On January 31, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied requests for an en banc rehearing of an August 2017 decision (Sierra Club v. FERC) vacating FERC’s approval of the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently under construction in the southeastern United States. In its August decision, the D.C. Circuit held that FERC failed to analyze the greenhouse gas emissions that would result from the SMP Project, as required by the National Environmental Policy Act (“NEPA”). On February 2, 2018, the developers for the SMP Project filed a request at FERC for expedited reissued construction approval certificates, or in the alternative, temporary emergency certificates, arguing that halting work on the SMP Project will cause “irreparable harm.”
In its August 2017 decision, the D.C. Circuit held, among other things, that FERC’s analysis in the final Environmental Impact Statement (“EIS”) did not meet the requirements of NEPA (see October 2, 2017 edition of the WER). Specifically, the D.C. Circuit held that FERC should have included an estimate of the “reasonably foreseeable” downstream greenhouse gas emissions indirectly caused by the SMP Project because all of the natural gas transported through the SMP Project will be delivered to natural gas-fired power plants. The D.C. Circuit directed FERC to supplement its EIS to address various issues, including an estimate of the SMP Project’s impact on downstream greenhouse gas emissions.
Along with the SMP Project developers, FERC petitioned for an en banc rehearing of the August 2017 decision. The parties primarily argued that the D.C. Circuit should have remanded to FERC for reconsideration, rather than vacating FERC’s orders issuing certificates to construct the SMP Project. The parties further claimed that vacating FERC’s orders will cause construction delays. Meanwhile, as required by the August 2017 order, FERC staff prepared a draft supplemental EIS (“SEIS”), which was issued in September 2017. FERC’s SEIS affirmed FERC’s earlier conclusion that the SMP Project would not significantly harm the environment.
The one-page order denying the petitions for en banc rehearing provided no analysis or explanation of the court’s decision, but did note that no judge voted to rehear the case. The D.C. Circuit is expected to issue its formal mandate soon, which will finalize the result in the case, thereby rendering the FERC-issued pipeline construction certificates void. In a February 2, 2018 filing to FERC, the developers of the SMP Project requested that FERC act quickly to finalize the draft SEIS and reissue certificates on an expedited, or temporary emergency, basis, to avoid alleged “irreparable harm” to the public and to their contractual obligations related to the SMP Project.
On February 5, 2018, FERC issued its Final SEIS, which maintained the conclusion that, “with respect to the impacts for which staff could assess significance,” the SMP Project would not significantly harm the environment. According to the Final SEIS, FERC staff were able to quantify the downstream greenhouse gas impacts from the SMP Project but could not identify a suitable method for attributing discrete environmental effects to those quantified emissions. Thus, the conclusion stated, “the SEIS cannot make a finding whether the quantified downstream GHG emissions pose a significant impact on the environment.”