United States Court of Appeals, District of Columbia Circuit
December 7, 2018
Petitions for Review of Orders of the Federal Energy
Elizabeth F. Benson argued the cause for petitioners
Allegheny Defense Project, et al. Siobhan K. Cole argued the
cause for petitioners Hilltop Hollow Limited Partnership, et
al. With them on the joint briefs was Benjamin A. Luckett.
Michael N. Onufrak and Derek O. Teaney entered appearances.
G. Pacella, Deputy Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on the
brief were James P. Danly, General Counsel, and Robert H.
Solomon, Solicitor. Anand Viswanathan, Attorney, entered an
F. Stoviak argued the cause for intervenors. With him on the
joint brief were Pamela S. Goodwin, Elizabeth U. Witmer,
Patrick F. Nugent, Kevin M. Sweeney, Jesse Stuart Unkenholz,
and Scott Borden Grover.
Before: Garland, Chief Judge, and Tatel and Millett, Circuit
February 2017, the Federal Energy Regulatory Commission
approved a natural gas pipeline expansion called the Atlantic
Sunrise Project, which stretches from northern Pennsylvania,
across the Carolinas, and into Alabama. Environmental
Associations whose members live and work in the areas
affected by the Project and individual Homeowners whose
property was used for the Project seek review of the
Commission's orders permitting the Transcontinental Gas
Pipe Line Company to move forward with the pipeline
expansion. Because the challenges to the Commission's
decision cannot surmount the deferential standards of agency
review and binding circuit precedent, we deny the petitions.
the Natural Gas Act, 15 U.S.C. § 717 et seq., a
company wishing to construct a natural gas pipeline must
first obtain a certificate of "public convenience and
necessity" from the Federal Energy Regulatory
Commission. See id. § 717f(c); Myersville
Citizens for a Rural Community, Inc. v. FERC, 783 F.3d
1301, 1307 (D.C. Cir. 2015). The Commission "shall * * *
issue" the certificate if it finds that the proposed
project "is or will be required by the present or future
public convenience and necessity." 15 U.S.C. §
pipeline company files a certificate application, the
Commission reviews it under criteria set forth in its
Certificate Policy Statement, 88 FERC ¶ 61, 227 (1999),
clarified, 90 FERC ¶ 61, 128, further
clarified, 92 FERC ¶ 61, 094 (2000). The
Certificate Policy Statement directs the Commission to
consider whether the project meets a market need and whether
the public benefits of the project outweigh the harms.
See Sierra Club v. FERC, 867 F.3d 1357, 1379 (D.C.
Cir. 2017). If market need and public benefit are both
established, the Commission will issue a certificate
authorizing the pipeline's construction. Id.
Once that certificate is granted, the Natural Gas Act
empowers the private certificate holder to exercise eminent
domain authority if it "cannot acquire by contract, or
is unable to agree with the owner of property to the
compensation to be paid for, the necessary right-of-way to
construct, operate, and maintain a pipeline[.]" 15
U.S.C. § 717f(h).
wishing to challenge the Commission's issuance of a
certificate of public convenience and necessity must file a
petition for rehearing with the Commission. 15 U.S.C. §
717r(a). Until the Commission disposes of that rehearing
petition, the agency action is not final for purposes of
judicial review. See id. § 717r(a)-(b);
Clifton Power Corp. v. FERC, 294 F.3d 108, 110-111
(D.C. Cir. 2002). The filing and disposition of such a
rehearing petition is thus a mandatory prerequisite to
obtaining judicial review of the Commission's action.
See Delaware Riverkeeper Network v. FERC, 857 F.3d
388, 399 (D.C. Cir. 2017); Clifton Power Corp., 294
F.3d at 110-111. Congress directed that petitions for
rehearing may be "deemed to have been denied" if
the Commission has not "act[ed] upon the application for
rehearing within thirty days after it is filed[.]" 15
U.S.C. § 717r(a).
National Environmental Policy Act ("NEPA"), 42
U.S.C. § 4321 et seq., "require[s] the
Commission to consider and disclose the environmental effects
of the actions it certifies." Delaware Riverkeeper
Network, 857 F.3d at 394 (internal quotation marks
omitted). The Commission may fulfill this requirement by
compiling an Environmental Impact Statement, which must
consider, among other things, the proposed project's
"indirect" environmental effects. See 42
U.S.C. § 4332(C); 40 C.F.R. §§ 1508.8,
March 2015, the Transcontinental Gas Pipe Line Company
("Transco") applied for a certificate of public
convenience and necessity to build the Atlantic Sunrise
Project. After notice and public comment, the Commission
issued a final Environmental Impact Statement in December
2016. In that Statement, the Commission concluded that
"neither construction nor operation of the Project would
significantly contribute to [greenhouse-gas] cumulative
effects or climate change." J.A. 323.
February 3, 2017, the Commission granted Transco its
requested certificate of public convenience and necessity.
158 FERC ¶ 61, 125 (2017) ("Certificate
Order"). Environmental Associations and the private
Homeowners whose land would become subject to an easement for
the Project both filed petitions for rehearing with the
Commission, along with motions for a stay of construction
pending disposition of their petitions. Before Congress's
30-day deadline for action on the rehearing petitions
expired, the Commission "granted" rehearing, but
only "for the limited purpose of further
consideration." J.A. 600 ("Certificate Tolling
Order"). The Commission took no action on the stay
motions for more than five months, and then denied them.
August, a Pennsylvania federal district court presiding over
Transco's eminent domain action entered an order that
declared Transco's "right to immediate possession of
the properties in question," based on the presumed
validity of FERC's Certificate Order.
Transcontinental Gas Pipe Line Co. v. Permanent Easements
for 2.14 Acres & Temp. Easements for 3.59 Acres in
Conestoga Township, Lancaster County, Pa., Tax Parcel No.
1201606900000, 2017 WL 3624250, at *1, *3 (E.D. Pa. Aug.
23, 2017) (rejecting the Homeowners' objections as
"attacks on the FERC order itself," which "can
only be challenged in front of FERC, and then in the United
States Court of Appeals for the District of Columbia
Circuit"), aff'd, 907 F.3d 725 (3d Cir.
September 15, 2017, while the Environmental Associations'
and Homeowners' petitions for rehearing were still
pending, the Commission issued an order authorizing Transco
to begin construction of the Project. J.A. 616
("Construction Order"). Transco broke ground that
Environmental Associations promptly moved for rehearing of
the Construction Order and an order halting construction. As
its 30-day statutory deadline for action on the Construction
Order rehearing petition approached, the Commission again
issued an order granting rehearing "for the limited
purpose of further consideration." J.A. 815
("Construction Tolling Order").
Commission eventually denied the Homeowners' and
Environmental Associations' petitions for rehearing in
December 2017, more than nine months after rehearing was
sought and three months after construction began. 161 FERC
¶ 61, 250 (2017) ("Certificate Rehearing
Order"). Three months after that-and nearly six months
after construction commenced-the Commission denied rehearing
of the Construction Order. 162 FERC ¶ 61, 192 (2018)
("Construction Rehearing Order").
consolidated case arises out of four petitions for review
collectively challenging the Certificate Order, the
Certificate Tolling Order, the Construction Order, the
Construction Tolling Order, and the Certificate Rehearing
Order. Because the Homeowners and Environmental Associations
both properly sought rehearing of the Certificate Rehearing
Order, which encompasses all of their claims for our review
and is the final agency decision greenlighting the Project,
this court has jurisdiction. See 15 U.S.C. §
Commission's factual findings are conclusive so long as
they are supported by substantial evidence. See 15
U.S.C. § 717(b). Where the Commission "has examined
the relevant considerations and articulated a satisfactory
explanation for its action, including a rational connection
between the facts found and the choice made," we must
uphold its decision. FERC v. Electric Power
Supply Ass'n, 136 S.Ct. 760, 782 (2016) (formatting
Homeowners and Environmental Associations argue that the
Commission's Certificate Order suffers from fatal
substantive and procedural flaws. Specifically, they argue
that the Commission improperly conducted its environmental
assessment under NEPA, failed to substantiate market need for
the Project as required by the Natural Gas Act, and denied
them due process by authorizing construction to commence
before the issuance of the Certificate Order could be
judicially reviewed. None of those arguments succeed.
administrative record forecloses the Homeowners' and
Environmental Associations' three NEPA arguments.
the Homeowners and Environmental Associations argue that the
Commission did not factor downstream greenhouse-gas emissions
into its evaluation of the Project's environmental
Homeowners and Environmental Associations are correct that
customers' burning of the natural gas that the Project
transports will produce greenhouse-gas emissions. See
Sierra Club, 867 F.3d at 1374. They are also correct
that NEPA required the Commission to consider both the direct
and indirect environmental effects of the Project, and that,
despite what the Commission argues, the downstream
greenhouse-gas emissions are just such an indirect effect.
See id.; 40 C.F.R. § 1502.16(b).
that is as far as the argument gets them, because the
Commission already took the steps the Homeowners and
Environmental Associations request. The Commission addressed
downstream emissions in the Environmental Impact Statement,
the Certificate Order, and the Certificate Rehearing Order.
In particular, the Commission estimated the amount of
CO2 emissions resulting from the gas that the
Project would transport and predicted that those emissions
would be partially offset by reductions in higher
carbon-emitting fuel that the Project's natural gas would
replace. Neither the Homeowners nor the Environmental
Associations have identified what more the Commission should
have said. That failure is fatal. Unsubstantiated objections
are not enough to stop an agency's action.
the Homeowners and Environmental Associations assert that the
Commission impermissibly segmented its environmental review
by failing to consider the synergistic effect of the Project
on emissions associated with a different pipeline-the
Southeast Market Pipeline. Improper segmentation occurs when
FERC creates separate Environmental Impact Statements for
interconnected pipelines that should have been evaluated as a
single project. See City of Boston Delegation v.
FERC, 897 F.3d 241, 251-252 (D.C. Cir. 2018).
NEPA requires more to make out an improper segmentation claim
than the Homeowners and Environmental Associations have
offered. Specifically, the Commission has no duty to consider
the environmental effects of a separate project if the
project in question has "substantial independent
utility." City of Boston Delegation, 897 F.3d
at 252 (internal quotation marks omitted); see also
Coalition on Sensible Transp., Inc. v. Dole, 826 F.2d
60, 69 (D.C. Cir. 1987) ...