Appeals Court Properly Rejects Activists’ Effort to Impede Domestic Energy Development

The scope of environmental “cumulative impact” extends only so far.  So said the U.S. Court of Appeals for the Second Circuit in its recent decision of Coalition for Responsible Growth and Resource Conservation v. U.S. Federal Energy Regulatory Commission (FERC).   The ruling is an important victory for the country’s energy sector because it clarifies that energy companies will not be held to unreasonable terms under the National Environmental Policy Act (NEPA).

The case arises from a petition filed by Earthjustice and other environmental organizations challenging an order issued by FERC allowing the Central New York Oil And Gas Company to build a natural gas pipeline in north central Pennsylvania.  Robert J. Alessi and Jeffrey D. Kuhn of DLA Piper have written a very thorough background of the case here, so I’ll just mention a few of the more important details. 

The question assessed by the Second Circuit was how broad must NEPA’s “cumulative impact” assessment be? What is “cumulative impact”? Alessi and Kuhn wrote:

In analyzing the environmental impacts of projects subject to NEPA, federal agencies must evaluate the action’s direct, indirect and cumulative impacts.  “Cumulative impact” is defined in Section 1508.7 of NEPA’s implementing regulations as “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.”  Stated differently, a cumulative impacts analysis examines whether a project’s otherwise insignificant direct/indirect effects on a particular resource might rise to the level of significance when considered in the context of other actions impacting the same resource.”

Earthjustice pushed for a broad interpretation of the “cumulative impact” assessment in the hope that such an assessment would force an Environmental Impact Statement – “a very costly and time-consuming” procedure that could potentially kill the project.  FERC, however, found that the breadth proposed by Earthjustice was inappropriate, and that the assessment need not include an “in-depth evaluation of the environmental effects of non-jurisdictional natural gas well drilling.”

This finding was wholly consistent with FERC’s past actions and consistent with past judicial rulings.  Steve Saunders, a Scranton-based oil and gas lawyer said that “It’s pretty unusual to find a circuit court that would overturn the federal agency in one of these cases.”

Still, Earthjustice challenged the assessment and the initial ruling by claiming, “We are seeing a very troubling pattern at work.  At every turn, the Central New York Oil & Gas Company has pressured regulators to fast-track this project.  FERC is bowing to this pressure, even to the point of behind its own rules.”

The NEPA assessment should only take into account environmental actions that are closely related to the planned activities.  To require otherwise would mandate a massive scavenger hunt to track down every related environmental thread and would seriously hamper the country’s energy development.  Precautions should be taken to avoid environmental harm, but the model that FERC has consistently applied in the past constitutes sufficient due diligence, and was correctly upheld by the Second Circuit.

The ruling “is important because it confirmed what FERC had been consistently doing,” and it will allow energy companies and FERC to move forward with a more definite sense of that standards to which they will be held – standards that will likely protect our environment and enable energy development.  (Elizabeth U. Witmer, Saul Ewing, Pittsburgh Post Gazette)

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