed federalization theory; limited application)
- Karst Environmental Educ. & Prot., Inc. v. EPA, 475 F.3d 1291 (D.C. Cir. 2007) (federalization theory lacks vitality after APA/"final agency action" analysis)
- National Comm. for the New River, Inc. v. FERC, 373 F.3d 1323 (D.C. Cir. 2004) (rejected but‑for test for federalization/control)
- Coalition for Underground Expansion v. Mineta, 333 F.3d 193 (D.C. Cir. 2003) (federal funding or potential future funding does not necessarily federalize a project)