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Appalachian Voices v. FERC

United States Court of Appeals for the District of Columbia Circuit

February 19, 2019, Filed

No. 17-1271 Consolidated with 18-1002, 18-1175, 18-1177, 18-1186, 18-1216, 18-1223

Opinion

JUDGMENT

This case was considered on the record from the Federal Energy Regulatory Commission (FERC), and [*14]  on the briefs and oral arguments of the parties. The Court has afforded the issues full consideration and has determined they do not warrant a published opinion. See Fed. R. App. P. 36; D.C. Cir. R. 36(d). It is

ORDERED AND ADJUDGED that the petitions for review be denied.

Petitioners Appalachian Voices, Chesapeake Climate Action Network, Sierra Club, and others challenge FERC's October 2017 issuance, under Section 7(c) of the Natural Gas Act, 15 U.S.C. § 717f(c)(1)(A), of a "certificate of public convenience and necessity" to Mountain Valley Pipeline, LLC ("Mountain Valley") for the construction and operation of a new natural gas pipeline. The proposed pipeline ("the Project"), which would extend 300 miles from Wetzel County, West Virginia, into Pittsylvania County, Virginia, and require the construction of three new compressor stations, is designed to transport up to two million dekatherms (approximately two billion cubic feet) of natural gas per day. Petitioners raise sixteen different challenges to FERC's environmental assessment of the Project and subsequent issuance of the certificate authorizing Mountain Valley to construct and operate the pipeline subject to several conditions described in the Certificate Order, Mountain Valley Pipeline, LLC, 161 FERC ¶ 61,043 (2017) ("Certificate Order"). None of the challenges succeeds. [*15] 

Notwithstanding petitioners' argument to the contrary, FERC's conclusion that there is a market need for the Project was reasonable and supported by substantial evidence, in the form of long-term precedent agreements for 100 percent of the Project's capacity. See Sierra Club v. FERC, 867 F.3d 1357, 1379, 432 U.S. App. D.C. 326 (D.C. Cir. 2017) (explaining that ] an applicant can make a showing of market need "by presenting evidence of preconstruction contracts for gas transportation service" (internal quotation marks omitted)). The fact that Mountain Valley's precedent agreements are with corporate affiliates does not render FERC's decision to rely on these agreements arbitrary or capricious; the Certificate Order reasonably explained that "[a]n affiliated shipper's need for new capacity and its obligation to pay for such service under a binding contract are not lessened just because it is affiliated with the project sponsor." Certificate Order ¶ 45. FERC's approval of Mountain Valley's requested fourteen percent return on equity was reasonably based on the specific character of the Project and Mountain Valley's status as a new market entrant, and the remainder of its public convenience and necessity determination was likewise reasoned and supported by substantial [*16]  evidence in the record.

Petitioners' Natural Gas Act, Takings Clause, and due process challenges to Mountain Valley's exercise of eminent domain authority also fail. FERC's issuance of the certificate of public convenience and necessity, upon which Mountain Valley's eminent domain authority ultimately relies, did not hinge, as petitioners claim, on the Bureau of Land Management's and the United States Forest Service's respective decisions to grant the company a right of way through federal land and amend the Jefferson National Forest Land Resource Management Plan to accommodate the right of way. Accordingly, the Fourth Circuit's 2018 opinion vacating those decisions, see Sierra Club, Inc. v. United States Forest Service, 897 F.3d 582 (4th Cir.), rehearing granted in part, 739 F. App'x 185 (4th Cir. 2018), has no bearing on the validity of Mountain Valley's certificate under the Natural Gas Act. Petitioners' next argument—that FERC violated the Act by issuing the certificate subject to conditions precedent—lacks merit because section 717f(e) expressly provides that FERC "shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require." 15 U.S.C. § 717f(e). Equally unavailing is the contention [*17]  that Mountain Valley's lack of certain required permits undermines FERC's conclusion that Mountain Valley is "able and willing," id., both to construct the pipeline and to comply with the requirements of the Act. Petitioners cite no authority for the proposition that an applicant must obtain all other relevant permits before FERC issues a Certificate Order, and, as the agency explained in the Rehearing Order, ] "Mountain Valley's acceptance of the certificate demonstrates the willingness to perform such acts in accordance with the conditions set out in the certificate." Mountain Valley Pipeline, LLC, 163 FERC ¶ 61,197, ¶ 62 (2018).

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2019 U.S. App. LEXIS 4803 *; 49 ELR 20032; 86 ERC (BNA) 3935; 2019 WL 847199

APPALACHIAN VOICES, ET AL., PETITIONERS v. FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT, BOLD ALLIANCE, ET AL., INTERVENORS

Notice: PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING THE CITATION TO UNPUBLISHED OPINIONS.

Prior History:  [*1] On Petitions for Review of Orders of the Federal Energy Regulatory Commission.

Mt. Valley Pipeline, LLC, 161 F.E.R.C. P61043, 2017 FERC LEXIS 1633 (F.E.R.C., Oct. 13, 2017)

CORE TERMS

certificate, petitioners', pipeline, consulting, impacts, public convenience, challenges, emissions, just compensation, conditions, issuance, eminent, parties, Carbon, domain

Energy & Utilities Law, Natural Gas Industry, Natural Gas Act, Certificates of Need, Evidence, Burdens of Proof, Allocation, Regulators, US Federal Energy Regulatory Commission, Authorities & Powers, Constitutional Law, Bill of Rights, Fundamental Rights, Eminent Domain & Takings, Business & Corporate Compliance, Energy & Utilities Law, Natural Gas Act, Pipelines & Transportation, Eminent Domain Proceedings, Procedural Due Process, Scope of Protection, Civil Procedure, Appeals, Reviewability of Lower Court Decisions, Preservation for Review, Hearings & Orders, Judicial Review, Administrative Law, Judicial Review, Reviewability, Reviewable Agency Action