Healthy Gulf v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals rejected National Environmental Policy Act and Natural Gas Act (NGA) claims challenging Federal Energy Regulatory Commission (FERC) approval of two natural gas pipelines in Louisiana that terminate at the Driftwood Terminal, a natural gas terminal owned and operated by the pipeline builder and operator’s sister company. First, the D.C. Circuit found that FERC adequately explained why it could not reasonably predict the location and number of additional wells that the two pipelines would induce and therefore did not act arbitrarily and capriciously by refusing to consider the upstream greenhouse gas emissions from new natural gas production induced by the project. Second, the court found that FERC adequately explained that it lacked criteria for determining whether the project’s impacts on greenhouse gas emissions would be significant or insignificant and therefore properly declined to make such a determination. Third, the court found that the petitioners forfeited their argument that FERC improperly segmented its reviews of the pipelines and the Driftwood Terminal by failing to raise it in comments on the draft environmental impact statement. Fourth, the court rejected the petitioners’ challenges to FERC’s determination under the NGA that the project would serve a market need. Fifth, the court was not persuaded that FERC failed to consider the project’s impacts on greenhouse gas emissions when it balanced the projects benefits against its costs under the NGA.