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Delaware Riverkeeper Network v. Federal Energy Regulatory Commission

United States Court of Appeals, District of Columbia Circuit

May 23, 2017

Delaware Riverkeeper Network and Maya van Rossum, the Delaware Riverkeeper, Petitioners.
Federal Energy Regulatory Commission, Respondent. Transcontinental Gas Pipe Line Company, LLC, Intervenor

          Argued April 4, 2017

         On Petition for Review of Orders of the Federal Energy Regulatory Commission.

          Aaron Stemplewicz argued the cause and filed the briefs for petitioners.

          Holly E. Cafer, Senior Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With her on the brief were Robert H. Solomon, Solicitor, and Lisa B. Luftig, Attorney. Karin L. Larson, Attorney, Federal Energy Regulatory Commission, entered an appearance.

          John F. Stoviak argued the cause for intervenor. With him on the brief were Pamela S. Goodwin, Elizabeth U. Witmer, and Patrick F. Nugent.

          Before: Garland, Chief Judge, Griffith, Circuit Judge, and Edwards, Senior Circuit Judge.

          Edwards, Senior Circuit Judge.

         This case involves three federal statutes: the Natural Gas Act ("NGA"), 15 U.S.C. § 717, et seq.; the Clean Water Act ("CWA"), formally titled the Federal Water Pollution Control Act Amendments of 1972, 33 U.S.C. § 1251, et seq.; and the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321, et seq. Although the Federal Energy Regulatory Commission ("FERC" or "Commission") administers only the NGA, all three statutes apply to the disputed actions taken by the Commission in this case.

         On September 30, 2013, Transcontinental Gas Pipe Line Company, LLC ("Transco") filed an application with FERC to construct and operate its proposed Leidy Southeast Project ("Leidy Project"). The project was designed to expand the capacity of Transco's existing natural gas pipeline and add new facilities in Pennsylvania and New Jersey. Pursuant to the requirements of NEPA, FERC conducted an environmental review of the project and issued an environmental assessment ("EA") on August 11, 2014. The EA found, with appropriate mitigating measures, "no significant impacts" associated with the Leidy Project. However, it required Transco to obtain "all applicable authorizations required under federal law" prior to FERC authorizing construction. Because it was understood that the Leidy Project might result in discharges into navigable waters, Transco was obligated by § 401 of the CWA to obtain a water quality certification from the state in which the discharge would originate before FERC could authorize any activity that "may result" in such a discharge. See 33 U.S.C. § 1341(a)(1). The EA thus in turn required Transco to obtain this state certification before FERC would authorize any construction.

         On June 10, 2014, Transco applied for a § 401 certification from Pennsylvania's Department of Environmental Protection. On December 18, 2014, before Pennsylvania had acted on Transco's application, FERC issued a Certificate of Public Convenience and Necessity ("Certificate Order") under the NGA conditionally approving the Leidy Project. The Certificate Order made it clear that FERC would not authorize any construction until Transco had obtained a § 401 certification from Pennsylvania. Delaware Riverkeeper Network, a nonprofit organization, timely sought rehearing of the Certificate Order before the Commission. FERC denied the request for rehearing. Delaware Riverkeeper Network and Maya van Rossum, the current Delaware Riverkeeper (together "Riverkeeper"), then petitioned for review in this court. Transco intervened in support of the Commission.

         Before this court, Riverkeeper contends that the Commission violated the CWA because it granted Transco's request to construct and operate the Leidy Project prior to the issuance of Pennsylvania's § 401 water quality certification. Riverkeeper also claims that the Commission violated NEPA in failing to establish an accurate baseline from which to conduct its environmental review of the Leidy Project. In particular, Riverkeeper argues that FERC misidentified numerous specially protected wetlands, and miscalculated both the cover type categorization of those wetlands and the total acreage of those wetlands. We find no merit in these claims and, therefore, reject the petition for review.

         I. Background

         A. Statutory Background

         Under the NGA, a natural gas pipeline company must obtain a Certificate of Public Convenience and Necessity from FERC prior to "undertak[ing] the construction or extension" of any natural gas facility for the transportation of natural gas in interstate commerce. 15 U.S.C. § 717f(c)(1)(A). FERC may place any reasonable conditions on the issuance of such a certificate "as the public convenience and necessity may require." Id. § 717f(e). This court has jurisdiction to review challenges to certificates granted under the NGA, but petitioning parties must first seek rehearing before the Commission and may not raise any argument before this court that was not raised on rehearing. See 15 U.S.C. § 717r(b). Letter orders issued by FERC are also subject to review in this court subject to the same rehearing requirement. See 18 C.F.R. § 385.1902.

         In addition to the requirements of the NGA, § 401 of the CWA requires "[a]ny applicant for a Federal license or permit to conduct any activity including . . . the construction or operation of facilities, which may result in any discharge into the navigable waters, " to "provide the licensing or permitting agency a certification from the State in which the discharge originates or will originate." 33 U.S.C. § 1341(a)(1). The state must certify "that any such discharge will comply" with the CWA's effluent limitations and other pollutant control requirements, including state-administered water quality standards. Id. The state may certify that there are no applicable limitations or standards for the discharge activity, or it may deny certification or waive the certification requirement. Id. But "[n]o license or permit shall be granted until the certification . . . has been obtained or has been waived." Id. Any limitation in a § 401 certification "shall become a condition" of the federal license or permit requiring such certification. Id. § 1341(d).

         Section 401 is an important part of the CWA, in which "Congress sought to expand federal oversight of projects affecting water quality while also reinforcing the role of States as the prime bulwark in the effort to abate water pollution." Alcoa Power Generating Inc. v. FERC, 643 F.3d 963, 971 (D.C. Cir. 2011) (citation and internal quotation marks omitted). The state certification authority under § 401 is "'[o]ne of the primary mechanisms' through which [states] may exercise this role, as it provides them with 'the power to block, for environmental reasons, local water projects that might otherwise win federal approval.'" Id. (quoting Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir. 1991)).

         The last statute at issue in this case is NEPA, which was enacted in part to "promote efforts which will prevent or eliminate damage to the environment and biosphere . . . [and] enrich the understanding of the ecological systems and natural resources important to the Nation." 42 U.S.C. § 4321. As we recently explained:

The Commission, in exercising its . . . 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 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.

Sierra Club v. FERC, 827 F.3d 59, 63 (D.C. Cir. 2016). For either an EA or an EIS, the purposes of NEPA require the Commission to "consider and disclose" the environmental effects of the actions it certifies. Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 96 (1983). So long as the agency takes a hard look at the environmental consequences, NEPA "does not mandate particular results." Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989).

         B. Factual and Procedural Background

         Transco maintains an interstate natural gas pipeline that runs from Texas to New York City, passing through Pennsylvania. In September 2013, Transco applied to FERC for a Certificate of Public Convenience and Necessity for the Leidy Project, which would add approximately thirty miles of looping to Transco's existing pipeline in Luzerne and Monroe Counties, Pennsylvania and parts of New Jersey, to meet increasing energy demands. On August 11, 2014, FERC issued a finding of no significant impact and published its review of the environmental consequences of the Leidy Project in a 217-page EA. Environmental Assessment, Joint Appendix ("JA") 168-331. Among a number of conditions, Environmental Condition No. 9 of the EA required Transco to obtain and file with the Secretary of the Commission "all applicable authorizations required under federal law (or evidence of waiver thereof)" prior to FERC authorizing construction. Id. at 324. The EA identified § 401 state water quality certifications as required authorizations. The EA also discussed mitigation for the Leidy Project's impact on Pennsylvania wetlands and concluded that the project's proposed pipeline gas flow velocities were safe.

         Transco had timely applied for a § 401 certification from Pennsylvania's Department of Environmental Protection on June 10, 2014. However, on December 18, 2014, FERC issued a Certificate Order to Transco, conditionally approving the Leidy Project, before Pennsylvania had acted on Transco's § 401 request. The Certificate Order adopted the conditions of the EA, including Environmental Condition No. 9, which clearly stated that Transco was required to obtain all applicable federal authorizations, including a § 401 certification from Pennsylvania. FERC was thus clear that it would not authorize any construction before the necessary § 401 certifications had been obtained. On January 16, 2015, Riverkeeper sought rehearing of the Certificate Order before the Commission.

         During the early months of 2015, after the conditional Certificate Order had been issued, the Commission authorized Transco via letter orders to conduct certain "pre-construction" activities, including tree-felling. Riverkeeper moved the Commission to stay the tree-felling activity. FERC denied this request. Riverkeeper never sought rehearing of this action or of any of FERC's letter orders. Instead, on March 15, 2015, Riverkeeper filed a petition for an emergency stay with this court. The Petition was denied on March 19, 2015. Del. Riverkeeper Network v. FERC, No. 15-1052 (D.C. Cir. Mar. 19, 2015), ECF No. 1543345. By ...

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