Last week, a divided panel of the D.C. Circuit Court of Appeals ruled that FERC violated NEPA in failing to assess downstream greenhouse gas emissions resulting from construction of the Sabal Trail pipeline, part of the Southeast Market Pipelines Project. If the decision stands, it is going to have a very significant impact on review and development of gas pipelines.
(Full disclosure – Foley Hoag represents NextEra, one of the developers of the project, in a variety of environmental matters, though we were not involved in this case.)
To the majority, the case was fairly straightforward. NEPA requires assessment of indirect impacts of projects, which are those which are downstream of the project, but nonetheless are “reasonably foreseeable.” Since the basic purpose of the pipeline is to supply gas to power plants, the Court had no trouble concluding that GHG emissions from those plants are reasonably foreseeable.
In response to FERC’s argument that assessment of those indirect impacts was not practical, the Court noted that NEPA “necessarily involves some ‘reasonable forecasting.’” Since FERC knows how much gas will be transported and at least roughly how much CO2 will be emitted by the power plants, the Court concluded that sufficient quantification of the downstream impacts is possible.
The Court also noted that FERC had argued that the pipeline gas will at least partially allow gas-fired plants to replace more polluting coal-fired plants. The Court’s response? All well and good, but not an excuse for failing to quantify both the emissions increases and decreases resulting from the pipeline.
The dissent by Judge Brown had a different take. First, she noted that the case seems indistinguishable from prior precedent, including recent decisions authorizing natural gas export terminals. She also noted that the Supreme Court has ruled that “but for” causation is not a sufficient basis to require an agency to assess indirect impacts under NEPA.
Given the dissent, and the arguable conflict with prior cases, it would not surprise me were the full Circuit to hear the case en banc. I certainly expect FERC to seek en banc review, and probably to appeal to the Supreme Court, if necessary.
If the case stands, one might note the beginning of something of a trend. Just last week, I posted about Montana Environmental Information Center v. U.S. Office of Surface Mining, in which the Court ruled that OSM could not approve a coal mine expansion without assessing the impacts of the GHG emissions that would result from the mine expansion.
We certainly live in interesting times.
