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Sierra Club v. Federal Energy Regulatory Commission

United States Court of Appeals, District of Columbia Circuit

August 22, 2017

Sierra Club, et al., Petitioners
v.
Federal Energy Regulatory Commission, Respondent Duke Energy Florida, LLC, et al., Intervenors

          Argued April 18, 2017

         On Petitions for Review of Orders of the Federal Energy Regulatory Commission

          Elizabeth F. Benson argued the cause for petitioners Sierra Club, et al. With her on the briefs was Eric Huber. Keri N. Powell entered an appearance.

          Jonathan Perry Waters argued the cause and filed the brief for petitioners G.B.A. Associates, LLC, et al.

          Ross R. Fulton, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief were David L. Morenoff, General Counsel, Robert H. Solomon, Solicitor, and Nicholas M. Gladd, Attorney. Anand Viswanathan, Attorney, entered an appearance.

          Jeremy C. Marwell argued the cause for respondent-intervenors. With him on the brief were Michael B. Wigmore, James D. Seegers, Gregory F. Miller, P. Martin Teague, James H. Jeffries, IV, Charles L. Schlumberger, Sid J. Trant, Anna M. Manasco, Brian D. O'Neill, Michael R. Pincus, and William Lavarco. Marc J. Ayers and Emily M. Ruzic entered appearances.

          Mohammad O. Jazil and David W. Childs were on the brief for amicus curiae The Florida Reliability Coordinating Council, Inc. in support of respondent.

          Before: Rogers, Brown, and Griffith, Circuit Judges.

          OPINION

          Griffith, Circuit Judge

         Environmental groups and landowners have challenged the decision of the Federal Energy Regulatory Commission to approve the construction and operation of three new interstate natural-gas pipelines in the southeastern United States. Their primary argument is that the agency's assessment of the environmental impact of the pipelines was inadequate. We agree that FERC's environmental impact statement did not contain enough information on the greenhouse-gas emissions that will result from burning the gas that the pipelines will carry. In all other respects, we conclude that FERC acted properly. We thus grant Sierra Club's petition for review and remand for preparation of a conforming environmental impact statement.

         I

         The Southeast Market Pipelines Project comprises three natural-gas pipelines now under construction in Alabama, Georgia, and Florida. The linchpin of the project is the Sabal Trail pipeline, which will wend its way from Tallapoosa County in eastern Alabama, across southwestern Georgia, and down to Osceola County, Florida, just south of Orlando: a journey of nearly five hundred miles. Sabal Trail will connect the other two portions of the project. The first-the Hillabee Expansion-will boost the capacity of an existing pipeline in Alabama, which will feed gas to Sabal Trail's upstream end for transport to Florida. At the downstream end of Sabal Trail will be the Florida Southeast Connection, which will link to a power plant in Martin County, Florida, 120 miles away. Shorter spurs will join Sabal Trail to other proposed and existing power plants and pipeline networks. By its scheduled completion in 2021, the project will be able to carry over one billion cubic feet of natural gas per day.

         The three segments of the project have different owners, [1]but they share a common purpose: to serve Florida's growing demand for natural gas and the electric power that natural gas can generate. At present, only two major natural-gas pipelines serve the state, and both are almost at capacity. Two major utilities, Florida Power & Light and Duke Energy Florida, have already committed to buying nearly all the gas the project will be able to transport. Florida Power & Light claims that without this new project, its gas needs will begin to exceed its supply this year. But the project's developers also indicate that the increased transport of natural gas will make it possible for utilities to retire older, dirtier coal-fired power plants.

         Despite these optimistic predictions, the project has drawn opposition from several quarters. Environmental groups fear that increased burning of natural gas will hasten climate change and its potentially catastrophic consequences. Landowners in the pipelines' path object to the seizure of their property by eminent domain. And communities on the project's route are concerned that pipeline facilities will be built in low-income and predominantly minority areas already overburdened by industrial polluters.

         Section 7 of the Natural Gas Act places these disputes into the bailiwick of the Federal Energy Regulatory Commission (FERC), which has jurisdiction to approve or deny the construction of interstate natural-gas pipelines. See 15 U.S.C. § 717f. Before any such pipeline can be built, FERC must grant the developer a "certificate of public convenience and necessity, " id. § 717f(c)(1)(A), also called a Section 7 certificate, upon a finding that the project will serve the public interest, see id. § 717f(e). FERC is also empowered to attach "reasonable terms and conditions" to the certificate, as necessary to protect the public. Id. A certificate holder has the ability to acquire necessary rights-of-way from unwilling landowners by eminent domain proceedings. See id. § 717f(h).

         FERC launched an environmental review of the proposed project in the fall of 2013. The agency understood that it would need to prepare an environmental impact statement (EIS) before approving the project, as the National Environmental Policy Act of 1969 (NEPA) requires for each "major Federal action[] significantly affecting the quality of the human environment." See 42 U.S.C. § 4332(2)(C). FERC solicited public comment and held thirteen public meetings on the project's environmental effects, and made limited modifications to the project plan in response to public concerns, before releasing a draft impact statement in September 2015 and a final impact statement in December 2015. In the meantime, the pipeline developers formally applied for their Section 7 certificates in September and November 2014.

         In the Certificate Order, issued on February 2, 2016, FERC granted the requested Section 7 certificates and approved construction of all three project segments, subject to compliance with various conditions not at issue here. Order Issuing Certificates and Approving Abandonment, Fla. Se. Connection, LLC, 154 FERC ¶ 61, 080 (2016) (Certificate Order). This order recognized a number of parties as intervenors in the agency proceedings, among them three environmental groups (Sierra Club, Flint Riverkeeper, and Chattahoochee Riverkeeper) and two Georgia landowners whose land Sabal Trail will cross (GBA Associates and K. Gregory Isaacs). These parties timely sought rehearing and a stay of construction; FERC agreed to entertain their arguments but denied a stay. Construction on the pipelines began in August 2016. On September 7, 2016, FERC issued its Rehearing Order, denying rehearing and declining to rescind the pipelines' certificates. Order on Rehearing, Fla. Se. Connection, LLC, 156 FERC ¶ 61, 160 (2016) (Rehearing Order).

         Both the environmental groups (collectively, "Sierra Club") and the landowners timely petitioned our court for review of the Certificate Order and the Rehearing Order. Sierra Club argues that FERC's environmental impact statement failed to adequately consider the project's contribution to greenhouse-gas emissions and its impact on low-income and minority communities. Sierra Club also contends that Sabal Trail's service rates were based on an invalid methodology. The landowners allege further oversights in the EIS, dispute the public need for the project, and assert that FERC used an insufficiently transparent process to approve the pipeline certificates. Their petitions were consolidated before us.

         II

         We have jurisdiction to hear these petitions under the Natural Gas Act. See 15 U.S.C. § 717r(b). Any party to a proceeding under the Act who is "aggrieved" by a FERC order may petition for review of that order in our court, provided that they first seek rehearing before FERC. Id. § 717r(a)-(b). Sierra Club was an intervenor in the proceedings on all three pipeline applications, see Certificate Order App. A, and the landowner petitioners were intervenors in the Sabal Trail proceedings, see id.

         A party is "aggrieved" by a FERC order if it challenges the order under NEPA and asserts an environmental harm. See Gunpowder Riverkeeper v. FERC, 807 F.3d 267, 273-74 (D.C. Cir. 2015). A landowner forced to choose between selling to a FERC-certified developer and undergoing eminent domain proceedings is also "aggrieved" within the meaning of the Act. See B&J Oil & Gas v. FERC, 353 F.3d 71, 75 (D.C. Cir. 2004); Moreau v. FERC, 982 F.2d 556, 564 n.3 (D.C. Cir. 1993). Sierra Club falls into the former camp, and the Georgia landowners into the latter.

         We also have an independent duty to ensure that at least one petitioner has standing under Article III of the Constitution. See Ams. for Safe Access v. DEA, 706 F.3d 438, 442-43 (D.C. Cir. 2013). A petitioner invoking federal-court jurisdiction has the burden to establish that she has suffered an injury in fact that is fairly traceable to the challenged action of the defendant and "likely" to be redressed by a favorable judicial decision. WildEarth Guardians v. Jewell, 738 F.3d 298, 305 (D.C. Cir. 2013). And an association, like Sierra Club, can sue on behalf of its members if at least one member would have standing to sue in her own right, the organization is suing to vindicate interests "germane to its purpose, " and nothing about the claim asserted or the relief requested requires an individual member to be a party. Sierra Club v. FERC, 827 F.3d 36, 43 (D.C. Cir. 2016). On direct review of agency action, an association can establish its standing by having its individual members submit affidavits to accompany the association's opening brief. See Pub. Citizen, Inc. v. Nat'l Highway Traffic Safety Admin., 489 F.3d 1279, 1289 (D.C. Cir. 2007).

         Several individual Sierra Club members submitted such affidavits, explaining how the pipeline project would harm their "concrete aesthetic and recreational interests." WildEarth, 738 F.3d at 305. For example, one member, Robin Koon, explained that the Sabal Trail pipeline will cross his property (on an easement taken by eminent domain), that construction noise will impair his enjoyment of his daily activities, and that trees shading his house will be permanently removed. Other Sierra Club members similarly averred that the pipeline project will affect their homes and daily lives. "Such credible claims of exposure to increased noise and its disruption of daily activities, backed up by specific factual representations in an affidavit or declaration, are sufficient to satisfy Article III's injury-in-fact requirement." Sierra Club, 827 F.3d at 44. And nobody disputes that the prevention of this sort of injury is germane to Sierra Club's conservation-oriented purposes, or cites any reason why these individual members would need to join the petition in their own names.

         Because they allege concrete injury from FERC's order certifying the pipeline project, and because that certification was based on an allegedly inadequate environmental impact statement, these Sierra Club members, and therefore Sierra Club itself, have standing to object to any deficiency in the environmental impact statement.[2] See WildEarth Guardians, 738 F.3d at 306-08. The deficiency need not be directly tied to the members' specific injuries. For example, Sierra Club may argue that FERC did not adequately consider the pipelines' contribution to climate change. See id. The members' injuries are caused by the allegedly unlawful Certificate Order, and would be redressed by vacatur of that order on the basis of any defect in the environmental impact statement. See id. at 308.[3]

         Transco, owner of the Hillabee Expansion, argues that no Sierra Club member has alleged an injury caused by Transco's section of the overall project, which would suggest that Sierra Club lacks standing to seek the vacatur of Hillabee's certificate. Transco thus implicitly argues that the Certificate Order is severable. Under this view, if Sierra Club succeeds on the merits, but has standing to challenge only Sabal Trail's certificate, we could vacate only the portion of the Certificate Order pertaining to Sabal Trail, and leave the rest intact.

         The question whether an agency order is severable turns on the agency's intent. See Epsilon Elecs., Inc. v. U.S. Dep't of Treasury, 857 F.3d 913, 929 (D.C. Cir. 2017). "Where there is substantial doubt that the agency would have adopted the same disposition regarding the unchallenged portion if the challenged portion were subtracted, partial affirmance is improper." Id. (quoting North Carolina v. FERC, 730 F.2d 790, 795-96 (D.C. Cir. 1984)). Since the beginning of its environmental review, FERC has treated the project as a single, integrated proposal. See Notice of Intent to Prepare an Environmental Impact Statement for the Planned Southeast Market Pipelines Project, 79 Fed. Reg. 10, 793, 10, 794 (Feb. 26, 2014) (explaining that FERC would prepare a single EIS for the three pipelines, to help the agency determine "whether the SMP Project is in the public convenience and necessity"). That characterization carried through to the Certificate Order. See J.A. 1075 (describing the pipelines as "separate but connected" and noting that the Hillabee Expansion's purpose is to give Sabal Trail's customers access to upstream gas supplies); J.A. 1096 (explaining that in the absence of Sabal Trail, existing pipelines will not be able to deliver the gas that the Florida Southeast Connection requires).

         We substantially doubt that FERC would have approved the Southeast Market Pipelines Project only in part, and we especially doubt that the agency would have certified either of the other two segments if Sabal Trail were not part of the project. Because Sierra Club and the landowners have alleged injury-in-fact caused by Sabal Trail, and because the Certificate Order is not severable, both sets of petitioners have standing to challenge the Certificate Order as a whole.

         Having concluded that we have jurisdiction to entertain all of petitioners' claims, we turn to the merits of those claims.

         III

         Both sets of petitioners rely heavily on the National Environmental Policy Act of 1969, Pub. L. No. 91-190, 83 Stat. 852 (1970). NEPA "declares a broad national commitment to protecting and promoting environmental quality, " and brings that commitment to bear on the operations of the federal government. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 348 (1989). The statute "commands agencies to imbue their decisionmaking, through the use of certain procedures, with our country's commitment to environmental salubrity." Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 193-94 (D.C. Cir. 1991). One of the most important procedures NEPA mandates is the preparation, as part of every "major Federal action[] significantly affecting the quality of the human environment, " of a "detailed statement" discussing and disclosing the environmental impact of the action. 42 U.S.C. § 4332(2)(C).

         This environmental impact statement, as it has come to be called, has two purposes. It forces the agency to take a "hard look" at the environmental consequences of its actions, including alternatives to its proposed course. See id. § 4332(2)(C)(iii); Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). It also ensures that these environmental consequences, and the agency's consideration of them, are disclosed to the public. See WildEarth Guardians, 738 F.3d at 302. Importantly, though, NEPA "directs agencies only to look hard at the environmental effects of their decisions, and not to take one type of action or another." Citizens Against Burlington, 938 F.2d at 194. That is, the statute is primarily information-forcing.

         The role of the courts in reviewing agency compliance with NEPA is accordingly limited. Furthermore, because NEPA does not create a private right of action, we can entertain NEPA-based challenges only under the Administrative Procedure Act and its deferential standard of review. See Theodore Roosevelt Conservation P'ship v. Salazar, 616 F.3d 497, 507 (D.C. Cir. 2010). That is, our mandate "is 'simply to ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary or capricious.'" WildEarth Guardians, 738 F.3d at 308 (quoting City of Olmsted Falls v. FAA, 292 F.3d 261, 269 (D.C. Cir. 2002)). We should not "'flyspeck' an agency's environmental analysis, looking for any deficiency no matter how minor." Nevada v. Dep't of Energy, 457 F.3d 78, 93 (D.C. Cir. 2006) (citation omitted).

         But at the same time, we are responsible for holding agencies to the standard the statute establishes. An EIS is deficient, and the agency action it undergirds is arbitrary and capricious, if the EIS does not contain "sufficient discussion of the relevant issues and opposing viewpoints, " Nevada, 457 F.3d at 93 (quoting Nat. Res. Def. Council v. Hodel, 865 F.2d 288, 294 (D.C. Cir. 1988)), or if it does not demonstrate "reasoned decisionmaking, " Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1313 (D.C. Cir. 2014) (quoting Found. on Econ. Trends v. Heckler, 756 F.2d 143, 154 (D.C. Cir. 1985)). The overarching question is whether an EIS's deficiencies are significant enough to undermine informed public comment ...


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