FERC, D.C. Circuit Reject Recent Challenges To Gas Pipeline Development

Landowners and environmental groups are bringing increasingly sophisticated challenges to gas pipeline projects and sometimes succeed in delaying development, but in recent cases they have ultimately lost on the merits. The latest setback for pipeline opponents came in July in Gunpowder Riverkeeper v. FERC, where the D.C. Circuit rejected an environmental group's challenge to a Federal Energy Regulatory Commission ("FERC") order approving a gas pipeline expansion project.[1] Recent FERC orders have also consistently found that new projects will benefit the public despite environmental groups' concerns.

Pipelines have responded to steady demand for expansion of gas infrastructure with proposals for numerous new and expanded projects. In particular, shippers require additional capacity to support conversions from coal to gas-fired generators, as well as to move liquefied natural gas ("LNG") to export facilities. In deciding whether to authorize construction and operation of the projects under section 7 of the Natural Gas Act,[2] FERC "balanc[es] the public benefits," such as more reliable and efficient service, "against the potential adverse consequences" to determine whether the project will serve the public interest.[3] FERC also conducts an Environmental Assessment of each proposal under the National Environmental Policy Act ("NEPA"), examining the proposal's potential impacts on numerous environmental resources. As part of the Environmental Assessment, FERC must take a "hard look" at each project's potential impact and include "sufficient discussion of the relevant issues and opposing viewpoints,"[4] meaning that in some cases it must undertake further study that may result in project delays in order to develop the necessary analysis. FERC employs a range of options, including imposition of mitigation measures as a condition of approval, to address environmental concerns.[5] It need not conduct further environmental analyses where it concludes that "there would be no significant [environmental] impact or [it has] planned measures to mitigate such impacts."[6] Last year, the D.C. Circuit in Delaware Riverkeeper v. FERC remanded a pipeline approval to FERC for further consideration of the "cumulative environmental impacts" of a group of closely related natural gas pipeline projects. [7] The court held that NEPA requires FERC to provide more than a "cursory statement" describing a project's environmental effects "when added to other past...