New Jersey Conservation Foundation v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals vacated FERC orders authorizing the construction and operation of a natural gas pipeline running through New Jersey, New York, Delaware, Maryland, and Pennsylvania. The court found that FERC’s decision “not to make a case-specific determination about the significance of the Project’s anticipated GHG emissions, in light of its own stated precedent that it can do so, nor to explain why it believed it could not do so, was arbitrary and capricious.” The court pointed to the earlier proceeding in which FERC had assessed the significance of greenhouse gas emissions (the same proceeding referenced in Healthy Gulf, above) and said it was unreasonable for FERC not even to acknowledge a change in position. The court also noted that in this case FERC’s “own estimates anticipate that the Project will spur enormous GHG emissions and associated costs” but that FERC declined to label the emissions as significant or insignificant in part based on an ongoing “generic proceeding” to determine whether and how FERC would conduct such determinations. The D.C. Circuit found that FERC did not explain why the pendency of the generic proceeding would affect FERC’s ability to make a case-specific determination as it had in the earlier proceeding. The court said that where FERC did not dispute, as was the case here, that it was “generally obligated to make a significance determination for each category of emissions” and instead argued that it was unable to make such a determination, it was necessary for FERC to provide an explanation. Also under NEPA, the D.C. Circuit found that FERC failed to assess mitigation strategies as required by NEPA regulations. The court rejected other NEPA arguments regarding the need to consider upstream and downstream emissions and the definition of project purpose and need. Under the Natural Gas Act, the court found that FERC acted arbitrarily by failing to respond to “material challenges to its finding of market need.” The court also found that FERC’s public interest determination was arbitrary and capricious both because it relied on the deficient determination of market need and also because it failed to conduct “any meaningful balancing” of potential environmental harms—including harms from increased greenhouse gas emissions—against the project’s benefits.

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On March 21, 2023, one group of petitioners filed an emergency motion to halt construction activities, including tree-felling. The petitioners argued that they were likely to succeed on the merits of their claim that FERC unlawfully approved project, including because FERC did not consider evidence that that there was no need for the project, and that FERC failed to adequately balance the project’s adverse impacts and public benefits. They argued that environmental harms, including impacts on climate change, would cause irreparable injury; that a stay would not significantly harm the applicant or other parties; and that there was “fundamental public interest” in granting a stay, including because the project would increase upstream gas production and contribute to adverse climate impacts.