Center for Biological Diversity v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals dismissed a challenge to the Federal Energy Regulatory Commission’s (FERC’s) authorization of a system of liquefied natural gas (LNG) facilities in Alaska. The court found that FERC complied with the Natural Gas Act, the National Environmental Policy Act (NEPA), and the Administrative Procedure Act. Regarding the consideration of the project’s potential impacts on greenhouse gas emissions and climate change, the court concluded that FERC acted reasonably by declining to use the social cost of carbon to measure the impacts of the project’s direct emissions of greenhouse gases. FERC instead compared the project’s direct emissions with existing Alaskan and nationwide emissions. The court noted that FERC had recognized a “lack of consensus about how to apply the social cost of carbon on a long time horizon,” and that FERC had noted that the social cost of carbon “places a dollar value on carbon emissions but does not measure environmental impacts as such” and that the FERC had not established criteria to translate the dollar values into assessment of environmental impacts. The court found that this approach was reasonable and mirrored previously upheld analysis. The D.C. Circuit also found that the petitioner had failed to raise before FERC a separate argument that the failure to use the social cost of carbon was contrary to NEPA regulations requiring use of “generally accepted” approaches and methods. The court also indicated that this separate argument was “in tension” with other D.C. Circuit decisions finding it permissible not to apply the social cost of carbon. In addition, the D.C. Circuit found that FERC was not required to consider downstream emissions from export-bound gas because FERC lacked jurisdiction over export approvals. The court therefore found that FERC appropriately “cabined” its NEPA analysis. The court also concluded that FERC’s decision not to consider the indirect effects of Alaska-bound gas was lawful because FERC had determined that it could not reasonably identify end users of the gas.

Center for Biological Diversity and Sierra Club filed their opening brief in their lawsuit challenging the Federal Energy Regulatory Commission’s authorization of the Alaska LNG Project, which the organizations described as including a gas treatment plant, eight compressor stations, liquefaction facilities, a marine terminal, and an 807-mile pipeline. The organizations assert claims under the NEPA and the Natural Gas Act. Under NEPA, their arguments include that FERC failed to consider the significance of the project’s substantial direct greenhouse gas emissions and that FERC segmented the environmental review, obscuring the project’s full impacts on climate. The organizations also argued that because FERC violated NEPA, its determination under the Natural Gas Act that the project was in the public interest was also invalid.