United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 2, 2017 Decided August 15, 2017 

No. 15-1489 

SIERRA CLUB, 

PETITIONER

v. 

UNITED STATES DEPARTMENT OF ENERGY, 

RESPONDENT

FLNG LIQUEFACTION 2, LLC, ET AL., 

INTERVENORS

On Petition for Review of the Department of Energy Office of 

Fossil Energy 

 Orders 3357-B (Nov. 14, 2014) and 3357-C (Dec. 4, 2015); 

DOE/FE Docket No. 11-1161-LNG 

Nathan Matthews argued the cause for petitioner. With 

him on the briefs was Sanjay Narayan. Joanne M. Spalding

entered an appearance. 

John L. Smeltzer, Attorney, U.S. Department of Justice, 

argued the cause for respondent. With him on the brief were 

John C. Cruden, Assistant Attorney General, and David 

Gunter, Attorney. 
2 

Jonathan S. Franklin argued the cause for intervenors 

Freeport LNG Expansion, L.P., et al. With him on the brief 

was Lisa M. Tonery. Charles R. Scott entered an appearance. 

Catherine E. Stetson, Stacy R. Linden, and Ben Norris

were on the brief for intervenor American Petroleum Institute. 

Before: HENDERSON and WILKINS, Circuit Judges, and 

SENTELLE, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge WILKINS. 

WILKINS, Circuit Judge: In this petition for review, Sierra 

Club challenges the Department of Energy’s (the 

“Department”) grant of an application to export liquefied 

natural gas (“LNG”) using terminals and liquefaction facilities

(collectively, the “Freeport Terminal”) on Quintana Island in 

Brazoria County, Texas. The Federal Energy Regulatory 

Commission (“FERC”) is responsible for approving the siting 

and construction of any such facilities. In Sierra Club v. FERC 

(“Sierra Club (Freeport)”), 827 F.3d 36, 40 (D.C. Cir. 2016), 

we upheld FERC’s decision to approve the construction of the 

Freeport Terminal. However, the export of LNG out of that 

terminal requires separate approval from the Department. 

In 2011, the Intervenors, Freeport LNG Expansion, L.P. 

and its related entities (collectively, “Freeport”), requested 

permission to export an amount of LNG equivalent to 0.4 

billion cubic feet per day (“Bcf/d”) of natural gas out of the 

Freeport Terminal. The Department granted the application, 

finding the proposed exports are in the “public interest” under

Section 3(a) of the Natural Gas Act. Under the National 

Environmental Policy Act (“NEPA”), the Department also 

considered and disclosed the potential environmental impacts 

of its decision. Sierra Club argues that the Department fell 
3 

short of its obligations under both the Natural Gas Act and 

NEPA. In particular, it asserts that the Department did not 

sufficiently examine the indirect effects of LNG exports, such 

as the effects related to the likely increase in natural gas 

production and usage that will result from the export 

authorization here, as well as the cumulative effects of other 

anticipated, pending, or approved export proposals. For the 

following reasons, Sierra Club’s petition is denied. 

I.

Much of the pertinent background is explained in our 

earlier decision in Sierra Club (Freeport). There, we 

determined FERC complied with both the Natural Gas Act and 

NEPA with respect to its decision to authorize the construction

of the Freeport Terminal. Yet the Department was 

independently required to consider the environmental impacts 

of its export authorization decision under NEPA and determine 

whether it satisfied the Natural Gas Act’s “public interest” test. 

A.

Section 3 of the Natural Gas Act authorizes the exportation 

of natural gas from the United States unless the Department 

determines that doing so “will not be consistent with the public 

interest.” 15 U.S.C. § 717b(a). The Department’s discretion 

in this regard depends on whether the country to which the gas 

will be exported is one that has with the United States a “free

trade agreement requiring national treatment for trade in 

natural gas” (a “Free Trade” country). Id. § 717b(c). If so, then 

the Department must authorize the exportation to that country 

“without modification or delay.” Id. § 717b(c). However, if 

the country does not have such an agreement with the United 

States (a “non-Free Trade” country), then the Department must 

independently determine whether such exports would be 
4 

inconsistent with the public interest. Rather than assign LNG 

export applications to particular end-user destinations, the 

applications are designated for export to either Free Trade or 

non-Free Trade countries, generally. 

Freeport submitted four separate applications to the 

Department seeking LNG export authorizations out of the 

Freeport Terminal – two for Free Trade countries and two for 

non-Free Trade countries, with each one seeking to export an 

amount of LNG equivalent to 1.4 Bcf/d of natural gas. In 

accordance with the Natural Gas Act, the Department promptly 

granted Freeport’s Free Trade applications. For the non-Free 

Trade applications, the Department published notices of intent 

to initiate public-interest review proceedings. Sierra Club filed 

a protest and moved to intervene in one of those proceedings 

regarding Freeport’s 2011 application (the “FLEX 

application”), which is the subject of the present petition. See 

77 Fed. Reg. 7568 (Feb. 13, 2012) (“FLEX”). Although the 

FLEX application originally sought authorization to export an 

amount of LNG equivalent to 1.4 Bcf/d of natural gas, the 

Department subsequently limited its authorization to 0.4 Bcf/d 

after Freeport amended its application to construct a facility 

with a smaller maximum capacity. 

B.

In considering whether to grant the FLEX application, the 

Department needed to determine whether and to what extent to 

issue an environmental impact statement under NEPA. That 

statute requires every agency proposing a “major Federal 

action” to prepare a statement of its environmental impact if 

the action will “significantly affect[] the quality of the human 

environment.” 42 U.S.C. § 4332(C). 
5 

The agency must consider not just the “direct” 

environmental effects that “are caused by the [agency’s] action

and occur at the same time and place,” but also the action’s 

“indirect” environmental effects that “are caused by the action

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

reasonably foreseeable.” 40 C.F.R. § 1508.8; Sierra Club 

(Freeport), 827 F.3d at 41. In addition, the agency must 

consider the “cumulative impact[s]” on the environment, 

meaning “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.” 40 C.F.R. § 1508.7. 

Where multiple federal agencies have authority over 

different aspects of the same project, agencies may coordinate 

review, and may incorporate one another’s analysis. Here, 

FERC was the “lead agency” for the purposes of complying 

with NEPA, see 15 U.S.C. § 717n(b)(1), and the Department 

acted as a “cooperating agency,” 40 C.F.R. § 1501.6(b). This 

meant the Department could “adopt [FERC’s] environmental 

analysis as its own for purposes of any additional NEPA review 

triggered by an export-authorization request.” Sierra Club 

(Freeport), 827 F.3d at 41. However, the Department must still 

“independently review [FERC’s] work and conclude that [the 

Department’s] own ‘comments and suggestions have been 

satisfied.’” Id. at 41-42. 

C.

The Department received applications similar to FLEX 

from other companies seeking to export LNG around the same 

time Freeport submitted its applications. In response to all 

pending and anticipated applications, the Department 

commissioned two studies – which we will refer to as the “EIA 

Study” and the “NERA Study” – to evaluate the impact of LNG 
6 

exports on domestic energy markets and related 

macroeconomic effects. 

The first study was done by the Energy Information 

Administration (“EIA”). By August 2011, the Department had 

received applications for authority to export that totaled 5.6 

Bcf/d of natural gas, J.A. 151, and requested that EIA conduct 

a study on various scenarios assessing how “increased natural 

gas exports could affect domestic energy markets, focusing on 

consumption, production, and prices,” J.A. 132. In the EIA 

Study, issued in January 2012, EIA examined how LNG 

exports in amounts equivalent to 6 and 12 Bcf/d might impact 

domestic energy markets over a 25-year period using the 

National Energy Modeling System. See U.S. Energy 

Information Administration, Effect of Increased Natural Gas 

Exports on Domestic Energy Markets (January 2012), J.A. 

318-26. 

EIA observed that “projections of energy markets over a 

25-year period are highly uncertain and subject to many events 

that cannot be foreseen, such as supply disruptions, policy 

changes, and technological breakthroughs.” EIA Study at 3, 

J.A. 134. Its particular study contained several limitations that 

made its projections even more uncertain, such as the fact that

it did not take account of the interaction of the U.S. market with 

the global energy market. Id. With these caveats, EIA 

projected that increased LNG exports would lead to increased 

natural gas prices within the United States and that the U.S. 

market would respond by increasing gas production. 

Specifically, across all cases, it projected that increased 

natural gas exports (of 6 to 12 Bcf/d, compared to a baseline of 

no exports) would result in increased natural gas production 

that would satisfy about 60 to 70 percent of the increase in 

natural gas exports. Id. at 6, J.A. 137. Notably, across most 
7 

cases, about three-quarters of this increased production would 

come from shale sources. Id. In response to higher gas prices, 

EIA also projected a decrease in the amount of gas consumed 

domestically, to be replaced primarily by switching to coal and

secondarily to renewable fuels. Id.1

The second study, the NERA Study, considered how these 

domestic projections might fit into the global marketplace. 

NERA Economic Consulting examined the same export 

scenarios within the context of the global marketplace, as well

as additional scenarios involving different assumptions about 

natural-gas development and international economic 

conditions. See NERA Study at 3-5, J.A. 183-85. The results 

revealed that “in many cases” – including the EIA Study’s 

reference case – “the world natural gas market would not 

accept the full amount of exports assumed in the EIA scenarios 

at export prices high enough to cover the U.S. wellhead 

domestic prices calculated by the EIA.” Id. at 3, J.A. 183. 

Although “U.S. natural gas prices increase when the [United 

States] exports LNG[,] . . . the global market limits how high 

U.S. natural gas prices can rise under pressure of LNG exports 

because importers will not purchase U.S. exports if U.S. 

wellhead price rises above the cost of competing supplies.” Id.

at 2, J.A. 182. Thus, NERA “estimated lower export volumes” 

than the EIA Study, indicating lesser impacts on U.S. markets 

 

1

 EIA later, in 2014, updated the EIA Study at the Department’s 

request. See J.A. 900, 924. It updated its baseline level of exports to 

reflect its latest projections (as explained in its 2014 Annual Outlook 

report) for U.S. LNG exports in 2029: 3,500 Bcf/y (approximately 

9.6 Bcf/d). See J.A. 908. It then modeled the incremental impact of 

increasing exports from this baseline level (9.6 Bcf/d) to increased 

levels of 12 Bcf/d and 20 Bcf/d (that is, 4,380 to 7,300 Bcf/y). J.A. 

908. EIA’s updated study largely confirmed the basic conclusions 

of the initial study regarding how the U.S. energy market might

respond to increased LNG exports. J.A. 907, 910-13. 
8 

than projected by EIA. Id. at 10, J.A. 190. But it acknowledged 

“great uncertainties about how the U.S. natural gas market will

evolve.” Id. at 21, J.A. 201. Regardless, NERA concluded 

that, in all the scenarios analyzed, “the U.S. would experience

net economic benefits from increased LNG exports.” Id. at 6, 

J.A. 186. 

Both studies were published in 2012. In 2013, the 

Department issued orders with findings on all nonenvironmental issues considered under Section 3(a), and 

conditionally approved Freeport’s non-Free Trade export 

applications, including FLEX. See Dep’t of Energy, Order No. 

3357, Dkt. 11-161-LNG (Nov. 15, 2013). Approval was 

contingent on Freeport’s satisfactory completion of the 

ongoing FERC-led environmental review of the proposed 

Freeport Liquefaction Project. 

D.

In June 2014, FERC released its final environmental 

impact statement for the Freeport Terminal construction 

project (the “Impact Statement”) in accordance with NEPA. 

The Impact Statement disclosed and analyzed direct, indirect, 

and cumulative impacts from the construction and operation of 

the proposed liquefaction and export facilities. However, it did 

not evaluate the indirect effects pertaining to the authorization 

of exports. The Department adopted the Impact Statement in 

full and supplemented it with two reports relevant here: the 

Addendum and the Life Cycle Report. 

First, the Department issued an Addendum to the Impact 

Statement to examine certain indirect effects of LNG exports, 

focusing primarily on the impacts of export-induced natural gas

production in the United States. See Addendum to 

Environmental Review Documents Concerning Exports of 
9 

Natural Gas from the United States (“Addendum” or “Add.”), 

79 Fed. Reg. 48,132 (Aug. 15, 2014). The Department issued 

this Addendum in response to concerns raised by many 

commenters that the Department had not examined the 

potential impacts of increased natural gas production and in 

particular shale gas production – a trend its economic studies 

suggested would occur under a variety of scenarios. See Add. 

at 1, J.A. 815. The Addendum was intended to fill that void by

providing “additional information to the public regarding the 

potential environmental impacts of unconventional natural gas 

production activities,” based on a review of existing literature, 

regulations, and best management practices. Id. at 2-3, J.A. 

816-17. In particular, it disclosed the various ways shale gas

production might impact the water, air, and land resources 

surrounding production activities; but it made no attempt to 

specifically project where or to what extent the impacts of 

increased production might occur in response to any particular 

amount of exports. 

Second, to address potential indirect effects of LNG 

exports on global greenhouse-gas emissions (CO2 and 

methane), the Department commissioned the National Energy 

Technology Laboratory to prepare a report. See Life Cycle 

Greenhouse Gas Perspective on Exporting Liquefied Natural 

Gas from the United States (“Life Cycle Report”), 79 Fed. Reg. 

32,260 (June 4, 2014). The report assesses the “life cycle” – 

from the wellhead to power plant – of greenhouse-gas 

emissions associated with electricity generated using U.S. 

LNG in Europe or Asia, and compares these with emissions 

from electricity generated from coal or other sources of gas. 

See Life Cycle Report at 1-2, J.A. 586-87. The report 

concluded that exporting U.S. LNG to produce power in 

Europe and Asia would not increase greenhouse-gas emissions 

compared to regional coal power, and that potential differences

in greenhouse-gas emissions relating to the use of U.S. LNG as 
10 

opposed to alternative sources of gas are largely dependent on 

transport distance but are “indeterminate” due to “uncertainty 

in the underlying modeled data.” Life Cycle Report at 9, 18, 

J.A. 594, 603. 

In November 2014, the Department issued its 

Authorization Order authorizing exports in the FLEX

application. Dep’t of Energy, Order 3357-B, Dkt. 11-161-

LNG, Final Opinion and Order (“Authorization Order”) (Nov. 

14, 2014). In that order, the Department explained its 

reasoning for adopting FERC’s Impact Statement in full and 

granting Freeport’s FLEX application under Section 3(a) of the 

Natural Gas Act, finding the proposed exports are in the 

“public interest.” Sierra Club petitioned for rehearing, which

the Department denied in December 2015. Dep’t of Energy, 

Order 3357-C, Dkt. 11-161-LNG, Opinion and Order Denying 

Request for Rehearing (“Rehearing Order”) (Dec. 4, 2015). 

This petition followed. 

Sierra Club challenges the Department’s compliance with 

the NEPA as well as the Natural Gas Act. We review both 

challenges under the arbitrary and capricious review standard. 

II.

We begin with the NEPA challenge. “NEPA is 

‘essentially procedural,’ designed to ensure ‘fully informed 

and well-considered decision[s]’ by federal agencies.” Del. 

Riverkeeper Network v. FERC, 753 F.3d 1304, 1309-10 (D.C. 

Cir. 2014) (quoting Vt. Yankee Nuclear Power Corp. v. 

NRDC, 435 U.S. 519, 558 (1978)). The statute serves that 

purpose by requiring federal agencies to take a “hard look” at 

“their proposed actions’ environmental consequences in 

advance of deciding whether and how to proceed.” Sierra Club 

v. U.S. Army Corps of Eng’rs, 803 F.3d 31, 37 (D.C. Cir. 2015). 
11 

NEPA “does not dictate particular decisional outcomes, but 

‘merely prohibits uninformed—rather than unwise—agency 

action.’” Id. (quoting Robertson v. Methow Valley Citizens 

Council, 490 U.S. 332, 351 (1989)). 

In reviewing Sierra Club’s challenges, “our task is not to 

‘flyspeck’ [the Department]’s environmental analysis for ‘any 

deficiency no matter how minor.’” Sierra Club (Freeport), 827 

F.3d at 46 (quoting Theodore Roosevelt Conservation P’ship v. 

Salazar, 661 F.3d 66, 75 (D.C. Cir. 2011)). Our job 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.” Del. Riverkeeper, 753 

F.3d at 1312-13 (quoting Balt. Gas & Elec. Co. v. NRDC, 462 

U.S. 87, 97-98 (1983)). “Courts may not use their review of an

agency’s environmental analysis to second-guess substantive 

decisions committed to the discretion of the agency.” Id. at 

1313. “Where an issue ‘requires a high level of technical 

expertise,’ we ‘defer to the informed discretion of the 

[agency].’” Id. (quoting Marsh v. Or. Nat. Res. Council, 490 

U.S. 360, 377 (1989)). 

Sierra Club asserts the Department failed to comply with 

NEPA because it did not tailor its review of indirect 

environmental effects to any particular volume of exports. The

Department responds that the type of analysis Sierra Club urges

would be too speculative and, in any event, unhelpful to its 

decisionmaking. For the following reasons, Sierra Club’s 

petition for review of the Department’s decision with respect 

to NEPA is denied. 

A.

Before we consider the merits of Sierra Club’s challenge, 

we address two preliminary matters. 
12 

First, the Department insists that it complied with NEPA 

by adopting FERC’s Impact Statement, and that its 

supplemental environmental reports (i.e., Addendum and Life 

Cycle Report) were part of the Department’s effort to go above 

and beyond what NEPA requires. Yet the Department plainly 

relies on these supplemental records to justify its “hard look”

under NEPA. See, e.g., Respondent Br. 30 (“Together, the 

[Impact Statement], Environmental Addendum, and Life Cycle 

Report constitute a ‘hard look’ at relevant environmental 

issues.”). Perhaps the Department framed its argument this 

way to avoid accusations of defective notice; but Sierra Club 

did not raise a notice challenge in its opening brief. Whatever 

the intention, the result is that the Department’s arguments are 

needlessly complicated. For our purposes, we will consider the

supplemental materials to be part of the agency’s 

environmental review. The issue is whether, overall, the 

Department conducted the requisite “hard look” “to ensure that 

[it] has adequately considered and disclosed the environmental 

impact of its actions . . . .” Minisink Residents for Env’tl Pres. 

& Safety v. FERC, 762 F.3d 97, 111 (D.C. Cir. 2014). 

Second, Sierra Club takes aim at the Department’s 

decision with respect to both the “indirect effects” of its FLEX

authorization as well as the “cumulative” impact of its decision 

“when added to other past, present, and reasonably foreseeable 

future actions.” 40 C.F.R. § 1508.7. For each claim, Sierra 

Club argues that the Department should have tailored its 

environmental impacts analysis to a particular amount of 

exports. For indirect effects, Sierra Club considers the amount 

authorized in the FLEX proceeding; and for cumulative effects, 

it considers the FLEX application as well as other pending and 

anticipated LNG export approvals. The cumulative impact 

requirement ensures that agencies consider effects that result 

from “individually minor but collectively significant actions 
13 

taking place over a period of time.” Del. Riverkeeper, 753 F.3d 

at 1319-20 (quoting 40 C.F.R. § 1508.7). Sierra Club does not 

argue that the Department impermissibly “segmented” its 

review of the Freeport Terminal exports from other export 

authorizations, and “thereby fail[ed] to address the true scope

and impact of the activities that should be under consideration.” 

Id. at 1313. The nature of the Department’s environmental 

review does not lend itself to that argument because the 

Department’s generalized impact assessment is not tailored to 

any specific level of exports. Thus, we will consider whether 

the Department adequately considered the indirect effects of 

the FLEX authorization but our analysis applies equally to its 

cumulative effects, given that the only distinction drawn by 

Sierra Club between the two categories is the level of exports 

involved in each one. 

B.

The first set of “indirect effects” concerns the 

environmental impacts of export-induced natural gas 

production in the United States. Sierra Club is particularly 

focused on how gas production might impact water resources 

and ozone concentration wherever export-induced production 

activities might occur.2

 Although the Department examined 

these impacts generally in the Addendum, Sierra Club’s chief 

complaint is that the Department did not attempt to quantify the 

impacts or tailor them to specific levels of exports or exportinduced gas production. 

In its Authorization Order, the Department explained that 

it deliberately did not perform such a quantitative impact 

analysis – that is, tying an incremental increase in exports to an 

 

2

 In Part II.D, we separately consider greenhouse-gas emissions 

resulting from export-induced gas production. 
14 

incremental increase in gas production, and in turn, to an 

impact on specific environmental resources. It determined that

such indirect effects were not “reasonably foreseeable.” 

1.

In determining what effects are “reasonably foreseeable,” 

an agency must engage in “reasonable forecasting and 

speculation,” Del. Riverkeeper, 753 F.3d at 1310 (quoting 

Scientists’ Inst. for Pub. Info., Inc. v. Atomic Energy Comm’n, 

481 F.2d 1079, 1092 (D.C. Cir. 1973)), with reasonable being 

the operative word. The agency “need not foresee the 

unforeseeable, but by the same token neither can it avoid 

drafting an impact statement simply because describing the 

environmental effects of and alternatives to particular agency 

action involves some degree of forecasting.” Scientists’ Inst. 

for Pub. Info., 481 F.2d at 1092. To navigate that dividing line, 

we consider the “usefulness of any new potential information 

to the decisionmaking process.” Dep’t of Transp. v. Pub. 

Citizen, 541 U.S. 752, 767 (2004). 

NEPA also “requires a reasonably close causal 

relationship between the environmental effect and the alleged 

cause,” analogous to proximate causation from tort law. Sierra 

Club (Freeport), 827 F.3d at 47 (quoting Pub. Citizen, 541 U.S. 

at 767). Just as baseless speculation is unhelpful, so, too, is 

information that the agency “lacks [any] power to act on.” Pub. 

Citizen, 541 U.S. at 768. Thus, the agency need not examine 

everything for which the FLEX exports out of Freeport “could 

conceivably be a but-for cause.” Sierra Club (Freeport), 827 

F.3d at 46. “Instead, the effect must be sufficiently likely to

occur that a person of ordinary prudence would take it into 

account in reaching a decision.” Id. at 47 (internal quotation 

marks and citations omitted). We “look to the underlying 

policies or legislative intent in order to draw a manageable line 
15 

between those causal changes that may make an actor 

responsible for an effect and those that do not.” Pub. Citizen, 

541 U.S. at 76 (quoting Metro. Edison Co. v. People Against 

Nuclear Energy, 460 U.S. 766, 774 (1983)). 

 

 The Department offered a reasoned explanation as to why 

it believed the indirect effects pertaining to increased gas 

production were not reasonably foreseeable. At the outset, it 

explained the difficulty with attempting to predict the 

incremental quantity of natural gas that might be produced in 

response to an incremental increase in LNG exports out of the 

Freeport Terminal. The link between the two depends on the 

price of gas, and the Department explained that the price 

competitiveness of U.S. LNG in foreign energy markets 

depends upon numerous factors that are inherently difficult to 

predict, including the pace of technological change, U.S. and 

international economic conditions, potential market 

disruptions, and U.S. and foreign energy and environmental 

regulations. Auth. Order at 84, J.A. 1024; Reh’g Order at 16-

17, J.A. 1115-16. 

More importantly, even if the Department could make 

reasonable projections about the quantity of export-induced gas

production, the Department was stumped by where, at the local 

level, such production might occur. As the Department 

explained, shale plays3

 and other unconventional sources of 

natural gas are spread throughout the lower 48 states, and there 

is an interconnected pipeline system covering these states. 

Reh’g Order at 19, J.A. 1118. This means every natural-gasproducing region in the country is a potential source for new 

gas wells in order to meet export-induced natural gas demand. 

Forecasting the locale of export-induced production would 

 

3

 A “play” is a subsurface geological formation containing natural 

gas. 
16 

require an economic model that used as an input the price 

elasticity of each potentially productive area at the local level 

throughout the country. Yet the Department explained it was 

“fundamentally uncertain how natural gas production at the 

local level will respond to price changes at the national level,” 

Reh’g Order at 17, J.A. 1116, and “it would be impossible to 

identify with any confidence the marginal production at the 

wellhead or local level that would be induced by FLEX’s 

exports over the [20-year4

] period of its non-[Free Trade 

country] authorization,” Reh’g Order at 16, J.A. 1115. This is

in large part due to the “local idiosyncrasies” involved, such as 

“the limitations of estimating geology at the local level, and the 

uncertainty of predicting local regulation, land use patterns, 

and the development of supporting infrastructure.” Reh’g 

Order at 18, J.A. 1117. Given that “nearly all of the 

environmental issues presented by unconventional gas 

production are local in nature,” the Department concluded that 

without knowing where the production would occur, the 

corresponding environmental impacts are “not ‘reasonably 

foreseeable’” under NEPA. Auth. Order at 85, J.A. 1025. 

The Department was not required to “foresee the 

unforeseeable.” Scientists’ Inst. for Pub. Info., 481 F.2d at 

1092. Its determination that an economic model estimating 

localized impacts would be far too speculative to be useful is a 

product of its expertise in energy markets and is entitled to 

deference. See Del. Riverkeeper, 753 F.3d at 1312. Sierra Club 

does not seriously dispute that the agency could not predict 

where export-induced production would occur on a local level. 

Because the Department could not estimate the locale of 

production, it was in no position to conduct an environmental 

analysis of corresponding local-level impacts, which inevitably

 

4

 The FLEX application originally sought approval for exports over 

a 25-year period but the Department reduced the term to 20 years. 
17 

would be “more misleading than informative.” Reh’g Order at 

17, J.A. 1116; cf. Theodore Roosevelt Conservation P’ship, 

616 F.3d at 513 (agency did not violate NEPA where it omitted 

from its cumulative impact analysis other projects which were 

“too preliminary to meaningfully estimate their cumulative 

impacts” in an environmental impact statement). 

2.

Sierra Club contends that even if identifying impacts 

specific to local-level resources is a challenge, the agency 

could have engaged in a regional impacts analysis. Although 

acknowledging that the Department provided “some regional 

analysis of how gas production in general affects water 

resources . . . [and] regional ozone levels[,]” Sierra Club 

suggests it should have done more. Pet’r Br. 60. In particular, 

Sierra Club points out that the Department demonstrated an 

ability to conduct an economic analysis projecting where 

increased production might occur at the shale-play level, yet 

the Department failed to explain why it could not use those 

tools to project shale-play level environmental impacts specific 

to the amount of exports authorized. 

In its Rehearing Order, the Department explained why its 

economic projections do not translate over well in the 

environmental-impact context. Identifying which shale plays 

are likely to contribute to export-induced production would not

“provide [any] information about where any incremental 

production would arise within those shale plays,” which 

themselves “overlap and stretch for thousands of square miles 

below diverse surface environments.” Reh’g Order at 18-19, 

J.A. 1117-18 (emphasis added). It would not add any 

confidence to projections about impacts on particular water 

resources, for example, which are “unique for each location 

and may vary widely from well to well.” Add. at 10, J.A. 824. 
18 

Nor could the agency predict “where in relation to existing 

ozone concentrations the incremental production would 

occur,” thus making futile any effort to determine which 

attainment areas might be at risk. Reh’g Order at 18, J.A. 1117; 

see also Add. at 29, J.A. 843 (map showing overlay of ozone 

non-attainment zones and shale basins, with no correlation 

between the two). Under these circumstances, the Department 

determined that it would not “facilitate meaningful analysis” to 

make projections about play-level environmental impacts. 

Reh’g Order at 18-19, J.A. 1117-18; see also Auth. Order at 

85, J.A. 1025 (“[N]early all of the environmental issues 

presented by unconventional gas production are local in nature,

affecting local water resources, local air quality, and local land 

use patterns, all under the auspices of state and local regulatory 

authority.”). It thus declined to engage in the shale-play level 

analysis urged by Sierra Club. 

The Department’s determination in that regard is 

consistent with the “rule of reason.” The purpose of NEPA is 

not to “generate . . . excellent paperwork,” but rather to “foster 

excellent action” through informed decisionmaking. 40 C.F.R. 

§ 1500.1(c). The Department drew the line when it declined to 

attempt to quantify impacts on a regional level that would not 

provide meaningful information about what water resources or 

attainment areas might be impacted. Sierra Club suggests 

certain estimates that the Department could have provided, 

such as regional totals of estimated water usage; but its 

suggestions do not reveal any flaw in the Department’s 

reasoning, which recognized that shale plays do not correspond 

to the water resources that might be impacted. At a certain 

point, the Department’s obligation to drill down into 

increasingly speculative projections about regional 

environmental impacts is also limited by the fact that it lacks

any authority to control the locale or amount of export-induced

gas production, much less any of its harmful effects. Cf. Pub. 
19 

Citizen, 541 U.S. at 768 (“Since [the agency] has no ability 

categorically to prevent the cross-border operations of Mexican

motor carriers, the environmental impact of the cross-border 

operations would have no effect on [its] decisionmaking—[the 

agency] simply lacks the power to act on whatever information 

might be contained in the EIS.”). 

Finally, we pause to consider whether the Department 

should have taken a different approach for its cumulative 

impacts analysis. The Supreme Court has instructed that 

“when several proposals for . . . actions that will have 

cumulative or synergistic environmental impact upon a region 

are pending concurrently before an agency, their environmental 

consequences must be considered together.” Kleppe v. Sierra 

Club, 427 U.S. 390, 410 (1976). “[T]he key language there is 

‘upon a region.’” Sierra Club (Freeport), 827 F.3d at 50 

(quoting Kleppe, 427 U.S. at 410). Here, the crucial stumbling 

block in the Department’s indirect-effects analysis was 

identifying where the export-induced natural gas production 

might occur or, if a regional analysis was possible, how its 

impacts might play out. Our conclusion is thus no different in

the context of cumulative exports as it is for the indirect effects 

of the FLEX application itself. 

Rather than ignore the potential impacts of increased gas 

production altogether, the Department assumed that production 

could occur anywhere across the country and examined the 

effects with that in mind. Thus, the Addendum considered 

impacts that may be felt regardless of where they occur, see, 

e.g., Add. at 13-14, J.A. 827-28 (identifying watercontamination risks associated with any drilling operation), as

well as those that are more specific to particular environments, 

see, e.g., id. at 13, J.A. 827 (explaining water impacts are “most 

likely to be more prevalent in the arid western regions of the 

United States”). It also identified the relevant policymakers,
20 

and existing state and federal laws that govern, and might 

curtail, the environmental impacts. See, e.g., id. (explaining 

the Clean Water Act regulates surface discharge and the Safe 

Drinking Water Act regulates underground injection of 

wastewaters); id. at 16-17, J.A. 830-31 (chart providing stateby-state comparison of hydraulic fracturing chemical 

disclosure regulations). Generalizing the impacts does not 

necessarily mean minimizing them; and here, the Addendum 

candidly discussed significant risks associated with increased 

gas production. See, e.g., id. at 27, J.A. 841 (explaining that 

increased production causes pollution and might “create new 

or expanded ozone non-attainment areas” and could frustrate 

state implementation plans for bringing current non-attainment 

areas into compliance with national standards). 

Under our limited and deferential review, we cannot say 

that the Department failed to fulfill its obligations under NEPA 

by declining to make specific projections about environmental 

impacts stemming from specific levels of export-induced gas 

production. 

C. 

Sierra Club similarly contends that the Department failed 

to fulfill its obligations with respect to the potential for the U.S. 

electric power sector to switch from gas to coal in response to

higher gas prices, which in turn would be a response to 

increased exports. See EIA Study at 6, J.A. 137. As the 

Department noted, the economic causal chain between its 

export authorization and the potential use of coal as a substitute 

fuel for gas “is even more attenuated” than its relationship to

export-induced gas production. Reh’g Order at 23, J.A. 1122. 

Sierra Club has the same complaint about the Department’s 

failure to make specific projections about the indirect effects of 

coal, but offers no reason to believe the impacts are any more 
21 

foreseeable or more prone to usefulness than those associated 

with increased gas production. Thus, Sierra Club’s petition 

with respect to coal usage is denied. 

D. 

Sierra Club challenges the Department’s examination of 

the potential greenhouse-gas emissions resulting from the 

indirect effects of exports. To address these issues, the 

Department evaluated the upstream and downstream 

greenhouse-gas emissions (CO2 and methane) from producing, 

transporting, and exporting LNG in its Life Cycle Report. See 

J.A. 578. Sierra Club challenges the adequacy of the 

Department’s review. 

As for the “upstream” – i.e., domestic – emissions, Sierra 

Club asserts that the Department failed to disclose the “amount

of greenhouse gases that would be emitted by export-induced 

gas production” in the Impact Statement. Pet’r Br. 63. 

Although the Impact Statement itself did not contain that 

information, Sierra Club acknowledges that the information it 

seeks is provided in the Life Cycle Report. Indeed, Sierra Club 

explains that studies published by the Department collectively 

“provide detailed estimates of the amount of emissions from 

each stage of the well-to-terminal life cycle” – which it 

describes as providing a “thorough analysis” and which it 

suggests the Department should have used as a reference for 

analyzing the effects of export-induced gas production in 

individual shale plays. Pet’r Reply Br. 21. 

As for “downstream” emissions – i.e., those resulting from 

transport and usage abroad – Sierra Club does not challenge the

method employed by the Department to address them, but 

instead believes it should have evaluated additional variables. 

The Department compared emissions from exported U.S. LNG 
22 

to emissions of coal or other sources of natural gas. Sierra Club 

asserts that the Department should have also considered the 

potential for LNG to compete with renewables, which it says 

are “prevalent” in certain import markets.5 Sierra Club’s 

complaint “falls under the category of ‘flyspecking.’” 

Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 

1301, 1324 (D.C. Cir. 2015). 

As the Department explained, there are a number of other 

fuel sources that U.S. LNG might compete with, and “[t]o 

model the effect that U.S. LNG exports would have on net 

global [greenhouse-gas] emissions would require projections 

of how each” fuel source (nuclear, renewable, etc.) would be 

affected in each potential LNG-importing nation. Auth. Order 

at 93, J.A. 1033. Such an analysis, the Department noted, 

would require consideration of the dynamics of all energy 

markets in LNG-importing nations, and given the many 

uncertainties in modeling such market dynamics, the analysis 

would be “too speculative to inform the public interest 

determination.” Auth. Order at 93, J.A. 1033. In addition to 

foreseeability limitations, “‘practical considerations of 

feasibility might well necessitate restricting the scope’ of an

agency’s analysis.” Sierra Club (Freeport), 827 F.3d at 50 

(quoting Kleppe, 427 U.S. at 414). We see nothing arbitrary 

about the Department’s decision. 

III.

Finally, we consider whether the Department 

appropriately authorized the FLEX exports destined for non-

 

5

 Freeport argues we lack jurisdiction of this claim because Sierra 

Club did not raise its objection before the Department. See 15 U.S.C. 

§ 717r(b). We disagree. Sierra Club’s rehearing request challenged 

the Department’s analysis of the extent to which U.S. LNG exports 

would displace other fuel sources. 
23 

FTA countries under the Natural Gas Act’s “public interest” 

test. See 15 U.S.C. § 717b(a). We review the Department’s 

decision here, too, under the arbitrary and capricious standard. 

Wash. Gas Light Co. v. FERC, 532 F.3d 928, 930 (D.C. Cir. 

2008). 

Congress enacted the Natural Gas Act with the “principal 

purpose” of “encourag[ing] the orderly development of 

plentiful supplies of . . . natural gas at reasonable prices.” 

NAACP v. Fed. Power Comm’n, 425 U.S. 662, 669-70 (1976). 

Other “subsidiary” purposes include respecting “conservation, 

environmental, and antitrust” limitations. Id. at 670 & n.6; 

accord Myersville Citizens for a Rural Cmty., 783 F.3d at 1307. 

The Natural Gas Act provides that the Department “shall” 

authorize exports to non-FTA nations “unless . . . it finds that 

the proposed exportation . . . will not be consistent with the 

public interest.” 15 U.S.C. § 717b(a) (emphasis added). We 

have construed this as containing a “general presumption 

favoring [export] authorization.” W. Va. Pub. Servs. Comm’n 

v. U.S. Dep’t of Energy, 681 F.2d 847, 856 (D.C. Cir. 1982). 

Thus, there must be “an affirmative showing of inconsistency 

with the public interest” to deny the application. Panhandle 

Producers & Royalty Owners Ass’n v. Econ. Regulatory 

Admin., 822 F.2d 1105, 1111 (D.C. Cir. 1987). 

For its “public interest” review, the Department 

considered various factors such as domestic economic effects 

(e.g., job creation and tax revenue, J.A. 313-14) and foreign 

policy goals (e.g., global fuel diversification and energy 

security for our foreign trading partners, J.A. 1036), in addition 

to the environmental impacts it examined through the NEPA 

process. It ultimately decided to grant the FLEX application, 

explaining that Section 3 of the Natural Gas Act “is too blunt 
24 

an instrument to address [Sierra Club’s] environmental 

concerns efficiently.” Auth. Order at 87, J.A. 1027. 

In the two-and-a-half pages Sierra Club dedicates to this 

claim, the only factor it suggests is inconsistent with the public 

interest is environmental. Sierra Club argues that the 

Department failed to conduct a thorough enough examination 

of the environmental impacts and thus arbitrarily granted the 

application. In doing so, it repeats the same argument it made

to support its NEPA claim – namely, that the Department 

arbitrarily failed to evaluate foreseeable indirect effects of 

exports. We have already rejected this argument and explained 

why the Department adequately considered the environmental 

impacts of its decision. Sierra Club offers no basis for 

reevaluating the scope of the Department’s evaluation for 

purposes of the Natural Gas Act. 

To the extent Sierra Club suggests the Department should 

have weighed environmental concerns more heavily before 

granting the FLEX application, it fails to overcome the 

presumption in favor of exports. Notably, even if the 

Department determined the impacts were significant, it could 

still find that the public interest weighs in favor of allowing the 

exports. “[I]t is . . . well settled that NEPA itself does not

mandate particular results, but simply prescribes the necessary

process.” Robertson, 490 U.S. at 350. Thus, “[i]f the adverse 

environmental effects of the proposed action are adequately 

identified and evaluated, the agency is not constrained by 

NEPA from deciding that other values outweigh the 

environmental costs.” Id.; see, e.g., id. (“[I]t would not have 

violated NEPA if the Forest Service, . . . had decided that the

benefits to be derived from downhill skiing at Sandy Butte 

justified the issuance of a special use permit, notwithstanding

the loss of 15 percent, 50 percent, or even 100 percent of the 

mule deer herd.”). Sierra Club has given us no reason to 
25 

question the Department’s judgment that the FLEX application 

is not inconsistent with the public interest. Sierra Club’s 

petition for review on this claim is denied. 

IV.

For the foregoing reasons, Sierra Club’s petition for 

review of the Department’s orders is denied. 

So ordered.