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Delaware Riverkeeper Network v. United States Army Corps of Engineers

United States Court of Appeals, Third Circuit

August 23, 2017

DELAWARE RIVERKEEPER NETWORK; MAYA VAN ROSSUM, the Delaware Riverkeeper, Petitioners
v.
UNITED STATES ARMY CORPS OF ENGINEERS, Respondent Tennessee Gas Pipeline Co., Intervenor

          Argued July 13, 2017

         On Petition for Review from the United States Army Corps of Engineers CENAP-OP-R-2015-0802-65

          Aaron J. Stemplewicz [ARGUED] Delaware Riverkeeper Network Counsel for Petitioners.

          Varu Chilakamarri [ARGUED] United States Department of Justice Environment & Natural Resources Division, Michael T. Gray United States Department of Justice Army Corps of Engineers, David C. Shilton United States Department of Justice Environment & Natural Resources Division Counsel for Respondent.

          Pamela S. Goodwin Saul Ewing, Patrick F. Nugent, John F. Stoviak [ARGUED] Elizabeth U. Witmer Saul Ewing Counsel for Intervenor Respondent.

          Before: SMITH, Chief Judge, NYGAARD, and FUENTES, Circuit Judges

          OPINION OF THE COURT

          SMITH, CHIEF JUDGE.

         Tennessee Gas Pipeline Co. ("Tennessee Gas") submitted applications to several federal and state agencies seeking approval to build an interstate pipeline project. One such agency is the United States Army Corps of Engineers, [1] which administers certain provisions of the Clean Water Act. The Corps issued a permit approving the project. The petitioners, Maya van Rossum and Delaware Riverkeeper Network (collectively, "Riverkeeper"), challenge that decision on the ground that the Corps acted arbitrarily and capriciously by rejecting a "compression" alternative.

         W e conclude that the Corps considered the compression alternative but rejected it for reasons supported by the record. While the compression alternative would disturb less land, its impact would be mostly permanent. The pipeline project would disturb more land, but its impact would be mostly temporary. In making a policy choice between those environmental tradeoffs, the agency's discretion was at its apex. We will therefore deny the petition for review.

         I

         A

         At issue is the Orion Project-12.9 miles of pipeline looping[2] that would transport an additional 135, 000 dekatherms per day of natural gas through Pennsylvania. Approximately 99.5% of the new pipeline would run alongside existing pipelines. According to Riverkeeper, construction will lead to deforestation, destruction of wetland habitats, and other forms of environmental damage. Riverkeeper asserts that such damage can be avoided by building or upgrading a compressor station. "Compressor stations . . . us[e] gas- and electric-powered turbines to increase the pressure and rate of flow at given points along the pipeline's route." Del. Riverkeeper Network v. Sec'y Pa. Dep't of Envtl. Prot., 833 F.3d 360, 369 (3d Cir. 2016). Building or upgrading a compressor station would increase the amount of natural gas transported through existing pipelines and thus avoid any need to build pipeline looping.[3]

         Contrary to Riverkeeper's concerns, the agencies concluded that the Orion Project would result in "minimal" and "temporary" environmental impact. Of the 12.9 miles of pipeline looping, fewer than 2 miles would cross wetlands or water bodies. The pipeline would be buried 2-3 feet beneath the ground, and all disturbed areas would be restored to their original elevations and contours with no net loss of wetlands. However, nearly five acres of forested wetlands would be de-forested and converted into emergent wetlands. The compression alternative, by contrast, would require constructing one or more permanent fixtures-causing permanent deforestation as well as light, air, sound, and greenhouse gas pollution.

         With that initial background in mind, we next set forth a brief overview of the administrative scheme and then describe how that process unfolded in this case.

         B

         Under the Natural Gas Act of 1938, the Federal Energy Regulatory Commission ("FERC") is the "lead agency" for evaluating interstate pipeline projects. 15 U.S.C. § 717n(b). As part of that role, FERC performs a technical environmental analysis pursuant to the National Environmental Policy Act ("NEPA"). Id.

         NEPA requires FERC to take a "hard look" at the environmental impact of the proposed project. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). If the project involves a "major Federal action" that would "significantly affect[] the quality of the human environment, " FERC must prepare a detailed Environmental Impact Statement. 42 U.S.C. § 4332(C). Otherwise, FERC need only prepare a concise Environmental Assessment. 40 C.F.R. §§ 1501.3, 1501.4, 1508.13.

         As a condition of FERC's approval, the applicant is required to obtain any additional state or federal licenses required by law. For example, because the Orion Project would discharge "dredged or fill material" into the "waters of the United States, " Tennessee Gas was required to obtain a permit under Section 404 of the Clean Water Act. 33 U.S.C. §§ 1344(a), 1362(7).

         The United States Army Corps of Engineers reviews applications for Section 404 permits. In doing so, the Corps applies the so-called Section 404 Guidelines ("the Guidelines") issued by the Environmental Protection Agency. See 33 C.F.R. § 320.4. See generally Coeur Alaska, Inc. v. Se. Alaska Conservation Council, 557 U.S. 261 (2009). Among other things, the Corps may not issue a permit where there is a "practicable alternative" with less adverse impact on the aquatic ecosystem, "so long as the alternative does not have other significant adverse environmental consequences." 40 C.F.R. § 230.10(a).

         In performing its alternatives analysis, the Corps may rely on the environmental report prepared by FERC pursuant to NEPA. The agencies memorialized their cooperative relationship in a 2005 Memorandum of Understanding, which states that the Corps will "use the FERC record to the maximum extent practicable and as allowed by law . . . . [T]he Corps will give deference, to the maximum extent allowed by law, to the project purpose, project need, and project alternatives that FERC determines to be appropriate for the project." JA 39.[4]

         C

         1. Tennessee Gas's application.

         On October 9, 2015, Tennessee Gas submitted an application to FERC for approval of the Orion Project. Its application included an Environmental Report, which discussed and rejected compression alternatives. Tennessee Gas explained that building compressor stations would require Tennessee Gas "to obtain approximately 40-acres per site (total of 80 acres)." JA 408. Building compressor stations would also require "permanent vegetation clearing from the area in order to install permanent access roads, fencing, buildings and other appurtenance equipment, " and would create "light pollution and noise impacts and may also become a source of [greenhouse gas] emissions." Id. But with the Orion Project, "the new [right-of-way] will be allowed to re-vegetate to minimize and mitigate possible environmental impacts." Id. The report further concluded that the "compression alternative would result in higher Project operating and fuel costs." Id.

         2. Public notice.

         On December 3, 2015, FERC issued a Notice of Intent and solicited public comments regarding the Orion Project. FERC specifically requested comments on "reasonable alternatives." JA 560. On June 10, 2016, the Corps issued its own public notice of the Section 404 permit application.

         3. FERC's draft Environmental Assessment.

         In July 2016, FERC circulated a non-public draft Environmental Assessment to the Corps for internal comment. The draft specifically considered and rejected a possible compression alternative, as conveyed in a detailed chart. While the draft Environmental Assessment concluded that compression would be "technically feasible, " its "economic efficiency" would be "lower" and it would "require permanent land use conversion" and present a new source of light, air emissions, and noise. JA 212. The draft characterized compression's environmental impact as "different, " "comparable, " and "possibly lower" than the Orion Project. But ultimately, the draft concluded that the aboveground footprint of building a compression station is "permanent, " whereas "the bulk of the Project impacts are temporary (such as water body crossings) or adjacent to the existing right-of-way." Id.

         4. Final Environmental Assessment.

         On August 23, 2016, FERC published its Environmental Assessment for public comments-requesting that comments "focus on the potential environmental effects, reasonable alternatives, and measures to lessen or avoid environmental impacts." JA 239. For reasons that are not clear from the record, the final Environmental Assessment omitted the draft's analysis of the compression alternative. The final assessment did, nonetheless, recommend a "finding of no significant impact" because the Orion Project's "impacts on water bodies and wetlands would be minor and temporary." JA 340, 274, 278.

         5. Public Comments.

         Before the publication of the Environmental Assessment, "[n]one of the environmental comments received on the Orion Project identified specific alternatives to the proposed looping segments." JA 335. After publication, groups including Riverkeeper commented on alternatives but never specifically addressed compression.

         The Corps received no public comments and received no requests for a public hearing.

         6. FERC Order Issuing a Certificate.

         On February 2, 2017, FERC published its Order Issuing a Certificate, approving the Orion Project and issuing a "certificate of public convenience and necessity." 15 U.S.C. § 717f(c). FERC explained that it "evaluated alternatives to the Orion Project to determine whether they would be reasonable and environmentally preferable to the proposed project, " and "affirm[ed] the conclusion in the [Environmental Assessment] that no reasonable alternative would result in significantly less environmental impacts and accomplish the project's objective." JA 635.

         The Order also noted that "[w]hile Delaware Riverkeeper presents general alternatives that would potentially result in less impact, Tennessee's application and its response to Delaware Riverkeeper's comments provide further evidence that the Orion Project could not be satisfied by relying on other transportation systems or looping, compression, and route alternatives along Tennessee's own system." JA 635 (emphasis added).

         7.Corps Considers and Issues a Section 404 Permit.

         Concurrently with the FERC process, the Corps reviewed Tennessee Gas's application for a Section 404 permit. The Corps issued its permit on the same date as FERC's order, February 2, 2017. The Corps incorporated the Environmental Assessment into its findings-concluding that the water impacts would be "temporary in nature" and the project would have a "[n]egligible effect." JA 432-34. The Corps further concluded that "there are no reasonable or practicable alternatives" for which there would be no "significant adverse environmental effects, " and that ...


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