The United States’ energy sector is the country’s “principal . . . contribution to climate change.” The Federal Energy Regulatory Commission (FERC) “regulates significant swaths of the U.S. energy industry, including the wholesale sale and transmission of electricity,” the permitting of several types of energy infrastructure projects, and the transportation of oil and natural gas, imbuing the Commission’s decisions with serious climate impacts. The Commission approving natural gas pipelines in the face of climate change is an “increasingly high-profile issue” and “has been the subject of significant litigation in recent years.”
Two recent D.C. Circuit decisions, Sierra Club and Birckhead, clarified how FERC must consider the climate impacts of infrastructure projects under the National Environmental Policy Act of 1969 (NEPA). In Sierra Club, the court held that a natural gas pipeline’s downstream greenhouse gas (GHG) emissions were reasonably foreseeable indirect environmental effects when FERC knew that the gas was going to be combusted in specific powerplants. This decision can be interpreted extremely narrowly to stand for the proposition that downstream GHG emissions are foreseeable only when FERC knows the exact destination and end-use of natural gas. In Birckhead, the court explicitly rejected a narrow interpretation of Sierra Club. The case involved whether upstream and downstream GHG emissions were indirect effects of installing a natural gas compression facility, infrastructure that compresses gas so that more can be transported in a pipeline. While the court ultimately held that it lacked
jurisdiction to rule on this issue, it stated in dicta that projects’ indirect GHG effects are not just foreseeable when the gas’s destination and end-use are precisely known, thereby rejecting FERC’s “extreme” interpretation of Sierra Club. Instead, it provided that these decisions should be made on a case-by-case basis.
Despite the dicta in Birckhead, many recent FERC decisions only recognized GHG emissions to be indirect effects of natural gas projects when the destination and end-use of gas was precisely known. FERC Commissioner Glick opined in numerous dissents that by not fully considering the indirect climate effects of natural gas projects, FERC is snubbing the D.C. Circuit’s interpretation and violating NEPA. Birckhead’s dicta portends a future D.C. Circuit decision finding FERC in violation of NEPA and providing more stringent guidelines on how FERC must consider the climate impacts of projects under its purview.