City of Port Isabel v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals partially granted project applicants’ petitions for panel rehearing of the court’s August 2024 decision vacating the Federal Energy Regulatory Commission’s (FERC’s) reauthorization of two liquefied natural gas (LNG) terminals and an associated pipeline in Texas. The court found that although FERC had made “unjustifiable” procedural choices to skip certain steps, these “procedural missteps, though important, are not so fundamental as to justify throwing the projects and those reliant upon them into disarray.” The court declined to resolve disputes regarding the impacts of two intervening executive orders issued by President Trump that revoked a 1994 executive order on environmental justice and limited the scope of environmental considerations to be weighed by agencies, though the court noted that the orders might be “highly relevant” to FERC’s proceedings on remand.

The D.C. Circuit Court of Appeals vacated the Federal Energy Regulatory Commission’s (FERC’s) reauthorization of two liquefied natural gas (LNG) terminals in Cameron County, Texas, and a pipeline to carry gas to one of the terminals. FERC reauthorized the projects on remand from an <a href="https://climatecasechart.com/case/vecinos-para-el-bienestar-de-la-comunidad-costera-v-federal-energy-regulatory-commission/">earlier D.C. Circuit decision</a> that found that FERC failed to adequately analyze climate change and environmental justice impacts. In considering FERC’s reauthorization, the D.C. Circuit found that FERC erred by declining to prepare a supplemental environmental impact statement to address its “entirely new and significantly expanded environmental justice analysis that reached new conclusions” and by failing to consider a proposed carbon capture and sequestration system for one of the terminals as part of its supplemental environmental review. The D.C. Circuit also found that FERC should have explained why it declined to consider air quality data from an air monitor that was closer to the projects than the monitor from which the project applicant’s analysis drew its data. The D.C. Circuit rejected challenges to FERC’s updated ozone and greenhouse gas analyses. The D.C. Circuit found that FERC had adequately responded to the court’s earlier decision by explaining why a Council on Environmental Quality National Environmental Policy Act (NEPA) regulation did not compel use of the social cost of carbon protocol to assess the significance of greenhouse gas emissions. Because it concluded that FERC had adequately explained why the NEPA regulation did not alter the greenhouse gas analysis, the D.C. Circuit also rejected the petitioners’ related argument that FERC did not explain greenhouse gas emissions’ role in its public interest determinations under the Natural Gas Act. In addition, the court concluded that it lacked jurisdiction to consider arguments that the petitioners did not make before FERC regarding whether other regulations required FERC to somehow evaluate the significance of greenhouse gas emissions.

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