FOOD & WATER WATCH, PETITIONER v. FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. AND TENNESSEE GAS PIPELINE COMPANY, L.L.C., INTERVENORS
No. 22-1214
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
June 14, 2024
Consolidated with 22-1315; Argued November 7, 2023
Erin E. Doran argued the cause and filed the briefs for petitioner. Daniel A. Greenhouse entered an appearance.
Scott Ray Ediger, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With him on
Brian D. O‘Neill argued the cause for respondent-intervenors Tennessee Gas Pipeline Company, L.L.C. and Consolidated Edison Company of New York, Inc. With him on the brief were Michael R. Pincus, Neil H. Butterklee, and Blake R. Urban Sr. Susan J. LoFrumento entered an appearance.
Before: WILKINS and KATSAS, Circuit Judges, and ROGERS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge KATSAS.
KATSAS, Circuit Judge: The Federal Energy Regulatory Commission issued a certificate allowing the Tennessee Gas Pipeline Company to build facilities to expand service on a natural-gas pipeline running from western Pennsylvania to the New York metropolitan area. The additional gas transported as a result will alleviate shortages in Westchester County, New York.
Petitioner Food & Water Watch contends that FERC, in approving the project, arbitrarily overlooked environmental issues. Food & Water Watch argues that the Commission‘s Environmental Impact Statement impermissibly failed to quantify greenhouse-gas emissions from upstream drilling for the extra gas, to quantify ozone emissions from its downstream burning, and to categorize emissions impacts as either significant or insignificant. In addition, Food & Water Watch argues that FERC, in finding a need for the project, did not adequately consider New York State and New York City laws mandating reductions in carbon-dioxide emissions. We reject these contentions and deny the petitions for review.
A
The Natural Gas Act regulates the transportation and sale of natural gas in interstate commerce.
The National Environmental Policy Act requires federal agencies to prepare an Environmental Impact Statement (EIS) for all “major Federal actions significantly affecting the quality of the human environment.”
The NEPA regulations address how agencies should decide whether to prepare an EIS. Agencies may exclude from NEPA review categories of actions that normally have no “significant effect” on the environment.
NEPA “does not mandate particular results.” DOT v. Pub. Citizen, 541 U.S. 752, 756 (2004) (cleaned up). It imposes “only procedural requirements,” id. at 756–57, which ensure that agencies consider “significant” environmental impacts and that the public is also aware of them, Balt. Gas & Elec. Co. v. NRDC, 462 U.S. 87, 97 (1983) (cleaned up). NEPA sometimes requires agencies to engage in “reasonable forecasting” based on “some educated assumptions.” Sabal Trail, 867 F.3d at 1374 (cleaned up). But it does not require “forecasting that is not meaningfully possible.” Food & Water Watch v. FERC, 28 F.4th 277, 285 (D.C. Cir. 2022) (cleaned up).
B
Tennessee Gas owns connected natural-gas pipelines running from Texas to New England. This case involves its Line 300, which runs from western Pennsylvania through New Jersey and into New York. In the project at issue, dubbed the East 300 Upgrade Project, Tennessee Gas sought to build or
Consolidated Edison Company of New York (ConEd), a utility operating in New York City and Westchester County, has entered into a 20-year agreement to buy firm transportation service for all this additional gas. ConEd plans to use the gas to alleviate shortages in Westchester County, where the demand for natural gas has increased substantially over the last decade. As a result of the increased demand, ConEd has been unable to offer gas service to new customers, despite a state-law obligation to provide reliable service to all who seek it. It has also been forced to truck compressed natural gas into the county to meet peak winter demand. ConEd anticipates that the gas supplied by the project will solve these problems.
Tennessee Gas applied to FERC for a certificate of public convenience and necessity for the East 300 Upgrade Project. Initially, the Commission published an Environmental Assessment. But after receiving comments, it decided to prepare a full EIS, which devotes some 16 pages to addressing GHG emissions. J.A. 244-59. The EIS estimated the downstream carbon-dioxide emissions that would occur when ConEd customers burn the gas in Westchester County. However, FERC concluded that the sources of this gas were unknown, so the EIS declined to address upstream environmental effects—including GHG emissions—from drilling for the gas.
FERC then issued a certificate of public convenience and necessity, which incorporated and elaborated on the EIS. Tenn. Gas Pipeline Co., 179 FERC ¶ 61,041, P 35 (Apr. 21, 2022) (Certificate Order). The Commission declined to characterize downstream emissions “as significant or insignificant.” Id. P
FERC then denied rehearing. Tenn. Gas Pipeline Co., 181 FERC ¶ 61,051 (Oct. 24, 2022) (Rehearing Order). For a third time, it declined to address upstream environmental effects. Id. P 27.
Addressing downstream ozone, the Commission estimated the volume of ozone precursor chemicals caused by burning the gas from the project. Id. P 30 n. 85. However, it declined to estimate how much additional ozone their emission would ultimately cause. Id. PP 30–32.
Food & Water Watch petitioned for review of the certificate and rehearing orders, and we consolidated the petitions. We have jurisdiction under
II
Food & Water Watch raises three NEPA challenges to the Commission‘s analysis of environmental effects. We review NEPA claims through the Administrative Procedure Act. Gulf Restoration Network v. Haaland, 47 F.4th 795, 799 (D.C. Cir. 2022). Under the APA, we consider whether agency action is arbitrary or capricious,
Food & Water Watch first asserts that FERC erred by refusing to assess upstream environmental effects caused by extracting natural gas from the ground. Drilling new wells can cause such effects, ranging from increased traffic to GHG emissions. See Eagle Cnty., 82 F.4th at 1176–77. But an EIS need not discuss such effects unless their nature and extent are “reasonably foreseeable.”
Here, FERC reasonably concluded that there was too much uncertainty regarding the number and location of additional upstream wells. As it explained, Line 300 receives natural gas from other pipelines across the country, stretching from the Rockies to the Gulf Coast to Appalachia. Rehearing Order, 181 FERC ¶ 61,051, P 27 & n.74. In the context of downstream emissions, we have held that pinpointing emissions to “somewhere in the Southeast” is not enough to trigger a duty to explain under NEPA. See Birckhead, 925 F.3d at 518, 520–21. Nor is pinpointing upstream emissions to somewhere along Tennessee Gas‘s pipeline network.
Food & Water Watch objects that the gas is unlikely to come from remote locations in the South or Midwest. It highlights evidence that Line 300 takes natural gas primarily from the Marcellus and Utica Shales. But that assertion, even if true, does not move the needle. The Marcellus and Utica deposits reach at least across West Virginia and Pennsylvania and into parts of Ohio and New York. See United States Energy Information Administration, Utica Shale Play Geology
Our decision in Eagle County is not to the contrary. There, we required the Surface Transportation Board to consider the upstream environmental effects from a rail line proposed to facilitate oil drilling in the Uinta Basin in northeastern Utah and northwestern Colorado. 82 F.4th at 1165, 1180. That area is a remote, 12,000-square-mile basin “bounded by high mountains or plateaus,” with only small roads leading in or out. Id. at 1165–66 (cleaned up). The purpose of the project was to “connect the Uinta Basin to the national rail network” to facilitate the “transport of waxy crude oil produced in the Uinta Basin.” Id. at 1166 (cleaned up). There was relatively little oil production in the basin, making it certain that the rail line would stimulate many new wells. See id. And the agency was able to “estimate[] the number of oil wells that would need to be constructed and operated in the Basin to satisfy the expected increased oil production volume.” Id. at 1178 (cleaned up). We held that, with these estimates in hand, the agency had to either take the next step to “quantify the environmental impacts of the wells it reasonably expects in this already identified region” or else explain why it could not do so. See id. at 1179.
Here, in contrast, any prediction about the location and number of wells would be much less precise. For one thing, the point of this project is to bring fuel to a specific downstream area experiencing shortages, not to bring fuel from a specific upstream area with rich, underutilized deposits. So it is hardly surprising that upstream effects were more estimable in Eagle County than they are here. Moreover, the upstream formations here, stretching at least from southwestern West Virginia into central New York, are much larger, less remote, and more geographically diverse than the Uinta Basin. The thousands of existing wells make uncertain the number of new wells
Food & Water Watch notes that the Environmental Protection Agency, in comments to FERC, suggested quantifying upstream emissions, which it said would be reasonably foreseeable. EPA did not suggest, however, that the number or location of additional wells was known to any reasonable degree of precision. Instead, citing assertions in the draft about downstream emissions, it stated more generally that “GHG impacts do not depend on where they occur.” J.A. 196. But as for upstream emissions, we have held that quantification is unnecessary where the “number and location of any additional wells” is unknown. Del. Riverkeeper Network, 45 F.4th at 109 (quoting Birckhead, 925 F.3d at 517). EPA thus urged FERC to do more than our precedents require, and FERC permissibly declined.
As a fallback, Food & Water Watch contends that FERC arbitrarily failed to ask Tennessee Gas for more information about the number and location of any additional wells. But NEPA “involves an almost endless series of judgment calls” left primarily to the agency, Duncan‘s Point Lot Owners Ass‘n v. FERC, 522 F.3d 371, 376 (D.C. Cir. 2008) (cleaned up)—including the question of how much information to seek from regulated parties. Although we have criticized FERC for failing to demand more information about other pipeline projects, see Birckhead, 925 F.3d at 518, we have never set aside a certificate on that basis. Moreover, FERC here reasonably declined to seek more information from Tennessee Gas because no evidence suggests that a request would have
B
Food & Water Watch next objects to FERC‘s discussion of ozone pollution that might be caused by downstream burning of the gas in Westchester County.
In its Rehearing Order, FERC addressed ozone concerns at length. It explained that burning natural gas emits ozone precursor chemicals such as nitrogen oxides and volatile organic compounds, which then react with sunlight to form ozone. 181 FERC ¶ 61,051, P 29. It flagged in qualitative terms that “an increase in natural gas combustion in the region will likely lead to some increase in ozone pollution.” Id. And it estimated the volume of nitrogen oxides and volatile organic compounds that could be released if the pipeline operated as Food & Water Watch claimed. Id. P 30 n.85. But FERC did not give a quantitative estimate of how much ozone would be produced as a result.
Food & Water Watch contends that FERC‘s failure to take that final step was arbitrary. We disagree. For one thing,
Our precedent supports FERC on this point. In WildEarth Guardians v. Jewell, 738 F.3d 298 (D.C. Cir. 2013), we upheld an agency decision to estimate ozone precursors as a reasonable proxy for ozone. WildEarth involved downstream emissions created by a mining project. See id. at 304. The permitting agency explained its decision to estimate only precursor chemicals in terms nearly identical to FERC‘s explanation here. See id. at 311–12. In upholding that decision, we stressed that “the line-drawing decisions necessitated by the NEPA process” are “almost endless,” and we concluded that the agency‘s approach was reasonable even if it were “possible or even prudent” for the agency to hazard a guess at the volume of ozone. Id. at 312 (cleaned up).
Food & Water Watch seeks to distinguish WildEarth on the ground that Westchester County is not in compliance with ozone air-quality standards established under the Clean Air Act. But FERC acknowledged that point in discussing
C
Finally, Food & Water Watch objects to FERC‘s discussion of downstream GHG emissions. We have held that such emissions may be reasonably foreseeable if FERC can “reasonably identify the end users of the gas.” See Ctr. for Bio. Div., 67 F.4th at 1185–86. In that instance, FERC must either give a “quantitative estimate of the downstream greenhouse emissions” or explain why it cannot. Sabal Trail, 867 F.3d at 1374. But FERC need not attempt to monetize those emissions through a Social Cost of Carbon model, which FERC views as unreliable for analyzing individual projects. See Ala. Mun. Distribs. Grp. v. FERC, 100 F.4th 207, 214 (D.C. Cir. 2024); Ctr. for Bio. Div., 67 F.4th at 1183–84.
FERC here went well beyond these requirements. Most importantly, the Commission did quantify downstream GHG emissions, and it compared those emissions to national and state totals. Specifically, it estimated that the upgrade project could contribute up to 2.22 million metric tons of carbon to the atmosphere each year, which could increase national carbon emissions by .041 percent and New York emissions by 1.3 percent. J.A. 247–50 (EIS); see also Certificate Order, 179 FERC ¶ 61,041, PP 50–54. FERC also explained how increased GHG emissions contribute to climate changes such as higher temperatures, rising sea levels, and increased
Food & Water Watch still thinks FERC did not say enough. It contends that the Commission needed to label the increased emissions and ensuing costs as either significant or insignificant. But NEPA contains no such mandate. It merely requires an EIS if a “major” federal action “significantly” affects the environment.
We recognize that, in the recent past, FERC had chosen to label a project‘s carbon emissions as either “significant” or “insignificant” based on a threshold of 100,000 metric tons of greenhouse gases per year. See Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108, PP 79–81 (Feb. 18, 2022); N. Nat. Gas Co., 174 FERC ¶ 61,189, PP 29–36 (Mar. 22, 2021). But FERC never asserted that it was legally compelled to attach the label. To the contrary, the Commission later withdrew the policy statement pending further study about what level or kind of threshold might warrant such a classification. Order on Draft Policy Statements, 178 FERC ¶ 61,197, P 2 (Mar. 24, 2022). Food & Water Watch hints that the withdrawal was arbitrary. But the withdrawal showed FERC‘s awareness that it was pulling back, and a desire for further study is a reasonable basis for doing so. FERC‘s change in course was therefore not arbitrary. See FCC v. Fox TV Stations, Inc., 556 U.S. 502, 515 (2009). We recently confirmed as much in Alabama Municipal Distributors Group. There, we held that FERC‘s withdrawal of its Greenhouse Gas Emissions policy statement cast no doubt on its failure to attach a “significant” or “insignificant” label to the GHG emissions addressed in the EIS at issue. See 100 F.4th at 215. So too here.
III
In addition to challenging FERC‘s discussion of environmental impacts under NEPA, Food & Water Watch also challenges the certificate of public convenience and necessity. This claim too is subject to deferential review for
Food & Water Watch argues that FERC placed too much weight on the contract between Tennessee Gas and ConEd as evidence of market demand. But we repeatedly have held that such contracts—especially between unaffiliated entities—are “good evidence” of such demand. Del. Riverkeeper Network, 45 F.4th at 114; see Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1311 (D.C. Cir. 2015) (precedent agreement showing full subscription was “adequate to support a finding of market need” (cleaned up)); Minisink, 762 F.3d at 111 n.10 (precedent agreements “always will be important evidence of demand for a project” (cleaned up)). Food & Water Watch counters with one decision stating that precedent agreements are not “always sufficient” to show need, but that case involved an agreement between corporate affiliates. See Env‘t Def. Fund v. FERC, 2 F.4th 953, 972–73 (D.C. Cir. 2021). In any event, FERC here relied on much more than just the contract. As it explained, there was a natural-gas shortage in Westchester County, which was forcing ConEd to refuse service to certain new customers and to bring in compressed gas by truck during peak winter demand. Certificate Order, 179 FERC ¶ 61,041, P 49. That evidence was more than enough to support a finding of need.
Food & Water Watch objects that a recently enacted New York statute cuts against the finding of need. The New York State Climate Leadership and Community Protection Act requires carbon emissions from the state to be reduced to 60 percent of 1990 levels by 2030 and to 15 percent of 1990 levels by 2050.
FERC reasonably explained why the statute did not undercut its finding of need. To begin with, the statute does
Food & Water Watch raises a similar argument based on a recent New York City ordinance that it characterizes as prohibiting nearly all use of natural gas in newly constructed or renovated buildings. See
IV
For these reasons, we deny the petitions for review.
So ordered.