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case number 23-1069 et al.

[00:00:04] Speaker 01:
Delphico et al.

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Mr. Matthews for the petitioners, Mr. Chiu for the respondents, Mr. Longsprap for the interviewers.

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Good morning.

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Nathan Matthews on behalf of petitioners Healthy Golf et al.

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I'd like to reserve three minutes for rebuttal.

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Excuse me.

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This case challenges FERC's approval of the Commonwealth Liquefied Natural Gas Export Terminal.

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This is the first LNG export terminal that FERC has approved since this court's decision in Vecinos para el Bienestar de la Comunidad Costera et al.

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And Commonwealth is a massive infrastructure project.

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It will emit annually 3.6 million tons of greenhouse gases, which is more than 36 times FERC's proposed threshold for the significance of greenhouse gases.

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Commonwealth will also emit 550 tons per year of nitrogen dioxide, more than five times EPA's major source threshold under the Clean Air Act.

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And the majority of this pollution will fall on environmental justice communities.

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FERC failed to take a hard look at these impacts in violation of NEPA and the Natural Gas Act, including failing to look at ways to mitigate these impacts and to demonstrate that the project as a whole was consistent with the public interest.

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I'd like to start with greenhouse gas emissions.

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FERC has an obligation to determine whether these emissions are significant.

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FERC has the tools to do so, and FERC's refusal to do so here had material consequences for the rest of FERC's analysis.

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FERC does not appear to dispute that its own regulation at 18 CFR 380.7 requires FERC to determine whether each individual environmental impact is significant or not.

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And FERC makes that determination for every other type of impact.

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The EIS here addresses the significance of everything else.

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FERC argues that greenhouse gases are different because FERC claims it is impossible for FERC to make a significant determination for greenhouse gases, but the record demonstrates that FERC had at least two ways in which it could have done so.

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So can I stop you there?

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So your argument is, let me put it this way, if these two methods, if FERC adequately explained why those can't be used, that's the sum and substance of your argument, that this argument would fail if they adequately explained why they can't use these two specific methods.

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Of the greenhouse gas significance argument specifically.

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Exactly.

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We do think that even if FERC

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explain that if the court was persuaded by FERC's arguments with respect to the NEPA, is it significant or not determination, there still is a greenhouse gas argument under the public interest standard and whether greenhouse gas is factored into the public interest determination.

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But for the NEPA significance argument?

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Yes, we say that of FERC.

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And so the first method, and probably the most straightforward, would have just been to make an adjudication in this particular case.

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FERC has done that before.

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In the Northern Natural Gas Pipeline case, FERC looked at a project that FERC concluded would emit 315 tons per year of greenhouse gases.

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And FERC said that although the agency had not adopted a threshold for significance yet, that 315 was far below any threshold FERC could plausibly adopt.

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And FERC could have done the same here, where the 3.6 million tons per year of emissions are 36 times FERC's draft threshold, which in itself was equal to or higher than every other threshold any other agency has proposed or that FERC had ever identified.

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So FERC may not know where the line is, but FERC doesn't raise any argument as to why the line should be farther beyond the emissions we have here.

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On the social cost of carbon, we have

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a case, Earth Reports, which said that FERC is not required to use the social cost of carbon tools to assess significance.

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And we have another case, Vecinos, that said under a particular regulation, if you raise it, that might be a different analysis, but you didn't raise that regulation, so why isn't this covered by Earth Reports?

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We didn't raise Vecinos because Vecinos was decided before FERC issued the orders here, and Vecinos was already integrated into the FERC orders.

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Earth reports on through the Center for Biological Diversity case about the Alaska project looked at three different arguments that FERC had been praised in every case about social cost of carbon.

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FERC complained that it didn't measure physical impacts.

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FERC said, we don't know what discount rate to use.

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And then FERC said, we don't know where significance is anyway.

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In Vecinos, the court said that if FERC doesn't have any other way of addressing greenhouse gases, FERC needs to use methods that are generally accepted in the scientific community.

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Post-Vecinos, when FERC issued the orders that issue here, FERC didn't make two of those three arguments.

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So I think because Vecinos was already in the background, FERC didn't say social cost of carbon doesn't measure physical effects.

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I think the reason FERC omitted that is because, Vecinos said, we don't care.

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That if that's not a problem for the scientific community, then FERC can't use that argument.

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And similarly, although FERC had expressed some uncertainty about what discount rate to use,

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general consensus in the scientific community that you use these range of discount rates as articulated in the social cost of carbon protocol.

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So having vicinos, we didn't need to raise vicinos because FERC kind of attempted to comply with it itself and didn't make do with the arguments.

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But they did calculate the social cost of carbon.

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They just didn't take the next step.

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And are you saying that now in every case they have to both calculate it and take the next step and rely on it?

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Well, so this court has said that

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environmental impacts, including greenhouse gas emissions, are a factor that FERC needs to consider and that needs to, not just underneath it, but also in its natural gas act public interest analysis.

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The Council on Environmental Quality has said you should calculate social cost of carbon in every case.

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Here the problem is that FERC calculated social cost of carbon and then said we're telling this to the public, but we're not going to use it.

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FERC explicitly said that the social cost of carbon estimate played no role in FERC's own analysis.

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And that would potentially be fine if FERC had explained that it was choosing to consider greenhouse gas emissions in some other way.

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But if FERC is saying we're not using social cost of carbon, but FERC is also not telling us what else it's doing instead, then FERC hasn't met this court's command from the Sable Trail case and others to factor greenhouse gases in.

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FERC has to do something.

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So you're not arguing that they must use the social cost of carbon.

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You're saying under the facts of this particular case, it gave them a way of doing this.

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Yeah.

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And I think that when the Council on Environmental Quality or when other agencies have discussed greenhouse gases or significance, they just do it through talks rather than needing to monetize it.

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Monetizing the impacts can help inform the public.

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And we have pointed to social cost of carbon to say,

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actually doesn't know whether 3.6 million tons per year is something that you should worry about, the social cost of carbon can let you know that that's enough that you ought to take it seriously.

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But once FERC starts taking it seriously, then they don't necessarily need to do a cost benefit analysis with social cost of carbon.

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They just can't refuse to do anything at all.

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So I mentioned that this case is distinct from the Center for Biological Diversity case and prior cases because FERC isn't making

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two out of the three arguments that it made in those prior cases.

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And because of Visinos, we'd argue that FERC couldn't have made those arguments, even if it had wanted to.

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So all that FERC has left is its concern that there is no general threshold for when monetized impacts become significant.

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No court has held that that concern standing alone is enough to justify refusal to use social cost of carbon.

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And this this court should not make that holding, you know, FERC hasn't explained why the policy judgment involved in deciding whether or not

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a certain level of impact is significant, is any different or more difficult than the policy judgments FERC makes all the time for other impacts.

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For example, here, FERC concluded that the visual impact of the terminal would be significant, that the height of the structure and the amount of light at night, you know, the scenery of the surrounding area.

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FERC said all of those issues made that visual impacts and impacts on scenery were significant.

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And FERC didn't have a general cross-agency standard for how bright a light has to be before an impact is significant or something.

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FERC just made its own policy judgment.

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And that's also not something that's central to FERC's own expertise or something.

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FERC is not an agency specifically tasked with thinking about scenery.

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So FERC, you know, hasn't said why greenhouse gases should be different than any of the other impacts that FERC routinely regulates, including in the EIS here where FERC said significant or not significant for everything else.

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If there are no further questions about greenhouse gases, I'd like to turn to the other air pollution impacts in this case.

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So this terminal will emit 550 tons per year of nitrogen dioxide.

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EPA has explained that more nitrogen dioxide is always bad.

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There's never a point where you've got so much of it that further increases in pollution don't matter.

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And here, the modeling that FERC relied on concluded that there would be numerous exceedances of the National Ambient Air Quality Standard for nitrogen dioxide

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in the vicinity of the terminal, I think the highest of those exceedances was 60% above the NACs.

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FERC failed to take a hard look at these nitrogen dioxide emissions for two reasons.

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The first is that FERC simply misunderstands cumulative effects.

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FERC concluded that there would be no cumulative impact problem here because the individual incremental impact of this project was individually insignificant, but the

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central thrust of the cumulative impact regulation and doctrine is to guard against the death by a thousand cuts.

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And so if that's what you're concerned about, saying that one cut is small doesn't answer the question.

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Every court that has considered the issue has held that an impact that is individually insignificant can still be cumulatively significant, as we explain in our briefs.

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And FERC has recognized that projects with individually insignificant impacts can have a cumulatively significant impact.

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FERC reached that conclusion for the Rio Grande projects.

[00:11:32] Speaker 02:
So FERC relied on these significant impact levels, which is a concept that they derive from sort of a different scheme.

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Can you explain what that is for?

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Because it wasn't clear to me what significant impact levels

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What does that mean?

[00:11:46] Speaker 00:
Like EPA uses that?

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I can try, Your Honor, with the caveat that the significant impact level, like that our cumulative climate and significant impact, or climate misuse of significant impact levels are distinct.

[00:11:55] Speaker 02:
Yeah, no, I understand they're distinct, but I know that FERC relied on them.

[00:11:57] Speaker 00:
Yes.

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So just trying to understand, like, what is that really for?

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So under the Clean Air Act, Prevention of Significant Deterioration Program, a major stationary source cannot be approved if it will cause or contribute to a violation of a national ambient air quality standard.

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And that's not a cumulative assessment.

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So EPA has interpreted that to require an individually significant contribution to the violation of the NACs.

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And EPA has proposed the significant impact levels.

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Here it's a proposal from 2010 that was never finalized.

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As like an administrative tool that the regulations define as a sufficient but not necessary element of showing a cause and contribute finding.

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So a project that exceeds the CIL

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where air quality will exceed the next causes and contributes to and so cannot be permitted under the Clean Air Act.

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That's what I'm a little bit confused about because is it as it contributes to the next therefore is it a cumulative assessment or is it an incremental assessment?

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It's both.

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So there was a two-stage modeling here where

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the modeling that was done under the Clean Act, which FERC based its NEPA modeling on, you first asked, will emissions exceed the significant impact level without worrying about background concentrations?

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If so, then you model the background concentrations, and then you ask, and again, the Clean Act is not directly an issue in this case.

[00:13:25] Speaker 02:
Yeah, no, I understand.

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You would then ask whether or not the background concentration plus the contribution, or whether this

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This project's contribution on the days when you're going to have a cumulative exceedance of the national quality standard, the incremental contribution exceeded the significant impact level.

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So if its background is 188, did this project is increasing that, or is it going to increase it by more than seven and a half, is the proposed significant impact level for nitrogen dioxide.

[00:14:01] Speaker 02:
So it's still incremental.

[00:14:03] Speaker 00:
It's still incremental, right.

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And so under the Clean Air Act, even if you have horrific air quality, you don't necessarily have a cause and contribute finding if the incremental contribution isn't that big.

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You might, I mean, EPA, one of our claims here is that for borrowed EPA significant impact level proposal without recognizing EPA's own caveats about that, where EPA has said,

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Even under the Clean Air Act, prevention of significant deterioration program, you might have a cause and contribute finding for emissions that are under the significant impact level that you need to do a case-specific analysis.

[00:14:40] Speaker 00:
But as a screening tool, it's...

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Is the cumulative impact going to exceed the standard?

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And if so, is this project's contribution above that?

[00:14:50] Speaker 04:
So I want to make sure I understand what you think, what legal requirement was violated here.

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Is your position essentially that Clean Air Act aside, NEPA imposes a requirement that if the cumulative level is significant, the agency needs to just apply the label significant and then explain

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as it usually would explain, why that doesn't warrant stopping the project.

[00:15:14] Speaker 04:
But that the problem here was not saying the total level, the cumulative impact, is significant.

[00:15:21] Speaker 00:
That's certainly the heart of it, Your Honor.

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And it's not just whether the cumulatively significant problem of the pollution that everyone agrees is unhealthy would warrant denying the project.

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FERC also does a more robust investigation of mitigation

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for significant impacts.

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That's also in 18 CFR 380.7, where Perk says, for every impact you've identified as significant, you have to discuss mitigation of that impact.

[00:15:45] Speaker 00:
And here, we think that they could have redesigned the terminal to reduce these emissions, even if they were going to still approve the terminal, and that if they had admitted that the cumulative NO2 was a problem, they might have... But in the first instance, you read the NEPA regulations to impose a requirement that

[00:16:00] Speaker 04:
the agency has to say, are the direct impacts significant, and then separately, are the cumulative impacts significant, right?

[00:16:06] Speaker 00:
Yes, Your Honor.

[00:16:07] Speaker 00:
I think that the clearest authority on that is the Fifth Circuit case we set on our reefs that said that even if you're going to mitigate the impacts to the level of individual insignificance, that doesn't get you out of the obligation to then say, is there a cumulative significance problem as well, because of the death by 1,000 cuts scenario.

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And that, I mean, one of the problems here is FERC didn't explain

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why the air pollution is so bad.

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It hasn't addressed, are the modeled exceedances due to some other single facility that could be taken care of, or is this actually occurring because of the death of 1,000 cuts?

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FERC itself has approved eight other projects in the area that FERC identifies as all contributing to the cumulative air pollution

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problem.

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You know, FERC says, well, the Commonwealth emissions are not significant because they're only increasing by one and a half percent of the max, and the sale is four percent.

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But then the neighboring CB2 project is going to have a maximum contribution that's about half the significant back level.

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And then there are six other projects as well.

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So it could be that

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The reason we're in this situation is because of agencies continuing to approve projects like this one that have small but cumulative contributions to the unhealthy air.

[00:17:32] Speaker 00:
I see that I'm out of time.

[00:17:33] Speaker 00:
I don't know if there are other questions about the significant effect level or the alternatives or other claims.

[00:17:38] Speaker 02:
We'll give you a couple minutes to reply.

[00:17:40] Speaker 00:
Thank you, Your Honor.

[00:17:59] Speaker 03:
Good morning.

[00:18:00] Speaker 03:
May it please the court?

[00:18:01] Speaker 03:
Susanna Chu for the Federal Energy Regulatory Commission.

[00:18:05] Speaker 03:
I'd like to start by saying that Vecinos is actually not the most recent LNG terminal case that has been before this court.

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It's the Center for Biological Diversity, which involved the commission's approval of the Alaska LNG terminal under Natural Gas Act Section 3.

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And that case is directly relevant here, because like this case, it's a purely

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section three terminal case.

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There's no section seven pipeline involved.

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So the standard here is that the commission must approve the terminal proposal unless it makes a finding that the terminal is actually inconsistent with the public interest.

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So it's a different standard than under section seven and that is the overarching standard that the commission is working under here.

[00:18:57] Speaker 02:
So on the greenhouse gas emissions, it seems that the levels of this project are 36 times the greenhouse gas levels that FERC has proposed is significant.

[00:19:10] Speaker 02:
And you held in Northern Gas that if under anything we would choose, the project would pass, you can make a significance finding.

[00:19:22] Speaker 02:
So why isn't this project significant under any

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proposal that you might adopt as a significance level.

[00:19:31] Speaker 03:
Right.

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So your honor, let me try to explain that those two proposed thresholds are well, there's one proposed threshold that my friends on the other side have been advancing the 100,000 threshold.

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And then also there's the Northern natural gas case, which you mentioned.

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So the commission has explained that that 100,000 threshold was an interim number that

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it had considered using, but it actually has been withdrawn in the proceeding that remains open to public comment.

[00:20:05] Speaker 03:
And the commission continues to grapple with this issue of how to assess the potential significance.

[00:20:13] Speaker 02:
Even if you're not applying that particular number, is there any chance that the commission's going to choose a level that's 36 times that number?

[00:20:23] Speaker 03:
I don't know, Your Honor, because there are different ways that there potentially could be different ways to make an assessment.

[00:20:31] Speaker 03:
And a strict number about the output of the emissions might not be that way.

[00:20:37] Speaker 03:
So for example, there's the social cost of carbon method, which is another possibility that has been advanced.

[00:20:46] Speaker 02:
But the commission has explained that... If we could just stick with these levels, this project is estimated to contribute to 1.7% of Louisiana's and 0.06% of the US's total greenhouse gas emissions.

[00:21:00] Speaker 02:
I mean, that seems... You don't think that's significant?

[00:21:03] Speaker 02:
Is there some level where it would be significant?

[00:21:05] Speaker 02:
For example, if it increased Louisiana's greenhouse gas emissions by 20%, would you be able to say it's significant even if you haven't yet?

[00:21:16] Speaker 02:
picked a number or a threshold parameter.

[00:21:20] Speaker 02:
So no, your honor.

[00:21:21] Speaker 02:
You know, I think it's not as... I'm sorry, your answer is no?

[00:21:23] Speaker 02:
If it increased Louisiana's greenhouse gases by 20%, you would not say that's significant?

[00:21:27] Speaker 03:
I'm sorry.

[00:21:28] Speaker 03:
My answer is not no.

[00:21:29] Speaker 03:
My answer is that I don't know the answer.

[00:21:31] Speaker 03:
I don't know the answer because the commission is continuing to grapple with this issue.

[00:21:36] Speaker 02:
That's astounding.

[00:21:38] Speaker 02:
So what if it increased Louisiana by 50% greenhouse gas emissions?

[00:21:43] Speaker 02:
You would still say you don't know if that's significant because you're still grappling with the issue.

[00:21:47] Speaker 03:
I mean, I cannot speak for the agency as to whether or not that would be considered a significant impact, but I mean, I think we, what if it doubled it?

[00:21:57] Speaker 02:
What if it would increase it by a hundred percent?

[00:21:59] Speaker 02:
You still don't know if that's significant.

[00:22:02] Speaker 03:
I can't say as I stand here before you, because the commission has not reached that issue.

[00:22:07] Speaker 03:
Um, the,

[00:22:11] Speaker 03:
The issue with global climate change as the commission explained in the environmental statement is that there are incremental impacts and you can't attribute physical global climate change impacts such as sea level rise or other specific impacts to a particular

[00:22:32] Speaker 03:
project, at least the commission has not yet been able to identify a methodology that would allow it to do so.

[00:22:41] Speaker 03:
Now the northern natural gas is different.

[00:22:42] Speaker 02:
But I guess the bottom line is there's no level at which you would concede that it's significant until the commission has developed whatever parameter it decides it's going to use.

[00:22:52] Speaker 03:
I think it's right, Your Honor, that I cannot make that judgment call.

[00:22:56] Speaker 02:
I'm not asking you personally.

[00:22:57] Speaker 03:
I'm asking about the commission, who you represent.

[00:23:01] Speaker 03:
Right.

[00:23:01] Speaker 03:
But the commission has not yet made, it has not yet found itself able to identify a methodology that would allow it to make this determination.

[00:23:11] Speaker 02:
So it is still working on it.

[00:23:12] Speaker 02:
But the implication of that is you're saying no matter what the level is, you're never going to say it's significant until the commission decides what this parameter is going to be.

[00:23:25] Speaker 03:
Yes, the commission is working on determining if there are parameters that it can apply.

[00:23:33] Speaker 03:
I think it's important to remember that in this case, the commission actually has provided even more information than it has ever

[00:23:43] Speaker 03:
produced before regarding greenhouse gas emissions.

[00:23:47] Speaker 03:
If we go back to what the court has required of it in stable trail and in going through up to earth reports and Center for Biological Diversity, the commission here, it not only quantified the actual emissions from the terminal, so we have that information, it did the comparison to the national and to the state level

[00:24:06] Speaker 03:
emissions, and it also conducted the calculations under the social cost of carbon, although it recognized that that methodology has significant limitations because, of course, it was developed in the context of cost-benefit analyses for agency rulemakings.

[00:24:23] Speaker 04:
So can you point to anything in the order that shows any of that information played a role in the Commission's actual decision on this project or mitigation measures, consideration of alternatives, or anything?

[00:24:36] Speaker 03:
Right, so I think the discussion is in the orders at paragraph 75 of the authorization order and at paragraph 40 of the rehearing order.

[00:24:48] Speaker 03:
And it's in the environmental statement, the discussion of global climate change impacts.

[00:24:55] Speaker 03:
It's around Joint Appendix page 380.

[00:25:02] Speaker 03:
Excuse me, really around J 378, that's where the discussion begins.

[00:25:11] Speaker 03:
the significant problem of global climate change, but it has not yet been able to find that it can draw a line from the specific project's emissions to make an up or down call as to whether it's significant for purposes of climate change.

[00:25:26] Speaker 03:
And the court has never required the commission to do that.

[00:25:29] Speaker 03:
Nevertheless, the commission is still, is trying to determine whether or not it can make this determination and whether it should make this determination.

[00:25:39] Speaker 02:
And the only implication of making the determination is then you just have to consider other mitigating alternatives.

[00:25:47] Speaker 03:
Right.

[00:25:49] Speaker 03:
But the commission did consider alternatives.

[00:25:51] Speaker 03:
Judge Garcia, since you mentioned alternatives, I mean the commission gave consideration to numerous alternatives, including a no action alternative, which is not on review before the court.

[00:26:02] Speaker 02:
I guess my only point is I don't know why they're being so reluctant to ever find significance until they

[00:26:08] Speaker 02:
finish their other work when all they have to do is say it's significant and then consider more alternatives.

[00:26:13] Speaker 02:
It seems easier than litigation like this.

[00:26:15] Speaker 03:
Right, Your Honor.

[00:26:17] Speaker 03:
I think it's not as easy as it appears.

[00:26:20] Speaker 03:
I mean, it may seem easy based on some of the

[00:26:23] Speaker 03:
assertions from environmental petitioners.

[00:26:26] Speaker 03:
It's not easy.

[00:26:27] Speaker 03:
I mean, it's been something that the agency has been grappling with.

[00:26:31] Speaker 03:
I mean, this is a bipartisan independent commission.

[00:26:33] Speaker 03:
And we see from the different, the evolution of the cases, the commission is moving towards more and more information in the environmental analysis.

[00:26:47] Speaker 02:
That's not what I meant was easy.

[00:26:48] Speaker 02:
I think that the results of finding something significant

[00:26:53] Speaker 02:
Isn't it just that you then have to consider other mitigating alternatives for this significant factor?

[00:27:00] Speaker 02:
And you've already considered a bunch of alternatives.

[00:27:02] Speaker 02:
It seems easier to make the finding of significance and consider the alternatives than to be so reluctant to ever make this finding and then have to go through this litigation.

[00:27:15] Speaker 03:
I see your point, Your Honor.

[00:27:17] Speaker 03:
But I think the commission is really doing its utmost to meet all of its obligations.

[00:27:22] Speaker 03:
And I think the commission considered here that it has produced all of the information it has ever been required to produce by the court, and then some.

[00:27:34] Speaker 03:
And it is still grappling with this issue of whether it should or should not make this finding.

[00:27:40] Speaker 03:
And I agree.

[00:27:41] Speaker 03:
I think that the commission has already considered all of the alternatives

[00:27:45] Speaker 03:
It's addressed mitigation.

[00:27:47] Speaker 03:
It's taken a deep dive into the environmental analysis here.

[00:27:51] Speaker 03:
So it has already done all of the analysis.

[00:27:55] Speaker 03:
But as to making this up or down call, it is a fundamentally different call, I think, than some of the other significance findings.

[00:28:03] Speaker 03:
The visual impacts finding, for example, that my friend brought up, I mean, that's a much more concrete finding.

[00:28:12] Speaker 03:
And if you look at the discussion in the authorization order,

[00:28:15] Speaker 03:
The commission there was looking at visual renderings of the terminal from different vantage points.

[00:28:21] Speaker 04:
Um, council, can I ask you to address another issue?

[00:28:23] Speaker 04:
Uh, it's the cumulative impacts issue.

[00:28:26] Speaker 04:
So as I understand it, their argument at least is that you essentially looked at, uh, the incremental effect on NO2 emissions said that was insignificant.

[00:28:38] Speaker 04:
And for that reason, so the cumulative impact was insignificant.

[00:28:42] Speaker 04:
What does that get wrong?

[00:28:43] Speaker 04:
Because if that's what you did, it seems arbitrary.

[00:28:47] Speaker 03:
Right.

[00:28:47] Speaker 03:
So that's not exactly how I see it, Your Honor.

[00:28:50] Speaker 03:
The commission, it looked at the impacts of all of the background sources in the region, along with the terminal, the proposed terminal.

[00:29:01] Speaker 03:
So that is the second stage of that air quality model that I believe Mr. Matthews discussed.

[00:29:09] Speaker 03:
That is a cumulative impact model.

[00:29:13] Speaker 03:
And so there, the commission is looking at all of the emissions from all of the background sources.

[00:29:20] Speaker 03:
It's getting this information from the state of Louisiana.

[00:29:23] Speaker 03:
And the commission actually, in addition, reviewed emissions from the ships.

[00:29:29] Speaker 04:
related to that i appreciate that they did a thorough analysis of what the cumulative levels were but i guess it seems like there's at least a substantial argument that what nipa does is it says you have to look at the total level of emissions of this particular pollutant and if it is at a level that is significant and this project contributes contributes to it even a little bit the cumulative level is significant the total level is significant isn't that

[00:29:59] Speaker 04:
So essentially, you're way above the nax, and this project is bumping it up just a little bit.

[00:30:05] Speaker 04:
You would say the direct impact is not significant, but the cumulative level is, right?

[00:30:12] Speaker 03:
Right, can I back up for one moment?

[00:30:16] Speaker 03:
Please.

[00:30:17] Speaker 02:
This region is in attainment, it is in compliance with the NACS, so I just want to mention that, you know, at the threshold, that this, Cameron Parish, you know, this whole- I thought the analysis was on some days it might be above the NACS, on some days it wouldn't, but the problem was on the days when it would be above the NACS, you relied on the significant impact levels, which is an incremental measure,

[00:30:42] Speaker 02:
to say that it wasn't significant, thereby just by definition not looking at the cumulative effects for those particular days.

[00:30:49] Speaker 03:
Right.

[00:30:50] Speaker 03:
Yes, so what I just wanted to mention is just that as a region, Cameron Parish is in compliance with the NACs.

[00:30:57] Speaker 03:
So what the commission is doing here is this air quality model is a worst case scenario analysis.

[00:31:05] Speaker 03:
They're assuming that the terminal is operating at full tilt.

[00:31:10] Speaker 03:
And they do this initial analysis, which is an initial screen that did find that the emissions were going above the significant impact level such that an additional analysis had to be done.

[00:31:27] Speaker 03:
The significant impact level, as I understand it, is that if it's below that threshold, that's basically de minimis.

[00:31:33] Speaker 03:
Then there's no additional analysis done.

[00:31:35] Speaker 03:
So since the initial screen went above the

[00:31:40] Speaker 03:
significant impact level, it proceeded to the cumulative impacts analysis, which involved an assessment of all of the background sources.

[00:31:48] Speaker 03:
And it compared the contribution of the terminal to the potential, the highest potential max exceedance.

[00:32:01] Speaker 03:
And it found that the terminal's contribution was

[00:32:05] Speaker 03:
just minuscule, I forget the specific number, I believe it was 0.0004 or something along those lines.

[00:32:12] Speaker 03:
So that is the number that the commission was looking at.

[00:32:14] Speaker 03:
This is my difficulty.

[00:32:15] Speaker 04:
This is my difficulty, right?

[00:32:16] Speaker 04:
Yes.

[00:32:16] Speaker 04:
That's saying the incremental addition from this facility is very small.

[00:32:22] Speaker 04:
Why is that relevant to the total level, which is what cumulative impacts analysis is asking you to look at?

[00:32:34] Speaker 03:
Right.

[00:32:35] Speaker 03:
I think that what the model was finding was potential max exceedances at specific times and in specific places.

[00:32:45] Speaker 03:
So that's why the commission is taking all of that into account.

[00:32:51] Speaker 03:
And overall, the whole region is in compliance.

[00:32:54] Speaker 03:
So the commission found that this proposal was environmentally acceptable.

[00:33:02] Speaker 04:
OK, so the point is that when we look at that

[00:33:08] Speaker 04:
the overall level when you zoom out from particular sources within the terminal is in attainment for NO2?

[00:33:18] Speaker 04:
Is that?

[00:33:20] Speaker 03:
I think that's right.

[00:33:21] Speaker 03:
I mean, when you zoom out to the, I mean, I think it's right that when you zoom out completely, the region generally is in attainment and you're looking at whether there might be potential exceedances under a model that's just looking, it's looking

[00:33:36] Speaker 03:
It's a computer-based model.

[00:33:37] Speaker 03:
And it's really measuring the worst-case possible scenario.

[00:33:42] Speaker 04:
So I read their brief to paint the following picture, that in some respect, there's a NACS exceedance.

[00:33:49] Speaker 04:
And then when you looked at it, you found out that this project is only contributing a little bit to that NACS exceedance.

[00:33:56] Speaker 04:
And therefore, you have to say the total impact, which is just this total level, is by definition significant.

[00:34:05] Speaker 04:
Are you telling me that that is, that's just inaccurate in terms of the facts on the ground?

[00:34:10] Speaker 03:
I think that's, I think it's not right that the commission has to find significance just based on some potential model NACC succeedances.

[00:34:21] Speaker 03:
Um, and I think it, you know, using the significant impact levels, I think that that is a methodology that is, I mean, that's an EPA methodology.

[00:34:31] Speaker 03:
I think that the commission, um, you know, it's,

[00:34:35] Speaker 03:
it reasonably used that methodology, and I don't think there's any problem with the actual methodology here.

[00:34:45] Speaker 02:
But the thing is, if you choose to use this significant impact level methodology, it has to not be in an arbitrary and capricious way.

[00:34:54] Speaker 02:
And the overall test is cumulative impacts.

[00:34:58] Speaker 02:
And what I understand that the commission did was on the days or when you ran the model and the NACs were exceeded and you had to take a closer look because the NACs were exceeded, you said, well, the significant impact levels haven't been exceeded.

[00:35:15] Speaker 02:
And that that is an incremental analysis and not a cumulative effects analysis because the whole reason you were looking at those days was because on the cumulative effects, you had exceeded the NACs.

[00:35:27] Speaker 02:
But then you reverted to this incremental test in order to say, but that's not significant.

[00:35:33] Speaker 02:
And why is that not arbitrary and capricious?

[00:35:37] Speaker 03:
Well, I think this is consistent with the methodology the commission typically uses.

[00:35:42] Speaker 03:
And I think that because they were modeling all of the sources, I mean, they're looking at the impacts.

[00:35:48] Speaker 03:
And in the future, in the event that another project is proposed,

[00:35:54] Speaker 03:
the commission will again be doing this analysis.

[00:35:58] Speaker 03:
So it's certainly possible at some point in time that, that this analysis will tip over into significance, but that's not what the commission found here.

[00:36:13] Speaker 04:
I just, one last subject I wanted to ask you about, and that is where you started, which is the public interest determination.

[00:36:18] Speaker 04:
So I appreciate that.

[00:36:20] Speaker 04:
There's a presumption in the statute that there are certain public benefits.

[00:36:24] Speaker 04:
But in every single case I've seen, there was some discussion from the commission of what the public benefits of the projects are.

[00:36:33] Speaker 04:
And in other words, some effort to explain how strong this presumption is.

[00:36:37] Speaker 04:
But that's just absent here.

[00:36:40] Speaker 04:
And why isn't that a basis for remand for there to be some explanation of what the public benefit is in this case?

[00:36:49] Speaker 03:
Well, I think, Your Honor, that the statute dictates that the exports are presumed to be in the public interest here.

[00:36:59] Speaker 03:
The commission actually did state in the authorization order that here the Department of Energy has already authorized exports for the full capacity of the project to free trade agreement countries.

[00:37:12] Speaker 03:
And so that

[00:37:14] Speaker 03:
does create a presumption that this is statutorily in the public interest.

[00:37:25] Speaker 04:
Yeah, I think that same paragraph that you're referring to goes on to say, we are not going to do any independent consideration of the benefits.

[00:37:36] Speaker 03:
I'm not sure if the commission said exactly those words but I don't believe it was necessary in this case because of the statutory presumption and the commission did all of the environmental analysis here and I think it's kind of baked into the discussion in the environmental analysis that this enables exports of natural gas to free trade agreement countries

[00:38:04] Speaker 03:
the commission found it had sufficient information to proceed.

[00:38:08] Speaker 03:
This action was environmentally acceptable.

[00:38:10] Speaker 03:
It had limited adverse environmental impacts.

[00:38:13] Speaker 03:
So I think the commission felt it was on firm ground in approving because it's required to do so.

[00:38:22] Speaker 03:
So maybe there's more discussion in other cases, but I don't think it was required here.

[00:38:31] Speaker 02:
Any more questions?

[00:38:32] Speaker 02:
No.

[00:38:33] Speaker 02:
Any more questions?

[00:38:34] Speaker 02:
All right.

[00:38:35] Speaker 03:
Thank you.

[00:38:36] Speaker 03:
Thank you, Your Honors.

[00:38:37] Speaker 03:
Mr. Longstreth.

[00:38:43] Speaker 05:
Thank you, Your Honors.

[00:38:56] Speaker 05:
John Longstreth for the project developers here.

[00:39:00] Speaker 05:
I wanted to start going back to the cumulative impacts analysis and all that discussion because I think it is confusing a little bit in terms of exactly what argument they're presenting.

[00:39:12] Speaker 05:
The point that FERC Council made about the background emissions is I think an important point.

[00:39:18] Speaker 05:
So the way this works is it goes in stages.

[00:39:21] Speaker 05:
So the first stage they do is basically

[00:39:24] Speaker 05:
Look at the discharge basically before you do any air modeling at all you look to see just a pace place the discharge are you over the Over the levels and that is they found four in this particular case one hour knocks annual knocks one hour SO2 and 24 hour

[00:39:43] Speaker 05:
PM something, not sure what it is.

[00:39:45] Speaker 05:
So that's when you do this cumulative impact analysis.

[00:39:47] Speaker 05:
In other words, if that's not triggered, that's a screen.

[00:39:51] Speaker 05:
You don't have to look at anything else.

[00:39:53] Speaker 05:
They're not challenging that, as far as I understand it.

[00:39:55] Speaker 05:
They're not challenging really any of the process here.

[00:39:59] Speaker 05:
in terms of actual calculations.

[00:40:01] Speaker 05:
Then you go to the cumulative impacts analysis, and that's when you look at, as Fert Council mentioned, all the background sources, offsite inventory within the area of impact plus 15 kilometers, all major sources within the area of impact.

[00:40:14] Speaker 05:
20 kilometers, you're looking at all the sources in the area.

[00:40:17] Speaker 05:
When they did that analysis, three of them fell away.

[00:40:20] Speaker 05:
The only thing that was left was one hour nitrogen dioxide.

[00:40:24] Speaker 05:
That was the only thing left in the case.

[00:40:26] Speaker 05:
So that was the thing that they looked at with respect to the significant impact analysis.

[00:40:31] Speaker 05:
They said, okay, we already know, and this gets to the cumulative impact analysis, we already know when you look at all these other sources, you know, the six other

[00:40:39] Speaker 05:
projects that he mentioned and all that.

[00:40:42] Speaker 05:
We know when you're looking at this that you're going to be over for the next for that one specific pollutant here.

[00:40:49] Speaker 05:
So now we're going to look to see because again, NEPA is not a statute that requires a solution.

[00:40:55] Speaker 05:
It doesn't say

[00:40:56] Speaker 05:
Because we're over the NACs, you can't have this project.

[00:40:59] Speaker 05:
We're just looking at what this tells us.

[00:41:02] Speaker 05:
So we're looking again, and that's when we use a significant impact level.

[00:41:06] Speaker 05:
We say, OK, we're over the NACs.

[00:41:08] Speaker 05:
How much does this project matter?

[00:41:10] Speaker 05:
Because that's what they have in front of them, approving this project.

[00:41:14] Speaker 05:
And they said, not just that it was minor, not just that it wasn't that much, but it was almost a vanishingly small portion of it.

[00:41:23] Speaker 05:
I think even counting the mobile sources, I think, for council mention, .0055, .0018% or something.

[00:41:32] Speaker 05:
And so at some point, I think you're allowed to say, when you do that analysis, looking at all of it, with all the background in there,

[00:41:40] Speaker 05:
This is so small that we are not going to require, because it's not this very small analysis, we're not going to require to go further on that analysis.

[00:41:51] Speaker 02:
But then the question is now... How is that consistent with cumulative?

[00:41:55] Speaker 02:
the directive that you look at cumulative effects?

[00:41:58] Speaker 05:
Well, because you've already looked at the cumulative impacts of the other sources in there, because that was the stage two thing that you did.

[00:42:05] Speaker 05:
And this is the question I have when I'm trying to figure out the argument here, which is suppose you do this cumulative impact analysis on the contribution.

[00:42:14] Speaker 05:
I mean, we already know from the cumulative impact analysis that was done that when you put all the sources together, you're over the next level for this one pollutant measured in this one way.

[00:42:25] Speaker 05:
So I'm not sure what additional information we're going to get.

[00:42:28] Speaker 02:
But why isn't that all you need?

[00:42:29] Speaker 02:
Now it has a cumulative effect.

[00:42:31] Speaker 02:
It's significant.

[00:42:32] Speaker 02:
And now you just look at alternatives.

[00:42:34] Speaker 05:
Well, but they did look at that.

[00:42:35] Speaker 05:
Well, because the question is now you're looking at the

[00:42:40] Speaker 05:
Because the question is the approval of this project and the approval of this project says that this particular whatever is going on else this particular project has so little to do with it.

[00:42:52] Speaker 04:
We're not going to as you said NEPA is a procedural and pretty formal statute.

[00:42:57] Speaker 04:
So formally why isn't the right answer that this page just should have said the cumulative impact is significant but

[00:43:07] Speaker 04:
The contribution from this project is so small that, and so forth.

[00:43:11] Speaker 04:
But you can't, it just literally doesn't compute in my head that it's not a significant level.

[00:43:16] Speaker 05:
I think they did sort of say that because they wouldn't have got, I mean, I think, well, I don't know if they said it specifically, but it's inherent in the process because you don't get to the SIL unless you find, looking at all these background sources, you've got an ax exceedance.

[00:43:32] Speaker 05:
So that's what confuses me about it.

[00:43:33] Speaker 02:
I think that's what went wrong.

[00:43:34] Speaker 02:
But the commission has discretion.

[00:43:35] Speaker 02:
It didn't have to go to that second stage.

[00:43:37] Speaker 02:
It just should have said,

[00:43:38] Speaker 02:
this is significant, it's a significant cumulative impact.

[00:43:41] Speaker 02:
Now we just look at alternatives.

[00:43:43] Speaker 02:
You're doing anyway in other contexts in the same way.

[00:43:46] Speaker 05:
I'm sorry.

[00:43:46] Speaker 05:
No, it does have to go to that second stage because that second stage is when three of the four exceedances of the first stage got thrown out.

[00:43:53] Speaker 05:
It was that second stage showed you that the only thing we had to worry about was the one hour nitrogen dioxide because that was the only thing looking at all the cumulative impacts triggered.

[00:44:05] Speaker 05:
Then the question is, well, what do you do with that?

[00:44:07] Speaker 05:
And the question is, well, we're just looking at this.

[00:44:10] Speaker 05:
We'll get this one thing.

[00:44:11] Speaker 05:
We're looking to see how significant is the contribution from that.

[00:44:15] Speaker 05:
And it's so small that for our informational purposes, we don't think we need to go further than that.

[00:44:20] Speaker 02:
So that was a third step.

[00:44:21] Speaker 02:
So maybe you didn't need that third step.

[00:44:23] Speaker 02:
Because once you figured out the nitrogen dioxide was higher.

[00:44:26] Speaker 05:
But I think that gets to the question, and I think Judge Pan, you were looking at that with respect.

[00:44:31] Speaker 05:
There's a little bit of a talismanic view here on significance.

[00:44:34] Speaker 05:
I mean, you look at significance initially, but there's really no authority, legal authority, for example, for saying that greenhouse gas emissions have to be determined to be significant.

[00:44:47] Speaker 05:
Judge Garcia, you asked that question.

[00:44:49] Speaker 05:
You mentioned a Fifth Circuit mitigation case or something like that, which is kind of a second order.

[00:44:54] Speaker 05:
But we do have precedent on this, the Center for Biological Diversity case.

[00:44:59] Speaker 05:
And by the way, another case, Delaware Riverkeeper, that's in 45F4.

[00:45:03] Speaker 05:
That's cited in Center for Biological Diversity.

[00:45:07] Speaker 05:
All of those are post-facidos cases.

[00:45:10] Speaker 05:
So the idea that this is the first time you've had it since then, I'm not sure where that comes from.

[00:45:17] Speaker 05:
But then also, Judge Pan, you mentioned the waiver issue here.

[00:45:20] Speaker 05:
If you're going to be distinguishing this case from Center for Biology to Diversity or Delaware Riverkeeper to unpublished decisions, we're at least a fifth of the sixth bind at the apple here, the question is, well, how are you going to distinguish those?

[00:45:33] Speaker 05:
In Vecinos, they distinguished it because there was a regulation that the court held needed to be considered.

[00:45:42] Speaker 05:
As you pointed out, that regulation was not raised in this case.

[00:45:45] Speaker 05:
It's not even mentioned in their briefs.

[00:45:48] Speaker 05:
So you ask Petitioner's Council about that.

[00:45:51] Speaker 05:
He said, well, we didn't have to because we were after Vecinos, and the suggestion was that somehow FERC had changed its whole analysis.

[00:45:59] Speaker 05:
with respect to Vecinos more or less accepting the decision.

[00:46:02] Speaker 05:
Vecinos was a remand decision.

[00:46:04] Speaker 05:
We're involved in that case.

[00:46:06] Speaker 05:
The commission explained that's going to be one of the next cases you have.

[00:46:10] Speaker 05:
The commission explained in that case, they didn't concede that they were all wrong because of this regulation.

[00:46:17] Speaker 05:
They explained very carefully why, given the regulation, they still could not make this significance finding.

[00:46:23] Speaker 05:
So all of this is a way of saying, I'm, of course, not asking you to anticipate this case.

[00:46:27] Speaker 05:
What I'm saying is the argument that they didn't waive reliance on this regulation because somehow their opposed facilities and FERC had accepted their argument.

[00:46:37] Speaker 05:
is absolutely not true.

[00:46:38] Speaker 05:
They have no way to distinguish this case from Center for Biological Diversity, from Delaware for Keeper, from the five or six cases where they've made this argument and it's been rejected.

[00:46:49] Speaker 05:
Final thing they said, and this was also about the distinct, well in this particular case they only relied on one

[00:47:00] Speaker 05:
order.

[00:47:01] Speaker 05:
You know, FERCUS had three reasons, and in this case, they just didn't rely on one of these or two of these because of FASCINOS.

[00:47:09] Speaker 05:
If you look at the rehearing order, paragraph 40, they talk about the fact that there are

[00:47:20] Speaker 05:
There's no way for the commission to determine credibly whether the reasonably foreseeable GHG admissions are significant or not significant in terms of their impact on global climate change.

[00:47:30] Speaker 05:
That's a very, very general statement.

[00:47:32] Speaker 05:
That's not relying on, that's not giving up any argument.

[00:47:35] Speaker 05:
Then they say currently there are no criteria to identify what monetized values are significant.

[00:47:40] Speaker 05:
Then they cite in note 129, they cite to Tennessee gas pipeline, they cite to mountain valley pipeline,

[00:47:47] Speaker 05:
giving several reasons why I believe the petitioner's preferred metric is not appropriate.

[00:47:52] Speaker 05:
This is JA 113, Rehearing Order 40.

[00:47:55] Speaker 05:
I don't read that and say they are now walking away.

[00:47:59] Speaker 05:
Mountain Valley Pipeline, that was a case with the three organizations.

[00:48:03] Speaker 02:
You're way over your time.

[00:48:04] Speaker 02:
Oh, I'm sorry.

[00:48:05] Speaker 05:
But yeah, there's no way to distinguish their precedent.

[00:48:09] Speaker 05:
Thank you.

[00:48:13] Speaker 05:
Why don't you take two minutes?

[00:48:21] Speaker 00:
Okay.

[00:48:23] Speaker 00:
Thank you, Your Honor.

[00:48:25] Speaker 00:
So this case is distinct from Center for Biological Diversity, the Delaware River case and others, for the reasons we stated, that FERC did not make two of the arguments about social cost of carbon from those cases.

[00:48:35] Speaker 00:
FERC does not complain that the social cost of carbon doesn't measure physical effects.

[00:48:40] Speaker 00:
FERC does not express concern about the choice of discount rate.

[00:48:43] Speaker 00:
It's true that those DC circuit decisions were decided after Vecinos, but the FERC orders at issue in those decisions preceded Vecinos, which is why Vecinos isn't reflected in the records there, but Vecinos did change the reasoning FERC used in its issue here.

[00:48:58] Speaker 00:
Second, Council for FERC stated that FERC is still working on how to figure out the significance of greenhouse gas emissions.

[00:49:04] Speaker 00:
I don't believe that that's correct.

[00:49:06] Speaker 00:
In the authorization order at issue here,

[00:49:08] Speaker 00:
Ferck said we aren't making a significance determination because we have this ongoing proceeding about how we're going to do this.

[00:49:14] Speaker 00:
In the rehearing order, Ferck acknowledged that that draft had been rescinded.

[00:49:19] Speaker 00:
I don't believe Ferck is still doing any work on the greenhouse gas policy.

[00:49:22] Speaker 00:
And Ferck didn't say we're figuring it out.

[00:49:24] Speaker 00:
Ferck said it is impossible to do it.

[00:49:26] Speaker 00:
That's why we're not going to do it here.

[00:49:28] Speaker 00:
So I don't know that there is some

[00:49:30] Speaker 00:
better analysis from FERC that is going to be coming in another case.

[00:49:35] Speaker 00:
Also note, FERC didn't make any argument here as to why these emissions are insignificant.

[00:49:39] Speaker 00:
It's not like there are arguments for finding significance and finding insignificance and FERC hasn't decided which are the more compelling.

[00:49:45] Speaker 00:
FERC is just saying we don't know what to do without having any plausible theory under which you could decide that these emissions were insignificant.

[00:49:54] Speaker 00:
On the air pollution issues,

[00:49:58] Speaker 00:
I think both opposing counsel mentioned something about a .005% increase.

[00:50:02] Speaker 00:
That's not the maximum increase from this project.

[00:50:05] Speaker 00:
That's on the day when air is the worst, that this project level is very small, but on other days where the background is not as high, this project will have a much larger contribution.

[00:50:14] Speaker 00:
We identified a 2.79 micrograms per cubic meter increase when this project is the biggest problem, but there's still a max exceedance.

[00:50:22] Speaker 00:
Um, first council mentioned that the area is currently in attainment having conducted this modeling that shows exceedances for can't walk away from, from that modeling now.

[00:50:32] Speaker 00:
So the modeling says when this project starts operating and other facilities that have been approved, but aren't yet constructed are also operating at that point in the future.

[00:50:40] Speaker 00:
we think the error is going to be, frankly, really bad.

[00:50:44] Speaker 00:
And so having based its analysis of what the error will be like when this project starts operating on that modeling, FERC can't now say, but that modeling doesn't really matter because the error is not so bad right now.

[00:50:55] Speaker 00:
One last point on the public interest.

[00:50:58] Speaker 00:
This question of whether or not issues are significant matters because of how FERC does its public interest analysis.

[00:51:05] Speaker 00:
FERC summarizes that on page 26 of its brief.

[00:51:07] Speaker 00:
FERC explains that there is a presumption favoring exports.

[00:51:12] Speaker 00:
Where environmental impacts are insignificant, FERC says there's nothing to weigh.

[00:51:16] Speaker 00:
FERC kind of stops the analysis there.

[00:51:18] Speaker 00:
And here, where FERC dismissed almost all of the impacts other than visual as insignificant, FERC said, well, since there's nothing to weigh against benefit, we don't need to worry about benefit.

[00:51:27] Speaker 00:
But if FERC had to admit that some of these impacts were significant, then FERC would need to do some balancing.

[00:51:32] Speaker 00:
And FERC would have to explain, why does this project provide some benefits?

[00:51:37] Speaker 00:
that outweigh the significant impacts.

[00:51:39] Speaker 00:
And again, that's not NEPA that says if an impact is significant, then you have to address it in your public interest balancing, but that is FERC's practice.

[00:51:46] Speaker 00:
The rationale FERC gives under the Natural Gas Act is to say our NEPA insignificant findings mean we don't have anything else to do here.

[00:51:53] Speaker 00:
I see that I'm over my time, but if there's any further questions.

[00:51:56] Speaker 01:
Thank you.