Birckhead v. Fed. Energy Regulatory Comm'n
Opinion
Residents and business owners have petitioned for review of the Federal Energy Regulatory Commission's decision to authorize the construction and operation of a new natural gas compression facility in Davidson County, Tennessee. They argue that the Commission violated the National Environmental Policy Act (NEPA) by failing to adequately assess alternatives and by failing to consider the environmental effects of increased gas production and consumption related to the project. For the reasons set forth below, we deny the petition.
I.
In early 2015, Tennessee Gas Pipeline Co. applied for a certificate of public convenience and necessity for the Broad Run Expansion Project. Designed to enhance the company's capacity to transport pressurized natural gas through the interstate pipeline network to markets in the southeastern United States, the Project called for construction of several gas compression facilities in Kentucky, Tennessee, and West Virginia. The most controversial of these facilities-at least as far as petitioners are concerned-was Compressor Station 563, which Tennessee Gas proposed to build near petitioners' Nashville homes and businesses.
The Commission completed an Environmental Assessment of the Project in March 2016 and issued a certificate order later that year. Shortly thereafter, petitioners-collectively referred to here as "Concerned Citizens" because of their affiliation with local advocacy group Concerned Citizens for a Safe Environment-sought rehearing, arguing that the Commission *515 violated NEPA in two ways: by inadequately evaluating alternatives to the Project and by failing to address reasonably foreseeable indirect environmental effects resulting from increased gas production "upstream" from the compressor station and increased gas combustion "downstream" from the facility.
The Commission denied the request for rehearing in June 2018,
see
Tennessee Gas Pipeline Co.
,
II.
"[W]e apply [an] arbitrary and capricious standard [of review] to a NEPA challenge."
Nevada v. Department of Energy
,
A.
The regulations implementing NEPA provide that an Environmental Assessment must briefly discuss "reasonable alternatives to the proposed action" and compare the respective environmental impacts of each.
Myersville Citizens for a Rural Community, Inc. v. FERC
,
Concerned Citizens first contend that the Commission acted arbitrarily and capriciously by selecting the proposed site for Compressor Station 563 over an allegedly environmentally superior alternative location. We disagree. The Environmental Assessment reflects that, in addition to Tennessee Gas's proposed site, the Commission considered twelve alternatives-including Concerned Citizens' favored site-and evaluated each with respect to eighteen different environmental factors. Acknowledging that several factors weighed in favor of Concerned Citizens' site, the Commission pointed out in the certificate order that other legitimate environmental factors weighed in favor of the proposed site. The Commission explained that "[b]ased on [an] overall assessment of the various factors, which do not necessarily carry equal weight, ... [Concerned Citizens'] alternative site ... does not have a significant advantage over the proposed site."
Tennessee Gas Pipeline Co.
,
We also reject Concerned Citizens' related claim that the Commission violated NEPA by failing to consider the possibility that locating Compressor Station 563 at an alternative site more centrally located between two existing stations would enable Tennessee Gas to reduce emissions from
*516
the facility by forty percent. The Commission explained in its rehearing order that any resulting "improvement in air quality impacts" would "not be significant," Rehearing Order, at P 26, because the Project as a whole would "not have a significant impact on regional air quality,"
Nor did the Commission err by placing some "weight upon avoidance of unnecessary use of eminent domain when analyzing alternatives to the proposed site." Respondent's Br. 27. The Commission has long expressed a preference for minimizing the need for certificate holders to resort to eminent domain to acquire land for a given project.
See, e.g.
,
Florida Gas Transmission Co.
,
We are similarly unpersuaded by petitioners' contention that the Commission violated NEPA by failing to adequately consider the option of building a smaller compressor station at the proposed site. The Commission addressed that possibility both in the certificate order and the rehearing order, explaining that its engineering staff had reviewed the flow diagrams and hydraulic models submitted by Tennessee Gas and concluded that "Compressor Station 563[ ] [was] properly designed to provide the additional 200,000 Dth/d of incremental capacity proposed for the project." Certificate Order, at P 17 ;
see also
Rehearing Order, at P 7 (reiterating that the Commission's engineering staff found that the Project, "including Compressor Station 563," was "properly designed"). We decline Concerned Citizens' invitation to second-guess the Commission's informed conclusion on this highly technical point.
See, e.g.
,
Delaware Riverkeeper Network v. FERC
,
B.
During the NEPA review process, the Commission "must consider not only the direct effects, but also the
indirect
environmental effects" of a pipeline project.
Sierra Club v. FERC
,
Heeding a famous and sensible instruction, we "[b]egin at the beginning" of the pipeline, with the challenge to the Commission's failure to consider the impacts of upstream gas production. Lewis Carroll,
Alice's Adventures in Wonderland
142 (Edmund R. Brown ed., International Pocket Library 1936) (1865). At oral argument, the Commission conceded that there may well be instances in which upstream gas production is both reasonably foreseeable and sufficiently causally connected to a pipeline project to qualify as an indirect effect.
See
Oral Arg. Rec. 38:26-39:29. But according to the Commission, unless the record demonstrates that the proposed project represents the
only
way to get additional gas "from a specified production area" into the interstate pipeline system, Certificate Order, at P 68, no such "reasonably close causal relationship" exists,
The record in this case, the Commission contends, is devoid of the information necessary to establish that causal relationship. And even assuming causation, the Commission continues, the environmental effects of any upstream gas production induced by this project would not be reasonably foreseeable because the source area for the gas to be transported is ill-defined and "the number or location of any additional wells are matters of speculation."
To begin with, Concerned Citizens have identified no record evidence that would help the Commission predict the number and location of any additional wells that would be drilled as a result of production demand created by the Project. Moreover, although they suggest that Antero, the natural gas producer and shipper that has contracted with Tennessee Gas for the Project's extra transportation capacity, "would not extract and produce [the] gas" in the absence of the Project "because it would not have the ability to bring the gas to market," Petitioners' Br. 41, Concerned Citizens cite no evidence supporting that allegation. Instead, they merely point to the Commission's determination that there is a "need" for the Project "based on the fact that Tennessee [Gas] has executed a binding precedent agreement for ... 100 percent of the design capacity." Certificate Order, at P 17. We have repeatedly held that a project applicant may demonstrate market need "by presenting evidence of
*518
preconstruction contracts for gas transportation service."
Sierra Club
,
This brings us to the other end of the pipeline and to whether the Commission reasonably declined to consider greenhouse-gas emissions and other environmental impacts related to
downstream
gas consumption. The parties' dispute on this point centers largely on the breadth of our court's 2017 decision in
Sierra Club v. FERC
. In that case, we held that downstream greenhouse-gas emissions resulting from the combustion of natural gas were a reasonably foreseeable indirect effect of a pipeline project designed to transport gas to certain power plants in Florida.
See
Sierra Club
,
According to Concerned Citizens, the Commission's refusal to quantify or otherwise consider downstream emissions related to the Broad Run Expansion Project directly contravenes Sierra Club , which they characterize as standing for the general proposition that combustion-related emissions are necessarily a reasonably foreseeable indirect effect of a pipeline project that "must be considered and quantified by the Commission under NEPA." Petitioners' Reply Br. 17.
For its part, the Commission contends that far from "establishing a bright-line rule that [it] must evaluate downstream ... greenhouse gas emissions in all circumstances," Sierra Club is narrowly limited to the facts of that case. Respondent's Br. 34-35. The Commission emphasizes that in Sierra Club , "the destination and use of the gas were actually known." Id. at 35. For that reason, and for that reason only, the Commission says, "it was reasonably foreseeable that the gas would be burned by those power plants and produce new greenhouse gas emissions at their respective locations." Id. Here, as the Commission sees it, the circumstances are markedly different because the destination and the end user (or users) remain a mystery; all that is known is that the gas is headed somewhere in the Southeast. As a result, the Commission claims, it is impossible to assess whether the Project will result in increased emissions overall or offset emissions by reducing demand for other (perhaps dirtier) fuel sources. According to the Commission, then, unlike in Sierra Club , "[a]ny attempt to quantify downstream ... emissions on the record before us" in this case "would result in a number so imprecise as to be meaningless." Rehearing Order, at P 61.
Neither side has it exactly right. As an initial matter, the Commission is wrong to suggest that downstream emissions are not reasonably foreseeable simply because the gas transported by the Project may displace existing natural gas supplies or higher-emitting fuels. Indeed, that position is a total non-sequitur: as we explained in
Sierra Club
, if downstream greenhouse-gas emissions otherwise qualify as an indirect effect, the
*519
mere possibility that a project's overall emissions calculation will be favorable because of an "offset ... elsewhere" does not "excuse[ ]" the Commission "from making emissions estimates" in the first place.
The Commission suggests an alternative justification: that it need not consider downstream greenhouse-gas emissions if it " 'cannot be considered a legally relevant cause' " of such emissions due to its lack of jurisdiction over any entity other than the pipeline applicant. Respondent's Br. 37 (quoting
Department of Transportation v. Public Citizen
,
We are left, then, to decide whether the Commission acted reasonably in declining to consider greenhouse-gas emissions and other environmental impacts from downstream gas combustion in this particular case. We are troubled, as we were in the upstream-effects context, by the Commission's attempt to justify its decision to discount downstream impacts based on its lack of information about the destination and end use of the gas in question.
See, e.g.
, Rehearing Order, at P 61 ("The Commission does not know where
*520
the gas will ultimately be consumed or what fuels it will displace, and likely neither does the entity over which the Commission has jurisdiction ...."). "NEPA analysis necessarily involves some 'reasonable forecasting,' and ... agencies may sometimes need to make educated assumptions about an uncertain future."
Sierra Club
,
In this case, the Commission made no effort to obtain the missing information from Tennessee Gas. As Commissioner Glick observed in his partial dissent from the rehearing order, "[i]n deeming an entire category of potential consequences not reasonably foreseeable and any inquiry into the matter an 'exercise in futility,' the Commission excuses itself from making any effort to develop [the] record in the first place." Rehearing Order,
Despite our misgivings regarding the Commission's decidedly less-than-dogged efforts to obtain the information it says it would need to determine that downstream greenhouse-gas emissions qualify as a reasonably foreseeable indirect effect of the Project, Concerned Citizens failed to raise this record-development issue in the proceedings before the Commission. We therefore lack jurisdiction to decide whether the Commission acted arbitrarily or capriciously and violated NEPA by failing to further develop the record in this case. See 15 U.S.C. § 717r(b) ("No objection ... shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing unless there is reasonable ground for failure so to do."). Therefore, taking the record as it currently stands, we have no basis for concluding that the Commission acted unreasonably in declining to evaluate downstream combustion *521 impacts as part of its indirect effects analysis.
III.
For the foregoing reasons, we deny Concerned Citizens' petition for review.
So ordered.
Reference
- Full Case Name
- Lori BIRCKHEAD, Et Al., Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent Tennessee Gas Pipeline Company, LLC, Intervenor
- Cited By
- 16 cases
- Status
- Published