gas production the record indicates that exports will also displaced some existing gas demand primarily by the electorate sector switching from gas to coal power these increases in gas production and coal use  important environmental consequences in particular that will lead to an increase in greenhouse gas emissions and increasing emissions of ozone forming pollution might my question for you is why and why is this action directed at first why is it directed at the department of energy i mean we learn from public citizen that we're supposed to look to the agency that has statutory authority over the cost the cause here is increased ability to prevent the effect issues that the entry of mexican trucks in the united states did depend upon the department of transportation issuing the rules that issue but because the statutory scheme so having the department transportation discretion there was no ability for the department of transportation to refrain from issuing the regulations that issue in contrast to that  inquiry specifically concerns effects on natural gas supplies that is one of the purposes that need to be considered in execution of their resolution of the public interest determination and as well as effects on the environment so the statutory provision here  the focus is under the natural gas act the impact of this letting this increase be authorized statute as you natural gas act clearly encompasses you know what i'm trying to focus on is the natural gas act is not another e p a statute all right that's one realm of responsibility it's also not a department of energy statute it's focusing on what for yes and one purpose arguing here is you know the siting the statutory scheme this invasion by congress there are separate responsibility and just because the word environment and the word public interest appears in the statute doesn't necessarily mean that the agency implementing that stack has the same breath of responsibility as other agencies in particular area and indeed in this case congress said this was a matter for the department of energy although the department energy delegated authority to further to undertake the public interest inquiry for purposes of citing construction and operation of natural gas exports the least there is no clear language in that delegation order or in any other department energy statement that would plainly limit the scope of first inquiries or to limit the scope of it would otherwise be required so the agency has adopted consider in an execution of the section three public interest inquiry that impacts on gas supply on the environment among those impacts and it further by refusing to consider impacts on gas supply and on the environment here failed to consider an important part of the myself in public citizen we're supposed to look at the agency that has authority over the conduct that is causing the problem the statutory authority for first here is to pick the site to operate produce and that's not the problem the problem here according to your view things i think is is the department of energy who has the s authority to determine turn the spigot saw on let's let's send it all overseas and that that's that's what's causing the problems in your view isn't it so what it's again the questions why don't you go after them  the overlapping agency authority is is the norm or this is just because it's the way it functions the way that the the statute functions in the real world you're saying her she's making the first determination you want to cut it off at the pass right  allow for it to make decisions without considering the full scope of factors that congress intended to be considered and so can be hazardous i'm asking why what happens when a gallon nation is made does that mean that deal he has the energy is still not statutorily responsible for this i mean i have to assume they were still statutorily responsible for the decision that you just like when any other rental agent delegates power to someone else they're still on the buck stops with the version  gas is going to be exploited to somebody to a country with which there is a free trade agreement not a nonaligned not free trade where there is where it's i think it's automatic under the statute automatic approval if it's a free trade country is that correct but approach that's correct and so if earth authorizes construction and then the gas is authorized by in dealy for export to a free trade how does that work when it's a free trade on tree and there is no opportunity it's automatic congress has already said there will be no you know the directly you know right now that public citizen i think part of the difficulty is that again there is only a single public interest standard in the natural gas act and the provisions of the natural gas that address exports to free trade agreement countries simply refer to the public interest standard and because the statute does not break up public interest may it please the court robert solomon for the commission i think i'll start with the statutory and delegation scheme and then i'll proceed to judge millette questions concerning a standing your honors or correct to start with the statute itself section three of the natural gas act which is fifteen u s c seven seventeen b now the language of that provision speaks just to the commission but it's important to also bring into account the department of energy organization act of one nine hundred seventy seven which was founded forty two us c seventy one fifty one as it pertains to the new department of energy and seventy one seventy one and seventy one seventy two as it pertains to the brand new federal energy regulatory commission prior to one nine hundred seventy seven when there was no department of energy from the one nine hundred thirty eight passage of the natural gas act to nine hundred seventy seven the only federal actor which is assessing the public interest is the federal power commission after nineteen seventy seven under forty two u s c seventy one fifty one b the powers of the federal power commission were transferred to the new department of energy in forty two us c seventy one seventy two a various authorities were transferred back from the department of energy to the new with your suit but that authority did not include section three of the natural gas act seven seventeen b of title fifteen under forty two u s c seventy one seventy two either however the deal we secretary may assign to the commission an only the authority over the facilities at the import and export sites so your honors are there is there anyone for sierra club to sue on this if it can't be  department of energy has not yet acted with finality with respect to freeport or to being but there are provisions under the federal i thought it was the view  additional new there's no need to challenge that can be brought there i mean if if if the result of the decision to authorize to be increase exports has adverse environmental impacts where's the relief will all that goes to do we regulations concerning a categorical exemption under its people regulations for projects where there is no new construction how would that work here how would that work here  we is not a cooperating agency with respect to sabine pass as it is in the freeport case with respect to the preparation of either an environmental assessment or environmental impact statement however the department of energy still has to independently assess the environmental findings and conclusions of the  here and well under the statute under a provision that was added in the two thousand and five energy policy act as it amends the natural gas act there is a provision for judicial review under fifteen u s c seven seventeen or which provides for under subsection d which provides for judicial review of actions by federal or state citing agencies other than the federal energy first so fur had to make some decisions about what that would encompass yes and further decided it could mean any deeper obligations an environmental assessment yes so that goes back to the department of energy and is energy just hypothetically going to go back to square one and allow challenges no the department of energy would not go back to square one that's particularly the case with respect to the two thousand and fourteen authorizations in this particular case with respect to some let's just stick to what before will putting aside the standing concern that i'll get to in a moment when we have the type of proceeding that we have here which does not involve any new construction and does not involve any additional shipping traffic or any additional upstream natural gas capacity yes there are limitations on what can be challenged in light of the fact that no construction whatsoever has authorized in this proceeding here's here's how i've been trying to understand this case and the analogy may be poor the original offer was a should was to construct a building that allowed fifteen however the owner decided it only wanted to use ten of those units and that was what the original authorization was for the use of ten of those unit even though the construction of the building itself was able to handle additional tenants then the owner comes back and says no you figure out a way that he can get two more tenants in there now we're at the point where the owner wants to have fifteen tenants in the building and at least according to my reading of the record this will involve an increase of one thousand and twelve billion cubic feet per day being exported so just stick with my analogy moment with t are going to be additional water usage sewer needs traffic tenants in and out of the building that sort of thing so that's what fergus looking at and as i back that's number one and you say no no no we're not going back to square one and they reply very thick knowledge they're not challenging the two thousand and twelve authorization but they say there is this one thousand billion cubic feet that's being authorized so no no no new construction but there's new activity and the activity is in their view going to produce the negative impact on the environment and they move on the agency and they say that the agency is obligated under a need to address that your honor  to consider additional activity but using the fifteen and ten hypothetical that your honor provided in the earlier twenty twelve proceeding that the agency took into account the fifteen not just simply the ten so in the thirteen it's modeling anticipated i'm putting words in your mouth and tell me if i'm wrong modeling anticipated that there could be fifteen not exactly twenty four hours a day three hundred sixty five days a year the most aggressive form of modeling it could have been passed came back to the agency and said well it won't be operating twenty four seven three sixty five under the very conservative assumptions that it provided to the agency earlier but it is possible under the design as originally planned and the with respect to certain design changes that the commission approved in two thousand and thirteen that can squeeze out additional efficiencies so i have to correct petitioner's counsel the twenty five percent increase is only on the best day of the year under optimal up rating conditions you cannot extrapolate twenty five percent increase for the entire year the few more people one more people that well that's correct i wanted to differentiate between the shipping traffic and the operational activity the commission anticipates a zero percent increase with respect to shipping traffic with respect to operating activity yes possible that the facility might run one percent five percent longer in the additional design should be factored into the earth and the commission factor those consequences into need both back in the twenty twelve proceeding we contemplated that the facility would not be down for maintenance we contemplated that the facility would run as hard and as efficiently as sabine pass now posits in its twenty thirteen application for the additional authorization so we believe that underneath the wall there is possible you under optimal operating conditions some incremental activity at the side of the agenc is correct but there is a statutory provision that applies specifically for a exports to free trade agreements and in those circumstances the department of energy shall authorize  from is to or from a free trade agreement or not for purposes of that export import there has to be construction an operation of these facilities at the export import site the federal energy regulatory is the lead agency with respect to the environmental review typically there are cooperating agencies including the department of energy and i  ask like this case there is no place to raise concerns about the hymn of the x or position is that true there's no place to raise them well i believe the department of energy does issue orders with respect is the opportunity for a judicial review of the environmental analysis of the facilities themselves on the review of the first order which is exactly what we have here even though there was no additional  concern with respect to the environmental aspects of the export if the for your suit is responsible only for the facilities and congress has decided that the regulations controlling the emissions now i'm just you're smiling but i'm trying to understand what needs isn't this just undercutting the whole point of the if nobody can raise these questions before dio he or ferk to which he has delegated this responsibility i would say that's a decision the congress has made with respect to exports to free trade agreements countries the commission is trying to faithfully but administer its responsibilities under the natural gas are to underwrite the so here's here's my question suppose that what you say is totally true but first has options before for example if we were where we are in the second case report where these facilities should be cited for if it had all this information about indirect impacts cumulative impact could it not decide that this facility should not be sited at one site but should be sited at another site where it would have less direct negative environmental effects or that it would have to add conditions to its approval to mitigate further if it understood what the full effect was to be since this is the only point at which the nepa analysis comes into play i think that it is correct of both the subsection a and subsection e of section three of the natural gas all of these cases well that's not my question because statute clearly authorizes to impose conditions but my question is what is the basis of knowledge on which for is obligated to consider what conditions would be appropriate well i don't want to start talking about the freeport case but as that case demonstrates the agency does have the ability to look into the particular location placement of the silage there was considerable attention devoted to the pre treatment center which is two and a half miles away it export i guess that could be accounted for the the broader public interest assessment that the agency bakes i do want to point out the specific language though that congress has used in section three it's that the commission shall off the rise unless it is demonstrated that the project is not consistent with the public interest this is quite a stark contrast with the agenc traditional sliding authority under section seven of the natural gas act fifteen u s c seven seventeen s which is that the commission shall authorize if consistent with the public convenience and  there wasn't any such and such construction or shipping authorized but the commission is looking for some type of causal relationship between the facility itself which is the focus to export and you know that the lion sheer of these exports are going to come from domestic production right one why why is it so i mean if perk saying this isn't forseeable because we don't know which shale play is going to be the source of this but you do know that there's going to be more methane and more of those yeah in the atmosphere is a result of this activity and i don't know much about chemistry or physics but the brief say that  in case in case of those two pollutants you know they get it that's national that's regional it's not just located at the at the side the terminal what why why isn't that a fair inquiry to make when we know that there's going to be more zone there's going to be more may think gas as a result of this act the commission is not denying that there very well may be an effect or there might even be a positive relationship between the siting of export terminals and the development of natural gas in the united states if i can go back to the public citizen case that we started with what the supreme court requires is a reasonably close calls all relationship between the agency action and the upstream environmental impact the this is not like the leading case that petition logically will induce additional coal consumption and coal burning and the eminently reasonable thing if you're increasing the amount of gas in x or in this country think you're going to leading the contributing factors to that decision will be global oil market demand and prices technological breakthroughs of the type that we saw in the last ten years and environmental policy import basket to now they're adding liquefaction capabilities so that they can export as well as import what we know is over the next couple of decades a gas will be coming and going we know how volatile and unpredictable markets are for liquefied natural gas because we have the the history of how we have things changed over decades but even doesn't require you to have a crystal ball it just says water and public safety but the agency also it did not distinguish between facts that were directed and interact but i do know that the agency took into account all socioeconomic factors that are induced by the facilities or the authorizations in place and we look good jobs and housing and roads and schools and property values those types of effect is this is a collateral attack on what happened in twenty two well well it depends upon what petitioner is arguing and various i know i'm talking about what you just argued right to the extent that they did not take advantage of the opportunity to appeal the twenty twelve orders to the extent that sierra but is arguing not about the additional incremental capacity of the facilities per rather the as authorized capabilities and how soon are you going to do well i just need to be clear what the agency's mission is your answer to judge millette is that we did all this in twenty twelve we considered our modeling both of the original two point two billion cubic feet a day and the authorization to go on the very best day to two point seven six billion  determined that some adjustments could be made so it could produce another thousand billion cubic feet per day upon the engineering plans and designs as they were earlier presented to the agency in the twenty twelve proceeding and also some design modifications that were presented to the agency in a twenty thirteen proceeding by the time you get to the twenty fourteen proceeding the orders on review now all of the effects have already been model been taken into account in the earlier proceedings how can that conservative assumptions it was based on average annual production capabilities my understanding is sabine pass is the first of the applicants for export authorization it's probably the first or among the first to actually start designing and constructing these facilities and it makes sense in the earliest of the proceedings that the assumptions at the pre design pre construction station might not necessarily match the reality of the design and construction stage i think i do want to talk briefly about standing and our standing argument is based on the fact as we have discussed that nothing new has been authorized the much more consequential decisions were made by the agency in the twenty twelve proceeding those orders were not challenge and in this year's twenty fifteen proceedings as to the additional trains five and six also which the sierra club has chosen not to appeal with respect to the twenty fourteen authorization we're just simply making a classic injury in fact argument that any harm that they believe they have suffered is not definitive in concrete and it's no different than that which was modeled in the earlier proceedings with respect to the two declarations of mr paul and ms isles were we're looking forward to clarence who lives works or recreates near the project site for purposes of standing sierra club seems to have conceded that ms isles does not live or recreate the new year with respect to mr paul it was difficult to tell with respect to the phrasing in the declarations whether these are current impacts th facing right yes and we will we will concede specially based upon the reply brief that the present tense means that mr pawle does hans boat or fish at the project now but that does not relieve petitioner of the obligation to show immediate definitive concrete injury which it cannot show based upon the nature of the twenty four to get on because you say there is no there is no there will be no increased traffic on the river sorry yes we are saying there will be no increased traffic even though there's going to be an increase in exports ok well that's not necessarily so  odd it depends upon whether the up to four hundred ships were fully utilized it depends upon the dates in the a year under which those passages shall be made and the commission did not authorize any additional upstream natural gas capacity to bring natural gas to the facilities so it shouldn't be assumed that any more necessarily any additional takeaway capacity will be needed as well argument is based upon the fact that that activity has already been modeled and taken into account in the earlier workers all right thank you let's hear from interview has sets the standard for this court as to how to analyze whether an agency has abuse or not abuse its discretion in connection with the need analysis and there are really two components to that standard the first is that there has to be a reasonably close connection something the court said was a kin to proximate cause under the legal definition between the action that the agency is asked to to implement and the alleged effect that doesn't and let me just start with some of your questioning from before and that is with respect to free trade nations it's automatic it's not discretionary congress has made the determination in the statute that exports shall be allowed to not to free regulations it did not have authority to stop the trucks from coming in so to here first we have an order of free trade order authorizing the entire capacity to be export their central objection is that should in essence not allow the spigot to be created and deal we should not allow it to be turned on that's what these objections are talking about here go to and that is just like public citizen where there was a not discretionary determination the supreme court held that the safety agency there was not required to consider the alleged indirect effects of the mexican trucks in this challenging that issue into non free trade nations sierra club didn't intervene in time on those orders and hasn't challenge them in court but could have there was an opportunity to do that and the way th regulations work is they don't do another environmental analysis they didn't want to already for the capacity that was authorized they don't do another one for the non the the just the things don't require new construction because the original  cooperating agency process works and the need but if an agency cooperates with the other agency and their concerns are addressed in the cooperation proper process then when it comes back to them they do have to make their own nepa determination but they can say natural gas production that might occur somewhere in north america at some point in the future they have two different types of affects that they're saying that the agency had to consider the first are it's a local regional effects you do need to know where the gas is go be produced it could be produced anywhere from canada to the marcellus shale in pennsylvania to north dakota to texas and the environmental impacts there are different i don't think anybody could res reason it was i think quite reasonable and it said that there is an interconnected national in fact in some cases going going to canada there's an interconnected pipeline system of natural gas such that effect on the price of natural gas which will then have some effect on marginal producers it was your that here is what i'm trying to get my head again here's what bothers me is i don't know if i don't know this is that a thirty thousand foot level or a right to the heart of the matter somewhere in between we all know that something very significant is happening in the country with with with with this boom in natural gas production this is a significant event that's taking place right before our eyes does it have environmental consequences it's hard to imagine that it doesn't have environmental consequences who has to measure that and tell us the public what those costs are that's what anita supposed to do all this doing is informing decision makers in the public what the environmental costs are now who's going to tell the public the cost of this that's going on there are multiple multiple regulatory agencies that have that responsibility e p a is one of them in the understanding as it is currently in looking at those exact issues there are also state and local environmental agencies say in the places where it's produce is not directed towards substantive policy choices the procedural statutes deal we did look at those in the issues under its separate authority which has now been delegated to further to look at whether the export of the not getting it out moving right and shipping it out because you can look at for example at the at the order again it's not the force we're talking about the only but again it's another case but freeport order the final freeport order has extensive analysis of that under the always public interest determination but here we have said the same thing is first and that is this is not a reasonably foreseeable that under need and to get to just judge rogers hypothetical about the tenants in the building and deal we both look at the impacts from the fifteen tenets in the building and how much traffic they would bring to the hallway isn't what they would do to the to the gardens and all that and i know i'm not going to be you know i'm stretching the hypothetical a bit but it would be sort of like saying in addition to doing that you have to look at the impact from the electricity that the tenants are using and where that's going to be produced and the agency said we will go this far because it's reasonable to do that we are not going to go and look at the entire world and that's with zero clubs asking of course to look at global impacts and that's beyond regional so you have to look at all of the factors that influence natural gas production which include price which include regulations by other agencies which include technology and on top of that you would have to look at where the gas is going to be shipped so one country even we don't even know that my clients don't even know where it's going to go and then you have to look at what it's going to substitute for in that other country whether that fuel is going to be cleaner or because the companies that we contract for for the gas they are course taking it where the market on any particular day would allow them to do it in the markets change day to day so they could take it from pennsylvania today and they could there was a lot of money building these important terminals we thought when we built these terminals both the sabine pass and freeport that there was going to be a huge market for imports of natural gas we put a lot of money behind that turned out it wasn't right now what we've done is we've hedged the market so now these terminals are by directional they can go either way depending on where the market is and any particular moment somebody can always tell you that they can put together a model that they can project on there are people out there who will tell you that they can project where the stock market is going to be twenty five years from now based on some model that may be ok for what they're saying but it is not something that an agency would have to take account of underneath a need that require under this public citizen that there be a reasonable close connection something like proximate cause and i don't think anybody could reasonably argue that this order authoriz haven't raised that we haven't separately argued that issue but i would say that it is serious of burden to demonstrate that they have standing it is not our burden to disprove their stan and they have put it to put forward to pretty bare bones declarations none of which says anything concrete about an injury that would occur from this additional slice of capacity not something that they didn't challenge that happened before and some interest of there's the issue the problem on this it's entirely of their own making they intervened the they could have they could have challenged the original quarter on  and i don't think anybody would be arguing standing there because there was a new facility that was being built and it's going to have some impacts they didn't do that so we're here today only because they chose for whatever reasons not to challenge that and all they  no effects resulting from the expansion beyond the level of effects for previously authorized or the level effects for a previously considered but that measurement to get of effects of the amendment against what for previously analyzed it did  not consider a counterfactual in which for it took a no action alternative and did not allow the facility to operate with the increases in efficiency in things that had been previously implemented authorized but where that efficiency was not used to actually increase in out of gas export halfway online you get half of the number of ships and we get all the way on line you get something i believe was two hundred or two hundred fifty ships per year for the level of exports authorized in two thousand and twelve so the record clearly indicates that in terms of actual shipping traffic more actually on the river per year constitutes an aesthetic injury in addition to vessel traffic flow we have also started injury based on air pollution from increased operations of the facility and again this is an injury that is twenty fourth amendment and the increase in operating hours will create an increasing actual air pollution emissions and that actually increasing to remember regardless of whether though the level of emissions that were previously analyze is is is not determined if our member will actually read more pollution because of this authorization then he would have otherwise breathed that but that's an injury sufficient for purposes of article three standing