EarthReports, Inc. v. Federal Energy Regulatory Commission
2016 U.S. App. LEXIS 12982
| D.C. Cir. | 2016Background
- Cove Point LNG in Maryland sought FERC authorization to convert its import-only terminal into a dual-use import/export terminal by adding liquefaction and modifying pipeline/compressor facilities; no new storage tanks or increase in previously authorized vessel traffic were proposed.
- Dominion applied under NGA §§ 3 and 7; DOE retains exclusive authority to authorize export of natural gas as a commodity while FERC reviews siting/construction/operation of terminals and pipeline facilities.
- FERC prepared a >200-page Environmental Assessment (EA), concluded a FONSI conditioned on mitigation measures, and issued a conditional authorization (2014 Authorization Order); rehearing was denied (2015 Rehearing Order).
- Petitioners (environmental groups) challenged FERC’s NEPA review, arguing FERC failed to consider (a) indirect effects of increased LNG exports (including upstream production impacts and greenhouse gas/climate effects) and (b) specific direct effects on ballast-water invasive species, North Atlantic right whales, and public safety.
- The court reviewed whether FERC took the requisite "hard look" under NEPA and whether its factual and methodological choices were arbitrary or capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FERC had to consider indirect effects of increased LNG exports (upstream production, GHG emissions) | FERC must analyze reasonably foreseeable indirect effects of facility conversion because exports will induce more domestic production and emissions | DOE, not FERC, has exclusive authority to authorize exports; effects tied to export volumes are not sufficiently causally linked or reasonably foreseeable for FERC to analyze | FERC not required to consider those indirect export-related effects under NEPA because it lacks authority to prevent them and they are not the agency's legally relevant cause |
| Whether FERC erred by declining to use the "social cost of carbon" metric | FERC should monetize GHG impacts using the social cost of carbon (or present a range) to assess significance | The tool is not informative here: discount-rate disagreement, inability to isolate a project’s incremental global effects, and no NEPA significance thresholds | FERC reasonably declined to rely on the social cost of carbon for this project; its methodological choice was not arbitrary |
| Ballast water effects (invasive species, water quality) | FERC minimized risks from ballast-water discharge and failed to require stronger mitigation (e.g., onshore treatment) | FERC acknowledged risks, relied on existing federal/state/Coast Guard measures and found onshore treatment infeasible because Dominion cannot control third-party vessels | FERC adequately considered ballast-water impacts and reasonably relied on existing regulatory regime and practical constraints |
| Impact on North Atlantic right whale from maritime traffic | FERC failed to analyze up-to-date risks and should have supplemented older studies given changes in traffic and coastal conditions | FERC and NOAA reviewed prior extensive analyses, found no material change, and noted the project does not increase authorized vessel traffic | FERC’s reliance on earlier analyses and NOAA consultation was reasonable; no AR/C showing that supplementary study was required |
| Public safety risks from facility footprint near residences | The facility’s small footprint and proximity to homes increase catastrophic risk; FERC failed to independently evaluate safety | FERC conducted extensive safety review, imposed conditions, and required compliance with federal/state/local safety regimes and coordination with authorities | FERC adequately considered public-safety impacts; reliance on regulatory standards and coordination was a reasonable component of its review |
Key Cases Cited
- Department of Transportation v. Public Citizen, 541 U.S. 752 (2004) (NEPA does not require agencies to consider effects they cannot legally prevent or that are not reasonably foreseeable)
- Baltimore Gas & Electric Co. v. Natural Resources Defense Council, 462 U.S. 87 (1983) (NEPA requires agencies take a "hard look" at environmental consequences)
- National Committee for the New River, Inc. v. FERC, 373 F.3d 1323 (D.C. Cir. 2004) (standard of review for FERC NEPA compliance)
- Village of Bensenville v. FAA, 457 F.3d 52 (D.C. Cir. 2006) (NEPA foreseeability limits and scope of effect analysis)
- WildEarth Guardians v. Jewell, 738 F.3d 298 (D.C. Cir. 2013) (agency discretion in choosing methodologies for climate-related analysis)
- Theodore Roosevelt Conservation Partnership v. Salazar, 616 F.3d 497 (D.C. Cir. 2010) (agency may rely on prior analyses where reasoned and applicable)
- James Madison Ltd. v. Ludwig, 82 F.3d 1085 (D.C. Cir. 1996) (review limited to the administrative record)
- Taxpayers of Michigan Against Casinos v. Norton, 433 F.3d 852 (D.C. Cir. 2006) (NEPA documentation standards: EA and FONSI requirements)