SIERRA CLUB, Petitioner v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent American Petroleum Institute, et al., Intervenors
No. 14-1249
United States Court of Appeals, District of Columbia Circuit.
Argued November 13, 2015 Decided June 28, 2016
827 F.3d 59
So ordered.
Robert H. Solomon, Solicitor, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief was Karin L. Larson, Attorney, Washington, DC.
Jonathan S. Franklin, Beverly Hills, CA, argued the cause for respondent-intervenors Sabine Pаss Liquefaction, LLC and Sabine Pass LNG, L.P. With him on the brief were Lisa M. Tonery, New York, NY, and Charles R. Scott.
Catherine E. Stetson, Washington, DC, was on the brief for intervenor American Petroleum Institute in support of respondent. Stacy R. Linden and Benjamin Norris IV entered appearances.
Before: ROGERS, GRIFFITH and MILLETT, Circuit Judges.
ROGERS, Circuit Judge:
Sierra Club seeks review of the authorization by the Federal Energy Regulatory Commission of an increase in production capacity at a liquefied natural gas terminal in Louisiana. According to Sierra Club, the Commission failed to consider certain environmental consequences of its authorization, in violation of the National Environmental Policy Act of 1969 (“NEPA“),
I.
Until 1977, section 3 of the Natural Gas Act of 1938, Pub. L. No. 75-688, 52 Stat. 821, 822 (codified as amended at
The Commission, in exercising its section 3 authority, must comply with NEPA and its implementing regulations, which require that all federal agencies include an environmental impact statement (“EIS“) “in every recommendation or report on . . . major Federal actions significantly affecting the quality of the human environment.”
The petition before the court challenges whether the Commission complied with NEPA when, pursuant to its delegated section 3 powers, it approved an increase in production capacity at a liquefied natural gas terminal (“the Terminal“) in Cameron Parish, Louisiana, operated by Sabine Pass Liquefaction, LLC, and Sabine Pass LNG, L.P. (collectively “Sabine Pass“). The Commission initially approved the construction and operatiоn of the Terminal as a facility for the import of liquefied natural gas into the United States. Sabine Pass LNG, L.P. & Cheniere Sabine Pass Pipeline Co., 109 F.E.R.C. ¶ 61,324 (2004); Sabine Pass LNG, L.P., 115 F.E.R.C. ¶ 61,330 (2006). Changes in market conditions, however, prompted Sabine Pass to seek Commission authorization to construct and operate facilities that would permit the Terminal to receive natural gas produced in the United States, liquefy it, and prepare it for export to points abroad. In 2012, the Commission authorized Sabine Pass to liquefy and prepare for export up to 16 million tons of natural gas per year. Sabine Pass Liquefaction, LLC & Sabine Pass LNG, L.P. (the “2012 Order“), 139 F.E.R.C. ¶ 61,039 at PP 1, 4. (2012). Sierra Club, which participated in the Commission proceedings, did not petition for judicial review of the 2012 Order.
Pursuant to NEPA, the Commission produced an environmental assessment of Sabine Pass‘s latest proposal. It summarily rejected Sierra Club‘s comments, stating that it had addressed them in the environmental assessment that it conducted in connection with the 2012 Order. The Commission proceeded to grant Sabine Pass‘s request and amended the 2012 Order to increase the maximum volume of natural gas that it could liquefy at the Terminal from 16 to 20 million tons per year. Sabine Pass Liquefaction, LLC & Sabine Pass LNG, L.P. (“2014 Amend.“), 146 F.E.R.C. ¶ 61,117 at PP 5, 12 (2014) (“the 2014 Amendment“). In so doing, the Commission explained in greater detail its rejection of Sierra Club‘s comments. Id. at PP 15, 19. The Commission observed that with respect to effects flowing frоm export-driven increases in domestic natural gas prices, the Department of Energy—and not the Commission—possessed the legal authority to approve any increase in the volume of natural gas actually exported. Id. at P 10. The Commission also determined that induced natural gas production was not a reasonably foreseeable consequence of the 2014 Amendment and therefore not an indirect effect under NEPA. Id. at P 15. Furthermore, in the Commission‘s view, the 2014 Amendment did not generate any new impacts that NEPA required it to consider cumulatively. Id. at P 19. Instead of generating an EIS, the Commission therefore issued a FONSI. Id. at P 20. The Commission denied Sierra Club‘s request for rehearing, reiterating the determinations it had made in granting the 2014 Amendment. Sabine Pass Liquefaction, LLC & Sabine Pass LNG, L.P. (“Rehr‘g Order“), 148 F.E.R.C. ¶ 61,200 at PP 10-14 (2014).
Sierra Club challenges the Commission‘s orders granting the 2014 Amendment and denying rehearing on the ground that the Commission‘s NEPA analysis was deficient. That analysis, Sierra Club contends, failed to consider two indirect effects and should also have considered those effects cumulatively alongside all pending and approved proposals to increase the vоlume of natural gas prepared for export nationwide. To determine whether the court has jurisdiction to consider these challenges, the court must first determine whether Sierra Club has standing under Article III of the Constitution.
An organization has associational standing to bring suit on its members’ behalf when: (1) at least one of its members would have standing to sue in his or her own right; (2) “the interests it seeks to protect are germane to the organization‘s purpose“; and (3) “neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” WildEarth Guardians v. Jewell, 738 F.3d 298, 305 (D.C. Cir. 2013) (quoting Hunt v. Wash. State Apple Adver. Comm‘n, 432 U.S. 333, 343 (1977)); see also Del. Dep‘t of Natural Res. & Envtl. Control v. EPA, 785 F.3d 1, 7 (D.C. Cir. 2015). That Sierra Club meets the latter two requirements is unchallenged and clear, while the first requirement warrants discussion.
To satisfy the first requirement of the associational standing inquiry, Sierra Club must show that: (1) at least one of its members has suffered an “injury-in-fact” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical“; (2) the injury is “fairly traceable to the challenged action“; and (3) it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends оf the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). It must demonstrate a “substantial probability” that it satisfies each element of standing. Sierra Club v. EPA, 292 F.3d 895, 898-99 (D.C. Cir. 2002). Where, as here, a party alleges deprivation of its procedural rights, courts relax the normal standards of redressability and imminence. Summers v. Earth Island Inst., 555 U.S. 488, 496-97 (2009) (citing Lujan, 504 U.S. at 572 n. 7). As for causation, in a NEPA procedural injury case, the petitioner need demonstrate only that “the procedural step was connected to the substantive result,” not that “the agency would have reached a different substantive result” but for the alleged procedural error. WildEarth Guardians, 738 F.3d at 306 (internal citations omitted); see also City of Dania Beach v. FAA, 485 F.3d 1181, 1186-87 (D.C. Cir. 2007); Sugar Cane Growers Co-op. of Fla. v. Veneman, 289 F.3d 89, 94-95 (D.C. Cir. 2002). “[A]n adеquate causal chain must contain at least two links: one connecting the omitted [NEPA analysis] to some substantive government decision that may have been wrongly decided because of the lack of [proper NEPA analysis] and one connecting that substantive decision to the plaintiff‘s particularized injury.” Fla. Audubon Soc. v. Bentsen, 94 F.3d 658, 668 (D.C. Cir. 1996) (en banc). It must be substantially probable “that the substantive agency action that disregarded a procedural requirement created a demonstrable risk, or caused a demonstrable increase in an existing risk, of injury to the particularized interests of the plaintiff . . . .” Id. at 669.
Sierra Club meets the requirements of associational standing on the basis of a
There can be little doubt that Paul will suffer cognizable aesthetic and recreational harm were thе volume of tanker traffic to and from the Terminal to grow. See Friends of the Earth, 528 U.S. at 182-83; Lujan, 504 U.S. at 562-63; Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972); Minisink Residents for Envtl. Preservation & Safety v. FERC, 762 F.3d 97, 106 (D.C. Cir. 2014). The Commission‘s suggestion that Paul “appears to no longer fish near the Sabine Pass terminal” after moving his boat to Galveston, Resp‘t‘s Br. 25, misreads the Paul Declaration. Paul states, in the present tense, that he “frequently” fishes, boats, and hunts in waterways near the Terminal. Paul Decl. ¶ 5. He also expresses concern that greater tanker traffic “will” diminish his use and enjoyment of those waterways. Id. ¶ 9. That Paul moved his “primary boat” to Galveston does not undermine his claim that he presently boats near the Terminal and will continue to do so in the future. If anything, Paul‘s decision to move one of his boats partly in response to the Terminal‘s current production levels (up to 16 million tons per year) gives credence to his assertion that additional tanker traffic will compound his aesthetic and recreational injury.
Sierra Club has also demonstrated a substantial probability that an increase in production capacity at the Terminal will cause an increase in tanker traffic. The Commission insists that the 2014 Amendment will not result in a greatеr number of tankers traversing the waters around the Terminal. See Resp‘t‘s Br. 26. Throughout the process of approving an additional 4 million tons of annual production capacity at the Terminal, the Commission maintained that the 2014 Amendment would not increase the maximum number of tankers—400 per year—authorized to serve the Terminal in the 2012 Order. Sabine Pass Amend. Envtl. Assessment (“2014 Envtl. Assessment“) at 5 (2014); 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 18; Rehr‘g Order, 148 F.E.R.C. ¶ 61,200 at PP 8-9. Yet keeping constant the authorized maximum number of tankers is not the same thing as keeping constant the actual num
To the contrary, the record demonstrates that even when the authorized maximum number of tankers remains steady, an increase in the volume of natural gas prepared for export corresponds with an increase in the number of tankers needed to ferry it into foreign commerce. In fact, there is a roughly linear relationship between production capacity and the number of tankers needed. A production capacity of 8 million tons of liquefied natural gas per year requires an estimated 69 to 147 tankers, whereas a production capaсity of 16 million tons per year requires twice that—between an estimated 138 and 294 tankers. See Sabine Pass Liquefaction Project Envtl. Assessment at 2-15 (2011). Sabine Pass has entered into contracts to export 18 million tons of liquefied natural gas per year. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 12 n. 18. That is 2 million tons above the maximum production capacity of 16 million tons per year authorized by the 2012 Order. Id. at P 5. There is a very substantial probability that Sabine Pass will require more tankers to transport the additional 2 million tons of natural gas per year, a quantity it could not legally liquefy and prepare for export but for the 2014 Amendment.
Therefore, Sierra Club satisfies the causation and redressability requirements of Article III standing. First, the alleged omissions in the Commission‘s NEPA analysis are connected to the Commission‘s decision to authorize the increased volume of production in the 2014 Amendment. If Sierra Club prevails on the merits, the Commission will have to incorporate into its NEPA analysis the omitted indirect effects and cumulative impacts. Upon considering those effects, the Commission could change its position and deny Sabine Pass‘s aрplication for additional production capacity. Second, the decision to authorize additional production capacity in the 2014 Amendment is connected to the harm to Paul‘s aesthetic and recreational interests. Absent the 2014 Amendment, Sabine Pass could not fulfill its contractual obligations to export 2 million tons of liquefied natural gas per year above the pre-2014 Amendment production ceiling. It is substantially probable—if not more likely still—that those 2 million tons of additional export will require additional tankers, and those additional tankers are the source of the harm to Paul‘s aesthetic and recreational interests.
The Paul Declaration is distinguishable from the declarations submitted in National Committee for the New River, Inc. v. FERC, 433 F.3d 830 (D.C. Cir. 2005). Petitioners in that case challenged the realignment of a natural gas pipeline, yet their affidavits focused not on harms arising from the realignment but on general harms arising from the construction of the pipeline in the first place. Id. at 831-32. Nothing in the affidavits explained how their injuries depended on whether the pipeline crossed one part of the New Rivеr versus another. Id. at 832. Here, by contrast, the Paul Declaration attributes his injury to the “increase in operations” at the Terminal and “additional operation of the export facility.” Paul Decl. ¶¶ 7-10. Even if Paul would suffer a similar type of harm in the absence of the 2014 Amendment, the 2014 Amendment will cause him to suffer an additional quantum of that harm.
The Commission‘s reliance on Center for Biological Diversity v. U.S. Department of the Interior, 563 F.3d 466 (D.C. Cir. 2009), mistakes sufficiency for necessity. There, members of the petitioner organization detailed in their affidavits “definitive dates in the near future” when they planned to observe animals affected by offshore oil
III.
Turning to the merits of Sierra Club‘s petition for review, the court‘s review of the Commission‘s compliance with NEPA is limited to determining whether the Commission‘s NEPA analysis was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Nat‘l Comm. for the New River v. FERC, 373 F.3d 1323, 1327 (D.C. Cir. 2004) (citing
A.
Sierra Club contends that the Commission‘s NEPA analysis failed to consider two indirect effects of the 2014 Amendment. Both presuppose that the 2014 Amendment will increase natural gas export capacity and thereby expose thе domestic natural gas market to new international demand. First, natural gas producers in the United States will extract and process more gas to meet this newly heightened demand for their product, thereby intensifying production-related pollution. Second, increasing export capacity will raise the domestic price of natural gas, and that, in turn, will prompt greater reliance on coal, a cheaper but more pollution-intensive fuel.
We disagree for the reasons stated in Sierra Club (Freeport), No. 14-1275, Slip Op. at 13-20. What Sierra Club challenges here is the potential environmental effects flowing from greater natural gas exports from the Terminal. The two indirect effects at the heart of Sierra Club‘s petition cannot occur unless a greater volume of liquefied natural gas is shipped from the Terminal and enters the international marketplace. But the Commission orders challenged here do not authorize Sabine Pass to increase exports from the Terminal. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 5 n. 10; Rehr‘g Order, 148 F.E.R.C. ¶ 61,200 at PP 3 n. 6, 14. Those orders only authorize an increase in production capacity at the Terminal. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at PP 11-12; Rehr‘g Order, 148 F.E.R.C. ¶ 61,200 at P 3. As the Commission exрlained, the Department of Energy alone has the legal authority to authorize Sabine Pass to increase commodity exports of liquefied natural gas. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 10; Rehr‘g Order, 148 F.E.R.C. ¶ 61,200 at PP 12-13; see also
Furthermore, the Commission adequately explained why it was not reasonably foreseeable that greater production capacity at the Terminal—separate and apart from any export activity—would induce additional domestic natural gas production. See
B.
Next, Sierra Club contends the Commission failed to take into account certain cumulative impacts of the 2014 Amendment. In particular, Sierra Club maintains the Commission should have considered the impacts of the 2014 Amendment alongside several other proposals to increase natural gas export capacity nationwide, some pending, some already approved. Those proposals include two other projects at the Terminal (the “Sabine Pass projects“). During administrative proceedings, the Commission determined that the 2014 Amendment would not contribute to any cumulative impacts. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 19. On appeal, the Commission contends that Sierra Club‘s argument fails on two grounds: (1) The court lacks jurisdiction to hear Sierra Club‘s contention regarding the other projects—save for one of the Sabine Pass projects—because it failed to raise them in its petition for rehearing before the Commission, and (2) in any event, NEPA did not require the Commission to consider the effects of the 2014 Amendment cumulatively with the other projects.
1. The court lacks jurisdiction to consider Sierra Club‘s challenge as it pertains to any projects other than the Sabine Pass projects. Section 19(a) of the Natural Gas Aсt requires that a party seek rehearing by the agency before challenging an order issued pursuant to the Act.
Sierra Club endeavors to hang jurisdiction on a very thin reed. In its Motion to Intervene, Sierra Club commented that the Commission needed to “consider the cumulative impacts of all pending export proposals.” Mot. to Intervene, Protest & Cmt. at 19 (Nov. 14, 2013). Its Motion for Rehearing, however, contains no mention of any projects besides other Sabine Pass projects. The header of the relevant section reads: “FERC Violated NEPA by Failing to Consider Cоnnected Actions or the Cumulative Effect of Other Proposed Sabine and Related Pipeline Projects.” Mot. for Rehr‘g at 6 (Mar. 24, 2014). In that section, Sierra Club notes that the
2. On the merits, we hold that the Commission‘s orders are not arbitrary or capricious for failing to address the cumulative impacts of the 2014 Amendment and the Sabine Pass projects for largely the same reason stated in Sierra Club (Freeport), No. 14-1275, Slip Op. at 22-23. The Commission provided a reasonable explanation for why it was unnecessary to conduct a cumulative impact analysis: The 2014 Amendment did not generate environmental impacts of the sort that NEPA requires it to consider cumulatively. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 19; see also Minisink Residents, 762 F.3d at 113.
Accordingly, we dismiss Sierra Club‘s petition for review in part and deny it in part.