6 F.4th 1321
D.C. Cir.2021Background
- FERC approved construction and operation of three LNG export terminals on the Brownsville Shipping Channel (Rio Grande, Texas, and Annova) and related pipelines; petitioners (residents, environmental groups, and a nearby city) sought rehearing and then judicial review challenging NEPA, APA, and NGA issues.
- Annova abandoned its project before argument; that petition was dismissed as moot.
- Petitioners argued FERC’s EISs inadequately analyzed (1) greenhouse gas (GHG) impacts—claiming FERC should have used the social cost of carbon or another accepted method under 40 C.F.R. § 1502.21(c); and (2) environmental justice impacts—challenging FERC’s choice to limit analysis to census block groups within two miles despite finding air impacts could extend far beyond that radius.
- The court held FERC’s greenhouse-gas analysis deficient for failing to address the significance of 40 C.F.R. § 1502.21(c) and failing to engage opposing viewpoints about use of the social cost of carbon; it also held the environmental-justice analysis arbitrary for the unexplained two-mile delimitation.
- Because FERC’s public-interest determinations under Sections 3 and 7 of the NGA depended on those defective NEPA analyses, the court remanded those determinations as well.
- Remedy: remand without vacatur (court found defects likely remediable and vacatur would be disruptive).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of GHG analysis under NEPA (use of social cost of carbon / 40 C.F.R. § 1502.21(c)) | FERC had to use the social cost of carbon or another generally accepted method under § 1502.21(c) because the agency said impacts couldn’t be quantified by other means. | FERC said no consensus on discount rate, tool doesn’t show project-level incremental physical impacts, and no monetary threshold for "significant." | Court: FERC’s analysis was deficient for failing to address § 1502.21(c) and opposing viewpoints; on remand FERC must explain whether and how to apply the social cost of carbon or another accepted method or explain why not. |
| Environmental justice scope (geographic delineation) | Limiting EJ analysis to census blocks within two miles was arbitrary given FERC found some air impacts could reach ~31 miles. | FERC did not adequately justify the two-mile boundary in the rehearing order. | Court: Arbitrary—FERC must justify the two-mile boundary or analyze a broader area and reassess findings that affected populations are minority/low-income and that impacts are not disproportionate. |
| NGA public-interest determinations (Sections 3 & 7) | FERC’s public-interest/convenience findings are invalid to the extent based on the deficient NEPA analyses. | FERC relied on its EIS conclusions; those EIS conclusions were challenged. | Court: Because NGA findings rested on flawed NEPA analyses, those determinations must be reconsidered on remand. |
| Remedy (vacatur vs. remand) | Petitioners sought vacatur; intervenors argued remand without vacatur to avoid project disruption. | Intervenors argued vacatur would disrupt financing and project completion; defects likely fixable. | Court: Remand without vacatur—deficiencies are remediable and vacatur would cause undue disruption. |
Key Cases Cited
- Sierra Club v. FERC, 827 F.3d 36 (D.C. Cir. 2016) (describing DOE/FERC roles for LNG export and facility approvals)
- Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (NEPA EIS must force an agency to take a "hard look" and disclose analysis)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary-and-capricious standard for agency action)
- TransCanada Power Mktg. Ltd. v. FERC, 811 F.3d 1 (D.C. Cir. 2015) (agency must address opposing viewpoints in NEPA analysis)
- EarthReports, Inc. v. FERC, 828 F.3d 949 (D.C. Cir. 2016) (discussing FERC’s past refusals to use the social cost of carbon)
- Cmtys. Against Runway Expansion, Inc. v. FAA, 355 F.3d 678 (D.C. Cir. 2004) (environmental justice analysis reviewable under NEPA/APA)
- Williams Gas Processing–Gulf Coast Co. v. FERC, 475 F.3d 319 (D.C. Cir. 2006) (agency decision that rests on an infirm ground is arbitrary and capricious)
- Black Oak Energy, LLC v. FERC, 725 F.3d 230 (D.C. Cir. 2013) (vacatur/remand balancing test: remediability and disruptive consequences)
- Nevada v. Dep’t of Energy, 457 F.3d 78 (D.C. Cir. 2006) (NEPA review standard; scope of appellate review)