On Tuesday, the U.S. Court of Appeals for the DC Circuit, in the case of Sierra Club, at al., v. FERC, rejected most of the arguments made against the Federal Energy Regulatory Commission’s (FERC) decision to approve the construction and operation of three interstate natural gas pipelines that would serve customers in the southeast.

The Court of Appeals was notably unconvinced by the environmental justice arguments made by the petitioners. However, the Court of Appeals decided, on a 2 to 1 vote, that FERC’s environmental impact statement (EIS) was deficient in that it failed to come to grips with the argument that the downstream greenhouse gas emissions generated by the burning of this gas by the customers of the pipelines would have adverse impacts.

In response to FERC’s argument “that it is impossible to know exactly what quantity of greenhouse gases will be emitted as a result of this project being approved, the Court of Appeals responded

True, that number depends on several uncertain variables, including the operating decisions of individual plants and the demand for electricity in the region. But we have previously held that NEPA analysis necessarily involves some ‘reasonable forecasting,’ and that agencies may sometimes need to make educated assumptions about an uncertain future. Indeed, FERC has already estimated how much gas the pipelines will transport: about one million dekatherms (roughly 1.1 billion cubic feet) per day. The EIS gave no reason why this number could not be used to estimate greenhouse-gas emissions from the power plants, and even cited a Department of Energy report that gives emissions estimates per unit of energy generated for various types of plant. (Internal citation omitted).

The Court of Appeals concluded “that the EIS for the Southeast Market Pipelines Project should have either given a quantitative estimate of the downstream greenhouse emissions that will result from burning the natural gas that the pipelines will transport or explained more specifically why it could not have done so.”

Judge Brown, in dissent, argued that the decision of the Court of Appeals was inconsistent with the Supreme Court’s 2004 ruling in DOT v. Public Citizen, in that FERC had no legal authority to weigh in on this matter. In addition, it was also inconsistent with some liquefied natural gas (LNG) pipeline cases decided by the DC Circuit in the past few weeks.

It is likely that there will be further appeals in the Sierra Club case because the law may now be seen as being unsettled.