Sierra Club v. Federal Energy Regulatory Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 13, 2015 Decided June 28, 2016
No. 14-1249
SIERRA CLUB,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
AMERICAN PETROLEUM INSTITUTE, ET AL.,
INTERVENORS
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Nathan Matthews argued the cause for petitioner. With him
on the brief was Sanjay Narayan.
Robert H. Solomon, Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on the
brief was Karin L. Larson, Attorney.
Jonathan S. Franklin argued the cause for respondent-
intervenors Sabine Pass Liquefaction, LLC and Sabine Pass
LNG, L.P. With him on the brief were Lisa M. Tonery and
Charles R. Scott.
2
Catherine E. Stetson was on the brief for intervenor
American Petroleum Institute in support of respondent. Stacy R.
Linden and Benjamin Norris IV entered appearances.
Before: ROGERS, GRIFFITH and MILLETT, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: Sierra Club seeks review of the
authorization by the Federal Energy Regulatory Commission of
an increase in production capacity at a liquefied natural gas
terminal in Louisiana. According to Sierra Club, the
Commission failed to consider certain environmental
consequences of its authorization, in violation of the National
Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321
et seq. The Commission initially challenges Sierra Club’s
standing under Article III of the Constitution to bring this
petition. For reasons we explain, we conclude that Sierra Club
has standing but that its challenges to the Commission’s orders
fail on the merits, largely for the reasons stated in the companion
case, Sierra Club v. FERC (Freeport), No. 14-1275 (D.C. Cir
June 28, 2016), and otherwise the court lacks jurisdiction over
challenges to the Commission’s cumulative impacts analysis due
to Sierra Club’s failure to exhaust its administrative remedies.
Accordingly, we dismiss the petition in part and deny the
petition in part.
I.
Until 1977, section 3 of the Natural Gas Act of 1938, Pub.
L. No. 75-688, 52 Stat. 821, 822 (codified as amended at 15
U.S.C. § 717b), required the now-defunct Federal Power
Commission (“FPC”) to approve any application to export
natural gas to a foreign country unless the proposed export “will
not be consistent with the public interest.” 15 U.S.C. § 717b(a);
3
see also id. § 717a(9). In 1977, Congress abolished the FPC,
created the Federal Energy Regulatory Commission, and
transferred the section 3 authority to the Secretary of the
Department of Energy (“the Secretary”). Department of Energy
Organization Act, §§ 301(b), 401(a), 402(a), Pub. L. No. 95-91,
91 Stat. 565, 578, 582–84 (codified at 42 U.S.C. §§ 7151(b),
7171(a), 7172(a)). Subsequently, Congress amended section 3
to vest in the Secretary “the exclusive authority to approve or
deny an application for the siting, construction, expansion, or
operation of [a liquefied natural gas] terminal.” Energy Policy
Act of 2005, Pub. L. No. 109-58, § 311(c)(2), 119 Stat. 594, 686
(codified at 15 U.S.C. § 717b(e)(1)). The Secretary has
delegated to the Commission the decision under section 3
whether to “[a]pprove or disapprove the construction and
operation of particular facilities” used for the import or export
of natural gas, the location of such facilities, and when new
construction is involved, the entry point for imports and exit
point for exports of natural gas. See Dep’t of Energy,
Delegation Order No. 00-004.00A, § 1.21(A) (May 16, 2006);
42 U.S.C. § 7172(f). The Commission, however, lacks the
power to authorize the actual import and export of natural gas;
the Secretary has delegated that section 3 function to the
Assistant Secretary of Energy for Fossil Energy. See Dep’t of
Energy, Redelegation Order No. 00-006.02, § 1.3(A) (Nov. 17,
2014).
The Commission, in exercising its section 3 authority, must
comply with NEPA and its implementing regulations, which
require that all federal agencies include an environmental impact
statement (“EIS”) “in every recommendation or report on . . .
major Federal actions significantly affecting the quality of the
human environment.” 42 U.S.C. § 4332(2)(C); see also 40
C.F.R. § 1508.11. To determine whether an EIS is necessary, an
agency first prepares an environmental assessment, 40 C.F.R.
§ 1508.9, which must include, among other information, a
4
discussion of “the environmental impacts of the proposed
action,” id. § 1508.9(b). “Indirect effects . . . are caused by the
action and are later in time or farther removed in distance, but
are still reasonably foreseeable.” Id. § 1508.8(b). “Cumulative
impact is the impact on the environment which results from the
incremental impact of the action when added to other past,
present, and reasonably foreseeable future actions regardless of
what agency (Federal or non-Federal) or person undertakes such
other actions.” Id. § 1508.7; see also id. § 1508.8. After
preparing an environmental assessment, an agency may
conclude that the proposed action would have no significant
impact (often referred to as a “FONSI,” for “finding of no
significant impact”) in lieu of issuing an EIS. Id.
§§ 1508.9(a)(1), 1508.13.
The petition before the court challenges whether the
Commission complied with NEPA when, pursuant to its
delegated section 3 powers, it approved an increase in
production capacity at a liquefied natural gas terminal (“the
Terminal”) in Cameron Parish, Louisiana, operated by Sabine
Pass Liquefaction, LLC, and Sabine Pass LNG, L.P.
(collectively “Sabine Pass”). The Commission initially
approved the construction and operation of the Terminal as a
facility for the import of liquefied natural gas into the United
States. Sabine Pass LNG, L.P. & Cheniere Sabine Pass Pipeline
Co., 109 F.E.R.C. ¶ 61,324 (2004); Sabine Pass LNG, L.P., 115
F.E.R.C. ¶ 61,330 (2006). Changes in market conditions,
however, prompted Sabine Pass to seek Commission
authorization to construct and operate facilities that would
permit the Terminal to receive natural gas produced in the
United States, liquefy it, and prepare it for export to points
abroad. In 2012, the Commission authorized Sabine Pass to
liquefy and prepare for export up to 16 million tons of natural
gas per year. Sabine Pass Liquefaction, LLC & Sabine Pass
LNG, L.P. (the “2012 Order”), 139 F.E.R.C. ¶ 61,039 at PP 1, 4.
5
(2012). Sierra Club, which participated in the Commission
proceedings, did not petition for judicial review of the 2012
Order.
The Commission orders that Sierra Club now challenges
amend the 2012 Order and deny rehearing of the decision to
amend. On October 25, 2013, Sabine Pass requested that the
Commission authorize it to use the Terminal to liquefy and
prepare for export an additional 4 million tons of natural gas per
year — in total up to 20 million tons per year. NEPA required
the Commission to conduct an environmental analysis of Sabine
Pass’s proposed amendment, and Sierra Club, which intervened
in the application process, argued that the Commission needed
to consider several specific environmental consequences in its
analysis. Among them were two environmental consequences
that form the core of Sierra Club’s petition to the court. First,
Sierra Club argued that increasing the volume of exported
natural gas would induce U.S. natural gas producers to extract
and process more gas in order to meet the increase in demand
and thereby cause more gas production-related environmental
harm. Second, Sierra Club argued there would be increased air
pollution resulting from increased coal burning, because
(1) increasing the volume of natural gas exports would more
fully integrate the domestic natural gas market with the global
market, where the price of natural gas is generally higher;
(2) market integration would cause domestic natural gas prices
to rise as the lower domestic price and the higher global price
reach an equilibrium; (3) this hike in domestic gas prices would
prompt U.S. energy consumers — in particular electric utilities
— to switch from using natural gas to using coal, which is
cheaper than natural gas but generates more air pollution. In
Sierra Club’s view, both of these environmental consequences
of Sabine Pass’s proposal constituted “indirect effects” of the
proposed amendment and therefore had to be considered in the
Commission’s NEPA analysis. Sierra Club also maintained that
6
the Commission must consider these indirect effects as
“cumulative impacts” alongside all other pending natural gas
export proposals.
Pursuant to NEPA, the Commission produced an
environmental assessment of Sabine Pass’s latest proposal. It
summarily rejected Sierra Club’s comments, stating that it had
addressed them in the environmental assessment that it
conducted in connection with the 2012 Order. The Commission
proceeded to grant Sabine Pass’s request and amended the 2012
Order to increase the maximum volume of natural gas that it
could liquefy at the Terminal from 16 to 20 million tons per
year. Sabine Pass Liquefaction, LLC & Sabine Pass LNG, L.P.
(“2014 Amend.”), 146 F.E.R.C. ¶ 61,117 at PP 5, 12 (2014)
(“the 2014 Amendment”). In so doing, the Commission
explained in greater detail its rejection of Sierra Club’s
comments. Id. at PP 15, 19. The Commission observed that
with respect to effects flowing from export-driven increases in
domestic natural gas prices, the Department of Energy — and
not the Commission — possessed the legal authority to approve
any increase in the volume of natural gas actually exported. Id.
at P 10. The Commission also determined that induced natural
gas production was not a reasonably foreseeable consequence of
the 2014 Amendment and therefore not an indirect effect under
NEPA. Id. at P 15. Furthermore, in the Commission’s view, the
2014 Amendment did not generate any new impacts that NEPA
required it to consider cumulatively. Id. at P 19. Instead of
generating an EIS, the Commission therefore issued a FONSI.
Id. at P 20. The Commission denied Sierra Club’s request for
rehearing, reiterating the determinations it had made in granting
the 2014 Amendment. Sabine Pass Liquefaction, LLC & Sabine
Pass LNG, L.P. (“Rehr’g Order”), 148 F.E.R.C. ¶ 61,200 at
PP 10–14 (2014).
7
II.
Sierra Club challenges the Commission’s orders granting
the 2014 Amendment and denying rehearing on the ground that
the Commission’s NEPA analysis was deficient. That analysis,
Sierra Club contends, failed to consider two indirect effects and
should also have considered those effects cumulatively
alongside all pending and approved proposals to increase the
volume of natural gas prepared for export nationwide. To
determine whether the court has jurisdiction to consider these
challenges, the court must first determine whether Sierra Club
has standing under Article III of the Constitution.
An organization has associational standing to bring suit on
its members’ behalf when: (1) at least one of its members would
have standing to sue in his or her own right; (2) “the interests it
seeks to protect are germane to the organization’s purpose”; and
(3) “neither the claim asserted nor the relief requested requires
the participation of individual members in the lawsuit.”
WildEarth Guardians v. Jewell, 738 F.3d 298, 305 (D.C. Cir.
2013) (quoting Hunt v. Wash. State Apple Adver. Comm’n, 432
U.S. 333, 343 (1977)); see also Del. Dep’t of Natural Res. &
Envtl. Control v. EPA, 785 F.3d 1, 7 (D.C. Cir. 2015). That
Sierra Club meets the latter two requirements is unchallenged
and clear, while the first requirement warrants discussion.
To satisfy the first requirement of the associational standing
inquiry, Sierra Club must show that: (1) at least one of its
members has suffered an “injury-in-fact” that is “concrete and
particularized” and “actual or imminent, not conjectural or
hypothetical”; (2) the injury is “fairly traceable to the challenged
action”; and (3) it is “likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.”
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,
528 U.S. 167, 180–81 (2000) (citing Lujan v. Defenders of
8
Wildlife, 504 U.S. 555, 560–61 (1992)). It must demonstrate a
“substantial probability” that it satisfies each element of
standing. Sierra Club v. EPA, 292 F.3d 895, 898–99 (D.C. Cir.
2002). Where, as here, a party alleges deprivation of its
procedural rights, courts relax the normal standards of
redressability and imminence. Summers v. Earth Island Inst.,
555 U.S. 488, 496–97 (2009) (citing Lujan, 504 U.S. at 572 n.7).
As for causation, in a NEPA procedural injury case, the
petitioner need demonstrate only that “the procedural step was
connected to the substantive result,” not that “the agency would
have reached a different substantive result” but for the alleged
procedural error. WildEarth Guardians, 738 F.3d at 306
(internal citations omitted); see also City of Dania Beach v.
FAA, 485 F.3d 1181, 1186–87 (D.C. Cir. 2007); Sugar Cane
Growers Co-op. of Fla. v. Veneman, 289 F.3d 89, 94–95 (D.C.
Cir. 2002). “[A]n adequate causal chain must contain at least
two links: one connecting the omitted [NEPA analysis] to some
substantive government decision that may have been wrongly
decided because of the lack of [proper NEPA analysis] and one
connecting that substantive decision to the plaintiff’s
particularized injury.” Fla. Audubon Soc. v. Bentsen, 94 F.3d
658, 668 (D.C. Cir. 1996) (en banc). It must be substantially
probable “that the substantive agency action that disregarded a
procedural requirement created a demonstrable risk, or caused
a demonstrable increase in an existing risk, of injury to the
particularized interests of the plaintiff . . . .” Id. at 669.
Sierra Club meets the requirements of associational
standing on the basis of a declaration submitted by one of its
members, John Paul. Paul “fish[es], boat[s], and seasonal duck
hunt[s] frequently around Keith Lake, the south side of Sabine
Lake,” “the Texas Point National Wildlife Refuge,” and “the
Sabine River (on the south side of the Sabine Lake).” Decl. of
John Paul (“Paul Decl.”) ¶¶ 5, 9 (May 19, 2015). The Terminal
sits along the shoreline of the Sabine Pass Channel, a waterway
9
through which Sabine Lake empties into the Gulf of Mexico.
Paul attests “the increase in [liquefied natural gas] vessel traffic
from the Sabine Pass [Terminal]” will: (1) harm his aesthetic
interests in the waterways around the Terminal;
(2) inconvenience him, given the “large exclusion zone the
Coast Guard maintains around [tankers]”; and (3) “diminish
[his] use and enjoyment of the waterways, and specifically the
Sabine River and Texas Wildlife Refuge.” Id. In fact, due in
part to existing levels of operation at the Terminal, Paul recently
moved his “primary boat” from Sabine Pass to Galveston,
Texas. Id. ¶ 7. Sierra Club contends that Paul satisfies the
elements of standing because: (1) increased tanker (i.e., cargo
vessel) traffic will harm Paul’s aesthetic and recreational
interests; (2) the 2014 Amendment will result in increased
production of liquefied natural gas for export, the transport of
which will require additional tankers; and (3) a decision in favor
of Sierra Club would give the Commission the chance to
reconsider the increase in production capacity it approved in the
2014 Amendment after it corrects its NEPA analysis.
There can be little doubt that Paul will suffer cognizable
aesthetic and recreational harm were the volume of tanker
traffic to and from the Terminal to grow. See Friends of the
Earth, 528 U.S. at 182–83; Lujan, 504 U.S. at 562–63; Sierra
Club v. Morton, 405 U.S. 727, 734–35 (1972); Minisink
Residents for Envtl. Preservation & Safety v. FERC, 762 F.3d
97, 106 (D.C. Cir. 2014). The Commission’s suggestion that
Paul “appears to no longer fish near the Sabine Pass terminal”
after moving his boat to Galveston, Resp’t’s Br. 25, misreads
the Paul Declaration. Paul states, in the present tense, that he
“frequently” fishes, boats, and hunts in waterways near the
Terminal. Paul Decl. ¶ 5. He also expresses concern that
greater tanker traffic “will” diminish his use and enjoyment of
those waterways. Id. ¶ 9. That Paul moved his “primary boat”
to Galveston does not undermine his claim that he presently
10
boats near the Terminal and will continue to do so in the future.
If anything, Paul’s decision to move one of his boats partly in
response to the Terminal’s current production levels (up to
16 million tons per year) gives credence to his assertion that
additional tanker traffic will compound his aesthetic and
recreational injury.
Sierra Club has also demonstrated a substantial probability
that an increase in production capacity at the Terminal will
cause an increase in tanker traffic. The Commission insists that
the 2014 Amendment will not result in a greater number of
tankers traversing the waters around the Terminal. See Resp’t’s
Br. 26. Throughout the process of approving an additional
4 million tons of annual production capacity at the Terminal, the
Commission maintained that the 2014 Amendment would not
increase the maximum number of tankers — 400 per year —
authorized to serve the Terminal in the 2012 Order. Sabine Pass
Amend. Envtl. Assessment (“2014 Envtl. Assessment”) at 5
(2014); 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 18; Rehr’g
Order, 148 F.E.R.C. ¶ 61,200 at PP 8–9. Yet keeping constant
the authorized maximum number of tankers is not the same
thing as keeping constant the actual number of tankers plying
the waterways near the Terminal.
To the contrary, the record demonstrates that even when the
authorized maximum number of tankers remains steady, an
increase in the volume of natural gas prepared for export
corresponds with an increase in the number of tankers needed
to ferry it into foreign commerce. In fact, there is a roughly
linear relationship between production capacity and the number
of tankers needed. A production capacity of 8 million tons of
liquefied natural gas per year requires an estimated 69 to 147
tankers, whereas a production capacity of 16 million tons per
year requires twice that — between an estimated 138 and 294
tankers. See Sabine Pass Liquefaction Project Envtl.
11
Assessment at 2-15 (2011). Sabine Pass has entered into
contracts to export 18 million tons of liquefied natural gas per
year. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 12 n.18. That
is 2 million tons above the maximum production capacity of
16 million tons per year authorized by the 2012 Order. Id. at
P 5. There is a very substantial probability that Sabine Pass will
require more tankers to transport the additional 2 million tons
of natural gas per year, a quantity it could not legally liquefy
and prepare for export but for the 2014 Amendment.
Therefore, Sierra Club satisfies the causation and
redressability requirements of Article III standing. First, the
alleged omissions in the Commission’s NEPA analysis are
connected to the Commission’s decision to authorize the
increased volume of production in the 2014 Amendment. If
Sierra Club prevails on the merits, the Commission will have to
incorporate into its NEPA analysis the omitted indirect effects
and cumulative impacts. Upon considering those effects, the
Commission could change its position and deny Sabine Pass’s
application for additional production capacity. Second, the
decision to authorize additional production capacity in the 2014
Amendment is connected to the harm to Paul’s aesthetic and
recreational interests. Absent the 2014 Amendment, Sabine
Pass could not fulfill its contractual obligations to export
2 million tons of liquefied natural gas per year above the pre-
2014 Amendment production ceiling. It is substantially
probable — if not more likely still — that those 2 million tons
of additional export will require additional tankers, and those
additional tankers are the source of the harm to Paul’s aesthetic
and recreational interests.
The Paul Declaration is distinguishable from the
declarations submitted in National Committee for the New
River, Inc. v. FERC, 433 F.3d 830 (D.C. Cir. 2005). Petitioners
in that case challenged the realignment of a natural gas pipeline,
12
yet their affidavits focused not on harms arising from the
realignment but on general harms arising from the construction
of the pipeline in the first place. Id. at 831–32. Nothing in the
affidavits explained how their injuries depended on whether the
pipeline crossed one part of the New River versus another. Id.
at 832. Here, by contrast, the Paul Declaration attributes his
injury to the “increase in operations” at the Terminal and
“additional operation of the export facility.” Paul Decl.
¶¶ 7–10. Even if Paul would suffer a similar type of harm in the
absence of the 2014 Amendment, the 2014 Amendment will
cause him to suffer an additional quantum of that harm.
The Commission’s reliance on Center for Biological
Diversity v. U.S. Department of the Interior, 563 F.3d 466 (D.C.
Cir. 2009), mistakes sufficiency for necessity. There, members
of the petitioner organization detailed in their affidavits
“definitive dates in the near future” when they planned to
observe animals affected by offshore oil and gas drilling. Id. at
479. But the court did not hold that a statement of definite dates
is necessary to establish Article III standing where, as here, a
member of a petitioner organization lives an hour’s drive from
the affected area and attests in a sworn statement that he
“frequently” fishes, boats, and duck hunts in the waters around
the Terminal. Paul Decl. ¶¶ 2, 5.
III.
Turning to the merits of Sierra Club’s petition for review,
the court’s review of the Commission’s compliance with NEPA
is limited to determining whether the Commission’s NEPA
analysis was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” Nat’l Comm. for the
New River v. FERC, 373 F.3d 1323, 1327 (D.C. Cir. 2004)
(citing 5 U.S.C. § 706(2)(A)). NEPA requires a federal agency
to take a “hard look” at the environmental consequences of a
13
major action prior to undertaking it. Balt. Gas & Elec. Co. v.
Natural Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). As a
procedural statute, NEPA does not mandate any particular
outcome. Minisink Residents, 762 F.3d at 111–12.
A.
Sierra Club contends that the Commission’s NEPA analysis
failed to consider two indirect effects of the 2014 Amendment.
Both presuppose that the 2014 Amendment will increase natural
gas export capacity and thereby expose the domestic natural gas
market to new international demand. First, natural gas
producers in the United States will extract and process more gas
to meet this newly heightened demand for their product, thereby
intensifying production-related pollution. Second, increasing
export capacity will raise the domestic price of natural gas, and
that, in turn, will prompt greater reliance on coal, a cheaper but
more pollution-intensive fuel.
We disagree for the reasons stated in Sierra Club
(Freeport), No. 14-1275, Slip Op. at 13–20. What Sierra Club
challenges here is the potential environmental effects flowing
from greater natural gas exports from the Terminal. The two
indirect effects at the heart of Sierra Club’s petition cannot
occur unless a greater volume of liquefied natural gas is shipped
from the Terminal and enters the international marketplace. But
the Commission orders challenged here do not authorize Sabine
Pass to increase exports from the Terminal. 2014 Amend., 146
F.E.R.C. ¶ 61,117 at P 5 n.10; Rehr’g Order, 148 F.E.R.C.
¶ 61,200 at PP 3 n.6, 14. Those orders only authorize an
increase in production capacity at the Terminal. 2014 Amend.,
146 F.E.R.C. ¶ 61,117 at PP 11–12; Rehr’g Order, 148 F.E.R.C.
¶ 61,200 at P 3. As the Commission explained, the Department
of Energy alone has the legal authority to authorize Sabine Pass
to increase commodity exports of liquefied natural gas. 2014
Amend., 146 F.E.R.C. ¶ 61,117 at P 10; Rehr’g Order, 148
14
F.E.R.C. ¶ 61,200 at PP 12–13; see also 15 U.S.C. § 717b(a); 42
U.S.C. § 7151(b); compare also Dep’t of Energy, Redelegation
Order No. 00-006.02, § 1.3(A) (Nov. 17, 2014), with Dep’t of
Energy, Delegation Order No. 00-004.00A, § 1.21(A) (May 16,
2006). The challenged Commission orders therefore are not the
legally relevant cause of the indirect effects Sierra Club raises.
See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 769–70
(2004). Accordingly, the Commission did not need to consider
those effects in its NEPA review. Id. at 770. Sierra Club, of
course, remains free to raise these issues in a challenge to the
Energy Department’s NEPA review of its export decision.
Nothing in our opinion should be read to foreclose that
challenge or predetermine its outcome.
Furthermore, the Commission adequately explained why it
was not reasonably foreseeable that greater production capacity
at the Terminal — separate and apart from any export activity
— would induce additional domestic natural gas production.
See 40 C.F.R. § 1508.8(b). It concluded that the Terminal’s
liquefaction operations did not necessitate an increase in
domestic natural gas production. 2014 Amend., 146 F.E.R.C.
¶ 61,117 at P 15 (citing 2012 Order, 139 F.E.R.C. ¶ 61,039 at
PP 94–99); Rehr’g Order, 148 F.E.R.C. ¶ 61,200 at P 13; see
also 2012 Order, 139 F.E.R.C. ¶ 61,039 at P 98. Whatever
effect increased natural gas exports might have on domestic
production levels, the Commission’s conclusion was reasonable
with respect to the effect of increasing production capacity.
B.
Next, Sierra Club contends the Commission failed to take
into account certain cumulative impacts of the 2014
Amendment. In particular, Sierra Club maintains the
Commission should have considered the impacts of the 2014
Amendment alongside several other proposals to increase
natural gas export capacity nationwide, some pending, some
15
already approved. Those proposals include two other projects
at the Terminal (the “Sabine Pass projects”). During
administrative proceedings, the Commission determined that the
2014 Amendment would not contribute to any cumulative
impacts. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 19. On
appeal, the Commission contends that Sierra Club’s argument
fails on two grounds: (1) The court lacks jurisdiction to hear
Sierra Club’s contention regarding the other projects — save for
one of the Sabine Pass projects — because it failed to raise them
in its petition for rehearing before the Commission, and (2) in
any event, NEPA did not require the Commission to consider
the effects of the 2014 Amendment cumulatively with the other
projects.
1. The court lacks jurisdiction to consider Sierra Club’s
challenge as it pertains to any projects other than the Sabine
Pass projects. Section 19(a) of the Natural Gas Act requires that
a party seek rehearing by the agency before challenging an
order issued pursuant to the Act. 15 U.S.C. § 717r(a). Section
19(b) bars a court from hearing an objection to such an order
where the objecting party failed to raise the objection in its
application for rehearing and there are no reasonable grounds to
excuse the party’s failure. Id. § 717r(b). The purpose of the
exhaustion requirement in § 717r is to give the Commission the
first opportunity to consider challenges to its orders and thereby
narrow or dissipate the issues before they reach the courts.
Moreau v. FERC, 982 F.2d 556, 564 (D.C. Cir. 1993). The
Natural Gas Act’s jurisdictional provisions are stringent. See
Columbia Gas Transmission Corp. v. FERC, 477 F.3d 739, 741
(D.C. Cir. 2007).
Sierra Club endeavors to hang jurisdiction on a very thin
reed. In its Motion to Intervene, Sierra Club commented that
the Commission needed to “consider the cumulative impacts of
all pending export proposals.” Mot. to Intervene, Protest &
16
Cmt. at 19 (Nov. 14, 2013). Its Motion for Rehearing, however,
contains no mention of any projects besides other Sabine Pass
projects. The header of the relevant section reads: “FERC
Violated NEPA by Failing to Consider Connected Actions or
the Cumulative Effect of Other Proposed Sabine and Related
Pipeline Projects.” Mot. for Rehr’g at 6 (Mar. 24, 2014). In
that section, Sierra Club notes that the 2014 Amendment “is one
of only a number [sic] of pending proposals for expansion of the
Sabine Pass project” and mentions that “Sabine Pass has also
applied for authorization to construct two additional
liquefaction trains and pipeline modifications. CP13-552 and
CP13-553.” Id. Sierra Club maintains that this merely “drew
the Commission’s attention to” the specified Sabine Pass project
but “did not suggest that these were the only relevant actions,
for purposes of a cumulative impacts analysis.” Pet’r’s Reply
Br. 33–34. This reads too much into its Motion for Rehearing.
Nothing in that motion put the Commission on notice that Sierra
Club was challenging the Commission’s cumulative impacts
analysis as it pertained to projects other than the Sabine Pass
projects. In granting the 2014 Amendment, the Commission
understood Sierra Club to contend that the Commission needed
to consider natural gas projects unrelated to the Terminal. 2014
Amend., 146 F.E.R.C. ¶ 61,117 at P 19. In denying rehearing,
the Commission addressed only one of the other Sabine Pass
projects while noting that Sierra Club on rehearing did not
challenge the Commission’s cumulative impacts analysis as to
projects unrelated to the Terminal. Rehr’g Order, 148 F.E.R.C.
¶ 61,200 at P 11 n.22. Because the Commission was not on
notice of Sierra Club’s broader objection, it did not have the
opportunity to consider them in the first instance. By contrast,
in Louisiana Intrastate Gas Corp. v. FERC, 962 F.2d 37 (D.C.
Cir. 1992), on which Sierra Club relies, the petitioner expressly
and clearly stated its objection, albeit in a single sentence, id. at
41–42, and the Commission addressed the merits of the
17
objection in denying rehearing, id. at 42. Neither indicia of
notice is present here.
2. On the merits, we hold that the Commission’s orders are
not arbitrary or capricious for failing to address the cumulative
impacts of the 2014 Amendment and the Sabine Pass projects
for largely the same reason stated in Sierra Club (Freeport),
No. 14-1275, Slip Op. at 22–23. The Commission provided a
reasonable explanation for why it was unnecessary to conduct
a cumulative impact analysis: The 2014 Amendment did not
generate environmental impacts of the sort that NEPA requires
it to consider cumulatively. 2014 Amend., 146 F.E.R.C.
¶ 61,117 at P 19; see also Minisink Residents, 762 F.3d at 113.
Accordingly, we dismiss Sierra Club’s petition for review
in part and deny it in part.