On July 16, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) found that FERC failed to adequately consider a liquefied natural gas (“LNG”) project’s greenhouse gas (“GHG”) emissions and failed to properly assess the cumulative effects of the LNG project’s nitrogen dioxide (“NO₂”) emissions. While the D.C. Circuit remanded to FERC for further consideration, it did so without vacatur.

In 2019, Commonwealth LNG, LLC (“Commonwealth”) applied for authorization to build and operate an LNG export facility in Cameron Parish, Louisiana (the “Project”). FERC subsequently issued a final Environmental Impact Statement (“FEIS”) for the Project, finding that although the Project would have a significant impact on visual resources in the area, other impacts would not be significant if certain mitigation measures were incorporated. In 2022, FERC approved the Project, finding that the Project constituted an environmentally acceptable action and that it was not inconsistent with the public interest (“Authorization Order”). Thereafter, several environmental groups (“Petitioners”) requested rehearing, claiming that FERC failed to consider the environmental significance of the Project’s GHG emissions, failed to assess the cumulative effects of the Project’s NO₂ emissions, and failed to explore reasonable alternatives. In 2023, FERC affirmed its Authorization Order on rehearing. 

On review before the D.C. Circuit, Petitioners first argued that FERC failed to comply with the National Environmental Policy Act (“NEPA”) because it arbitrarily declined to determine whether the Project’s GHG emissions would be significant. Petitioners argued that FERC should have compared the Project’s reasonably foreseeable GHG emissions to the total GHG emissions of the United States to determine whether the GHG emissions were significant, as it did in a 2021 decision in Northern Natural. In Northern Natural, FERC found that a project’s operations would increase national GHG emissions by 0.000006%, an increase that led FERC to conclude that emissions would not be considered significant. In the instant proceeding, the Project would increase national GHG emissions by 0.06% and Louisiana’s emission levels by 1.7%. Petitioners argued that FERC could have found the Project’s GHG emission levels to be significant using this analysis. The D.C. Circuit agreed, finding that FERC failed to explain why it did not factor in the Northern Natural analysis, and remanded for FERC to do so.  

Second, Petitioners argued that FERC’s analysis of the cumulative effects of the Project’s NO₂ emissions was arbitrary. In the FEIS, FERC concluded that the Project’s cumulative NO₂ effects were insignificant because the Project’s incremental NO₂ emissions fell below the 1-hour NO₂ Significant Impact Level (“SIL”) at each National Ambient Air Quality Standards exceedance location. The D.C. Circuit found this reasoning flawed, finding that simply measuring the Project’s own emissions against the SIL did not satisfy the requirement that FERC perform a distinct cumulative effects analysis. The D.C. Circuit therefore remanded the case to FERC to either explain how its use of the 1-hour NO₂ SIL is consistent with a proper cumulative effects analysis or to adequately assess the cumulative effects using a different methodology.

Lastly, the D.C. Circuit explained that because FERC failed to adequately explain why it could not determine the significance of the Project’s GHG emissions and failed to properly consider the cumulative impacts associated with the Project’s NO₂ emissions, it must reconsider its public interest determination on remand.  

Notably, the D.C. Circuit did not vacate the Authorization Order and instead remanded to FERC for further proceedings. The D.C. Circuit explained that it was “reasonably likely” that FERC could redress the errors in its GHG-emissions and cumulative-effects analyses and still authorize the Project. 

A copy of the opinion can be found here.