FERC Must Ask Pipeline Applicants to Provide More Upstream and Downstream Information

An environmental assessment complying with the National Environmental Policy Act (NEPA) is often required for the Federal Energy Regulatory Commission (FERC) to authorize construction and operation of a new natural gas pipeline or related facility.  In Birckhead v. FERC, the US Court of Appeals for the District of Columbia Circuit upheld FERC’s authorization of Tennessee Gas Pipeline’s new gas compression facility, but the Court indicated the ruling might have been different if those opposing the application had made different arguments.

NEPA Compliance Requires Evaluation of Indirect Environmental Effects
To comply with NEPA, FERC must evaluate both direct and indirect environmental effects of its authorizations.  In order to evaluate indirect effects, the DC Circuit strongly suggests NEPA requires FERC to make a reasonable attempt to determine the upstream and downstream consequences of a proposed project, including the potential upstream effect of more gas production and downstream effect of more gas combustion.

No Attempt to Get Upstream Information
In this case, FERC did not ask the applicant to provide information regarding the upstream consequences of FERC authorizing the construction. FERC argued that asking for such information would be an exercise in futility.

The DC Circuit stated it was dubious of FERC’s assertion that asking the applicant to provide additional information about the origin of the gas would be futile, but also noted those opposing this authorization did not argue that FERC’s failure to seek the additional information would constitute a violation of NEPA.

FERC applicants should expect future opponents will argue that FERC violates NEPA if it fails to make a good faith effort to have the applicant provide information on upstream environmental effects, such as possible increases in gas production.

No Attempt to Get Downstream Information
Similarly, FERC did not ask the applicant to provide information regarding the downstream effects of approving this application. The DC Circuit rejected FERC’s assertion that the project may simply replace existing natural gas supplies and thus, it would be futile to try to ascertain any downstream effect. The DC Circuit suggested such an argument goes against the applicant’s position that the project was necessary to meet natural gas demand.

While the court rejected the argument that downstream combustion environmental effects are always reasonably foreseeable from a pipeline project, the DC Circuit indicated FERC must at least attempt to obtain information necessary to determine the potential downstream environmental effects of a project. The court noted in this case FERC made no effort to obtain this information from the applicant.  The DC Circuit further suggested this would have been an issue in the case but for the failure of those opposing the application to raise this argument.

Future FERC applicants should expect future opponents will argue that FERC violates NEPA if it fails to make a good faith effort to have the applicant provide information relating to downstream environmental effects, such as possible increases in gas combustion.

For a copy of the DC Circuit opinion https://www.cadc.uscourts.gov/internet/opinions.nsf/F280040B0F48BE8C8525840F004D7275/$file/18-1218.pdf

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