97 F.4th 16
D.C. Cir.2024Background
- FERC regulates construction and operation of natural gas infrastructure under the Natural Gas Act (NGA), issuing certificates of public convenience and necessity for qualifying projects.
- FERC routinely sets deadlines for project completion and grants extensions for “good cause” if requests are filed before the deadline and the underlying public interest findings remain valid.
- National Fuel’s pipeline encountered delays owing to New York’s denial of a key environmental permit; litigation ensued, after which FERC granted a further extension to accommodate updating necessary permits.
- Cheniere requested and received an extension to its LNG project deadline, citing delays and uncertainties caused by the COVID-19 pandemic.
- Sierra Club and Public Citizen challenged FERC’s grant of extensions in both cases, arguing FERC was too permissive in its “good cause” analysis and failed to reconsider environmental and market-need findings.
- The court reviewed whether FERC’s extension decisions were reasonable, adequately explained, and in accordance with its statutory authority, under an arbitrary-and-capricious standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for Extension of Deadlines | FERC acted too permissively with 'good cause' | Extensions granted for delays beyond control | FERC’s approach reasonable, not arbitrary |
| Need to Reassess Certificate Findings | FERC must reconsider project need & environment | No need unless changed circumstances | FERC need not reevaluate absent major change |
| Sufficiency of 'Good Cause' Evidence | More specific evidence of diligence required | Showings such as litigation or COVID-19 suffice | FERC rationale was adequate |
| NEPA Supplementation Requirement | New climate law warranted new NEPA analysis | No significant new information/circumstances | No supplemental NEPA analysis required |
Key Cases Cited
- Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (affirmed FERC’s balancing of public benefits and adverse effects, including environmental, in pipeline cases)
- Tenn. Gas Pipeline Co. v. FERC, 860 F.2d 446 (D.C. Cir. 1988) (FERC has broad discretion under the NGA in certificate matters)
- Panhandle E. Pipe Line Co. v. FERC, 907 F.2d 185 (D.C. Cir. 1990) (confirmed FERC’s equitable powers under NGA § 717o)
- Marsh v. Or. Nat. Res. Council, 490 U.S. 360 (1989) (agency discretion in deciding to supplement NEPA analysis must be deferred to when reasonable)
- Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious review standard requires a rational connection between facts found and choice made)