Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-03-01111/USCOURTS-caDC-03-01111-0/pdf.json

Parties Involved:
East Tennessee Natural Gas Company
Intervenor
Federal Energy Regulatory Commission
Respondent
National Committee for the New River, Inc.
Petitioner
Barbara G. Smith
Petitioner

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 19, 2004 Decided July 9, 2004

No. 03-1111

NATIONAL COMMITTEE FOR THE NEW RIVER, INC.

AND BARBARA G. SMITH, AN INDIVIDUAL,

PETITIONERS

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

EAST TENNESSEE NATURAL GAS COMPANY,

INTERVENOR

On Petition for Review of Orders of the

Federal Energy Regulatory Commission

James W. McNeely argued the cause and filed the briefs

for petitioners.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #03-1111 Document #834872 Filed: 07/09/2004 Page 1 of 18
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Dennis Lane, Solicitor, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the

brief was Cynthia A. Marlette, General Counsel.

Henry S. May, Jr., John S. Decker, Catherine O’Harra and

Paul M. Teague were on the brief for intervenor.

Before: SENTELLE, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: At issue in this appeal are two

orders of the Federal Energy Regulatory Commission approving the application of the East Tennessee Natural Gas

Company (‘‘East Tennessee’’) for a certificate of public convenience and necessity to construct a pipeline extension

through southwest Virginia and North Carolina known as

‘‘the Patriot Project.’’ The National Committee for the New

River, Inc. and others (together ‘‘New River’’) contend that

the Commission’s environmental review of the Patriot Project

was deficient in several respects: (1) the draft environmental

statement was inadequate and incomplete in its disclosure

and analysis of the environmental effect of the project; (2)

neither the draft nor the final environmental impact statements adequately identified alternate routes for the pipeline;

(3) the location of the underground taps should not have been

considered in evaluating alternative routes for the pipeline, or

if considered, their environmental impacts should have been

considered; and (4) the draft environmental impact statement

was deficient for failing to consider the impacts of two

proposed generating plants.

We hold that the record demonstrates, consistent with the

evolving nature of a major project, that the Commission’s

process for ventilating and analyzing potential environmental

impacts of the Patriot Project involved the requisite ‘‘hard

look,’’ see Robertson v. Methow Valley Citizens Council, 490

U.S. 332, 350 (1989), and that any deficiencies in the draft

environmental impact statement as may have existed were

cured by the final environmental impact statement. Accordingly, because the Commission’s approval of East Tennessee’s

application and the conditional issuance of a certificate of

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public convenience and necessity to East Tennessee was not

arbitrary and capricious or an abuse of discretion, we deny

the petition.

I.

On July 26, 2001, East Tennessee Natural Gas Company

(‘‘East Tennessee’’) filed an application for a certificate of

public convenience and necessity under § 7(c) of the Natural

Gas Act (‘‘NGA’’), 15 U.S.C. § 717f(c), to expand an existing

natural gas transportation pipeline in Tennessee and southwest Virginia, and to extend a new pipeline from Virginia to

North Carolina (‘‘the Patriot Project’’). The purpose of the

project was to help meet forecasted growth in natural gas

consumption in Tennessee, Virginia, and North Carolina, to

provide resources to meet the increased demand for natural

gas-fired electric generation, and to stimulate industrial development in the region. The project would affect about

2,707 acres of land in three states, with a pipeline right-ofway 100 feet wide. It includes a 94 mile extension of East

Tennessee’s mainline transmission facilities from near Wytheville, Virginia to an intersection with facilities of the Transcontinental Gas Pipe Line Corporation in Eden, North Carolina, a seven mile extension to service a power plant in

Henry County, Virginia, and associated mainline valves and

other facilities, including underground taps.

On March 27, 2002, the Commission, following its policy of

evaluating non-environmental aspects of a proposed project

before the environmental ones, issued a Preliminary Determination on Non–Environmental Issues, finding that the

public benefits of East Tennessee’s proposal outweighed any

adverse impacts. 98 FERC ¶ 61,331, 62,392 (2002). In making this determination, it weighed such factors as the proposal’s market support and economic, operational, and competitive benefits. See Certification of New Interstate Natural

Gas Pipeline Facilities, 88 FERC ¶ 61,227, 61,743 (1999);

Order Clarifying Statement of Policy, 90 FERC ¶ 61,128,

61,396 (2000); Order Further Clarifying Statement of Policy,

92 FERC ¶ 61,094, 61,373 (2000). On the benefits side, the

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Commission found that the ‘‘Patriot Project is in the public

interest because it will provide fuel for new electric generation plants, provide additional gas supplies to existing local

distribution companies (LDCs), and bring natural gas service

to portions of southwestern Virginia for the first time.’’

Preliminary Determination, 98 FERC at 62,392. It also

noted that there was ample market demand for the Project,

with seven shippers already under contract for 87 percent of

the Project’s capacity. On the impacts side, the Commission

expected many potential adverse effects ‘‘will be resolved or

mitigated with appropriate conditions in [the] final order’’ and

with provisions for compensating property owners for any

damage to property or the taking of property necessary for

the pipeline right-of-way. Id. at 62,402. The Commission

reserved issuance of the certificate pending completion of its

environmental review.

The Commission’s process for evaluating the environmental

impacts of the project involved six steps: a notice of intent to

prepare an impact statement, a draft impact statement, public

hearings, staff review and evaluation of comments, a final

impact statement, and finally Commission consideration of the

final statement. On October 1, 2001, the Commission issued

a Notice of Intent to Prepare an Environmental Impact

Statement and Request for Comments on Environmental

Issues (‘‘NOI’’). The NOI described the project and included

an overview map as well as a website where further information was available. It advised that public ‘‘scoping’’ meetings

would be held to solicit and address public concerns, and that

there would be a visit to the proposed route. The NOI was

sent to approximately 2,460 individuals, organizations, and

interested parties, including federal, state, county, and local

agencies, elected officials, and property owners along the

proposed route of the extended pipeline. Four public scoping

meetings and two public working meetings in various cities

along the proposed route were held, and several hundred

comments and objections were received.

On April 25, 2002, a draft environmental impact statement

(‘‘DEIS’’) was issued, assessing the environmental impacts

associated with the construction and operation of the pipeline.

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After the time for comment on the DEIS was extended, five

public comment meetings were held in Virginia and Tennessee and one in Washington, D.C. Following evaluation of the

comments by Commission staff, a final environmental impact

statement (‘‘FEIS’’) was issued on September 23, 2002. The

Commission determined that the Patriot Project would result

in limited adverse environmental impacts, and that mitigation

measures detailed in the FEIS would ‘‘appropriately and

reasonably’’ reduce and compensate for them.

In the first order on review, the Commission on November

20, 2002, issued East Tennessee a final certificate of authorization, subject to 69 conditions to mitigate environmental

impacts. See Order Denying Rehearing, Authorizing Abandonment, and Issuing Certificate (‘‘Initial Order’’), 101

FERC ¶ 61,188, 61,743 (2002). The Commission rejected

New River’s petition for reconsideration of the Preliminary

Determination, where it had argued that current data failed

to support the need for increased gas service in the region,

and that the economic benefits of the project were overstated.

As relevant here, the Commission addressed the process of

its environmental analysis, and explained that it was approving the project and general route, but not the final route

delineation, due to survey and environmental study gaps

resulting from East Tennessee’s inability in some areas to

gain access to property, the numerous conditions to be satisfied, and the need to obtain approval by various state and

federal agencies regarding various aspects of the project.

See Initial Order, 101 FERC at 61,756. It also addressed

subjects New River raises in this appeal, such as the consideration of taps and alternative routes, and stated that it was

adopting certain recommendations from the Virginia Department of Environmental Quality as added conditions to the

Order. Id. at 61,759.

In the second order on review, the Commission, on February 27, 2003, denied the petition for rehearing of the November 20, 2002 order brought by New River, the Blue Ridge

Coalition, and other petitioners, and denied New River’s

separate request for a stay. See Order on Rehearing and

Denying Stay (‘‘Rehearing Order’’), 102 FERC ¶ 61,225, 61,-

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655 (2003). The Commission rejected the stay as making no

attempt to address the criteria for granting a stay, and,

offering largely the same reasons as in the Initial Order,

addressed the need for the Patriot Project, the adequacy of

notice of the underground taps in the NOI and DEIS, and

various environmental issues. See id. at 61,657–64.

II.

The court’s review of New River’s challenges to the Commission’s approval of the Patriot Project is limited to determining whether the two orders are ‘‘arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.’’

5 U.S.C. § 706(2)(A). See B&J Oil & Gas v. FERC, 353 F.3d

71, 75 (D.C. Cir. 2004); Pub. Utils. Comm’n v. FERC, 254

F.3d 250, 253–54 (D.C. Cir. 2001). The court considers, in

this regard, both ‘‘whether the decision was based on a

consideration of the relevant factors and whether there has

been a clear error of judgment.’’ ExxonMobil Gas Marketing Co. v. FERC, 297 F.3d 1071, 1083 (D.C. Cir. 2002)

(quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401

U.S. 402, 416 (1971)). The court cannot substitute its judgment for that of the Commission, id., and it must uphold the

Commission’s factual findings if they are supported by substantial evidence. 15 U.S.C. § 717r(b); Texaco Inc. v. FERC,

148 F.3d 1091, 1095 (D.C. Cir. 1998).

The same standard applies to New River’s challenge to the

adequacy of the Commission’s compliance with the National

Environmental Policy Act of 1969 (‘‘NEPA’’), 42 U.S.C.

§ 4332(2)(c), and to the court’s determination of the adequacy

of the Environmental Impact Statement (‘‘EIS’’). See City of

Olmsted Falls v. FAA, 292 F.3d 261, 269 (D.C. Cir. 2002)

(citing Marsh v. Oregon Natural Res. Council, 490 U.S. 360,

376 (1989)). Under NEPA, the court’s role is ‘‘simply to

ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its

decision is not arbitrary or capricious.’’ Baltimore Gas &

Elec. v. NRDC, 462 U.S. 87, 97–98 (1983). An environmental

impact statement is reviewed to ‘‘ensure that the agency took

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a ‘hard look’ at the environmental consequences of its decision

to go forward with the project.’’ Olmsted Falls, 292 F.3d at

269 (quoting City of Grapevine, Tex. v. DOT, 17 F.3d 1502,

1503–04 (D.C. Cir. 1994)). When an agency ‘‘is evaluating

scientific data within its technical expertise,’’ an ‘‘extreme

degree of deference to the agency’’ is warranted. B&J Oil &

Gas, 353 F.3d at 76 (quoting City of Waukesha v. EPA, 320

F.3d 228, 247 (D.C. Cir. 2003)).

A.

New River’s challenge to the Commission’s orders begins

with the contention that the DEIS was inadequate and incomplete in its analysis of the environmental effects of East

Tennessee’s proposal, and was improperly segmented and

sequenced. In New River’s view, the DEIS was also ‘‘so

incomplete and inadequate in important areas as to preclude

meaningful analysis or comment,’’ Petitioners’ Br. at 30, that

it should have been revised and republished, pursuant to

Council on Environmental Quality (‘‘CEQ’’) regulations, 40

C.F.R. § 1502.9(a).

The DEIS revealed that as of the time it was prepared,

East Tennessee had not yet filed a site-specific crossing plan

for the New River waterway with the Commission. It advised, however, that the New River would be crossed using

the horizontal directional drill (‘‘HDD’’) technique, and that

the crossing would be approximately 420 feet wide. The

Commission disclosed that East Tennessee had met with

Park representatives in May and November 2001, and that

the ‘‘HDD exit point would be in an area the park has

planned for the new campground facilities.’’ Patriot Project

Draft Environmental Impact Statement (‘‘DEIS’’), FERC

Docket No. CP01–415–000, at 3–99 (Apr. 25, 2002). Further,

the Commission noted that the Park Manager had been

‘‘concerned about disruption of the park trail traffic, settling

of the trail along the trench line, and the introduction of a

new cut in the treeline,’’ and that the Park had expressed

concern about an existing water well close to the proposed

HDD crossing. Id.

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That the description in the DEIS was sufficient to provide

‘‘a springboard for public comment,’’ Robertson, 490 U.S. at

349, would appear evident from the comments received by the

Commission. New River, for instance, commented in an

Issue Paper on August 19, 2002 that East Tennessee had

failed to disclose that the proposed gas line route would pass

directly through Park property and that there was a 30%

probability that the HDD would fail. The Virginia Horse

Council submitted a comment expressing concern that the

exit hole and open trench area was a State Park equestrian

campground, that the HDD crossing under the river might

not turn out to be possible, that a gas-fired steam power plant

would be located within a half mile of the state park, that

tourism would suffer, and that there could be adverse biological impacts on the river both as a water source and as an

aquatic habitat. The Blue Ridge Coalition, Roanoke River

Basin Association, Appalachian Trail Conference, and the

Environmental Protection Agency (‘‘EPA’’), among others,

also submitted comments on the DEIS. The comments received by the Commission were sufficiently detailed and

critical of particular deficiencies in the DEIS that the Commission was later able to address the deficiencies in the

FEIS. The FEIS responded to some comments by explanation and for others, recommended conditions that had to be

satisfied before the certificate could be ‘‘effectuated.’’ See

Rehearing Order, 102 FERC at 61,659. These conditions

ranged from requiring HDD to cross the New River and the

New River Trail State Park and an analysis of rerouting

options in case of HDD failure, to requiring an approved site

specific erosion and sediment control plan for the Park, all

matters of concern to New River. See Initial Order, 101

FERC at 61,767–68.

Under the circumstances, we are by no means persuaded

that the DEIS was deficient. As the Supreme Court stated

in Robertson, 490 U.S. at 349,

The statutory requirement that a federal agency contemplating a major action prepare TTT an environmental

impact statement serves NEPA’s ‘‘action-forcing’’ purUSCA Case #03-1111 Document #834872 Filed: 07/09/2004 Page 8 of 18
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pose in two important respects. It ensures that the

agency, in reaching its decision, will have available, and

will carefully consider, detailed information concerning

significant environmental impacts; it also guarantees

that the relevant information will be made available to

the larger audience that may also play a role in both the

decisionmaking process and the implementation of that

decision.

(internal citations omitted). By its very name, the DEIS is a

draft of the agency’s proposed FEIS, and as such the purpose

of a DEIS ‘‘is to elicit suggestions for change.’’ City of

Grapevine, Tex. v. Dep’t of Transp., 17 F.3d 1502, 1507 (D.C.

Cir. 1994). New River has not shown that omissions in the

DEIS left the public unable to make known its environmental

concerns about the project’s impact, even if the public was

unable to analyze each aspect of the project, such as specific

rather than generalized statements of proposed sitings. Indeed, as noted, comments on the DEIS resulted in substantial

changes that were reflected in the FEIS and the orders on

review. We leave open, however, the possibility that in cases

of actual prejudice resulting from a deficiency in the DEIS,

where, for example, omissions leave the agency without public

comment on a material environmental aspect of a project and

leave the relevant public without information about a proposed project, such deficiency may not be curable by the

FEIS. But, the very matters of principal concern to New

River on appeal are of a similar nature to those addressed by

public comments on the DEIS and are reflected in the

conditions attached by the Commission to the certificate of

authorization for the project.

New River’s other challenges to the sufficiency of the

DEIS fare no better. Regarding New River’s segmenting

and sequencing contentions, the Supreme Court has offered

relevant instruction, namely that NEPA does not require that

a complete plan be actually formulated at the outset, but only

that proper procedures be followed for ensuring that environmental consequences have been fairly evaluated. See Robertson, 490 U.S. at 352. The Commission explained that the

practical realities of large projects, such as the Patriot ProUSCA Case #03-1111 Document #834872 Filed: 07/09/2004 Page 9 of 18
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ject, involve considerable time and effort to develop, with

segments of the project proceeding at different speeds. This

is the result, for instance, of many individuals denying or

limiting access to property that East Tennessee needs to

survey and assess for environmental impacts. The Commission thus observed that ‘‘[i]f every aspect of the project were

required to be finalized before any part of the project could

move forward, it would be difficult, if not impossible, to

construct the project.’’ Rehearing Order, 102 FERC at

61,659.

Both the Supreme Court’s instruction and the Commission’s explanation provide an effective response to New River’s contention that the DEIS was improperly segmented by

failing to describe the project at sensitive environmental

areas such as major river crossings, the National Forest

lands, the New River Trail State Park, the Blue Ridge

Parkway, and the Appalachian National Scenic Trail. In the

DEIS, the Commission identified the areas where gaps existed, and in the FEIS, the Commission included conditions to

address those gaps before construction and operation could

proceed. See Rehearing Order, 102 FERC at 61,659; Initial

Order Appendix, 101 FERC at 61,764–72. To the extent New

River also contends that there was improper sequencing of

the environmental analyses, some of which were submitted by

East Tennessee in June 2002 after the public comment period

had expired, New River points only to an Appendix to the

June 17, 2002 Comments of East Tennessee on the DEIS,

and never explains why this Appendix was so crucial that its

absence denied the public of an opportunity meaningfully to

comment on the environmental effects of the project. Undoubtedly, a nonsegmented project enables more comprehensive public notice to be provided in a DEIS. But the volume

and substance of the comments received by the Commission

in response to the DEIS undermine New River’s position that

the DEIS failed to serve its purpose. On appeal, New River

has not pointed to any area it would have addressed differently had the Commission delayed issuance of the FEIS.

For essentially the same reasons, New River’s contention

that the DEIS should have been supplemented is unpersuaUSCA Case #03-1111 Document #834872 Filed: 07/09/2004 Page 10 of 18
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sive. New River relies on CEQ regulations calling for a

supplemental DEIS or FEIS if the agency ‘‘makes substantial

changes in the proposed action that are relevant to environmental concerns,’’ or ‘‘[t]here are significant new circumstances or information relevant to environmental concerns.’’

40 C.F.R. § 1502.9(c)(1). However, in Marsh v. Oregon

Natural Resources Council, 490 U.S. at 373, the Supreme

Court explained that under the ‘‘rule of reason,’’ ‘‘an agency

need not supplement an [environmental impact statement

(’’EIS‘‘)] every time new information comes to light after the

EIS is finalized.’’ Instead, if the new information shows that

the remaining action will affect the quality of the environment

‘‘in a significant manner or to a significant extent not already

considered, a supplemental EIS must be prepared.’’ Id. at

374. This court has similarly explained that a ‘‘supplemental

EIS is only required where new information ‘provides a

seriously different picture of the environmental landscape.’ ’’

Olmsted Falls, 292 F.3d at 274. Under the arbitrary and

capricious standard of 5 U.S.C. § 706(2)(A), the Commission’s

determination that the new information was not significant

enough to warrant preparation of a supplement to the DEIS,

is entitled to deference. See Marsh, 490 U.S. at 375–76.

The record indicates that on March 25, 2002, one month

before the DEIS was issued, East Tennessee had provided

the New River Trail State Park with a site-specific plan for

crossing the river and the Park. This report was apparently

not filed with the Commission until June 17, 2002, when East

Tennessee commented on the DEIS, and supplemented its

comments on June 18 with appendices that included a directional drill contingency plan and a further study of alternative routes. Because, as the issue is now framed by New

River, the new information in East Tennessee’s report did not

cause the Commission to make ‘‘substantial changes in the

proposed action,’’ the question is whether the new information

presented ‘‘significant new circumstances or information relevant to environmental concerns.’’ 40 C.F.R. § 1502.9(c)(1).

East Tennessee’s site-specific crossing report revealed that

the ‘‘exit hole of the pipeline drill will coincide with a farm

access road and cleared area that exists adjacent to the trail.’’

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East Tennessee Submission to New River Trail State Park,

Exhibit B of Blue Ridge Coalition’s June 16, 2002 Comments

on the DEIS, at 9 (Mar. 25, 2002). It also set out the

contingency plan, in case HDD technology were to fail, to use

standard construction techniques for crossing New River

Trail State Park land. In addition, the report identified

factors that could result in HDD failure: the large diameter

of the pipeline, and the difficulties in penetrating long lengths

of difficult subsurface conditions in the form of fractured

rock, gravel, or cobbles. Although the report provided new

information that is environmentally significant, the Commission could reasonably conclude that the information did not

significantly transform the nature of the environmental issues

raised in the DEIS and comments. The DEIS made clear

some of the attendant problems with East Tennessee’s proposed use of HDD to cross the river and trail, stating that the

exit point would be in an area of the park that had been

planned for new campground facilities, that there was concern

over the proximity of an existing water well, that the geology

was fractured dolomite (limestone), and that the aquifer was

not very deep in the area next to the river. The Commission

received comments on matters discussed in East Tennessee’s

report in response to the DEIS. Hence, New River fails to

demonstrate that the information provided in the site-specific

crossing report seriously changed the environmental landscape. See Olmsted Falls, 292 F.3d at 274.

As noted, the Commission’s process for evaluating the

environmental impact of East Tennessee’s proposed project

was comprehensive, based on public comments that focused

the Commission’s attention on the issues that New River now

contends were inadequately addressed in the DEIS. While

New River maintains that the exit hole and the possibility of

conventional drilling meant the environmental impact would

be different than could be understood from the DEIS, the

comments received alerted the Commission to these possibilities, as for instance, the possible failure of HDD and disruption caused by open trench construction. The Commission

could reasonably conclude, then, in light of the comments,

that the DEIS had accomplished its purpose and that the new

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information in the report had, in effect, already been anticipated by persons notified of East Tennessee’s proposal. Furthermore, the FEIS responded to the new information, and

included responsive proposed conditions, which were ultimately adopted by the Commission. Any defects there may have

been in the DEIS were cured by the Commission’s consideration of comments on the FEIS from such organizations as

the Blue Ridge Coalition and the EPA. Moreover, in the

Initial Order the Commission responded to the new information, in part, by conditionally issuing the certificate.

For these reasons, we conclude that the Commission was

not arbitrary and capricious and did not abuse its discretion

in determining that the DEIS had served its purpose and was

not prematurely published, that the DEIS was not improperly

segmented or sequenced, and that revision or supplementation of the DEIS was unnecessary.

B.

New River also contends that neither the DEIS or FEIS

adequately considered alternatives to the proposed route for

the pipeline extension. NEPA requires that ‘‘all agencies of

the Federal government shall’’ include in ‘‘every recommendation or report on proposals for legislation and other major

Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible

official’’ on not only the environmental impacts of a proposed

action, but also alternatives to the proposed action. 42 U.S.C.

§ 4332(c). The agency must ‘‘study, develop, and describe

appropriate alternatives to recommended courses of action in

any proposal which involves unresolved conflicts concerning

alternative uses of available resources.’’ Id. § 4332(e). The

Commission satisfied these requirements.

Both the DEIS and FEIS evaluated the no-action or postponed-action alternative, system alternatives, major route

alternatives, route variations, interconnection site alternatives, and aboveground-facility-site alternatives. Each included considerable detail on the major route alternatives, and

why they were not recommended. The FEIS considered 13

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major route alternatives in detail, but did not recommend any

of them after extensive analysis and multiple site visits. This

was sufficient to meet the Commission’s obligations to give

adequate consideration to appropriate alternative routes. See

Vermont Nuclear Power Corp. v. NRDC, 435 U.S. 519, 551

(1978). But, New River objects that the DEIS failed to

include any analysis of the initial route for the Max Meadows

Alternative, which it claims would have avoided all impact to

the Shot Tower–Fosters Falls section of the New River Trail

State Park. The Commission rejected the Max Meadows

Alternative, which was mentioned in the NOI but not the

DEIS or the FEIS, because it was longer than the proposed

route, would cross previously mined areas, and would be

located just west of a national monument. The court, however, need not consider whether the Commission adequately

analyzed this alternative route because New River has waived

this contention by failing to raise it before the Commission on

rehearing, and offers no explanation for its reasons for not

having done so. See 15 U.S.C. § 717r(b).

C.

New River further contends that the Commission improperly permitted East Tennessee to determine the location of

the pipeline extension by the location of the taps, thus

limiting consideration of other alternative routes. This contention, however, misconceives the Commission’s role and

ignores the record.

First, as the Commission explained, it was the prerogative

of East Tennessee to determine the project’s goals and the

means of achieving them. See Initial Order, 101 FERC at

61,750; see also Independence Pipeline Co. et al., 91 FERC

¶ 61,102, 61,345 (2000). Under the NGA, the Commission

cannot grant a certificate unless the proposed project ‘‘is or

will be required by the present or future public convenience

and necessity.’’ 15 U.S.C. § 717f(e). Some of the goals

outlined by East Tennessee in its application for a certificate

were to bring much-needed natural gas supplies to parts of

southwest Virginia for the first time, and to facilitate planned

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future development and economic growth in the regions

around the pipeline route. The 20 taps were installed, at

East Tennessee’s expense, with the support of local governments and business groups along the route, which viewed the

taps attached to the pipeline as essential to bringing economic

development to their region and attracting new business.

Consequently, the Commission determined that installation of

the underground taps along the pipeline represented a ‘‘potential added benefit to the region’’ and were an appropriate

goal for the Project. Initial Order, 101 FERC at 61,751.

Second, the record reveals that the general pipeline route

was not chosen based solely on the location of the taps.

Other considerations included meeting the needs of the seven

shippers with whom East Tennessee already had long-term

contracts to provide natural gas, meeting growth in the

natural gas local distribution market, and meeting the increased demand for natural gas-fired electric generation.

Initial Order, 101 FERC at 61,751. In the Commission’s

view, the ‘‘high level of subscription for the Patriot Project

alone warrants [the Project’s] approval.’’ Id. at 61,750–51.

It noted that three shippers had already entered into service

contracts by the time of the Rehearing Order, and that

approximately 87 percent of the project’s total capacity had

been subscribed. Rehearing Order, 102 FERC at 61,657.

The Commission also considered that the need for electric

power and natural gas service would continue to increase in

the southeastern states, and that sufficient infrastructure

needed to be in place so that increased natural gas demand

from electric power plants and distribution companies could

be served. Id.

The record also refutes New River’s contention that the

location of the taps along the planned pipeline route inappropriately narrowed consideration of alternatives to the route.

The Commission considered and analyzed other alternatives,

which were rejected not because they did not incorporate the

proposed taps, but because, for example, they increased the

length of the pipeline or increased the impact on the environment and residential areas or would have moved all or most

of the extension to North Carolina. See Initial Order, 101

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FERC at 61,751, 61,755. The Commission found, moreover,

that ‘‘none of the major route alternatives are environmentally superior to the route proposed by East Tennessee, even if

some of the taps are not served.’’ Id. at 61,751. New River’s

assertions in its brief that there are no current customers and

an inadequate supply of natural gas for the taps, do not

invalidate the Commission’s consideration of the taps. The

Commission found that, at that time, there was an excess of

‘‘64,000 Dth a day of currently unsubscribed natural gas

capacity available for future use’’ beyond that already subscribed by the existing seven contracting shippers, Initial

Order, 101 FERC at 61,751 n.22, and that additional capacity

could be made available by such means as capacity release or

by adding compression, thereby ‘‘bringing a degree of gas

service to an area that has no gas service.’’ Rehearing Order,

102 FERC at 61,658.

This analysis also disposes of New River’s contention that

the Commission abused its discretion in failing to evaluate the

environmental impact of the taps. The Commission determined that because the taps would be part of the underground installation of the pipeline, there were no tap-related

environmental impacts to be considered at that point outside

of those arising from the construction of the pipeline itself.

See Rehearing Order, 102 FERC at 61,663. The Commission

further reasoned that it could not evaluate any environmental

impacts of the taps along the extension route when it did not

know how the taps would be used in the future. See id.

D.

Finally, New River contends that the Commission should

have considered the environmental impact of the proposed

DENA Wythe Power Plant, as well as evidence that the

DENA Wythe and Henry County power plants were not

viable. Under the NGA, proposed facilities to be used in the

transportation of natural gas in interstate commerce are

subject to the jurisdiction of the Commission. See 15 U.S.C.

§ 717(b); Algonquin Gas Transmission Co., 59 FERC ¶ 61,-

255, 61,933 (1992). New River does not contest that the

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Commission has no authority over the permitting, funding,

construction, or operation of the DENA Wythe proposed

facilities, all of which are regulated by the Commonwealth of

Virginia.

To the extent that the Commission is required under

NEPA to give some environmental consideration of nonjurisdictional facilities, see Henry v. FPC, 513 F.2d 395, 406

(D.C. Cir. 1975), the Commission has adopted the four-factor

test of Algonquin Gas, 59 FERC at 61,934. Under this test,

in order to determine whether there is sufficient federal

control over a project to warrant environmental analysis, the

Commission considers: (1) whether the regulated activity

comprises ‘‘merely a link’’ in a corridor type project; (2)

whether there are aspects of the non-jurisdictional facility in

the immediate vicinity of the regulated activity that uniquely

determine the location and configuration of the regulated

activity; (3) the extent to which the entire project will be

within the Commission’s jurisdiction; and (4) the extent of

cumulative federal control and responsibility. See 18 C.F.R.

§ 380.12(c)(2)(ii). The requirement to consider the environmental effects of non-jurisdictional facilities will thus arise

only where they are built in conjunction with jurisdictional

facilities and are an essential part of a major federal action

having a significant effect on the environment. See id.

New River contends that but-for the DENA Wythe Power

Plant, the pipeline extension would not have been routed to

that location. It maintains, and repeats in its reply brief, that

because the second factor of the Algonquin test is thus

satisfied, that ‘‘alone is enough to tip the balance in the fourfactor test.’’ Reply Br. at 19. It further maintains that

several aspects of the power plant would require federal

licenses, such as a federal EPA authorization to operate the

proposed underground injection cooling water process. However, the Commission’s determination that there was insufficient federal control to warrant the Commission’s environmental review of the DENA Wythe Power Plant is entitled to

deference. Cf. Kleppe v. Sierra Club, 427 U.S. 390, 412

(1976).

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Consistent with its practice of applying the Algonquin test,

see, e.g., Regent Res. Ltd., 102 FERC ¶ 61,307, 61,983 (2003);

Tuscarora Gas Transmission Co., 99 FERC ¶ 61,044, 61,175

(2002); Empire State Pipeline, 61 FERC ¶ 61,091, 61,374

(1992), the Commission weighed a number of relevant, interrelated factors. The Commission reasoned that not only

would construction, operation, and location of the plant be

regulated by the Commonwealth of Virginia, but the federal

government had no financial involvement in the project and

no federal lands were at stake. See Rehearing Order, 102

FERC at 61,662–63. By contrast with the Algonquin test,

which calls for balancing of the federal interest against counterbalancing factors, New River’s but-for approach would

present the opportunity for the Commission to extend its

jurisdiction over non-jurisdictional activities simply on the

basis that they were connected to a jurisdictional pipeline.

Given the limits of the Commission’s NGA jurisdiction, New

River fails to show that the Commission’s approach was

arbitrary and capricious or contrary to law. Absent some

indication of further federal involvement, the Commission

reasonably concluded that the DENA Wythe and Henry

County power plants were non-jurisdictional facilities for

which it was not required to evaluate their environmental

impact or viability.

Accordingly, because New River has not shown that the

Commission acted arbitrarily or capriciously or abused its

discretion in evaluating the environmental impacts of East

Tennessee’s application for the Patriot Project, and because

New River’s challenge to the administrative record on appeal

is meritless, see Fed. R. App. P. 17(b)(3); FEIS Public

Meeting Comments, Appendix M, FERC Docket No. CP01–

415–000, at M543–92 (Sept. 23, 2002), we deny the petition for

review.

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