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FERC Compliance Under NEPA: FERC’s Obligation to Fully Evaluate Upstream and Downstream Environmental Impacts Associated with Siting Natural Gas Pipelines and Liquefied Natural Gas Terminals

By Aaron Flyer
J.D. Candidate 2016
Georgetown University Law Center

ABSTRACT

As the United States navigates the ongoing shale gas boom, advances in exploration technology continue to improve the country’s ability to obtain vast quantities of domestic natural gas. However, such advances, specifically hydraulic fracturing, are not without environmental costs and  political controversy. While upstream production and downstream consumption of natural gas are often regulated at a local level, the natural gas pipelines and liquefied natural gas terminals subject to the Federal Energy Regulatory Commission’s (“FERC”) jurisdiction serve as the key vehicles connecting the entire natural gas infrastructure. Therefore, FERC’s environmental reviews must  include an assessment of both the direct impacts of a project, as well as the indirect impacts associated with induced natural gas production upstream of the project and consumption of the gas downstream of the project.

Consistent with the requirements of the National Environmental Policy Act (“NEPA”), FERC must assess these upstream and downstream environmental impacts to understand the incremental environmental impacts of authorizing a new natural gas pipeline or liquefied natural gas terminal because these impacts are reasonably foreseeable. In addition, the “causally related” standard, which was relied upon in Department of Transportation v. Public Citizen, 541 U.S. 752 (2004) and which links a proposed federal action to a significant environmental impact, does not preclude FERC’s assessment of upstream and downstream environmental impacts. Although the scope of NEPA review is largely at FERC’s discretion, FERC’s decision to ignore upstream and downstream effects contravenes NEPA’s requirements because the scope of this review  must ensure that complete information is made available. NEPA review supports effective decisionmaking before federal action leads to irreparable  environmental changes, and upstream and downstream impacts must be understood.

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