Healthy Gulf v. FERC, 132 F.4th 544

The Federal Energy Regulatory Commission (FERC) granted Driftwood Pipeline LLC a certificate to construct and operate two new natural gas pipelines (Lines 200 and 300) in southwestern Louisiana.
Healthy Gulf and Sierra Club challenged FERC’s approval, alleging violations of the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA).
Petitioners argued FERC’s environmental review was deficient, especially regarding greenhouse gas (GHG) emissions and cumulative impacts with a related terminal project.
FERC conducted an environmental impact statement and found the project’s environmental impacts, including GHG emissions, not significant or unable to be characterized as significant/insignificant.
The D.C. Circuit reviewed FERC’s actions for arbitrariness under the Administrative Procedure Act (APA) and ultimately denied the petitioners’ challenge, upholding FERC’s decision.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Upstream GHG effects in NEPA review	FERC failed to consider reasonably foreseeable upstream GHG emissions from new gas production	Sources and quantities of extra wells are unpredictable; reasonable foreseeability not established	FERC’s refusal to analyze upstream GHG was not arbitrary
Significance of GHG emissions	FERC should have determined if GHG emissions were significant using the social cost of carbon	No accepted criteria for NEPA significance using social cost of carbon; monetization ≠ significance	FERC’s explanation for not determining significance was sufficient
Cumulative impacts with Driftwood Terminal (connected actions)	FERC should have considered cumulative environmental impacts with the related Driftwood Terminal	Petitioners failed to timely raise the segmentation/cumulative impacts argument below	Challenge was forfeited due to procedural default
Market need and public benefit balancing under NGA	FERC erred in finding market need and in weighing project benefits over GHG-related costs	Substantial evidence supports market need and appropriate balancing of benefits and environmental harms	FERC’s findings were adequately supported and not arbitrary

Atl. Refin. Co. v. Pub. Serv. Comm’n, 360 U.S. 378 (public convenience and necessity standard under NGA)
Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87 (agency duty under NEPA is to consider and disclose impacts)
Minisink Residents for Env’t Pres. & Safety v. FERC, 762 F.3d 97 (standards for reviewing agency environmental analysis)
Sierra Club v. FERC, 867 F.3d 1357 (scope of review for pipeline approvals under NEPA and NGA)
City of Oberlin v. FERC, 937 F.3d 599 (use of affiliate precedent agreements to show market need)
EarthReports, Inc. v. FERC, 828 F.3d 949 (FERC need not determine significance of GHG emissions under NEPA)
Del. Riverkeeper Network v. FERC, 45 F.4th 104 (precedent agreements as evidence of market need)
B&J Oil & Gas v. FERC, 353 F.3d 71 (arbitrariness standard of review for agency certification)
Environmental Defense Fund v. FERC, 2 F.4th 953 (limits of reliance on affiliate precedent agreements to demonstrate market need)
Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752 (forfeiture for failing to raise issues at the agency stage)
Ctr. for Biological Diversity v. FERC, 67 F.4th 1176 (NEPA does not require significance determination of GHG)