Vecinos para el Bienestar de la Comunidad Costera v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals denied a company’s petition for panel rehearing of the court’s August 2021 decision that found that FERC failed to adequately analyze the climate change and environmental justice impacts of two liquefied natural gas (LNG) export terminals on the Brownsville Shipping Channel in Texas and two pipelines that would carry LNG to one of the terminals. The decision required FERC to consider whether a NEPA regulation required FERC to apply the social cost of carbon or another framework to evaluate the impacts of the pipeline’s greenhouse gas emissions.

The D.C. Circuit Court of Appeals found that the Federal Energy Regulatory Commission (FERC) failed to adequately analyze the climate change and environmental justice impacts of two liquefied natural gas (LNG) export terminals on the Brownsville Shipping Channel in Texas and two pipelines that would carry LNG to one of the terminals. The court dismissed a challenge to a third LNG terminal on the Channel as moot after the developer informed FERC that the project would not go forward. With respect to climate change, the D.C. Circuit found that FERC failed to address the significance of a National Environmental Policy Act (NEPA) regulation that the petitioners argued required use of the social cost of carbon or another methodology to assess the impacts of the projects’ greenhouse gas emissions. The regulation provides that “[i]f … information relevant to reasonably foreseeable significant adverse impacts cannot be obtained … because the means to obtain it are not known, the agency shall include within the environmental impact statement … [t]he agency’s evaluation of such impacts based upon theoretical approaches or research methods generally accepted in the scientific community.” The D.C. Circuit agreed with the petitioners that FERC was required to address the significance of this regulation and directed FERC to explain on remand whether the regulation calls for application of the social cost of carbon protocol or another framework. The D.C. Circuit also found that FERC arbitrarily limited the scope of its environmental justice analysis to communities within two miles of the facilities despite acknowledging that impacts would extend beyond a two-mile radius. Because of the deficiencies in the NEPA analyses, the court also found that FERC’s determinations of public interest and convenience under the Natural Gas Act (NGA) were deficient. The court remanded without vacatur, finding that it was reasonably likely that FERC could redress the deficiencies under NEPA and the NGA on remand and that vacating FERC’s orders “would needlessly disrupt completion of the projects.” In an unpublished judgment, the court rejected the petitioners’ other NEPA arguments regarding project design and capacity and cumulative ozone impacts.