45 F.4th 104
D.C. Cir.2022Background
- Adelphia Gateway, LLC applied to FERC for a certificate to acquire existing interstate pipeline assets and to construct two short laterals (including a 0.3-mile "Parkway Lateral") and the Quakertown Compressor Station in PA; collectively the "Adelphia Gateway Project."
- FERC prepared an Environmental Assessment (EA), concluded "no significant impact," but declined to quantify certain upstream impacts and some downstream greenhouse‑gas (GHG) emissions because end users/destinations were unidentified.
- Adelphia had four precedent agreements covering ~76% of the Project capacity; FERC relied on those agreements to find market need.
- Petitioners challenged FERC’s Certificate and Rehearing Orders on three main grounds: (1) inadequate NEPA review (upstream, downstream GHGs, climate impacts, cumulative effects, alternatives for Quakertown), (2) inadequate market‑need finding, and (3) unconstitutional preemption of state/local authority.
- The D.C. Circuit reviewed under the APA arbitrary-and‑capricious standard and denied the petitions, finding FERC’s judgments reasonable and supported by the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| NEPA — upstream impacts (drilling) | FERC should have considered foreseeable upstream impacts (new wells) caused by increased demand. | Upstream drilling was not reasonably foreseeable; no record evidence could predict number/location of wells. | Affirmed: FERC reasonably declined to analyze upstream drilling; Birckhead controls. |
| NEPA — downstream GHG emissions (general/full‑burn) | FERC should have estimated downstream combustion emissions (full‑burn or industry average) for gas transported on the Project. | FERC could not identify end users/destinations for some volumes, so downstream emissions were not reasonably foreseeable. | Affirmed: FERC permissibly declined a categorical full‑burn estimate; court defers to agency technical judgment. |
| NEPA — Parkway Lateral & precedent‑agreement volumes | FERC should at least quantify emissions for the new Parkway Lateral and other specified volumes. | FERC sought data; applicant said no contracts/quantified capacity to specific end users, so quantification was not feasible. | Affirmed: FERC reasonably concluded it could not reliably quantify those emissions. |
| NEPA — Social Cost of Carbon / climate impacts | FERC was required to use Social Cost of Carbon or similar methodology to evaluate climate impacts. | FERC found no scientifically accepted methodology to link emissions to discrete environmental effects and rejected SCC in EA context; petitioners failed to raise the specific regulatory argument on rehearing. | Court: mostly non‑reviewable for lack of preservation; where reviewed, FERC’s refusal to apply SCC in this EA was reasonable or barred by forfeiture. |
| NEPA — segmentation/cumulative effects (PennEast) | FERC improperly segmented NEPA by not treating PennEast as connected/cumulative. | PennEast is defunct; even if error, its vacatur rendered any error harmless (no cumulative impact now). | Affirmed: any segmentation issue is harmless because PennEast was abandoned. |
| NEPA — Quakertown compressor alternatives & impacts | FERC failed to adequately analyze alternative sites, safety, noise, air quality, and impacts to historic/farmland resources. | FERC addressed site size, safety standards, mitigation, noise and air impacts, and explained tradeoffs (e.g., added compression/emissions at alternatives). | Affirmed: FERC took the required "hard look"; EA was adequate and EIS not required. |
| Market‑need under NGA (reliance on precedent agreements) | Precedent agreements alone were insufficient; other evidence showed overbuilding and lack of need; Spire STL and new policy guidance undermine reliance on precedent contracts. | Precedent agreements are strong evidence of market need, especially here (four different shippers, open season, large share of capacity); new policy does not apply retroactively. | Affirmed: FERC reasonably relied on precedent agreements; Spire STL is distinguishable and Updated Policy Statement not retroactive. |
| Constitutional preemption of state/local authority | FERC’s interpretation of NGA unlawfully preempts state/local health/safety protections under 5th/9th/10th Amendments. | Petitioners failed to raise constitutional objections to FERC on rehearing; exhaustion required. | Dismissed for forfeiture: constitutional claim not exhausted before the agency; court will not consider it. |
Key Cases Cited
- Minisink Residents for Env't Pres. & Safety v. FERC, 762 F.3d 97 (D.C. Cir. 2014) (APA/NEPA standard and role of precedent agreements in need analysis)
- Myersville Citizens for a Rural Cmty. v. FERC, 783 F.3d 1301 (D.C. Cir. 2015) (NEPA EIS/EA standards)
- Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (Sabal Trail) (downstream emissions foreseeability analysis)
- Birckhead v. FERC, 925 F.3d 510 (D.C. Cir. 2019) (limits on when downstream and upstream impacts are reasonably foreseeable)
- EarthReports, Inc. v. FERC, 828 F.3d 949 (D.C. Cir. 2016) (agency need to identify feasible methods to quantify impacts)
- Del. Riverkeeper Network v. FERC, 753 F.3d 1304 (D.C. Cir. 2014) (deference to agency technical expertise; segmentation principles)
- Environmental Defense Fund v. FERC, 2 F.4th 953 (D.C. Cir. 2021) (Spire STL) (circumstances where single/affiliated precedent agreement insufficient)
- Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, 462 U.S. 87 (1983) (standard for judicial review of agency NEPA determinations)