On November 4, 2016, the U.S. Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) rejected Sierra Club’s arguments that FERC’s environmental review under the National Environmental Policy Act of 1969 (“NEPA”) of Cheniere Energy Inc.’s (“Cheniere”) Corpus Christi, Texas liquefied natural gas (“LNG”) export project (the “Corpus Christi Project”) was inadequate. Notably, the D.C. Circuit held that FERC does not have to address the indirect environmental effects of anticipated exports of LNG in its NEPA review because the U.S. Department of Energy (the “DOE”) has sole authority to approve the export of natural gas.
FERC originally approved the construction of the Corpus Christi Project in 2014. Shortly thereafter, Sierra Club petitioned the D.C. Circuit for review of FERC’s approval, arguing that FERC’s environmental review under NEPA was inadequate because FERC: (1) did not address the indirect effects of the anticipated export of natural gas; (2) did not consider the cumulative impacts of the Corpus Christi Project with other projects; (3) violated the hard look doctrine by not considering the use of electric motors at the Corpus Christi Project; and (4) did not adequately consider the impacts of greenhouse gas emissions by the Corpus Christi Project.
The D.C. Circuit denied Sierra Club’s petition for review. In denying review, the D.C. Circuit stated that FERC does not have to “address the indirect effects of the anticipated export of natural gas…because the [DOE], not [FERC], has the sole authority to license the export of any natural gas.” The D.C. Circuit also held that, in its cumulative-impact analysis, FERC “need only consider the effect of the current project[s] along with any other past, present or likely future actions in the same geographic area as the project[s] under review.” Additionally, the D.C. Circuit held that FERC did not violate the hard look doctrine because it discussed electric motors as an alternative in “reasonable detail” and concluded they were inappropriate due to their environmental impacts and reliability concerns, and because they were unnecessary to meet certain air quality standards. Finally, the D.C. Circuit rejected Sierra Club’s arguments regarding greenhouse gas emissions, stating that the D.C. Circuit had previously rejected identical arguments relating to the social cost of carbon and federal greenhouse gas emission reduction goals in prior cases.