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Case number 14-1249, Sierra Club Petitioner versus Federal Energy Regulatory Commission.

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Mr. Matthews for the petitioner, Mr. Solomon for the respondent, and Mr. Franklin for the intervener.

[00:00:18] Speaker 01:
Good morning.

[00:00:19] Speaker 03:
Good morning.

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May it please the court, Nathan Matthews on behalf of Petitioner Sierra Club.

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I'd like to reserve five minutes for rebuttal.

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The cases before the court today concern first orders authorizing construction and increased operation of facilities that will enable the export of a large percentage of the natural gas produced in the United States.

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The gas exported by these facilities will have to come from somewhere.

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FERC admits in its response brief that the exports enabled by these facilities will lead to a foreseeable increase in gas production.

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The record indicates that exports will also displace some existing gas demand, primarily by the electric sector switching from gas to coal power.

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These increases in gas production and coal use will have important environmental consequences.

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In particular, they will lead to an increase in greenhouse gas emissions and an increase in emissions of ozone-forming pollution.

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My question for you is why is this action directed at FERC?

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Why isn't it directed

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at the Department of Energy.

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I mean, we learn from a public citizen that we're supposed to look to the agency that has statutory authority over the cause.

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The cause here is increased exports of natural gas.

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That's a decision that belongs to the Department of Energy and not to FERC.

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So why, under a public citizen, why aren't you going after

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department of energy instead of the little guy here.

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Before addressing, I have a two-part answer to the question about public citizen.

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The first is that

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Under NEPA, the norm, rather than the exception, for multiple agencies to have authority over a particular effect.

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That's especially true for growth and newsing effects, which are explicitly called out in the NEPA regulations as an effect that needs to be within the scope of action review.

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Let's go back to public citizen.

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Public citizen says we look to the agency that has the statutory authority, that has the ability to prevent the cause.

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And the cause here is increased exports.

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FERC isn't the problem here, according to your view of the world.

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The Department of Energy is the problem.

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FERC is just a little player executing the Department of Energy's policy.

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So Jacob disagrees with the idea that FERC is a small player.

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And I think that the reason for that is that public citizen turned on.

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Yeah, I actually didn't think about that too much before I said it.

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So yeah, FERC is a little bit of that.

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But you see, they play a function here where the real decision, the authority lies with the Department of Energy, at least as I read, the type of authority we're supposed to look at, at least as I read public citizen.

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Now, help me.

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Of course.

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I will try.

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Public citizen turned on a statutory framework which is starkly different from the statutory framework provided by the Natural Gas Act here.

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The decision of public citizen turned on the fact that the Department of Transportation had no authority or no ability to prevent the affected issue.

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The entry of Mexican trucks into the United States

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did depend upon the Department of Transportation issuing the rules at issue.

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But because the statutory scheme so cabined the Department of Transportation's discretion, there was no ability for the Department of Transportation to refrain from issuing the regulations at issue.

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In contrast to that sharply delimited discretion

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public citizen, the Natural Gas Act provision at issue here is the public interest determination under section three, which is a broad statutory inquiry that this court and the Supreme Court have held that that inquiry specifically concerns effects on natural gas supplies is one of the purposes that needs to be considered in execution or in resolution of that public interest determination, as well as effects on the environment.

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So the statutory provision here

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is much broader and certainly encompasses the types of effects on gas supply and on the environment that are at issue here.

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So the focus of ESSK in that connection following up on Judge Griffith's point, the focus is under the Natural Gas Act, the impact of this letting this increase be authorized.

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I agree that the first part of the public citizen inquiry is the court and public citizen stated that the scope of NEPA inquiry was informed by the policies and attempts underlying the statutes at issue.

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And here, the statute at issue, the Natural Gas Act, clearly encompasses the fact that- What I'm trying to focus on is the Natural Gas Act is not another EPA statute.

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All right, that's one realm of responsibility.

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It's also not a Department of Energy statute.

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It's focusing on what FERC does.

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And what FERC is arguing here is the siting, the operation of this facility.

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I'm not sure that I answered the question, but let me.

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Well, your response to Judge Griffith is Natural Gas Act talks about environmental effects.

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It talks about public interest.

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And my follow-up is to suggest that maybe under the statutory scheme as envisioned by Congress, there are separate responsibilities.

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And just because the word environment and the word public interest

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appears in a statute doesn't necessarily mean that the agency implementing that statute has the same breadth of responsibility as other agencies in particular areas.

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And indeed, in this case, Congress said this was a matter for the Department of Energy, and Energy delegated limited authority to FERC.

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So I have two responses to that question.

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The first is that although the Department of Energy delegated authority to FERC to undertake the public interest inquiry for purposes of site and construction and operation of natural gas export facilities,

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There is no clear language in that delegation order or in any other Department of Energy statement that would plainly limit the scope of FERC's inquiries or to limit the scope of NEPA inquiry that would otherwise be required.

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So the agency has adopted an interpretation, and what is your burden with regard to convincing us that it has adopted an impermissible interpretation?

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that our burden is under the arbitrary and capricious standard of review here, we would argue that the Natural Gas Act

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identified certain factors as factors that the agency must consider in execution of the Section 3 public interest inquiry, that impacts on gas supply and the environment are among those impacts, and that FERC, by refusing to consider impacts on gas supply and on the environment here, failed to consider an important part of the problem, and so that FERC's decision violates.

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As I understand what NEPA is trying to do here, again, in light of public citizen.

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Maybe I'm just repeating myself.

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In public citizen, we're supposed to look at the agency that has authority over the conduct that is causing the problem.

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The statutory authority for FERC here is siting, to pick the site, to operate, produce.

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And that's not the problem.

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The problem here, according to your view of things, is the Department of Energy

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who has the statutory authority to determine, turn the spigots on, let's send it all overseas.

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And that's what's causing the problems, in your view, isn't it?

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So again, the question is, why don't you go after them?

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One reason why we are concerned with FERC's authorization as well as the Department of Energy's actions is that because FERC, under the division of labor that the FERC and the Department of Energy has adopted, because FERC goes first and authorizes construction of these facilities, significant investment and commitment of resources ahead of time, FERC

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in essence allows a bum on the scale for the subsequent Department of Energy decision-making.

[00:09:33] Speaker 08:
And that, again, underneath a overlapping agency authority is the norm rather than... So it's just because it's the way it functions, the way the statute functions in the real world.

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You're saying FERC is making the first determination you want to cut it off at the pass, right?

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Is that sort of the idea?

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In essence, yes.

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But I don't know that public citizen allows us to take a functional view of this.

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I mean, the statutory authority is clearly with the Department of Energy, and it's not with FERC.

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And as I read public citizen, we're not supposed to conduct this sort of functional analysis.

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We're supposed to look at where the statutory authority lies for the conduct that's causing the alleged harm.

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And so our concern is that this scheme that has played out here is that the Natural Gas Act provides a single public interest standard.

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It not provides separate standards for construction of export facilities and then a different statutory inquiry for the decision on whether to authorize exports to occur.

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There's a single public interest standard in section three of the Natural Gas Act.

[00:10:38] Speaker 02:
Isn't it more than that?

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I mean, where is the statutory?

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DOE or FERC, the statutory authority?

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So the Natural Gas Section 3 authority was vested in the Federal Power Commission and then separately transferred to the Department of Energy.

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That's right, that's where the statutory authority is.

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There's no particular statutory provision transferring authority over site and construction or operation of natural gas export facilities to FERC.

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Exactly.

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That was done as a delegation by DOE.

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So for purposes of public citizen, is it not DOE that has the statutory authority for both segments of the decision-making process here, the construction and the export decision?

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I'm not sure why you're buying into the public citizen paradigm here, because there's one agency, and FERC is just its agent, its magistrate judge making a report and recommendation, essentially.

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I believe I agree in that, again, I think that public citizen was focused on the scope of factors that Congress intended an agency to consider.

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That the Department of Energy has authority under a separate statute to delegate decision-making to FERC, but that in this process of so doing,

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The Department of Energy doesn't have authority to allow for it to make decisions without considering the full scope of factors that Congress intended to be considered.

[00:12:09] Speaker 02:
And so, because... I guess I'm asking, what happens when a delegation is made?

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Does that mean that DOE is, the energy is still not statutorily responsible for the decision-making issues?

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and i i'd assume they were still statutorily responsible for the decision that issues just like when any other federal agent delegates power to someone else there's still a little bit of stops with the person that congress designated in the statute my understanding is that because the department of energy has uh... statutory a specific statutory authorization to delegate some of its authority to FERC

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that the buck stops with FERC for purposes of the site and construction and operation inquiry, but that although the Department of Energy can transfer the authority and responsibility to FERC, the Department of Energy can't do so in a way that allows decisions to be made without considering the full scope of issues of Congress.

[00:13:12] Speaker 02:
What happens if the gas is going to be exported?

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to a country with which there is a free trade agreement, not a non-free trade, but where there is, where it's, I take it it's automatic under the statute, automatic approval, if it's a free trade country, is that correct?

[00:13:33] Speaker 02:
That's correct.

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That's correct.

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And so if FERC authorizes construction, and then the gas is authorized by DOE for export to a free trade country,

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Where would one ever have the opportunity to challenge, make those export arguments that Burke is saying you need to level with DOE rather than with FERC?

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Is there any opportunity administratively to then raise the arguments that FERC wants us to raise with DOE?

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I believe that there is still some opportunity.

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And I would first point out that in the cases that issue here, there's no indication that these facilities will proceed with exports to free trade agreement.

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Both have sought non-free trade agreement.

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But there have also been free trade authorizations for some of these cases as well.

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But these facilities have entered contracts in the record where they have

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The record indicates that they intend to export to non-free trade countries.

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I've got to figure out how, I've got to figure that some of the time these things are being built for gas to go to free trade countries.

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And so if we have this bifurcated approach where you only talk about construction with FERC and you're supposed to raise the NEPA concerns about the impact of the export, the spigot turning on the Department of Energy, how does that work?

[00:14:58] Speaker 02:
when it's a free trade country and there is no opportunity, it's automatic.

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Congress has already said there will be no, you know, go directly to go.

[00:15:07] Speaker 02:
Right?

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Yep.

[00:15:09] Speaker 01:
That's public citizen.

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In that case there may be, we may have a public citizen problem where there's no authority to act and no authority to deny the exports.

[00:15:20] Speaker 02:
I'm sorry, so then the factors that you say NEPA requires to be considered just aren't to be considered at all when it's a free trade, but it is supposed to be considered when it's a non-free trade?

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That doesn't make a lot of sense to me.

[00:15:36] Speaker 03:
I think part of the difficulty is that, again, there is only a single public interest standard in the Natural Gas Act.

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And the provisions of the Natural Gas Act that address exports to free trade agreement countries simply refer to the public interest standard.

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And because the statute does not break out public interest separately for different types of authorizations, the statute does not explicitly speak to this question.

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Insofar as FERC has authority over the siting of projects in addition to its other issues, as I think FERC has agreed in the record, the siting of projects can influence where the gas supplying the project is likely to come from.

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located on the Oregon coast, for example, is not likely to increase gas production in the same areas that a project located on the Gulf Coast would.

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So there is still an aspect of the indirect effects that is influenced purely by the first decision of where to locate the project, separate from the decision of whether to export at all, and that decision would still need to be made even for exports to free trade agreement countries.

[00:16:37] Speaker 02:
All right.

[00:16:39] Speaker 02:
Oh, can I just ask you quickly to address standing in this case?

[00:16:44] Speaker 02:
In the civilian case?

[00:16:45] Speaker 02:
Yes, as what, show me where in your two declarations you think someone has identified injury traceable to this incremental increase in capacity.

[00:16:56] Speaker 03:
Um, of course.

[00:16:58] Speaker 03:
Um, so Sierra Club member John Paul testified that he fishes boats and hunts in the areas near the Supreme Pass facility, and that his enjoyment of those activities would be adversely impacted by an increase in vessel traffic.

[00:17:11] Speaker 02:
Right, but there's no vessel traffic.

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I mean, this is summary judgment level.

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from you is that there is not evidence of an increase in vessel traffic as a result from this capacity increase, not from the exporting of the train or engines, just from the capacity increase.

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We attempted to show in the record that by increasing the amount of gas processed and exported from the facility by 25 percent, which the increase in output specifically authorized by FERC, moving more gas requires more boats.

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And so a 25 percent increase in output would be expected to correlate with a 25 percent increase in vessel traffic.

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FERC made a specific finding that there would be no increase in

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in traffic, attributable just to the capacity increase, as opposed to the train authorizations, the other things that are going on in this area.

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And how did you rebut that?

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We rebutted that by showing that FERC mischaracterizes its own record.

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What the FERC authorization and rehearing denial show is that

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FERC concluded that vessel traffic resulting from the increase would not exceed the 400 ships per year that FERC previously determined would result from imports of a vastly greater amount of gas.

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But FERC never quantified the number of vessels that would be required for the 2.2 billion cubic feet per day authorized in 2012 relative to the 2.75 billion cubic feet per day authorized in 2014.

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Norris Burke identified any mechanism by which you could increase the volume of gas exported without requiring additional ship traffic.

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And how did you say his behavior had changed because of this?

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I know he said he relocated his boat, but he said that was

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a decision made in addition to owning property at the other location.

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And inside of a lot of things, it sounded like this increase in operations.

[00:19:03] Speaker 03:
Yeah, so it's an aesthetic and recreational injury that he will suffer because of diminished enjoyment of the fishing, hunting, and boating that he continues to do in the area.

[00:19:11] Speaker 02:
I just enjoy it.

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I keep doing it.

[00:19:15] Speaker 02:
My behavior hasn't changed.

[00:19:16] Speaker 02:
I just enjoy my... I'm somewhat like happy when I'm out there counts as article three injury.

[00:19:22] Speaker 03:
uh... under this court's precedence, we condemn that it does.

[00:19:25] Speaker 02:
It says just that behavior is not changed, just my marginal happiness?

[00:19:33] Speaker 02:
Yes.

[00:19:33] Speaker 03:
Which case?

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That that provides an injury under Article III.

[00:19:38] Speaker 02:
Which case?

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Do you think it says just the marginal, marginally less happy?

[00:19:57] Speaker 01:
You can check that.

[00:19:58] Speaker 01:
I'm sorry.

[00:19:58] Speaker 01:
I won't get that when we get to.

[00:20:00] Speaker 01:
Yeah.

[00:20:00] Speaker 01:
And you might check the animal suitcase.

[00:20:03] Speaker 01:
But in any event, let's hear from the commissioner.

[00:20:13] Speaker 05:
May it please the Court, Robert Solomon, for the Commission.

[00:20:16] Speaker 05:
I think I'll start with the statutory and delegation scheme, and then I'll proceed to Judge Millett's questions concerning standing.

[00:20:24] Speaker 05:
Your honors are correct to start with the statute itself, Section 3 of the Natural Gas Act, which is 15 U.S.C.

[00:20:33] Speaker 05:
717

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Now, the language of that provision speaks just to the Commission, but it's important to also bring into account the Department of Energy Organization Act of 1977, which is found in 42 USC 7151 as it pertains to the new Department of Energy.

[00:20:59] Speaker 05:
and 7171 and 7172 as it pertains to the brand new Federal Energy Regulatory Commission.

[00:21:09] Speaker 05:
Prior to 1977, when there was no Department of Energy, from the 1938 passage of the Natural Gas Act to 1977, the only federal actor which is assessing the public interest is the Federal Power Commission.

[00:21:25] Speaker 05:
After 1977, under 42 USC 7151B, the powers of the Federal Power Commission were transferred to the new Department of Energy.

[00:21:39] Speaker 05:
In 42 USC 7172B,

[00:21:43] Speaker 05:
A, various authorities were transferred back from the Department of Energy to the new FERC, but that authority did not include Section 3 of the Natural Gas Act, 717B of Title 15.

[00:22:00] Speaker 05:
Under 42 U.S.C.

[00:22:03] Speaker 05:
E, however, the DOE secretary may assign to the commission any matters it chooses.

[00:22:13] Speaker 05:
And under the delegations of the DOE secretary that started in 1978 and continue to this

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day the DOE assigned to the FERC only the authority over the facilities at the import and export sites.

[00:22:34] Speaker 05:
So your honors are... Is there anyone for Sierra Club to sue on this if it can't be FERC?

[00:22:42] Speaker 08:
Can they go against the Department of Energy?

[00:22:44] Speaker 05:
Of course they can go against the Department of Energy.

[00:22:48] Speaker 05:
The Department of Energy, of course, authorizes the import or the export of the commodity itself.

[00:22:55] Speaker 05:
The Department of Energy has not yet acted with finality with respect to Freeport or Sabine, but there are

[00:23:06] Speaker 08:
provisions under the federal... I thought it was the view of the Department of Energy that they need not conduct a NEPA analysis if there was no construction or modification of the existing facility.

[00:23:18] Speaker 05:
That is correct.

[00:23:19] Speaker 05:
With respect to Sabine, the FERC did not authorize any new construction, any new additional... So there's no NEPA challenge that can be brought there?

[00:23:31] Speaker 08:
I mean, if a result of the decision to authorize Sabine to increase its exports has adverse environmental impacts, where's the relief?

[00:23:41] Speaker 05:
Well, that goes to DOE regulations concerning a categorical exemption under its VEPA regulations for projects where there's no new construction.

[00:23:52] Speaker 05:
Well, how would that work here?

[00:23:54] Speaker 05:
How would that work here?

[00:23:57] Speaker 05:
The DOE is not a cooperating agency with respect to Sabine Pass as it is in the Freeport case with respect to the preparation of either an environmental assessment or an environmental impact statement.

[00:24:13] Speaker 05:
However, the Department of Energy still has to independently assess the environmental findings and conclusions

[00:24:24] Speaker 05:
of the FERC at the time it makes its import or export authorization.

[00:24:31] Speaker 05:
I cannot cite to you anything.

[00:24:32] Speaker 08:
So what sort of challenge would a petitioner like Sierra Club launch?

[00:24:36] Speaker 08:
Just an arbitrary and capricious challenge?

[00:24:38] Speaker 08:
There's no NEPA study that's conducted?

[00:24:42] Speaker 08:
How would they get at a decision by the Department of Energy in Sabine Pass?

[00:24:48] Speaker 05:
Well, again, at this point, there's nothing in the record because the DOE hasn't yet passed on the national authorization.

[00:24:54] Speaker 08:
I'm just trying to understand how the statute works here.

[00:24:57] Speaker 05:
Well, under the statute, under a provision that was added in the 2005 Energy Policy Act as it amends the Natural Gas Act, there is a provision for judicial review under 15 USC 717

[00:25:12] Speaker 05:
R, which provides for under subsection D, which provides for judicial review of actions by federal or state siting agencies other than the Federal Energy Regulatory Commission at the time duly makes its final authorization as to the import

[00:25:32] Speaker 05:
or export, there can be a challenge to DOE's assessment of the FERC's environmental document and environmental findings.

[00:25:45] Speaker 01:
Precisely.

[00:25:46] Speaker 01:
So DOE decided it was going to delegate a part of its work to FERC.

[00:25:59] Speaker 01:
So FERC

[00:26:00] Speaker 01:
had to make some decisions about what that would encompass.

[00:26:04] Speaker 08:
Yes.

[00:26:05] Speaker 01:
And FERC decided it could meet any deep obligations with respect to an environmental assessment.

[00:26:15] Speaker 05:
Yes.

[00:26:16] Speaker 01:
So that goes back to the Department of Energy.

[00:26:21] Speaker 01:
And is energy, just hypothetically, going to go back to square one?

[00:26:31] Speaker 01:
and allow challenges?

[00:26:33] Speaker 05:
No, the Department of Energy would not go back to square one.

[00:26:40] Speaker 05:
That's particularly the case with respect to the 2014 authorizations in this particular case.

[00:26:48] Speaker 01:
No, let's just stick to what's before us.

[00:26:52] Speaker 01:
So I want to be clear that if

[00:26:58] Speaker 01:
FERC has made certain decisions about what it thinks its appropriate role is here.

[00:27:08] Speaker 01:
Are you suggesting that those decisions are not subject to challenge, much less judicially reviewable, at this stage of the proceedings?

[00:27:23] Speaker 05:
Well, putting aside the standing concern that I'll get to in a moment, when we have the type of proceeding that we have here, which does not involve any new construction and does not involve any additional shipping traffic or any additional upstream natural gas

[00:27:43] Speaker 05:
capacity.

[00:27:44] Speaker 05:
Yes, there are limitations on what can be challenged in light of the fact that no construction whatsoever has been authorized in this proceeding.

[00:27:54] Speaker 01:
Here's how I've been trying to understand this case, and the analogy may be poor.

[00:28:00] Speaker 01:
The original authorization was to construct a building that allowed 15 dwelling units.

[00:28:10] Speaker 01:
However, the owner decided

[00:28:13] Speaker 01:
it only wanted to use 10 of those units.

[00:28:18] Speaker 01:
And that was what the original authorization was for, the use of 10 of those units, even though the construction of the building itself was able to handle additional tenants.

[00:28:34] Speaker 01:
Then the owner comes back and says, no, he's figured out a way that he can get two more tenants in there.

[00:28:42] Speaker 01:
Now we're at the point where the owner wants to have 15 tenants in the building.

[00:28:50] Speaker 01:
And at least according to my reading of the record, this will involve an increase of 1,012 billion cubic feet per day being exported.

[00:29:03] Speaker 01:
So just stick with my analogy for a moment.

[00:29:07] Speaker 01:
With three new tenants,

[00:29:10] Speaker 01:
they're going to be additional water usage, sewer needs, traffic, tenants in and out of the building, that sort of thing.

[00:29:21] Speaker 01:
So that's what FERC is looking at.

[00:29:24] Speaker 01:
And as I understand, what petitioners are arguing is that traffic, A, could be the tip

[00:29:33] Speaker 01:
I don't have a good analogy here, but the straw that breaks the camel's back, that's number one.

[00:29:40] Speaker 01:
And you say, no, no, no, no.

[00:29:43] Speaker 01:
We're not going back to square one.

[00:29:45] Speaker 01:
And in their reply brief, they acknowledge.

[00:29:47] Speaker 01:
They're not challenging the 2012 authorization.

[00:29:51] Speaker 01:
But they say, there is this 1,000

[00:29:56] Speaker 01:
billion cubic feet that's being authorized.

[00:30:00] Speaker 01:
So no new construction, but there's new activity.

[00:30:04] Speaker 01:
And the activity is, in their view, going to produce these negative impacts on the environment.

[00:30:14] Speaker 01:
And they want the agency, and they say that the agency is obligated under NEPA to address that.

[00:30:22] Speaker 05:
Your Honor, the Commission did address that.

[00:30:26] Speaker 01:
They say that because these three new tenants are in this facility, it may not be the straw that breaks the camel's back, but it's significant and therefore the agency can't simply stop

[00:30:43] Speaker 01:
at the narrow EA, it has to go beyond and see whether this additional thousand billion cubic feet

[00:30:53] Speaker 01:
is going to have indirect or cumulative impacts.

[00:30:57] Speaker 01:
Isn't that their argument?

[00:30:59] Speaker 05:
Yes, that is their argument.

[00:31:01] Speaker 08:
And isn't it a 25 percent increase?

[00:31:03] Speaker 08:
It's a significant increase.

[00:31:04] Speaker 05:
Well, there are several points here.

[00:31:06] Speaker 05:
One, yes, the agency does have a responsibility to consider additional activity, but using the 15 and 10 hypothetical

[00:31:16] Speaker 05:
that your honor provided in the earlier 2012 proceeding, the agency took into account the 15, not just simply the 10 or the 13.

[00:31:29] Speaker 01:
So it's modeling anticipated.

[00:31:31] Speaker 01:
putting words in your mouth, but tell me if I'm wrong.

[00:31:33] Speaker 01:
It's modeling anticipated that there could be 15 occupants.

[00:31:38] Speaker 01:
Exactly.

[00:31:39] Speaker 05:
Exactly, Your Honor.

[00:31:39] Speaker 05:
In the 2012 proceeding, the Commission modeled traffic operations, emissions of the Sabine facility as if it were operating 24 hours a day, 365 days a year.

[00:31:58] Speaker 05:
The most aggressive form of modeling

[00:32:00] Speaker 05:
it could, Sabine Pass came back to the agency and said, well, it won't be operating 24-7-365 under the very conservative assumptions that it provided to the agency earlier, but it is possible

[00:32:17] Speaker 05:
under the design as originally planned and with respect to certain design changes that the Commission approved in 2013, that it can squeeze out additional efficiencies.

[00:32:30] Speaker 05:
I have to correct Petitioner's Council.

[00:32:33] Speaker 05:
The 25 percent

[00:32:35] Speaker 05:
increase is only on the best day of the year under optimal operating conditions.

[00:32:45] Speaker 05:
You cannot extrapolate 25% increase for the entire year.

[00:32:52] Speaker 05:
The annual increase in operating efficiencies won't be 25%.

[00:32:57] Speaker 05:
It might be 1%.

[00:32:59] Speaker 05:
It might be 5%.

[00:33:01] Speaker 05:
The Commission found that the...

[00:33:04] Speaker 02:
I think Perk said it could at least go up to 18 MTPA, even if not all the way up to 20 MTPA.

[00:33:13] Speaker 02:
And so I don't think there's any dispute that there's going to be a material increase in the amount here.

[00:33:18] Speaker 02:
That's why we're all here.

[00:33:20] Speaker 02:
So maybe they're wrong on 25%, but it's 12%, 15%.

[00:33:24] Speaker 05:
Well, we're not contemplating any additional shipping traffic at the facility.

[00:33:32] Speaker 05:
Indeed, the agency did not authorize any expansion.

[00:33:37] Speaker 02:
Away from shipping, I want to get back to your point.

[00:33:40] Speaker 02:
You said it's not 25%, but so let's assume it's 10% to 15%.

[00:33:45] Speaker 02:
I read at least footnote 18, a first decision, but that's what they were contemplating.

[00:33:58] Speaker 02:
into the apartment, we've got the increase.

[00:34:00] Speaker 05:
Well, that's correct.

[00:34:01] Speaker 05:
I wanted to differentiate between the shipping traffic and the operational activity.

[00:34:05] Speaker 05:
The commission anticipates a 0% increase with respect to shipping traffic.

[00:34:10] Speaker 05:
With respect to operating activity, yes, it's possible that the facility might run 1%, 5% longer, and the additional

[00:34:23] Speaker 05:
design changes that allow for the refrigeration compressors to operate more efficiently when ambient air temperatures are higher.

[00:34:37] Speaker 05:
Yes, there could be, and with additional maintenance programs at the facility, it is possible that the facility might operate a little bit harder, a little bit longer.

[00:34:51] Speaker 02:
It's possible that there is going to be increased gas production with increased capacity.

[00:34:56] Speaker 02:
We can fight about whether it's 25% or 10% or 15% or 5%, but there's going to be increased capacity.

[00:35:03] Speaker 02:
And the whole reason they authorize that is they expect to use some of that increased capacity.

[00:35:08] Speaker 02:
So the question is, if there's increased capacity, that gas has to come from somewhere.

[00:35:13] Speaker 02:
And so shouldn't at least the costs

[00:35:16] Speaker 02:
of getting that extra gas and the consequences of it be factored into the NEPA?

[00:35:22] Speaker 05:
Yes, those consequences should be factored into NEPA and the commission factored those consequences into NEPA back in the 2012 proceeding.

[00:35:31] Speaker 05:
We contemplated

[00:35:32] Speaker 05:
that the facility would not be down for maintenance.

[00:35:37] Speaker 05:
We contemplated that the facility would run as hard and as efficiently as Sabine Pass now posits in its 2013 application for the additional authorization.

[00:35:54] Speaker 05:
So we believe under NEPA, while there is possibly, under optimal operating conditions, some incremental activity at the site, the agency's responsibility is to consider environmental consequences at the site, which the agency did in the 2012 proceeding.

[00:36:16] Speaker 02:
So with respect to your theory that

[00:36:20] Speaker 02:
The purpose of what FERC is doing, the NEPA analysis, should just look at the consequences of either construction or, in this case, an authorized increase in capacity, but not the ultimate decision.

[00:36:31] Speaker 02:
I think gas will be exported.

[00:36:33] Speaker 02:
That's for DOE.

[00:36:35] Speaker 02:
So when DOE makes an authorization for a free trade, a country that has a free trade agreement, I take it there's just no NEPA analysis of those export impacts that you're talking about.

[00:36:49] Speaker 02:
at all?

[00:36:49] Speaker 02:
Is it your understanding of what Congress did with its automatic authorization that NEPA just doesn't apply?

[00:36:55] Speaker 02:
Or is NEPA supposed to apply up front at this stage, whether it's construction or a capacity decision for free trade countries?

[00:37:03] Speaker 05:
No, NEPA would still apply.

[00:37:05] Speaker 05:
Your Honor is correct that there is a statutory provision that applies specifically for exports to free trade agreements.

[00:37:13] Speaker 05:
And in those circumstances,

[00:37:15] Speaker 05:
the Department of Energy shall authorize that export.

[00:37:21] Speaker 05:
My understanding of the Department of Energy, and I've received more questions about what the Department of Energy is doing or will doing than what the FERC actually did in this case.

[00:37:32] Speaker 02:
Well, let's say we're trying to figure out, your theory seems to be this, you know, only look at me but with respect to what PERC is doing and save that, those other concerns you have for the DOE decision making.

[00:37:45] Speaker 02:
But if you can't raise it with DOE because it's a free trade country or, as in this case, there's no construction or modification happening, then your theory doesn't work.

[00:37:59] Speaker 02:
And so what do we do?

[00:38:01] Speaker 05:
Well, regardless of whether the export to or import from is to or from a free trade agreement or not, for purposes of that export or import, there has to be construction and operation of the facilities at the export

[00:38:18] Speaker 05:
import site.

[00:38:21] Speaker 05:
The Federal Energy Regulatory is the lead agency with respect to the environmental review.

[00:38:28] Speaker 05:
Typically there are cooperating agencies including the Department of Energy.

[00:38:33] Speaker 02:
I think that hurts you, the fact that you're the lead agency and the fact that at least in those two scenarios there's no chance for further NEPA analysis by DOE.

[00:38:44] Speaker 02:
Then as the lead it has to be done

[00:38:48] Speaker 02:
When you do it, in your NEPA analysis, you have to include not just construction impacts, but the impacts of the export itself.

[00:38:57] Speaker 02:
Do you not?

[00:38:58] Speaker 02:
Because otherwise there's nowhere, I don't know where the claim is made otherwise.

[00:39:03] Speaker 05:
We do our NEPA analysis of the facilities, so we have limited statutory and delegated authority, and when it comes to the... So the answer to that, when it's a free trade country,

[00:39:15] Speaker 02:
or when there is no construction or modification that suggests increased capacity like this case, there is no place to raise the concerns about the impact of the export decision making.

[00:39:28] Speaker 02:
Is that true?

[00:39:28] Speaker 02:
There's no place to raise it.

[00:39:30] Speaker 05:
Well, I believe the Department of Energy does issue orders with respect to the export, both to a free trade agreement and with respect to the non-free trade agreement.

[00:39:41] Speaker 02:
I don't think DOE could say – I know, Congress, you said automatically authorize it to the free trade country.

[00:39:47] Speaker 02:
But I'm actually stopping here.

[00:39:49] Speaker 02:
I'm doing a NEPA analysis, and I don't think I should authorize it.

[00:39:52] Speaker 05:
Of course I can't.

[00:39:53] Speaker 05:
Well, with respect to the NEPA analysis, even when there is no additional construction of the type that we have here in the Sabine Pass case, there still is the opportunity for judicial review of the environmental analysis of the facilities themselves on review of the FERC order, which is exactly what we have here.

[00:40:14] Speaker 05:
Even though there was no additional

[00:40:17] Speaker 05:
construction.

[00:40:18] Speaker 02:
I just want to back this up.

[00:40:19] Speaker 02:
Assume this case involved the increase in capacity was going to allow for increased gas exporting to a free trade.

[00:40:31] Speaker 02:
Just assume that.

[00:40:34] Speaker 02:
Where would the NEPA analysis of the environmental consequences of the decision to export be made?

[00:40:45] Speaker 05:
with respect to the export, it would have to be made in the context of the Department of Energy order.

[00:40:50] Speaker 02:
The automatic order where they say it's a free trade country, nothing we can do about it.

[00:40:56] Speaker 05:
That is my understanding, because the FERC's responsibility is with respect to the FERC.

[00:41:03] Speaker 05:
The DOE does have an independent responsibility to make its own findings and conclusions based upon the environmental assessment or the environmental impact statement.

[00:41:12] Speaker 02:
I don't think so.

[00:41:13] Speaker 02:
Not in a free trade country case, does it?

[00:41:16] Speaker 02:
I mean, what does that legal challenge look like?

[00:41:18] Speaker 02:
Congress said it will be automatically done.

[00:41:22] Speaker 02:
POE did it.

[00:41:24] Speaker 05:
Okay, but even with respect to the NEPA analysis of the facilities that's handled by the FERC, if there's a concern with respect to the environmental aspects of the export, if the FERC is responsible only for the facilities and Congress has decided that the export

[00:41:50] Speaker 05:
shall be construed to be in the public interest.

[00:41:53] Speaker 08:
So that trumps NEPA then?

[00:41:54] Speaker 08:
In that instance you're saying Congress has decided in these free trade agreements that NEPA just does not obtain.

[00:42:01] Speaker 08:
That must be the answer.

[00:42:02] Speaker 08:
Can I ask you some questions about foreseeability?

[00:42:05] Speaker 05:
But yes, I do want to say that is a decision that Congress would have made in 15 U.S.C.

[00:42:11] Speaker 05:
717b little c in parens with respect to the shall approve with respect to free trade agreements.

[00:42:19] Speaker 01:
So the Mexican corrupt shall come into the country, you're relying on public citizens.

[00:42:26] Speaker 01:
So there is no NEPA analysis beyond the type of EA that

[00:42:34] Speaker 01:
FERC has done here, under this scheme, at least as to free trade countries.

[00:42:41] Speaker 05:
That is correct.

[00:42:42] Speaker 05:
The environmental analysis is done at the FERC level.

[00:42:47] Speaker 01:
And so the only protection of the public is, A, get Congress to change its mind and

[00:42:56] Speaker 01:
Say, the only protection to the public, then, is to get Congress to do something or to get EPA to issue some new regulations controlling the emissions.

[00:43:07] Speaker 01:
No, you're smiling, but I'm trying to understand what NEPA.

[00:43:11] Speaker 01:
Isn't this just undercutting the whole point of NEPA if nobody can raise these questions before DOE or FERC

[00:43:24] Speaker 01:
to which DOE has delegated this responsibility?

[00:43:29] Speaker 05:
I would say that's a decision that Congress has made with respect to exports to free trade agreement countries.

[00:43:35] Speaker 05:
The Commission is trying to faithfully administer its responsibilities under the Natural Gas Act.

[00:43:43] Speaker 01:
All right, so here's my question.

[00:43:45] Speaker 01:
Suppose that what you say is totally true.

[00:43:52] Speaker 01:
But FERC has options before it.

[00:43:55] Speaker 01:
For example, if we were where we are in the second case, Freeport, where these facilities should be cited, FERC, if it had all this information about indirect impacts, cumulative impact, could it not decide that this facility should not be cited

[00:44:21] Speaker 01:
at one site, but should be cited at another site where it would have less direct negative environmental effects, or that it would have to add conditions to its approval to mitigate further if it understood what the full effect

[00:44:46] Speaker 01:
was to be, since this is the only point at which the NEPA analysis comes into play,

[00:44:54] Speaker 05:
I think that is correct.

[00:44:55] Speaker 05:
Both the subsection A and subsection E of Section 3 of the Natural Gas Act, 15 U.S.C.

[00:45:04] Speaker 05:
717B, does speak in terms of reasonable terms and conditions and modifications that the FERC can employ and which it does employ in all of these cases.

[00:45:20] Speaker 01:
Well, that's not my question, because the statute clearly authorizes FERC to impose conditions, but my question is, what is the basis of knowledge on which FERC is obligated to consider what conditions would be appropriate?

[00:45:40] Speaker 05:
Well, I don't want to start talking about the Freeport case, but as that case demonstrates, the agency does have the ability to look into the particular location placement of facilities.

[00:45:54] Speaker 05:
There was considerable attention devoted to the pre-treatment center, which is two and a half miles away.

[00:46:02] Speaker 05:
Its route was changed.

[00:46:07] Speaker 05:
But with respect to the statute itself, while there is nothing that has been delegated by Congress or DOE to the export, I guess that could be accounted for the broader public interest assessment that the agency makes.

[00:46:23] Speaker 05:
I do want to point out the specific language, though, that Congress has used

[00:46:28] Speaker 05:
In Section 3, it's that the Commission shall authorize, unless it is demonstrated that the project is not consistent with the public interest.

[00:46:41] Speaker 05:
This is quite a stark contrast with the agency's traditional siting authority under Section 7 of the Natural Gas Act, 15 U.S.C.

[00:46:51] Speaker 05:
717-F, which is that the Commission shall authorize

[00:46:57] Speaker 05:
if consistent with the public convenience and the necessity.

[00:47:02] Speaker 05:
So Congress has placed its thumb on the scales with respect to FERC authorizations under Section 3.

[00:47:11] Speaker 01:
The question is, what opportunity is there to

[00:47:15] Speaker 01:
meet that burden.

[00:47:17] Speaker 01:
Let's see, does anybody have a question?

[00:47:18] Speaker 08:
I have a couple of questions about foreseeability, if I might, Mr. Solomon.

[00:47:22] Speaker 08:
So why can't FERC predict where the – they're called shale plays.

[00:47:27] Speaker 08:
Why can't you predict where they are?

[00:47:30] Speaker 08:
Aren't there models that do just that?

[00:47:32] Speaker 05:
There are models, but they wouldn't provide any meaningful, useful information to the agency.

[00:47:39] Speaker 05:
And I might have to leech a bit into the Freeport discussion, because again, in Sabine Pass, there wasn't any such construction or shipping

[00:47:51] Speaker 05:
authorized.

[00:47:54] Speaker 05:
But the commission is looking for some type of causal relationship between the facility itself, which is the focus of the congressional delegation and the DOE delegation, and reasonably foreseeable impacts.

[00:48:10] Speaker 08:
All the Sierra Club has provided is... But if you know you're going to increase capacity,

[00:48:16] Speaker 08:
to export.

[00:48:17] Speaker 08:
And you know that the lion's share of these exports are going to come from domestic production, right?

[00:48:24] Speaker 08:
Why is it – I mean, and Ferck's saying this isn't foreseeable because we don't know which shale play is going to be the source of this.

[00:48:30] Speaker 08:
But you do know that there's going to be more methane and more ozone in the atmosphere as a result of this activity.

[00:48:39] Speaker 08:
And I don't know much about

[00:48:42] Speaker 08:
chemistry or physics, but the briefs say that in case of those two pollutants, that's national, that's regional, it's not just located at the side of the terminal.

[00:48:56] Speaker 08:
Why isn't that a fair inquiry to make when you know that there's going to be more ozone, there's going to be more methane gas as a result of this activity?

[00:49:06] Speaker 05:
Well, the Commission is not denying that there very well may be

[00:49:11] Speaker 05:
an effect, or there might even be a positive relationship between the siting of export terminals and the development of natural gas in the United States.

[00:49:23] Speaker 05:
If I can go back to the public citizen case that we started with, what the Supreme Court requires is a reasonably close causal relationship between the agency action

[00:49:37] Speaker 05:
and the upstream environmental impact.

[00:49:41] Speaker 05:
This is not like the leading case that petitioner cites, the Eighth Circuit Mid-States case, where it could not have been more reasonably foreseeable that a railroad from coal mines to coal-burning power plants

[00:49:58] Speaker 05:
necessarily and logically will induce additional coal consumption and coal burning.

[00:50:06] Speaker 02:
But isn't it eminently reasonable to think that if you're increasing the amount of gas being exported in this country that you're going to increase the amount of gas being produced?

[00:50:18] Speaker 05:
There are many factors.

[00:50:20] Speaker 05:
There may be a causal relationship, but with respect to induced natural gas production, by far the leading contributing factors to that decision will be global market demand and prices, technological breakthroughs of the type that we saw in the last 10 years, and environmental policy and regulations.

[00:50:46] Speaker 02:
I've got to assume these companies aren't dumping

[00:50:50] Speaker 02:
billions of dollars or millions and billions of dollars into building these things without having given some thought to the fact that we're going to have to get this gas.

[00:50:57] Speaker 02:
You know, if we build it, the gas will come, right?

[00:51:00] Speaker 02:
That is correct.

[00:51:01] Speaker 02:
And this is... So that's completely reasonably foreseeable that we build it, the gas will come.

[00:51:05] Speaker 02:
And so why can't an estimate about, and you may have to estimate, you know, worst case scenario, best case scenario, here's the range of impacts

[00:51:15] Speaker 02:
that will come from that increased export?

[00:51:18] Speaker 05:
Well, I have a couple of answers for that.

[00:51:19] Speaker 05:
One, all we know is that gas will come and gas will go.

[00:51:23] Speaker 05:
These facilities are now bidirectional facilities.

[00:51:27] Speaker 05:
Ten years ago, they put all their eggs in the import

[00:51:31] Speaker 05:
basket.

[00:51:32] Speaker 05:
Now they're adding liquefaction capabilities so that they can export as well as import.

[00:51:39] Speaker 05:
What we know is over the next couple of decades, gas will be coming and going.

[00:51:45] Speaker 05:
We know how volatile and unpredictable markets are for liquefied natural gas because we have the history of the... I know we have things change over decades, but NEPA doesn't require you to have a

[00:51:58] Speaker 02:
crystal ball it just says look they want to export and they want to even export a bit more now from by increasing capacity they want to export and so we're going to look at we're going to look at this picture in time now and see what the environmental consequences are of exporting doesn't mean that things won't change in five or ten years but

[00:52:21] Speaker 02:
Everyone can always get out of NEPA by saying things could change next decade.

[00:52:26] Speaker 05:
That is correct.

[00:52:27] Speaker 05:
And the agency does a comprehensive review of all of the environmental effects concerning the facilities that are... The facilities, but not the gas.

[00:52:37] Speaker 02:
If you build it, gas will come.

[00:52:39] Speaker 02:
That's very reasonably foreseeable and tied to the building.

[00:52:42] Speaker 02:
That's the whole reason it's being built.

[00:52:44] Speaker 02:
They had any importance.

[00:52:46] Speaker 05:
Anything that is reasonably foreseeable, the agency took into account in both the Freeport and the Sabine cases.

[00:52:54] Speaker 05:
The commission did not just simply take into account

[00:52:57] Speaker 05:
air, water, and public safety, but the agency also, it did not distinguish between effects that were direct and indirect, but I do note that the agency took into account all socioeconomic

[00:53:12] Speaker 05:
factors that are induced by the facilities or the authorizations in place.

[00:53:19] Speaker 05:
And we looked at jobs and housing and roads and schools and property values, those types of indirect effects that are implicated by the decisions presented by the parties.

[00:53:38] Speaker 05:
I do want to bring up

[00:53:40] Speaker 01:
So just let me be clear, your argument in effect is this is a collateral attack on what happened in 2012?

[00:53:46] Speaker 05:
Well, it depends upon what petitioner is arguing.

[00:53:49] Speaker 01:
No, I know.

[00:53:50] Speaker 01:
I'm talking about what you just argued.

[00:53:53] Speaker 05:
Right.

[00:53:53] Speaker 05:
To the extent that they did not take advantage of the opportunity to appeal the 2012 orders,

[00:53:59] Speaker 05:
to the extent that Sierra Club is arguing not about the additional incremental capacity of the facilities, but rather the as authorized capabilities of facilities in 2012.

[00:54:16] Speaker 01:
I just need to be clear what the agency's position is.

[00:54:19] Speaker 01:
Your answer to Judge Millett is that we did all this in 2012.

[00:54:24] Speaker 01:
We considered

[00:54:28] Speaker 01:
full capacity in 2012.

[00:54:30] Speaker 06:
Yes.

[00:54:33] Speaker 01:
So it's too late now to raise all these objections.

[00:54:37] Speaker 05:
Yes, we do believe that to the extent they're arguing that we aired in our modeling both of the original 2.2 billion cubic feet a day and the authorization to up that on the very best day to 2.76 billion cubic feet, those are decisions and models that

[00:55:00] Speaker 05:
we undertook and made in the orders two years previously.

[00:55:05] Speaker 01:
So what is your answer to the question?

[00:55:07] Speaker 01:
The owner subsequently determined that some adjustments could be made so it could produce another thousand billion cubic feet per day.

[00:55:27] Speaker 01:
So that was not

[00:55:29] Speaker 01:
considered in 2012?

[00:55:31] Speaker 05:
That is correct.

[00:55:34] Speaker 05:
The incremental authorization is based upon the engineering plans and designs as they were earlier presented to the agency in the 2012 proceeding, and also some design modifications that were presented to the agency in a 2013 proceeding.

[00:55:55] Speaker 05:
By the time you get to the

[00:55:57] Speaker 05:
14 proceedings, the orders on review.

[00:56:01] Speaker 05:
Now all of the effects have already been modeled and taken into account in the earlier proceedings.

[00:56:11] Speaker 01:
How can that be when the justification is that, in a nutshell, the operators figured out a way to be more efficient and produce more?

[00:56:21] Speaker 05:
Because the assumptions in the earlier 2012 proceeding were very conservative assumptions.

[00:56:28] Speaker 05:
It was based on average annual production capabilities.

[00:56:33] Speaker 05:
My understanding is Sabine Pass is the first of the applicants for export authorization.

[00:56:40] Speaker 05:
It's probably the first or among the first to actually start designing and constructing these facilities.

[00:56:48] Speaker 05:
And it makes sense.

[00:56:49] Speaker 05:
in the earliest of the proceedings that the assumptions at the pre-design, pre-construction stage might not necessarily match the reality of the design and the construction stage.

[00:57:04] Speaker 05:
I do want to talk briefly about standing.

[00:57:09] Speaker 05:
And our standing argument is based on the fact, as we have discussed, that nothing new has been authorized.

[00:57:21] Speaker 05:
The much more consequential decisions were made by the agency in the 2012 proceeding.

[00:57:28] Speaker 05:
Those orders were not challenged.

[00:57:31] Speaker 05:
And in this year's 2015 proceedings,

[00:57:34] Speaker 05:
as to the additional trains five and six, also which Sierra Club has chosen not to appeal.

[00:57:43] Speaker 05:
With respect to the 2014 authorization, we're just simply making a classic injury in fact argument that any harm that they believe they have suffered is not definitive and concrete and is no different than that which was modeled in the earlier

[00:58:01] Speaker 05:
proceedings with respect to the two declarations of Mr. Paul and Ms.

[00:58:08] Speaker 05:
Isles.

[00:58:09] Speaker 05:
We're looking for a declarant who lives, works, or recreates near the project site for purposes of standing.

[00:58:18] Speaker 05:
Sierra Club seems to have

[00:58:20] Speaker 05:
conceded that Ms.

[00:58:23] Speaker 05:
Iles does not live or recreate near.

[00:58:26] Speaker 05:
With respect to Mr. Paul, it was difficult to tell with respect to the phrasing in the declarations whether these are current impacts that Mr. Paul was currently facing.

[00:58:40] Speaker 01:
Well, he used the present tense.

[00:58:42] Speaker 05:
Yes, and we will concede, especially based upon the reply brief, that the present tense means that Mr. Paul does hunt, boat, or fish at the project site now.

[00:58:55] Speaker 05:
But that does not relieve petitioner of the obligation to show immediate definitive concrete injury, which it cannot show based upon the nature of the 2014 authorization.

[00:59:08] Speaker 08:
Because you say there will be no increased

[00:59:12] Speaker 08:
traffic on the river.

[00:59:14] Speaker 08:
Is that right?

[00:59:14] Speaker 05:
Yes, we are saying there will be no increased traffic.

[00:59:17] Speaker 08:
Even though there's going to be an increase in exports.

[00:59:20] Speaker 08:
Okay.

[00:59:21] Speaker 05:
Well, that's not necessarily so odd.

[00:59:25] Speaker 05:
It depends upon whether the up to 400 ships were fully utilized.

[00:59:30] Speaker 05:
It depends upon the dates in the year under which those passages shall be made.

[00:59:37] Speaker 05:
And the Commission did not authorize any additional upstream natural gas capacity to bring natural gas

[00:59:45] Speaker 05:
to the facility, so it shouldn't be assumed that any more necessarily, any additional takeaway capacity will be needed as well.

[00:59:54] Speaker 02:
But he also says there's going to be, there's increased flaring and additional air and noise pollution.

[01:00:01] Speaker 05:
Yes, and I was trying to differentiate between the shipping traffic and the operational activity.

[01:00:05] Speaker 02:
Right, so how do you answer the operational injuries then?

[01:00:08] Speaker 02:
He seems to be asserting also these operational injuries.

[01:00:12] Speaker 05:
There it remains speculative, but yes, it's much more likely that there'll be some additional operational activity, and our argument is based upon the fact that that activity has already been modeled and taken into account in the earlier orders.

[01:00:32] Speaker 01:
All right, thank you.

[01:00:33] Speaker 01:
Let's hear from Intervener.

[01:00:50] Speaker 07:
Thank you, Your Honor.

[01:00:51] Speaker 07:
It's Jonathan Franklin.

[01:00:52] Speaker 07:
Excuse me, I have a bit of a cold today.

[01:00:54] Speaker 07:
Thank you, Your Honor.

[01:00:55] Speaker 07:
Jonathan Franklin, representing this and being past interveners.

[01:00:58] Speaker 07:
I'd like to bring us back, if I might, to the public citizen case where we started, and I hope we will end, I hope.

[01:01:04] Speaker 07:
That sets the standard for this court as to how to analyze whether an agency has

[01:01:12] Speaker 07:
abused or not abused, it's discretion in connection with the NEPA analysis.

[01:01:16] Speaker 07:
And there are really two components to that standard.

[01:01:19] Speaker 07:
The first is that there has to be a reasonably close connection, something the court said was akin to proximate cause under the legal definition, between the action that the agency is asked to implement and the alleged effect that comes from that.

[01:01:36] Speaker 02:
Here's what I'm trying to figure out with Public Citizen.

[01:01:39] Speaker 02:
That case involved what the president can authorize and what an administration can authorize.

[01:01:46] Speaker 02:
Right.

[01:01:47] Speaker 02:
In this case, you have a single agency, the Department of Energy, which has carved out this thing for FERC to be, which is within the Department of Energy.

[01:01:57] Speaker 02:
And it said, we'll do this thing.

[01:02:00] Speaker 02:
Right.

[01:02:00] Speaker 02:
And that seems very different from the scenario we had in Public Citizen.

[01:02:04] Speaker 02:
And how does this modeling and this splitting

[01:02:08] Speaker 07:
It's the same.

[01:02:09] Speaker 02:
How is that conformed to, or how is that consistent with the rules against segmentation of activities underneath by an agency?

[01:02:17] Speaker 02:
You can't segment things and just sort of destroy the, look at it piece by piece and never see an environmental consequence.

[01:02:23] Speaker 07:
Well, of course, they haven't raised that issue in this case, but in terms of- I'm just asking you how- Yeah, I understand what you're saying.

[01:02:28] Speaker 02:
Public citizen, I can't import it here if it's going to create segmentation problems that just were not an issue between the president and the administration.

[01:02:34] Speaker 07:
It doesn't.

[01:02:35] Speaker 07:
Let me just start with some of your questioning from before, and that is, with respect to free trade nations, it's automatic.

[01:02:42] Speaker 07:
It's non-discretionary.

[01:02:43] Speaker 07:
Congress has made the determination in the statute that exports shall be allowed to free trade nations.

[01:02:50] Speaker 02:
So what Sierra Club... Does that mean NEPA just doesn't apply, or that it's supposed to be not limited

[01:03:00] Speaker 02:
That's what I'm trying to figure out.

[01:03:03] Speaker 07:
It doesn't apply to the effects that Sierra Club is alleging here, because it's the same, in my view, as public citizen there, where it was a nondiscretionary determination.

[01:03:14] Speaker 07:
The agency there had authority over safety regulations.

[01:03:17] Speaker 07:
It did not have authority to stop the trucks from coming in.

[01:03:21] Speaker 07:
So too here.

[01:03:22] Speaker 07:
We have a free trade order authorizing the entire capacity to be exported.

[01:03:27] Speaker 07:
FERC – Sierra Club – and you can see this at page 16 of the reply group – their essential objection is that FERC should, in essence, not allow the spigot to be created, and DOE should not allow it to be turned on.

[01:03:41] Speaker 07:
That's what these objections they're talking about here go to.

[01:03:44] Speaker 07:
And that is just like public citizen, where there was a non-discretionary determination the Supreme Court held that the safety agency there was not required to consider the alleged indirect effects of the Mexican trucks in this country under NEPA because

[01:04:03] Speaker 07:
Congress had declared that they will go.

[01:04:05] Speaker 07:
And in this case, Congress has declared that.

[01:04:07] Speaker 07:
But that's not the only issue here.

[01:04:09] Speaker 02:
I think, am I correct that with respect to the Sabine Pass facility, that DOE has already authorized export of gas to free trade?

[01:04:24] Speaker 02:
Free trade and non-free trade.

[01:04:25] Speaker 02:
Right, but there are free trade.

[01:04:27] Speaker 02:
And is there any

[01:04:28] Speaker 02:
record basis for determining whether this increase in capacity is going to go to a free trade or a non-free trade?

[01:04:34] Speaker 02:
I'm just trying to figure out whether NEPA applies to this.

[01:04:36] Speaker 07:
There is not, Your Honor, and we have orders from DOE on the same capacity for both free trade and non-free trade, and there I would actually point out one thing that was seeming to trouble some of the judges here, and that is whether or not Sierra Club would have the opportunity to challenge some sort of a DOE order on non-free trade nations.

[01:04:56] Speaker 07:
Yes, they would have,

[01:04:57] Speaker 07:
There were orders from DOE challenging the issuing to non-free trade nations.

[01:05:04] Speaker 07:
Sierra Club didn't intervene in time on those orders and hasn't challenged them in court, but could have.

[01:05:11] Speaker 07:
There was an opportunity to do that.

[01:05:13] Speaker 07:
And the way that DOE regulations work is they don't do another environmental analysis.

[01:05:18] Speaker 07:
They did one already.

[01:05:20] Speaker 07:
for the capacity that was authorized.

[01:05:22] Speaker 07:
They don't do another one for the things that don't require new construction because the original one... You think Sierra Club has grounds to bring petition against...

[01:05:34] Speaker 08:
part of energy.

[01:05:36] Speaker 07:
They didn't.

[01:05:37] Speaker 07:
They didn't.

[01:05:38] Speaker 07:
They lost that opportunity.

[01:05:39] Speaker 07:
That's why we're here today.

[01:05:41] Speaker 02:
And then I'd like to also... How does it work, in terms of a practical matter, if DOE is just essentially piggybacking on FERC's NEPA analysis, right?

[01:05:51] Speaker 02:
That's my understanding, is they sort of take their own independent look, but they don't do their own

[01:05:56] Speaker 07:
They were a cooperating agency.

[01:05:59] Speaker 07:
So we're talking about the original environmental assessment that was done for the, not this little slice of capacity, but the bigger slice of capacity.

[01:06:07] Speaker 07:
They were a cooperating agency.

[01:06:09] Speaker 07:
They participated in the NEPA process.

[01:06:11] Speaker 07:
Their concerns were presumably addressed because the way the cooperating agency process works under NEPA, if an agency cooperates with the other agency and their concerns are addressed in the cooperation process,

[01:06:24] Speaker 07:
then when it comes back to them, they do have to make their own NEPA determination, but they can say, hey, our concerns were addressed, we are satisfied.

[01:06:33] Speaker 07:
And so DOE did that.

[01:06:34] Speaker 02:
But it keeps sounding like a heads we win, tails you lose, right?

[01:06:37] Speaker 02:
When they want to say, they say, hey, we need to factor in not just the environmental consequences of construction, but the environmental consequences of what's going to happen after you build it.

[01:06:47] Speaker 02:
And that is the export and the increased production.

[01:06:50] Speaker 02:
And you say, oh, no, no, no, no, no.

[01:06:53] Speaker 02:
Raise that.

[01:06:54] Speaker 02:
with DOE, that's their decision.

[01:06:56] Speaker 02:
But then when they try to raise it with them, they go, oh no, we were a cooperating agency, we don't have anything more to decide.

[01:07:05] Speaker 02:
It can't be both, can it?

[01:07:08] Speaker 07:
First of all, they did have the opportunity to challenge DOE, but actually, our position is, and remains, that whether it's FERC or whether it's DOE that is doing this analysis, NECA only requires that they look at reasonably foreseeable impacts from the environment.

[01:07:23] Speaker 02:
I understand that.

[01:07:24] Speaker 02:
So to be clear, your position is that you're not here to say whether or not someone might have prevailed.

[01:07:31] Speaker 02:
You wouldn't want to say it, but might have been able to prevail.

[01:07:33] Speaker 02:
Like, if they wanted to make the argument about you didn't look at the export stuff, the FERC one was too narrow.

[01:07:38] Speaker 02:
And it should have been made when DOE said, hey, we're adopting that for our NEPA analysis.

[01:07:43] Speaker 02:
They could have challenged.

[01:07:44] Speaker 02:
That's the place to fight that.

[01:07:45] Speaker 07:
And in fact, DOE made the exact same determination that FERC made here in that original environmental assessment when they adopted it.

[01:07:53] Speaker 02:
And someone could say, hey, you are way too narrow.

[01:07:55] Speaker 02:
You were supposed to look at all those export consequences that FERC said it can't look at or won't look at.

[01:07:59] Speaker 07:
Yeah, and CRC made those objections.

[01:08:02] Speaker 07:
They just made them too late, and they weren't able to challenge it.

[01:08:04] Speaker 07:
They had the opportunity.

[01:08:06] Speaker 07:
That's all I'm saying.

[01:08:06] Speaker 07:
They had the opportunity to challenge those.

[01:08:08] Speaker 07:
Either way, though, either with regard to DOE or with regard to FERC, there still needs to be a reasonably close connection akin to legal proximate cause.

[01:08:19] Speaker 07:
And to follow up Judge Griffith on one of your questions, it is not sufficient here that they might be able to foresee that there's some level of natural gas production that might occur somewhere in North America at some point in the future.

[01:08:34] Speaker 07:
They have two different types of effects that they're saying that the agency had to consider.

[01:08:38] Speaker 07:
The first are, say, local regional effects.

[01:08:41] Speaker 07:
You do need to know where the gas is going to be produced.

[01:08:43] Speaker 07:
It could be produced anywhere from Canada to the Marcellus Shale in Pennsylvania to North Dakota to Texas.

[01:08:50] Speaker 07:
And the environmental impacts there are different.

[01:08:54] Speaker 08:
I don't think anybody could reasonably... But that's capable of being discerned, right?

[01:08:59] Speaker 08:
I mean, there are models that show that.

[01:09:01] Speaker 08:
It's not...

[01:09:03] Speaker 07:
FERC said, and again, it is entitled to deference on these things.

[01:09:06] Speaker 07:
FERC said we can't.

[01:09:08] Speaker 08:
It's entitled to deference when it shows us its used reason.

[01:09:12] Speaker 07:
Yes.

[01:09:12] Speaker 07:
Right, right.

[01:09:13] Speaker 07:
And its reason was, I think, quite reasonable.

[01:09:16] Speaker 07:
And it said that there is an interconnected national, and in fact, in some cases, going to Canada, there's an interconnected pipeline system of natural gas, such that the effects that Sierra Club is arguing here have never, in my knowledge,

[01:09:33] Speaker 07:
deemed to be foreseeable under NEPA, and that is they're arguing price effects.

[01:09:37] Speaker 07:
They're saying that this additional capacity that you're authorizing here will have some effect on the price of natural gas, which will then have some effect on marginal producers who might produce more of it.

[01:09:49] Speaker 08:
Here's what I'm trying to get my head around.

[01:09:51] Speaker 08:
Here's what bothers me.

[01:09:53] Speaker 08:
I don't know if this is at a 30,000 foot level or

[01:09:56] Speaker 08:
or right to the heart of the matter, or somewhere in between.

[01:09:59] Speaker 08:
We all know that something very significant is happening in the country with this boom in natural gas production.

[01:10:08] Speaker 08:
It's a significant event that's taking place right before our eyes.

[01:10:12] Speaker 08:
Does it have environmental consequences?

[01:10:14] Speaker 08:
It's hard to imagine that it doesn't have environmental consequences.

[01:10:19] Speaker 08:
Who has to measure that and tell us

[01:10:23] Speaker 08:
the public what those costs are.

[01:10:26] Speaker 08:
That's what NEPA is supposed to do.

[01:10:29] Speaker 08:
All it's doing is informing decision makers and the public what the environmental costs are.

[01:10:34] Speaker 08:
Now, who's going to tell the public the cost of this boom that's going on?

[01:10:42] Speaker 07:
multiple, multiple regulatory agencies that have that responsibility.

[01:10:46] Speaker 07:
EPA is one of them, and as of my understanding, it is currently looking at those exact issues.

[01:10:52] Speaker 07:
There are also state and local environmental agencies, say, in the places where it's produced, who do and should and will look at those environmental impacts.

[01:11:01] Speaker 08:
But NEPA is the statute that brings us here today.

[01:11:04] Speaker 08:
Right.

[01:11:05] Speaker 08:
And you're saying NEPA has no role to play in this decision-making?

[01:11:08] Speaker 07:
I think it has a role to play with regard to the agencies that have that authority.

[01:11:13] Speaker 07:
So to bring the public citizen back into play, EPA has that authority.

[01:11:17] Speaker 08:
And you would say you would recognize that's DOE here when they allow increased exports?

[01:11:23] Speaker 07:
No, because DOE would only have to look at reasonably perceivable impacts.

[01:11:27] Speaker 07:
I'm talking about the agencies that are actually on the ground.

[01:11:30] Speaker 07:
They're looking at those impacts.

[01:11:31] Speaker 02:
And they do.

[01:11:32] Speaker 02:
It's like it's all trees and no forest that's going on here.

[01:11:34] Speaker 02:
Each agency will look at its little pocket and no one will stand back and go, look,

[01:11:38] Speaker 02:
Once you start allowing this stuff to be exported out in large quantities, you build it, they're going to come, and they're going to make more of it.

[01:11:46] Speaker 02:
And there's going to be environmental consequences.

[01:11:49] Speaker 02:
And everyone says it's not my job to look.

[01:11:51] Speaker 07:
DOE actually did say it was its job to look, but not under NEPA.

[01:11:55] Speaker 07:
We're here under NEPA.

[01:11:56] Speaker 07:
NEPA is not directed towards substantive policy choices.

[01:11:59] Speaker 07:
It's a procedural statute.

[01:12:01] Speaker 07:
DOE did look at those issues under its separate authority, which has not been delegated

[01:12:07] Speaker 07:
to FERC to look at whether the export of the commodity to a non-free trade nation is in the public interest.

[01:12:15] Speaker 07:
So DOE did look at that.

[01:12:17] Speaker 02:
How do we know without a NEPA analysis that in the process of looking at that they factored in specifically these environmental consequences from the increased

[01:12:26] Speaker 02:
production, getting it out, moving it, and shipping it out.

[01:12:30] Speaker 07:
Because you can look, for example, at the order.

[01:12:32] Speaker 07:
Again, it's not before us.

[01:12:33] Speaker 07:
We're talking about DOE.

[01:12:34] Speaker 07:
And again, it's another case.

[01:12:36] Speaker 07:
But the Freeport order, the final Freeport order, has extensive analysis of that under DOE's public interest determination.

[01:12:44] Speaker 07:
But DOE said the same thing as FERC.

[01:12:45] Speaker 07:
And that is, this is not a reasonably foreseeable effect under NEPA.

[01:12:49] Speaker 07:
And to get to just Judge Rogers' hypothetical about the tenants in the building,

[01:12:53] Speaker 07:
FERC and DOE both looked at the impacts from the 15 tenants in the building and how much traffic they would bring to the hallways and what they would do to the gardens and all that.

[01:13:06] Speaker 07:
And I know I'm not going to be stretching the hypothetical a bit, but it would be sort of like saying, in addition to doing that, you have to look at the impact from the electricity that the tenants are using and where that's going to be produced.

[01:13:19] Speaker 07:
And the agency said, we will go this far because it's reasonable to do that.

[01:13:23] Speaker 07:
We are not going to go and look at the entire world.

[01:13:26] Speaker 07:
And that's what Sierra Club is asking, of course, to look at global impacts.

[01:13:30] Speaker 07:
And that's beyond regional.

[01:13:31] Speaker 07:
So you have to look at all of the factors that influence natural gas production, which include price, which include regulations by other agencies, which include technology.

[01:13:40] Speaker 07:
And on top of that, you would have to look at where the gas is going to be shipped, so what country.

[01:13:46] Speaker 07:
And we don't even know that.

[01:13:47] Speaker 07:
My clients don't even know where it's going to go.

[01:13:49] Speaker 07:
And then you'd have to look at what it's going to substitute for in that other country, whether that fuel is going to be cleaner or dirtier than what the natural gas is.

[01:13:57] Speaker 07:
And all of that, you'd have to do a global economic analysis.

[01:14:00] Speaker 02:
I get that on the global analysis.

[01:14:02] Speaker 02:
I want to talk about regional or even national.

[01:14:05] Speaker 02:
Did the company, when it makes the decision to have this massive construction and expansion, and it's a huge amount of investment, does it not do its own internal

[01:14:17] Speaker 02:
studies and analysis on where we're most likely going to get this gas from.

[01:14:21] Speaker 07:
Not to my knowledge, Your Honor, because they have pipelines.

[01:14:24] Speaker 02:
They would build all this and then go, oh my gosh, there's no gas left for us.

[01:14:28] Speaker 07:
No, we build it all, and we know that it's connected to a pipeline so that people can get it to us.

[01:14:32] Speaker 07:
But how they get it to there is not of our concern, and we're not interested.

[01:14:36] Speaker 02:
But in terms of what we do and project, I wouldn't... You're not interested, so you don't have to have any contracts with anybody for supplies?

[01:14:42] Speaker 07:
We have contracts, but

[01:14:43] Speaker 07:
But they can take the gas from anywhere they want.

[01:14:47] Speaker 07:
I know.

[01:14:48] Speaker 02:
But then once you have a contract with a company, do they not traditionally take it from particular locations?

[01:14:53] Speaker 02:
Or can you not average?

[01:14:54] Speaker 02:
On average, they do it some from here, from this shale play.

[01:14:58] Speaker 02:
And 60% of theirs last year came from this shale play, 20% from another.

[01:15:02] Speaker 02:
And so we can figure these things out.

[01:15:03] Speaker 02:
I've got to figure your companies are very sophisticated.

[01:15:06] Speaker 02:
We don't need to know.

[01:15:07] Speaker 02:
We have this modeling at some level.

[01:15:08] Speaker 07:
We're getting, obviously, beyond the record, but no, because the companies that we contract for the gas, they, of course, are taking it where the market on any particular day would allow them to do it.

[01:15:20] Speaker 07:
And the markets change day to day.

[01:15:22] Speaker 07:
So they could take it from Pennsylvania today, and they could take it from Texas tomorrow, and they could take it from North Dakota on Thursday.

[01:15:31] Speaker 02:
But you know it's going to be there for you when you want it.

[01:15:33] Speaker 07:
We hope it will be there for us.

[01:15:36] Speaker 07:
There's a lot of money and I will just emphasize what Mr. Solomon said, there was a lot of money building these import terminals.

[01:15:44] Speaker 07:
We thought when we built these terminals, both Sabine Pass and Freeport, that there was going to be a huge market for imports of natural gas.

[01:15:54] Speaker 07:
We put a lot of money behind that.

[01:15:57] Speaker 07:
Turned out it wasn't right.

[01:15:58] Speaker 07:
Now what we've done is we've hedged the market.

[01:16:00] Speaker 07:
So now these terminals are bi-directional.

[01:16:02] Speaker 07:
They can go either way depending on where the market is in any particular moment.

[01:16:07] Speaker 07:
Somebody can always tell you that they can put together a model that they can project some.

[01:16:12] Speaker 07:
There are people out there who will tell you that they can project where the stock market is going to be 25 years from now based on some model.

[01:16:19] Speaker 07:
That may be OK for what they're saying, but it is not something that an agency would have to take account of under NEPA.

[01:16:25] Speaker 07:
NEPA requires under this public citizen that there be a reasonably close connection, something like proximate cause.

[01:16:31] Speaker 07:
And I don't think anybody could reasonably argue

[01:16:35] Speaker 07:
that this order authorizing the additional capacity for Sabine Pass export is the proximate cause of any particular environmental effect in North Dakota or Texas or the Marcellus Shale or globally.

[01:16:50] Speaker 07:
There are, in fact, numerous agencies who are looking at those effects.

[01:16:56] Speaker 07:
Standing – we haven't raised that – or we haven't separately argued that issue, but I would say that it is Sierra Club's burden to demonstrate that they have standing.

[01:17:07] Speaker 07:
It is not our burden to disprove their standing.

[01:17:11] Speaker 07:
And they have put forward two pretty bare-bones declarations

[01:17:16] Speaker 07:
None of which says anything concrete about an injury that would occur from this additional slice of capacity, not something that they didn't challenge that happened before.

[01:17:28] Speaker 07:
and some interest of theirs.

[01:17:31] Speaker 07:
The issue and the problem on this, it's entirely of their own making.

[01:17:36] Speaker 07:
They could have challenged the original order on capacity.

[01:17:41] Speaker 07:
And I don't think anybody would be arguing standing there, because there was a big new facility that was being built.

[01:17:47] Speaker 07:
And it's going to have some impacts.

[01:17:49] Speaker 07:
They didn't do that.

[01:17:50] Speaker 07:
So we're here today only because they chose, for whatever reasons, not to challenge that.

[01:17:55] Speaker 07:
And all they are challenging is this additional slice of capacity.

[01:17:58] Speaker 07:
It's their burden to show standing.

[01:18:00] Speaker 07:
And I think Burke has adequately demonstrated that they have not carried that burden.

[01:18:11] Speaker 07:
Yeah, I think I'll be back here again, I think.

[01:18:15] Speaker 07:
That's right, yes.

[01:18:18] Speaker 01:
We'll give you some time.

[01:18:19] Speaker 01:
Let's hear from petitioners in the Saban case.

[01:18:28] Speaker 03:
Thank you, Your Honor.

[01:18:30] Speaker 03:
I'll begin by addressing standing to mean pass and time permits discussed for seeability and causation, but that may also carry over to the Freeport case.

[01:18:41] Speaker 03:
For standing, it's important to recognize that the standing inquiry and the NEPA inquiry are separate, and the two are separate in scope and there are different standards.

[01:18:52] Speaker 03:
FERC's NEPA analysis for the Sabine Pass expansion concluded that there would be no effects resulting from the expansion beyond the level of effects FERC previously authorized or the level of effects FERC previously considered.

[01:19:06] Speaker 03:
But that measurement of effects of the amendment against what FERC previously analyzed did not consider a counterfactual in which FERC took a no-action alternative and

[01:19:17] Speaker 03:
did not allow the facility to operate with the increases in efficiency in things that had been previously implemented and authorized, but where that efficiency was not used to actually increase the amount of gas exported.

[01:19:29] Speaker 03:
So, for example, FERC's analysis of vessel traffic is teared off of analysis they did for imports back in 2006, where FERC considered the... You said 400 ships.

[01:19:38] Speaker 02:
400 ships.

[01:19:38] Speaker 02:
And it's not going to be more than 400 ships now.

[01:19:40] Speaker 03:
Right, and Sierra Club is not challenging the adequacy of the NEPA analysis with regard to shipping traffic.

[01:19:49] Speaker 03:
For purposes of this appeal, our...

[01:19:53] Speaker 03:
But no, because our member will be injured by the increase in shipping, regardless of whether the increase in shipping was properly considered in the NEPA analysis.

[01:20:04] Speaker 03:
Remember, John Paul will have aesthetic and recreational and air impact injuries because of the extra ship.

[01:20:11] Speaker 02:
Those aren't going to change if this incremental increase in, I mean, what you have to show is that the only thing that would happen is if your NEPA claim prevailed, they'd have to go

[01:20:19] Speaker 02:
back and look at whether they should have increased this capacity.

[01:20:23] Speaker 02:
But those 400 ships can keep coming and going under the old capacity.

[01:20:28] Speaker 02:
And the air in the north can keep coming and going, the operations can be exactly the same.

[01:20:32] Speaker 03:
And the record indicates that although Burke authorized 400 ships under the old capacity, the 400 ships

[01:20:38] Speaker 03:
would not actually visit the facility.

[01:20:42] Speaker 03:
How many were visiting the facility?

[01:20:44] Speaker 03:
400 ships had never visited this facility.

[01:20:46] Speaker 03:
How many were?

[01:20:47] Speaker 03:
And what's the increase?

[01:20:48] Speaker 03:
I believe the facility has sat mostly idle since it was initially constructed.

[01:20:52] Speaker 03:
The export facility is not yet complete yet, so we don't know what shipping graph will be there.

[01:20:56] Speaker 03:
But FERC estimated how many ships would be involved

[01:21:00] Speaker 03:
with the exports that were authorized in 2012.

[01:21:02] Speaker 08:
So when Mr. Paul's been fishing, he hadn't seen any vessels go by in Alaska?

[01:21:07] Speaker 03:
Not yet.

[01:21:07] Speaker 03:
He's concerned about a future impact as a result of that.

[01:21:10] Speaker 02:
But he has to be injured by this increased capacity.

[01:21:13] Speaker 02:
He can't say I'm injured by those 400 ships that you already authorized in 2012, even if they aren't here yet.

[01:21:19] Speaker 03:
Right.

[01:21:19] Speaker 03:
And he is not.

[01:21:20] Speaker 03:
So in authorizing the export facility in 2012, FERC's environmental analysis considered two stages of the export process.

[01:21:28] Speaker 03:
It was going to come online half first and half second.

[01:21:30] Speaker 03:
And FERC provided in the environmental assessment, and we cite this in our reply brief, the number of ships that would be involved with the actual ship traffic rather than the level of ship traffic analyzed back in 2006.

[01:21:43] Speaker 03:
And FERC concluded that when you bring it halfway online, you'll get half of the number of ships.

[01:21:47] Speaker 03:
When we bring it all the way online, you'll get something I believe was 200 or 250 ships per year for the level of exports authorized in 2012.

[01:21:55] Speaker 03:
So the record clearly indicates that in terms of actual shipping traffic, more gas means more boats.

[01:22:04] Speaker 03:
Did you did you find a case for in response to the aesthetic injury?

[01:22:08] Speaker 03:
Yeah, it cited in our brief is menacing residents for environmental protection.

[01:22:15] Speaker 03:
I think it's page 14 of our, but it's in our briefs.

[01:22:17] Speaker 08:
And that stands for the proposition that a marginal decrease in happiness

[01:22:22] Speaker 08:
That's not much that's going on in that case at all.

[01:22:25] Speaker 02:
People were talking about they had noise concerns, they had visual concerns, it was in their backyard.

[01:22:30] Speaker 03:
But the visual concern isn't an aesthetic concern.

[01:22:35] Speaker 02:
Right, but my view for my property is now obstructed.

[01:22:38] Speaker 02:
I've got this turbine in the backyard.

[01:22:40] Speaker 03:
Well, our member John Ball enjoys being out on the river and in nature, and his enjoyment of the natural environment is diminished by having additional shifts with large exclusion zones and noise interfering with his recreation.

[01:22:53] Speaker 02:
Those are already there from 2012.

[01:22:55] Speaker 02:
They're already authorized to be there.

[01:22:57] Speaker 02:
So the injury has to be that I'm fine with every boat being there that's authorized under 2012.

[01:23:04] Speaker 02:
It's just the

[01:23:06] Speaker 02:
X number of additional votes that 2014 has authorized, and since the X number of additional votes that 2014 has authorized is zero, I don't see how there can be an injury from that.

[01:23:17] Speaker 02:
You're just saying that it hasn't started up yet.

[01:23:20] Speaker 02:
It takes time to get these things online, but the injury has to be from the legal action taken in 2014, and that didn't increase shipping.

[01:23:28] Speaker 03:
So the level of shipping is dependent on, there are only going to be as many boats as the facility can fill.

[01:23:34] Speaker 03:
And there's never been any indication that there would have been 400 boats per year.

[01:23:39] Speaker 02:
But they authorized up to 400 in 2012.

[01:23:42] Speaker 02:
They authorized that.

[01:23:43] Speaker 02:
They made that decision.

[01:23:45] Speaker 02:
If you thought the environmental consequences of 400 was bad, you're supposed to challenge that in 2012.

[01:23:50] Speaker 02:
But it wasn't challenged.

[01:23:52] Speaker 02:
So the NEPA analysis for up to 400 is hunky dory as far as we're concerned at this stage.

[01:23:58] Speaker 03:
And we are not challenging the NEPA analysis for the 400.

[01:24:00] Speaker 02:
Right.

[01:24:01] Speaker 02:
And so then there's not going to be 401 or 402.

[01:24:06] Speaker 02:
Then you don't have an injury from increased shipping.

[01:24:08] Speaker 03:
So this court's opinion in Wild Earth Guardians versus Jewell clarified that the injury for purposes of standing does not need to overlap with the claimed deficiency in the NEPA analysis.

[01:24:20] Speaker 02:
I understand that, but you have to still have a backup injury behind the procedural adjournment you have.

[01:24:25] Speaker 03:
And our asserted injury with regard to vessel traffic is that there will be, I don't have the numbers, roughly 200 ships per year.

[01:24:34] Speaker 03:
in terms of actual ship traffic under the 2012 authorization, that the 2014 authorization would cause there to be an additional 50 ships per year, or a 25% increase.

[01:24:46] Speaker 03:
And so one extra day per week, there's going to be a ship on the river that's going to interfere with our members' enjoyment of the natural environment.

[01:24:56] Speaker 03:
And so that exposure to an extra ship actually on the river per year constitutes an aesthetic injury.

[01:25:03] Speaker 03:
In addition to vessel traffic, we have also started an injury based on air pollution from increased operations of the facility.

[01:25:11] Speaker 03:
And again, this is an injury that is based on a change in actual operations rather than a claim based on a deficiency in the DEPA analysis.

[01:25:23] Speaker 03:
The FERC order authorizing facility claims that the increase in output is possible in part by a decrease in downtime for maintenance.

[01:25:32] Speaker 03:
So the order explicitly complies that the facility will run more by using the reduction in maintenance downtime

[01:25:41] Speaker 03:
If the, you know, pursuant to the 2014 amendment and that increase in operating hours will create an increase in actual air pollution emissions and that actual increase injures our member regardless of whether the level of emissions that were previously analyzed.

[01:25:58] Speaker 02:
But FERC analyzed that increase and found that it did not have any actual impact.

[01:26:03] Speaker 03:
FERC concluded that the level of emissions would not exceed the level previously analyzed.

[01:26:07] Speaker 03:
FERC did not conclude that in terms of actual emissions, there would be no increase as a result of the amendment versus the no action alternative.

[01:26:15] Speaker 03:
Had FERC said no to the amendment, there would be less... It's just the same argument over again.

[01:26:18] Speaker 02:
They already authorized and you can't trace any injury to them saying you can go up to this much

[01:26:24] Speaker 02:
In vehicle traffic, you can go to hear in noise, and you can go to hear in air.

[01:26:29] Speaker 02:
And after 2014, they're still not, they're going to the exact same places, and you're saying, well, now I'm injured.

[01:26:36] Speaker 03:
And our view is that for Article 3, we are only required to show an increase in actual effects on our members, and the scope of the authorization or the NEPA analysis is not determinative.

[01:26:48] Speaker 03:
If our member will actually breathe more pollution because of this authorization, then he would have otherwise breathed.

[01:26:54] Speaker 03:
that that's an injury sufficient for purposes of Article 3 standing separate from whether or not there's any... But it's not caused by this authorization, is that a patented... Well, that it is caused by the authorization, but for causation of that increase in air pollution would not occur, but for this authorization, and that type of but for causation is all that standing requires.

[01:27:17] Speaker 03:
I see that I've spent some time on just standing, I'm happy to...

[01:27:21] Speaker 03:
answer any other questions in the standing or discuss the additional issues during Freeport.

[01:27:26] Speaker 01:
All right, so we'll turn to Freeport.

[01:27:28] Speaker 01:
All right.

[01:27:31] Speaker 01:
Take a minute.

[01:27:32] Speaker 03:
I would appreciate that.

[01:27:34] Speaker 03:
All right.