Court overturns FERC’s approval of southeastern US gas pipelines

A federal appeals court overturned the US Federal Energy Regulatory Commission’s approval of three proposed southeastern US natural gas pipelines and ordered the regulator to more closely examine potential environmental consequences of using gas that the systems would carry.

A federal appeals court overturned the US Federal Energy Regulatory Commission’s approval of three proposed southeastern US natural gas pipelines and ordered the regulator to more closely examine potential environmental consequences of using gas that the systems would carry.

The Aug. 22 decision by 2 of the 3 judges hearing the case in the US Appeals Court for the District of Columbia was a clear victory for the Sierra Club, which led the legal challenge by landowners and other environmental groups. It was not immediately clear whether it would be appealed to a higher federal court.

The case centered on the Southeast Market Pipelines Project, comprised of three lines now being constructed in Alabama, Georgia, and Florida, which would supply gas to electric power generators in Florida.

Only two major gas pipelines—both nearly at capacity—now serve the Sunshine State. Two major utilities, Florida Power & Light and Duke Energy Florida, have already committed to buy nearly all the gas the project would transport, Judge Thomas B. Griffith wrote in the decision. The project’s developers also have indicated that the resulting increased availability of gas would allow utilities there to retire older coal-fired power plants, he said.

“Despite these optimistic predictions, the project has drawn opposition from several quarters,” Griffith said. “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.”

FERC, which has authority to review proposed interstate gas pipelines under Section 7 of the 1983 Natural Gas Act, launched its review of this project in fall 2013 and issued a certificate order granting approval to construct all three of the project’s segments on Feb. 2, 2016. The environmental groups and landowners sought a rehearing, which FERC held the following September, after construction of the lines began the previous month. The commission declined the groups’ request to rescind the authorization and the groups sued.

“Their primary argument is that the agency’s assessment of the environmental impact of the pipelines was inadequate,” Griffith wrote in the decision in which Judge Judith W. Rogers concurred. “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.”

In her partial dissent, Judge Janice Rogers Brown said case law clearly states that when a government agency has no ability to prevent a certain effect because its statutory authority is limited, its action cannot be considered a legally relevant cause of an indirect environmental effect under the 1970 National Environmental Policy Act.

“Although this case seems indistinguishable from earlier precedent, the court now insists the action taken by [FERC] is the cause of an environmental effect, even though the agency has no authority to prevent the effect,” Brown wrote. “More significantly, today’s opinion completely omits any discussion of the role Florida’s state agencies play in the construction and expansion of power plants within the state—a question that should be dispositive.”

Contact Nick Snow at nicks@pennwell.com.

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