Sierra Club v. United States Department of Energy

867 F.3d 189, 47 Envtl. L. Rep. (Envtl. Law Inst.) 20102, 2017 WL 3480702, 84 ERC (BNA) 2272, 2017 U.S. App. LEXIS 15178
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 15, 2017
Docket15-1489
StatusPublished
Cited by17 cases

This text of 867 F.3d 189 (Sierra Club v. United States Department of Energy) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Sierra Club v. United States Department of Energy, 867 F.3d 189, 47 Envtl. L. Rep. (Envtl. Law Inst.) 20102, 2017 WL 3480702, 84 ERC (BNA) 2272, 2017 U.S. App. LEXIS 15178 (D.C. Cir. 2017).

Opinion

WILKINS, Circuit Judge:

In this petition for review, Sierra Club challenges the Department of Energy’s (the “Department”) grant of an application to export liquefied natural gas (“LNG”) using terminals and liquefaction facilities (collectively, the “Freeport Terminal”) on Quintana Island in Brazoria County, Texas. The federal Energy Regulatory Commission (“FERC”) is responsible for approving the siting and construction of any such facilities. In Sierra Club v. FERC (“Sierra Club (Freeport)”), 827 F.3d 36, 40 (D.C. Cir. 2016), we upheld FERC’s decision to approve the construction of the Freeport Terminal. However, the export of LNG out of that terminal requires separate approval from the Department.

In 2011, the Intervenors, Freeport LNG Expansion, L.P. and its related entities (collectively, “Freeport”), .requested permission to export an amount of LNG equivalent to 0.4 billion cubic feet per day (“Bcf/d”) of natural gas out of the Free-port Terminal. The Department granted the application, finding the proposed exports are in the “public interest” under Section 3(a) of the Natural Gas Act. Under the National Environmental Policy Act (“NEPA”), the Department also considered and disclosed the potential environmental impacts of its decision. Sierra Club argues that the Department fell short of its obligations under both, the Natural Gas Act and NEPA. In particular, it asserts that the Department did not sufficiently examine the indirect effects of LNG exports, such as the effects related to the likely increase in natural gas production and usage that will result from the export authorization herd, as well as the cumulative effects of other anticipated, pending, or approved export proposals. For the following reasons, Sierra Club’s petition is denied,

I.

Much of the pertinent background is explained in oúr earlier decision in Sierra Club (Freeport). There, we détermiried FERC complied with both the Natural Gas Act and NEPA with respect to its decision to authorize the construction of the Free-port Terminal. Yet the Department was independently required to consider the environmental impacts of its export authorization decision under NEPA and determine whether it satisfied the Natural Gas Act’s “public interest” test.

A.

Section 3 of the Natural Gas Act authorizes the exportation of natural gas-from the United States unless the Department determines that doing so “will not be consistent with the public interest.” 15 U.S.C. § 717b(a). The Department’s discretion in this regard depends on whether the country to which the gas will be exported is one that has with the United States a “free trade agreement requiring national treatment for trade in natural gas” (a “Free Trade” country). Id. § 717b(c). If so, then the Department must authorize the.exportation to that country “without modification- or delay.” Id. § 717b(c). However, if the country does not have such an agree *193 ment with the United States (a “non-Free Trade” country), then the Department must independently determine whether such exports would be inconsistent with the public interest. Rather than assign LNG export applications to particular end-user destinations, the applications are designated for export to either Free Trade or non-Free Trade countries, generally.

Freeport submitted four separate applications to the Department seeking LNG export authorizations out of the Freeport Terminal—two for Free Trade countries and two for non-Free Trade countries, with each one seeking to export an amount of LNG equivalent to 1.4 Bcf/d of natural gas. In accordance with the Natural Gas Act, the Department promptly granted Freeport’s Free Trade applications. For the non-Free Trade applications, the Department published notices of intent to initiate public-interest review proceedings. Sierra Club filed a protest and moved to intervene'in one of those proceedings regarding Freeport’s 2011 application (the “FLEX application”), which is the subject of the present petition. See 77 Fed. Reg. 7568 (Feb. 13, 2012) (“FLEX’). Although the FLEX application originally sought authorization to export an amount of LNG equivalent to 1.4 Bcf/d of natural gas, the Department subsequently limited its authorization to 0.4 Bcf/d after Freeport amended its application to construct a facility with a smaller maximum capacity.

B.

In considering whether to grant the FLEX application, the Department needed to determine whether and to what extent to issue an environmental impact statement under NEPA. That statute requires every agency proposing a “major Federal action” to prepare a statement of its environmental impact if the action will “significantly affect[] the quality of the human environment.” 42 U.S.C. § 4332(C).

The agency must consider not just t]ie “direct” environmental effects that “are caused by the [agency’s] action and occur at the same time and place,” but also the action’s “indirect” environmental effects that “are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” 40 C.F.R. § 1508.8; Sierra Club (Freeport), 827 F.3d at 41. In addition, the agency must consider the “cumulative impact[s]” on the environment, meaning-“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,” 40 C.F.R. § 1508.7.

Where multiple federal agencies have authority over different aspects of the same project, agencies may coordinate review, and may incorporate one another’s analysis. Here, FERC was the “lead agency” for the purposes of complying with NEPA, see 15 U.S.C. § 717n(b)(1), and the Department acted as a “cooperating agency,” 40 C.F.R. § 1501.6(b). This meant the Department could “adopt [FERC’s] environmental analysis as its own for purposes of any additional NEPA review triggered by an export-authorization request.” Sierra Club (Freeport), 827 F.3d at 41. However, the Department must still “independently review [FERC’s] work and conclude that [the Department’s] own ‘comments and suggestions have been satisfied.’ ” Id. at 41-42.

C.

The Department received applications similar to FLEX from other companies seeking to export LNG around the same time Freeport submitted its applications. In response to all pending and anticipated *194

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867 F.3d 189, 47 Envtl. L. Rep. (Envtl. Law Inst.) 20102, 2017 WL 3480702, 84 ERC (BNA) 2272, 2017 U.S. App. LEXIS 15178, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sierra-club-v-united-states-department-of-energy-cadc-2017.