On June 6, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“DC Circuit”) ruled that FERC’s environmental assessment of Tennessee Gas Pipeline Company, L.L.C.’s (“Tennessee Gas”) proposed “Northeast Project” violated the National Environmental Policy Act (“NEPA”). Specifically, the DC Circuit held that FERC (1) failed to consider Tennessee Gas’ Northeast Project in conjunction with three other connected and interdependent Tennessee Gas pipeline projects, and (2) failed to provide a meaningful analysis of the cumulative impacts of all of the Tennessee Gas projects. As a result, the DC Circuit remanded the case back to FERC for further consideration of both issues.
Between 2010 and 2013, Tennessee Gas commenced four pipeline project upgrades along the eastern leg of its 300 Line System, which generally runs from Pennsylvania to New Jersey. These four projects included: (1) the 300 Line Project; (2) the Northeast Supply Diversification Project; (3) the Northeast Project; and (4) the MPP Project. Starting with the 300 Line Project, Tennessee Gas submitted, and eventually received FERC approval for, the four proposed pipeline upgrades as separate projects. In the process, FERC reviewed each of the projects individually, which included an environmental assessment of each project pursuant to NEPA.
Tennessee Gas submitted its FERC certificate application in March 2011 for the Northeast Project, a project that called for the addition of five pipeline segments totaling 40 miles in length, as well as compression upgrades and various infrastructure improvements. During the Northeast Project proceeding at FERC, several parties (“Petitioners”) claimed that FERC violated NEPA by segmenting the environmental assessment of the Northeast Project from the other three projects, and for failing to provide a meaningful analysis of the cumulative impact of the projects. After the Petitioners’ claims were rejected at FERC, they petitioned the DC Circuit for review in 2013.
With regard to Petitioners’ segmentation claim, the DC Circuit concluded that the Northeast Project, along with Tennessee Gas’ three other projects, were “physically, functionally, and financially connected and interdependent.” The DC Circuit rejected FERC’s arguments in the process, noting that FERC both failed to identify some “logical termini” as a rational endpoint to the projects, and failed to demonstrate a substantial independent utility between the projects, particularly because the 300 Line Project helped lower the costs for the Northeast Project. The DC Circuit also noted that there clearly was insufficient time between the projects to prove that they were independent of each other.
In addressing the cumulative analysis claim, the DC Circuit stated that most of its reasoning supporting the segmentation claim also supported its conclusion that FERC failed to provide a meaningful analysis of the cumulative impacts of all four of Tennessee Gas’ projects. Therefore, the DC Circuit concluded that Tennessee Gas’ three other projects qualified as “other actions,” past, present, and proposed, and reasonably foreseeable, that have had or are expected to have impacts on the Northeast Project, and thus fall under the definition of cumulative effects.
A copy of the opinion is available here.