Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-01249/USCOURTS-caDC-14-01249-0/pdf.json

Parties Involved:
American Petroleum Institute
Intervenor for Respondent
Federal Energy Regulatory Commission
Respondent
Sabine Pass LNG, L.P.
Intervenor for Respondent
Sabine Pass Liquefaction, LLC
Intervenor for Respondent
Sierra Club
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 13, 2015 Decided June 28, 2016

No. 14-1249

SIERRA CLUB,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

AMERICAN PETROLEUM INSTITUTE, ET AL.,

INTERVENORS

On Petition for Review of Orders of the 

Federal Energy Regulatory Commission

Nathan Matthews argued the cause for petitioner. With him

on the brief was Sanjay Narayan.

Robert H. Solomon, Solicitor, Federal Energy Regulatory

Commission, argued the cause for respondent. With him on the

brief was Karin L. Larson, Attorney.

Jonathan S. Franklin argued the cause for respondentintervenors Sabine Pass Liquefaction, LLC and Sabine Pass

LNG, L.P. With him on the brief were Lisa M. Tonery and

Charles R. Scott.

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Catherine E. Stetson was on the brief for intervenor

American Petroleum Institute in support of respondent. Stacy R.

Linden and Benjamin Norris IV entered appearances.

Before: ROGERS, GRIFFITH and MILLETT, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Sierra Club seeks review of the

authorization by the Federal Energy Regulatory Commission of

an increase in production capacity at a liquefied natural gas

terminal in Louisiana. According to Sierra Club, the

Commission failed to consider certain environmental

consequences of its authorization, in violation of the National

Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321

et seq. The Commission initially challenges Sierra Club’s

standing under Article III of the Constitution to bring this

petition. For reasons we explain, we conclude that Sierra Club

has standing but that its challenges to the Commission’s orders

fail on the merits, largely for the reasons stated in the companion

case, Sierra Club v. FERC (Freeport), No. 14-1275 (D.C. Cir

June 28, 2016), and otherwise the court lacks jurisdiction over

challenges to the Commission’s cumulative impacts analysis due

to Sierra Club’s failure to exhaust its administrative remedies. 

Accordingly, we dismiss the petition in part and deny the

petition in part.

I. 

Until 1977, section 3 of the Natural Gas Act of 1938, Pub.

L. No. 75-688, 52 Stat. 821, 822 (codified as amended at 15

U.S.C. § 717b), required the now-defunct Federal Power

Commission (“FPC”) to approve any application to export

natural gas to a foreign country unless the proposed export “will

not be consistent with the public interest.” 15 U.S.C. § 717b(a);

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see also id. § 717a(9). In 1977, Congress abolished the FPC,

created the Federal Energy Regulatory Commission, and

transferred the section 3 authority to the Secretary of the

Department of Energy (“the Secretary”). Department of Energy

Organization Act, §§ 301(b), 401(a), 402(a), Pub. L. No. 95-91,

91 Stat. 565, 578, 582–84 (codified at 42 U.S.C. §§ 7151(b),

7171(a), 7172(a)). Subsequently, Congress amended section 3

to vest in the Secretary “the exclusive authority to approve or

deny an application for the siting, construction, expansion, or

operation of [a liquefied natural gas] terminal.” Energy Policy

Act of 2005, Pub. L. No. 109-58, § 311(c)(2), 119 Stat. 594, 686

(codified at 15 U.S.C. § 717b(e)(1)). The Secretary has

delegated to the Commission the decision under section 3

whether to “[a]pprove or disapprove the construction and

operation of particular facilities” used for the import or export

of natural gas, the location of such facilities, and when new

construction is involved, the entry point for imports and exit

point for exports of natural gas. See Dep’t of Energy,

Delegation Order No. 00-004.00A, § 1.21(A) (May 16, 2006);

42 U.S.C. § 7172(f). The Commission, however, lacks the

power to authorize the actual import and export of natural gas;

the Secretary has delegated that section 3 function to the

Assistant Secretary of Energy for Fossil Energy. See Dep’t of

Energy, Redelegation Order No. 00-006.02, § 1.3(A) (Nov. 17,

2014).

The Commission, in exercising its section 3 authority, must

comply with NEPA and its implementing regulations, which

require that all federal agencies include an environmental impact

statement (“EIS”) “in every recommendation or report on . . .

major Federal actions significantly affecting the quality of the

human environment.” 42 U.S.C. § 4332(2)(C); see also 40

C.F.R. § 1508.11. To determine whether an EIS is necessary, an

agency first prepares an environmental assessment, 40 C.F.R.

§ 1508.9, which must include, among other information, a

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discussion of “the environmental impacts of the proposed

action,” id. § 1508.9(b). “Indirect effects . . . are caused by the

action and are later in time or farther removed in distance, but

are still reasonably foreseeable.” Id. § 1508.8(b). “Cumulative

impact is the impact on the environment which results from the

incremental impact of the action when added to other past,

present, and reasonably foreseeable future actions regardless of

what agency (Federal or non-Federal) or person undertakes such

other actions.” Id. § 1508.7; see also id. § 1508.8. After

preparing an environmental assessment, an agency may

conclude that the proposed action would have no significant

impact (often referred to as a “FONSI,” for “finding of no

significant impact”) in lieu of issuing an EIS. Id.

§§ 1508.9(a)(1), 1508.13. 

The petition before the court challenges whether the

Commission complied with NEPA when, pursuant to its

delegated section 3 powers, it approved an increase in

production capacity at a liquefied natural gas terminal (“the

Terminal”) in Cameron Parish, Louisiana, operated by Sabine

Pass Liquefaction, LLC, and Sabine Pass LNG, L.P.

(collectively “Sabine Pass”). The Commission initially

approved the construction and operation of the Terminal as a

facility for the import of liquefied natural gas into the United

States. Sabine Pass LNG, L.P. &Cheniere Sabine Pass Pipeline

Co., 109 F.E.R.C. ¶ 61,324 (2004); Sabine Pass LNG, L.P., 115

F.E.R.C. ¶ 61,330 (2006). Changes in market conditions,

however, prompted Sabine Pass to seek Commission

authorization to construct and operate facilities that would

permit the Terminal to receive natural gas produced in the

United States, liquefy it, and prepare it for export to points

abroad. In 2012, the Commission authorized Sabine Pass to

liquefy and prepare for export up to 16 million tons of natural

gas per year. Sabine Pass Liquefaction, LLC & Sabine Pass

LNG, L.P. (the “2012 Order”), 139 F.E.R.C. ¶ 61,039 at PP 1, 4.

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(2012). Sierra Club, which participated in the Commission

proceedings, did not petition for judicial review of the 2012

Order.

The Commission orders that Sierra Club now challenges

amend the 2012 Order and deny rehearing of the decision to

amend. On October 25, 2013, Sabine Pass requested that the

Commission authorize it to use the Terminal to liquefy and

prepare for export an additional 4 million tons of natural gas per

year — in total up to 20 million tons per year. NEPA required

the Commission to conduct an environmental analysis of Sabine

Pass’s proposed amendment, and Sierra Club, which intervened

in the application process, argued that the Commission needed

to consider several specific environmental consequences in its

analysis. Among them were two environmental consequences

that form the core of Sierra Club’s petition to the court. First,

Sierra Club argued that increasing the volume of exported

natural gas would induce U.S. natural gas producers to extract

and process more gas in order to meet the increase in demand

and thereby cause more gas production-related environmental

harm. Second, Sierra Club argued there would be increased air

pollution resulting from increased coal burning, because

(1) increasing the volume of natural gas exports would more

fully integrate the domestic natural gas market with the global

market, where the price of natural gas is generally higher;

(2) market integration would cause domestic natural gas prices

to rise as the lower domestic price and the higher global price

reach an equilibrium; (3) this hike in domestic gas prices would

prompt U.S. energy consumers — in particular electric utilities

— to switch from using natural gas to using coal, which is

cheaper than natural gas but generates more air pollution. In

Sierra Club’s view, both of these environmental consequences

of Sabine Pass’s proposal constituted “indirect effects” of the

proposed amendment and therefore had to be considered in the

Commission’s NEPA analysis. Sierra Club also maintained that

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the Commission must consider these indirect effects as

“cumulative impacts” alongside all other pending natural gas

export proposals. 

Pursuant to NEPA, the Commission produced an

environmental assessment of Sabine Pass’s latest proposal. It

summarily rejected Sierra Club’s comments, stating that it had

addressed them in the environmental assessment that it

conducted in connection with the 2012 Order. The Commission

proceeded to grant Sabine Pass’s request and amended the 2012

Order to increase the maximum volume of natural gas that it

could liquefy at the Terminal from 16 to 20 million tons per

year. Sabine Pass Liquefaction, LLC & Sabine Pass LNG, L.P.

(“2014 Amend.”), 146 F.E.R.C. ¶ 61,117 at PP 5, 12 (2014)

(“the 2014 Amendment”). In so doing, the Commission

explained in greater detail its rejection of Sierra Club’s

comments. Id. at PP 15, 19. The Commission observed that

with respect to effects flowing from export-driven increases in

domestic natural gas prices, the Department of Energy — and

not the Commission — possessed the legal authority to approve

any increase in the volume of natural gas actually exported. Id.

at P 10. The Commission also determined that induced natural

gas production was not a reasonably foreseeable consequence of

the 2014 Amendment and therefore not an indirect effect under

NEPA. Id. at P 15. Furthermore, in the Commission’s view, the

2014 Amendment did not generate any new impacts that NEPA

required it to consider cumulatively. Id. at P 19. Instead of

generating an EIS, the Commission therefore issued a FONSI. 

Id. at P 20. The Commission denied Sierra Club’s request for

rehearing, reiterating the determinations it had made in granting

the 2014 Amendment. Sabine Pass Liquefaction, LLC &Sabine

Pass LNG, L.P. (“Rehr’g Order”), 148 F.E.R.C. ¶ 61,200 at

PP 10–14 (2014).

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II. 

Sierra Club challenges the Commission’s orders granting

the 2014 Amendment and denying rehearing on the ground that

the Commission’s NEPA analysis was deficient. That analysis,

Sierra Club contends, failed to consider two indirect effects and

should also have considered those effects cumulatively

alongside all pending and approved proposals to increase the

volume of natural gas prepared for export nationwide. To

determine whether the court has jurisdiction to consider these

challenges, the court must first determine whether Sierra Club

has standing under Article III of the Constitution. 

An organization has associational standing to bring suit on

its members’ behalf when: (1) at least one of its members would

have standing to sue in his or her own right; (2) “the interests it

seeks to protect are germane to the organization’s purpose”; and

(3) “neither the claim asserted nor the relief requested requires

the participation of individual members in the lawsuit.” 

WildEarth Guardians v. Jewell, 738 F.3d 298, 305 (D.C. Cir.

2013) (quoting Hunt v. Wash. State Apple Adver. Comm’n, 432

U.S. 333, 343 (1977)); see also Del. Dep’t of Natural Res. &

Envtl. Control v. EPA, 785 F.3d 1, 7 (D.C. Cir. 2015). That

Sierra Club meets the latter two requirements is unchallenged

and clear, while the first requirement warrants discussion.

To satisfy the first requirement of the associational standing

inquiry, Sierra Club must show that: (1) at least one of its

members has suffered an “injury-in-fact” that is “concrete and

particularized” and “actual or imminent, not conjectural or

hypothetical”; (2) the injury is “fairly traceable to the challenged

action”; and (3) it is “likely, as opposed to merely speculative,

that the injury will be redressed by a favorable decision.” 

Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,

528 U.S. 167, 180–81 (2000) (citing Lujan v. Defenders of

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Wildlife, 504 U.S. 555, 560–61 (1992)). It must demonstrate a

“substantial probability” that it satisfies each element of

standing. Sierra Club v. EPA, 292 F.3d 895, 898–99 (D.C. Cir.

2002). Where, as here, a party alleges deprivation of its

procedural rights, courts relax the normal standards of

redressability and imminence. Summers v. Earth Island Inst.,

555 U.S. 488, 496–97 (2009) (citing Lujan, 504 U.S. at 572 n.7). 

As for causation, in a NEPA procedural injury case, the

petitioner need demonstrate only that “the procedural step was

connected to the substantive result,” not that “the agency would

have reached a different substantive result” but for the alleged

procedural error. WildEarth Guardians, 738 F.3d at 306

(internal citations omitted); see also City of Dania Beach v.

FAA, 485 F.3d 1181, 1186–87 (D.C. Cir. 2007); Sugar Cane

Growers Co-op. of Fla. v. Veneman, 289 F.3d 89, 94–95 (D.C.

Cir. 2002). “[A]n adequate causal chain must contain at least

two links: one connecting the omitted [NEPA analysis] to some

substantive government decision that may have been wrongly

decided because of the lack of [proper NEPA analysis] and one

connecting that substantive decision to the plaintiff’s

particularized injury.” Fla. Audubon Soc. v. Bentsen, 94 F.3d

658, 668 (D.C. Cir. 1996) (en banc). It must be substantially

probable “that the substantive agency action that disregarded a

procedural requirement created a demonstrable risk, or caused

a demonstrable increase in an existing risk, of injury to the

particularized interests of the plaintiff . . . .” Id. at 669.

Sierra Club meets the requirements of associational

standing on the basis of a declaration submitted by one of its

members, John Paul. Paul “fish[es], boat[s], and seasonal duck

hunt[s] frequently around Keith Lake, the south side of Sabine

Lake,” “the Texas Point National Wildlife Refuge,” and “the

Sabine River (on the south side of the Sabine Lake).” Decl. of

John Paul (“Paul Decl.”) ¶¶ 5, 9 (May 19, 2015). The Terminal

sits along the shoreline of the Sabine Pass Channel, a waterway

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through which Sabine Lake empties into the Gulf of Mexico. 

Paul attests “the increase in [liquefied natural gas] vessel traffic

from the Sabine Pass [Terminal]” will: (1) harm his aesthetic

interests in the waterways around the Terminal;

(2) inconvenience him, given the “large exclusion zone the

Coast Guard maintains around [tankers]”; and (3) “diminish

[his] use and enjoyment of the waterways, and specifically the

Sabine River and Texas Wildlife Refuge.” Id. In fact, due in

part to existing levels of operation at the Terminal, Paul recently

moved his “primary boat” from Sabine Pass to Galveston,

Texas. Id. ¶ 7. Sierra Club contends that Paul satisfies the

elements of standing because: (1) increased tanker (i.e., cargo

vessel) traffic will harm Paul’s aesthetic and recreational

interests; (2) the 2014 Amendment will result in increased

production of liquefied natural gas for export, the transport of

which will require additional tankers; and (3) a decision in favor

of Sierra Club would give the Commission the chance to

reconsider the increase in production capacity it approved in the

2014 Amendment after it corrects its NEPA analysis. 

There can be little doubt that Paul will suffer cognizable

aesthetic and recreational harm were the volume of tanker

traffic to and from the Terminal to grow. See Friends of the

Earth, 528 U.S. at 182–83; Lujan, 504 U.S. at 562–63; Sierra

Club v. Morton, 405 U.S. 727, 734–35 (1972); Minisink

Residents for Envtl. Preservation & Safety v. FERC, 762 F.3d

97, 106 (D.C. Cir. 2014). The Commission’s suggestion that

Paul “appears to no longer fish near the Sabine Pass terminal”

after moving his boat to Galveston, Resp’t’s Br. 25, misreads

the Paul Declaration. Paul states, in the present tense, that he

“frequently” fishes, boats, and hunts in waterways near the

Terminal. Paul Decl. ¶ 5. He also expresses concern that

greater tanker traffic “will” diminish his use and enjoyment of

those waterways. Id. ¶ 9. That Paul moved his “primary boat”

to Galveston does not undermine his claim that he presently

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boats near the Terminal and will continue to do so in the future. 

If anything, Paul’s decision to move one of his boats partly in

response to the Terminal’s current production levels (up to

16 million tons per year) gives credence to his assertion that

additional tanker traffic will compound his aesthetic and

recreational injury.

Sierra Club has also demonstrated a substantial probability

that an increase in production capacity at the Terminal will

cause an increase in tanker traffic. The Commission insiststhat

the 2014 Amendment will not result in a greater number of

tankers traversing the waters around the Terminal. See Resp’t’s

Br. 26. Throughout the process of approving an additional

4 million tons of annual production capacity at the Terminal, the

Commission maintained that the 2014 Amendment would not

increase the maximum number of tankers — 400 per year —

authorized to serve the Terminal in the 2012 Order. Sabine Pass

Amend. Envtl. Assessment (“2014 Envtl. Assessment”) at 5

(2014); 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 18; Rehr’g

Order, 148 F.E.R.C. ¶ 61,200 at PP 8–9. Yet keeping constant

the authorized maximum number of tankers is not the same

thing as keeping constant the actual number of tankers plying

the waterways near the Terminal. 

To the contrary, the record demonstrates that even when the

authorized maximum number of tankers remains steady, an

increase in the volume of natural gas prepared for export

corresponds with an increase in the number of tankers needed

to ferry it into foreign commerce. In fact, there is a roughly

linear relationship between production capacity and the number

of tankers needed. A production capacity of 8 million tons of

liquefied natural gas per year requires an estimated 69 to 147

tankers, whereas a production capacity of 16 million tons per

year requires twice that — between an estimated 138 and 294

tankers. See Sabine Pass Liquefaction Project Envtl.

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Assessment at 2-15 (2011). Sabine Pass has entered into

contracts to export 18 million tons of liquefied natural gas per

year. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 12 n.18. That

is 2 million tons above the maximum production capacity of

16 million tons per year authorized by the 2012 Order. Id. at

P 5. There is a very substantial probability that Sabine Pass will

require more tankers to transport the additional 2 million tons

of natural gas per year, a quantity it could not legally liquefy

and prepare for export but for the 2014 Amendment. 

Therefore, Sierra Club satisfies the causation and

redressability requirements of Article III standing. First, the

alleged omissions in the Commission’s NEPA analysis are

connected to the Commission’s decision to authorize the

increased volume of production in the 2014 Amendment. If

Sierra Club prevails on the merits, the Commission will have to

incorporate into its NEPA analysis the omitted indirect effects

and cumulative impacts. Upon considering those effects, the

Commission could change its position and deny Sabine Pass’s

application for additional production capacity. Second, the

decision to authorize additional production capacity in the 2014

Amendment is connected to the harm to Paul’s aesthetic and

recreational interests. Absent the 2014 Amendment, Sabine

Pass could not fulfill its contractual obligations to export

2 million tons of liquefied natural gas per year above the pre2014 Amendment production ceiling. It is substantially

probable — if not more likely still — that those 2 million tons

of additional export will require additional tankers, and those

additional tankers are the source of the harm to Paul’s aesthetic

and recreational interests. 

The Paul Declaration is distinguishable from the

declarations submitted in National Committee for the New

River, Inc. v. FERC, 433 F.3d 830 (D.C. Cir. 2005). Petitioners

in that case challenged the realignment of a natural gas pipeline,

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yet their affidavits focused not on harms arising from the

realignment but on general harms arising from the construction

of the pipeline in the first place. Id. at 831–32. Nothing in the

affidavits explained how their injuries depended on whether the

pipeline crossed one part of the New River versus another. Id.

at 832. Here, by contrast, the Paul Declaration attributes his

injury to the “increase in operations” at the Terminal and

“additional operation of the export facility.” Paul Decl.

¶¶ 7–10. Even if Paul would suffer a similar type of harm in the

absence of the 2014 Amendment, the 2014 Amendment will

cause him to suffer an additional quantum of that harm.

The Commission’s reliance on Center for Biological

Diversity v. U.S. Department of the Interior, 563 F.3d 466 (D.C.

Cir. 2009), mistakes sufficiency for necessity. There, members

of the petitioner organization detailed in their affidavits

“definitive dates in the near future” when they planned to

observe animals affected by offshore oil and gas drilling. Id. at

479. But the court did not hold that a statement of definite dates

is necessary to establish Article III standing where, as here, a

member of a petitioner organization lives an hour’s drive from

the affected area and attests in a sworn statement that he

“frequently” fishes, boats, and duck hunts in the waters around

the Terminal. Paul Decl. ¶¶ 2, 5.

III.

Turning to the merits of Sierra Club’s petition for review,

the court’s review of the Commission’s compliance with NEPA

is limited to determining whether the Commission’s NEPA

analysis was “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.” Nat’l Comm. for the

New River v. FERC, 373 F.3d 1323, 1327 (D.C. Cir. 2004)

(citing 5 U.S.C. § 706(2)(A)). NEPA requires a federal agency

to take a “hard look” at the environmental consequences of a

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major action prior to undertaking it. Balt. Gas & Elec. Co. v.

Natural Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). As a

procedural statute, NEPA does not mandate any particular

outcome. Minisink Residents, 762 F.3d at 111–12. 

A.

Sierra Club contendsthat the Commission’s NEPA analysis

failed to consider two indirect effects of the 2014 Amendment. 

Both presuppose that the 2014 Amendment will increase natural

gas export capacity and thereby expose the domestic natural gas

market to new international demand. First, natural gas

producers in the United States will extract and process more gas

to meet this newly heightened demand for their product, thereby

intensifying production-related pollution. Second, increasing

export capacity will raise the domestic price of natural gas, and

that, in turn, will prompt greater reliance on coal, a cheaper but

more pollution-intensive fuel.

We disagree for the reasons stated in Sierra Club

(Freeport), No. 14-1275, Slip Op. at 13–20. What Sierra Club

challenges here is the potential environmental effects flowing

from greater natural gas exports from the Terminal. The two

indirect effects at the heart of Sierra Club’s petition cannot

occur unless a greater volume of liquefied natural gas is shipped

from the Terminal and enters the international marketplace. But

the Commission orders challenged here do not authorize Sabine

Pass to increase exports from the Terminal. 2014 Amend., 146

F.E.R.C. ¶ 61,117 at P 5 n.10; Rehr’g Order, 148 F.E.R.C.

¶ 61,200 at PP 3 n.6, 14. Those orders only authorize an

increase in production capacity at the Terminal. 2014 Amend.,

146 F.E.R.C. ¶ 61,117 at PP 11–12; Rehr’g Order, 148 F.E.R.C.

¶ 61,200 at P 3. As the Commission explained, the Department

of Energy alone has the legal authority to authorize Sabine Pass

to increase commodity exports of liquefied natural gas. 2014

Amend., 146 F.E.R.C. ¶ 61,117 at P 10; Rehr’g Order, 148

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F.E.R.C. ¶ 61,200 at PP 12–13; see also 15 U.S.C. § 717b(a); 42

U.S.C. § 7151(b); compare also Dep’t of Energy, Redelegation

Order No. 00-006.02, § 1.3(A) (Nov. 17, 2014), with Dep’t of

Energy, Delegation Order No. 00-004.00A, § 1.21(A) (May 16,

2006). The challenged Commission orders therefore are not the

legally relevant cause of the indirect effects Sierra Club raises. 

See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 769–70

(2004). Accordingly, the Commission did not need to consider

those effects in its NEPA review. Id. at 770. Sierra Club, of

course, remains free to raise these issues in a challenge to the

Energy Department’s NEPA review of its export decision. 

Nothing in our opinion should be read to foreclose that

challenge or predetermine its outcome.

Furthermore, the Commission adequately explained why it

was not reasonably foreseeable that greater production capacity

at the Terminal — separate and apart from any export activity

— would induce additional domestic natural gas production. 

See 40 C.F.R. § 1508.8(b). It concluded that the Terminal’s

liquefaction operations did not necessitate an increase in

domestic natural gas production. 2014 Amend., 146 F.E.R.C.

¶ 61,117 at P 15 (citing 2012 Order, 139 F.E.R.C. ¶ 61,039 at

PP 94–99); Rehr’g Order, 148 F.E.R.C. ¶ 61,200 at P 13; see

also 2012 Order, 139 F.E.R.C. ¶ 61,039 at P 98. Whatever

effect increased natural gas exports might have on domestic

production levels, the Commission’s conclusion was reasonable

with respect to the effect of increasing production capacity. 

B.

Next, Sierra Club contends the Commission failed to take

into account certain cumulative impacts of the 2014

Amendment. In particular, Sierra Club maintains the

Commission should have considered the impacts of the 2014

Amendment alongside several other proposals to increase

natural gas export capacity nationwide, some pending, some

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already approved. Those proposals include two other projects

at the Terminal (the “Sabine Pass projects”). During

administrative proceedings, the Commission determined that the

2014 Amendment would not contribute to any cumulative

impacts. 2014 Amend., 146 F.E.R.C. ¶ 61,117 at P 19. On

appeal, the Commission contends that Sierra Club’s argument

fails on two grounds: (1) The court lacks jurisdiction to hear

Sierra Club’s contention regarding the other projects — save for

one of the Sabine Pass projects — because it failed to raise them

in its petition for rehearing before the Commission, and (2) in

any event, NEPA did not require the Commission to consider

the effects of the 2014 Amendment cumulatively with the other

projects. 

1. The court lacks jurisdiction to consider Sierra Club’s

challenge as it pertains to any projects other than the Sabine

Pass projects. Section 19(a) of the Natural Gas Act requires that

a party seek rehearing by the agency before challenging an

order issued pursuant to the Act. 15 U.S.C. § 717r(a). Section

19(b) bars a court from hearing an objection to such an order

where the objecting party failed to raise the objection in its

application for rehearing and there are no reasonable grounds to

excuse the party’s failure. Id. § 717r(b). The purpose of the

exhaustion requirement in § 717r is to give the Commission the

first opportunity to consider challenges to its orders and thereby

narrow or dissipate the issues before they reach the courts. 

Moreau v. FERC, 982 F.2d 556, 564 (D.C. Cir. 1993). The

Natural Gas Act’s jurisdictional provisions are stringent. See

Columbia Gas Transmission Corp. v. FERC, 477 F.3d 739, 741

(D.C. Cir. 2007).

Sierra Club endeavors to hang jurisdiction on a very thin

reed. In its Motion to Intervene, Sierra Club commented that

the Commission needed to “consider the cumulative impacts of

all pending export proposals.” Mot. to Intervene, Protest &

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Cmt. at 19 (Nov. 14, 2013). Its Motion for Rehearing, however,

contains no mention of any projects besides other Sabine Pass

projects. The header of the relevant section reads: “FERC

Violated NEPA by Failing to Consider Connected Actions or

the Cumulative Effect of Other Proposed Sabine and Related

Pipeline Projects.” Mot. for Rehr’g at 6 (Mar. 24, 2014). In

that section, Sierra Club notes that the 2014 Amendment “is one

of only a number [sic] of pending proposals for expansion of the

Sabine Pass project” and mentions that “Sabine Pass has also

applied for authorization to construct two additional

liquefaction trains and pipeline modifications. CP13-552 and

CP13-553.” Id. Sierra Club maintains that this merely “drew

the Commission’s attention to” the specified Sabine Pass project

but “did not suggest that these were the only relevant actions,

for purposes of a cumulative impacts analysis.” Pet’r’s Reply

Br. 33–34. This reads too much into its Motion for Rehearing. 

Nothing in that motion put the Commission on notice that Sierra

Club was challenging the Commission’s cumulative impacts

analysis as it pertained to projects other than the Sabine Pass

projects. In granting the 2014 Amendment, the Commission

understood Sierra Club to contend that the Commission needed

to consider natural gas projects unrelated to the Terminal. 2014

Amend., 146 F.E.R.C. ¶ 61,117 at P 19. In denying rehearing,

the Commission addressed only one of the other Sabine Pass

projects while noting that Sierra Club on rehearing did not

challenge the Commission’s cumulative impacts analysis as to

projects unrelated to the Terminal. Rehr’g Order, 148 F.E.R.C.

¶ 61,200 at P 11 n.22. Because the Commission was not on

notice of Sierra Club’s broader objection, it did not have the

opportunity to consider them in the first instance. By contrast,

in Louisiana Intrastate Gas Corp. v. FERC, 962 F.2d 37 (D.C.

Cir. 1992), on which Sierra Club relies, the petitioner expressly

and clearly stated its objection, albeit in a single sentence, id. at

41–42, and the Commission addressed the merits of the

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objection in denying rehearing, id. at 42. Neither indicia of

notice is present here.

2. On the merits, we hold that the Commission’s orders are

not arbitrary or capricious for failing to address the cumulative

impacts of the 2014 Amendment and the Sabine Pass projects

for largely the same reason stated in Sierra Club (Freeport),

No. 14-1275, Slip Op. at 22–23. The Commission provided a

reasonable explanation for why it was unnecessary to conduct

a cumulative impact analysis: The 2014 Amendment did not

generate environmental impacts of the sort that NEPA requires

it to consider cumulatively. 2014 Amend., 146 F.E.R.C.

¶ 61,117 at P 19; see also Minisink Residents, 762 F.3d at 113.

Accordingly, we dismiss Sierra Club’s petition for review

in part and deny it in part.

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