[00:00:04] Speaker 00: Case number 14-1275, Sierra Club at El Petitioners versus Federal Energy Regulatory Commission. [00:00:10] Speaker 00: Mr. Matthews for the petitioners, Mr. Solomon for the respondent, and Mr. Franklin for the interveners. [00:00:18] Speaker 07: Thank you again. [00:00:18] Speaker 07: Nathan Matthews this time on behalf of Petitioners, Sierra Club, as well as Galveston Baykeeper. [00:00:23] Speaker 07: And again, I would like to reserve five minutes for rebuttal. [00:00:30] Speaker 07: I'd like to begin by reiterating that the purpose of the projects authorized by FERC in Freeport, as well as in Seminox, is solely to enable the export of natural gas. [00:00:42] Speaker 07: These are not facilities that are being constructed that will have an incidental effect of enabling or facilitating future exports. [00:00:50] Speaker 07: That is the sole purpose of the facilities at issue here. [00:00:54] Speaker 07: And that they are, the Freeport facility is, [00:00:59] Speaker 07: Interveners have indicated that it's a $13 billion project. [00:01:05] Speaker 07: It's a massive investment with the capacity to export natural gas equivalent to more than 2% of the Energy Information Administration's estimate of baseline domestic natural gas production. [00:01:17] Speaker 07: So this is a facility that serves no purpose other than enabling [00:01:25] Speaker 07: export of natural gas, that there has been a significant commitment of resources enabled by the FERC decision here, despite the fact that there is not yet a final or appeal order from the Department of Energy regarding this facility, and that [00:01:41] Speaker 07: the scale of this facility when measured against the overall domestic gas landscape is quite large. [00:01:47] Speaker 04: Can you start with what? [00:01:49] Speaker 04: I'm sorry to take you back where you don't like to be, but standing. [00:01:53] Speaker 04: Your brief, opening brief, doesn't even mention standing. [00:01:58] Speaker 04: And on a petition for review like this, you have a burden. [00:02:01] Speaker 04: pieces you wouldn't have complained to establish standing. [00:02:05] Speaker 04: And not just to allege it, mind you, but to establish it at summary judgment level of evidence. [00:02:11] Speaker 04: And you just didn't do it at all until your reply brief, at which point they don't have any chance to respond to that in briefing. [00:02:20] Speaker 04: What are we supposed to do with that? [00:02:21] Speaker 07: So we attached the declaration for opening brief [00:02:26] Speaker 04: I understand you attach stuff, but I mean, normally parties are supposed to argue, but we're not supposed to go to court. [00:02:32] Speaker 07: So this court's decision in Citizens Against Runway Expansion versus the Federal Aviation Administration summarized cases by this court, holding that the rule that when standing is self-evident on the basis of the record, the rules of Circuit Rule 28 or Sierra Club v. EPA do not apply and that the party means that. [00:02:55] Speaker 04: When it's not self-evident. [00:02:56] Speaker 07: Petitions reasonably understood their standing to be self-evident in this case, where our members live near the facility and will suffer impacts that the environmental impact statement is self-identified as significant. [00:03:10] Speaker 07: The EIS states that the Freeport project will have significant impacts in terms of light, noise, [00:03:20] Speaker 07: Also vibration, I believe, on members, or not on members specifically, but on residents of Quintana and on folks living and recreating near the facility. [00:03:29] Speaker 06: All right. [00:03:30] Speaker 06: So in American Library Association versus FCC, we made clear that the court could inquire at any time and that in previous cases we've allowed where the petitioner proceeded in good faith, I think it was self-evident, to submit affidavits or even supplemental affidavits and declarations to establish standing. [00:03:51] Speaker 06: So that's what you've attempted to do, I gather. [00:03:54] Speaker 07: As I understand the case and the others like it, the court allowed submission of affidavits later than the opening, in the reply, where evidence appeared for the first time. [00:04:05] Speaker 07: And here, we're not asking to be allowed to introduce new evidence in the reply. [00:04:10] Speaker 07: We explained the factual basis for our claim for standing in the opening brief, or in the declarations attached to the opening brief. [00:04:17] Speaker 07: And again, because our members were complaining of injuries that FERC itself had identified as being significant environmental effects, we understood our standing to be self-evident. [00:04:33] Speaker 07: So our understanding was, because our understanding was self-evident, that we were not required to further brief standing, either by FERC Rule 28 or by... But I think to close the loop here, you at least have to show [00:04:46] Speaker 06: For example, is it Mrs. Ollum? [00:04:53] Speaker 06: standing. [00:04:54] Speaker 07: Again, because our members have testified that they live and recreate near the facility, that they will have their enjoyment of the beaches near the facility, but also in their homes, adversely impacted by the noise, light, vibration from the project, that the project injures our members in a way that this court recognizes is sufficient basis for standing in the menacing residence case and other cases on aesthetic injury. [00:05:23] Speaker 04: I believe that she that's why the boat that she'll visit less frequently but also that when she does is that her enjoyment of the facility will be diminished and And then we got mr. Hershey who's talking about? [00:05:48] Speaker 07: So Mr. Hershey is. [00:05:50] Speaker 07: So I think one answer to your question is that. [00:06:01] Speaker 07: Our view of this circuitous case law and of the Supreme Court's standard case law is that a change in behavior is not required to demonstrate standing. [00:06:08] Speaker 07: That, you know, for example, if a member is going to have loud noise from pile driving for constructing this facility, just disrupt their life at their home, [00:06:19] Speaker 07: That's an injury for purposes of standing regardless of whether or not that noise is so bad that it causes the person to spend less time in their home or move or something That that sort of quality of life injury is itself sufficient to demonstrate standing without any change in behavior and that our members Melanie Oldham and Teresa [00:06:39] Speaker 07: We have two declarations from members who live or spend significant time on Quintana Island who have that type of aesthetic and recreational injury. [00:06:53] Speaker 07: Michael Hershey is a separate case because he lives near a pipeline that would be constructed solely to serve, where the explicit purpose of that pipeline would be to serve the Freeport Export Project. [00:07:03] Speaker 07: But I don't believe that we need to get into the injuries because the declarations from members who [00:07:09] Speaker 07: are adjacent to the facility itself provide a sufficient basis for standing. [00:07:16] Speaker 06: All right, moving on. [00:07:20] Speaker 07: So again, I mentioned that this is a large infrastructure project whose sole purpose is to enable the exports of natural gas. [00:07:29] Speaker 07: And there's a large body of NEPA case law regarding NEPA review of infrastructure projects. [00:07:37] Speaker 07: And in many cases, for example, a NEPA case concerning a bridge or a highway that will enable development in a location that otherwise was inaccessible or was less accessible, [00:07:51] Speaker 07: Courts have held that the fact that infrastructure development of access makes development of that area easier and more effective means that the induced growth of additional buildings, say, building on an island that you couldn't get to before the bridge was built. [00:08:07] Speaker 01: How do you respond to Mr. Franklin's point about foreseeability, that the very nature of the market here means that you're not going to be able to know where these things come from? [00:08:18] Speaker 01: It's just too speculative. [00:08:21] Speaker 07: I have several responses to that. [00:08:24] Speaker 07: One is that the gas will have to come from somewhere. [00:08:29] Speaker 07: And to the extent that there's uncertainty as to how much of the gas will come from new gas production, then the balance will need to be made up by a reduction in gas consumption. [00:08:39] Speaker 07: And so the precise ratio of new gas production to increased coal use may be something where reasonable minds could differ. [00:08:47] Speaker 07: But it's clear it has to be some combination of both. [00:08:50] Speaker 07: The question about not knowing where gas production will occur is, first of all, irrelevant for purposes of the greenhouse gas analysis. [00:08:58] Speaker 07: Nothing in the record indicates that you would need any information about where the additional gas production would occur before you could conduct a meaningful analysis of the greenhouse gas emissions resulting from that production. [00:09:10] Speaker 01: Do you have cases that support that view? [00:09:13] Speaker 01: Besides mid-states? [00:09:15] Speaker 07: Besides mid-states. [00:09:17] Speaker 07: I don't believe mid-states concern greenhouse gases at all. [00:09:20] Speaker 01: No, no, but the general idea that you just don't need to know where it comes from, it's just that it's happening. [00:09:30] Speaker 07: For purposes of not needing to know where it comes from, then just that it's happening for purposes of greenhouse gases. [00:09:34] Speaker 07: And we point to EPA documents explaining that because greenhouse gases are well mixed and long-lived in the atmosphere, that those impacts do not depend on knowing where they occur. [00:09:44] Speaker 07: But we also think that the record clearly indicates that it is possible to foresee where this production will occur. [00:09:50] Speaker 07: In particular, the [00:09:52] Speaker 07: Energy Information Administration study is built upon the National Energy Modeling System, which includes a regional breakdown of gas production in the United States and divides the lower 48 states into six different regions. [00:10:07] Speaker 07: And that the documentation of that model, which we called the first attention in the record here, demonstrates that EIA can predict not just that production will occur, but where among those regions additional production will occur. [00:10:21] Speaker 07: And FERC has not provided any reason for concluding that those regional estimates on where production will occur are an insufficient basis for analyzing the ozone impacts of these projects. [00:10:34] Speaker 07: As we mentioned, [00:10:37] Speaker 07: and is demonstrated by documents in the record, ozone is a regional pollutant that affects, ozone emissions can affect multi-state areas, and so just the regional predictions provided by the National Energy Modeling System would provide an adequate basis for conducting an analysis of the ozone impacts of the additional production that would be induced by these projects. [00:10:59] Speaker 07: I'd also mentioned that the ozone impacts are likely to be influenced by the siting of where export facilities occur. [00:11:10] Speaker 07: Earlier on, I noted that the impacts of a gas facility, export facility, located in the Gulf are likely to be different than the impacts of a facility located on, say, the Oregon coast, which are also two proposals pending for Oregon facilities. [00:11:28] Speaker 07: And that it is likely that a facility located in the Gulf is likely to induce additional gas production in Texas or along the East Coast, whereas an Oregon facility would be more likely to induce additional gas production in the Mountain West. [00:11:43] Speaker 07: And that likelihood could be tested using... Why is that? [00:11:46] Speaker 04: Why is that? [00:11:46] Speaker 04: I'm just not scientific. [00:11:47] Speaker 04: Why is that? [00:11:48] Speaker 04: More likely they tell us that... Just because it's a shorter... [00:11:50] Speaker 07: Pipeline distance. [00:11:52] Speaker 04: Is it different so much for gas? [00:11:54] Speaker 04: The way gas moves, does that matter? [00:11:56] Speaker 07: Well, so FERC's statements in the record here are that because of the nature, interconnected nature of the pipeline network, that gas processed by the Freeport or the Sabine Pass project, as far as we're talking about, just the increment for Sabine Pass, could come from anywhere in the Gulf or the eastern United States. [00:12:14] Speaker 07: The FERC's own statements reflect the fact that although there's a large interconnected pipeline network, [00:12:19] Speaker 07: there are fewer connections between the Mountain West and the Gulf. [00:12:24] Speaker 07: But those are not issues that FERC needs to speculate on because the Environmental Information Administration has the modeling tool that would let FERC predict or take an analysis of our exports from the Gulf likely to change gas production in different regions than wood exports from Oregon. [00:12:43] Speaker 04: Is there any reason to think that where the gas comes from is relevant? [00:12:49] Speaker 04: and analyzing what the environmental consequences of its production are? [00:12:52] Speaker 04: Is it some place that's harder to get it out than others? [00:12:55] Speaker 04: So maybe we do need to know where it's coming from to do this analysis? [00:12:58] Speaker 07: Well, it certainly has a potential impact to the analysis of ozone because ozone has a regional impact. [00:13:03] Speaker 07: And so if there's additional gas production happening in an area that, say, is already suffering [00:13:10] Speaker 07: heavily impacted ozone levels, the marginal contribution to ozone because of the additional gas production could cause a bigger public health consequence than if that gas production was coming at some place that had a little more headroom and didn't have as bad of regional ozone impacts. [00:13:26] Speaker 04: And so... But wouldn't... I mean, that might affect what the EPA is doing under [00:13:32] Speaker 04: you know, attainment areas or non-attainment areas, but for NEPA, does it matter whether there's Ohioism or not? [00:13:39] Speaker 04: Wouldn't they just want to figure out, is your position, whether it's coming in a place that has [00:13:46] Speaker 04: pristine, clear air or a very smoggy city, NEPA needs to measure what the impact of this increased protection is on the air. [00:13:57] Speaker 07: Yes, our position is that NEPA requires not just an analysis of how many tons of pollution are going to come out of a project, but what the impact those tons of pollution are going to have. [00:14:06] Speaker 07: And I don't believe that FERC disagrees with that in any way, demonstrated by FERC's environmental review of the local and direct impacts of these projects here. [00:14:14] Speaker 07: FERC, in reviewing these projects, hasn't just said there will be X tons of nitrogen oxide pollution and Y tons of volatile organic chemicals. [00:14:24] Speaker 07: FERC then proceeds to talk about the context of the surrounding area and the impact of those emissions in the particular areas where they will occur. [00:14:32] Speaker 07: including referring to whether or not those impacts will or won't cause a violation of EPA's air quality standards. [00:14:41] Speaker 07: And one of the requirements for environmental impact statements provided by the NEPA regulations is to assess the extent to which actions will or won't cause violations of applicable [00:14:57] Speaker 07: environmental standards, including other agencies' air quality standards. [00:15:00] Speaker 07: And so it's not that FERC can say, we don't care about ozone because ozone is EPA's problem. [00:15:07] Speaker 07: It's the reverse, that EPA has designated that ozone is a problem, and that that triggers an obligation for FERC to think about whether FERC's actions will cause ozone levels that violate EPA standards. [00:15:18] Speaker 07: And that's true, regardless of whether we're in the non-attainment context, where there's a Clean Air Act informative information, or just the general NEPA analysis. [00:15:31] Speaker 07: I'd like to return to the discussion of other cases concerning infrastructure projects, and that again, it's the norm rather than the exception for agencies reviewing infrastructure such as building a bridge to have to consider the effect of the additional growth that will be enabled or facilitated by that project. [00:15:49] Speaker 07: And in those cases, there's generally no direct regulatory authority [00:15:56] Speaker 07: over that induced growth. [00:15:58] Speaker 07: The regulations specifically call for an analysis of induced growth, but there will be very, very few cases, if any, where the agency that is acting in a way that will induce growth also has direct regulatory over the growth itself. [00:16:14] Speaker 04: Why isn't the better place to raise all these arguments about the consequences of exporting all this gas? [00:16:23] Speaker 04: In a challenge to DOEs, [00:16:26] Speaker 04: authorization of export. [00:16:28] Speaker 04: Why can't you do it there? [00:16:29] Speaker 04: Why isn't that the better place to do it? [00:16:31] Speaker 07: So I have two answers to that. [00:16:33] Speaker 07: One is that NEPA imposes, although NEPA provides a framework for interagency cooperation, every agency has an independent obligation to ensure that the impacts have fully been considered. [00:16:43] Speaker 07: And so NEPA doesn't require a challenge to be made at the best place or at the agency that has the most direct authority. [00:16:50] Speaker 07: NEPA provides an opportunity [00:16:53] Speaker 07: and a right to challenge any agency's action that will lead to an indirect effect. [00:16:59] Speaker 07: But there's a pragmatic reason as well, which is that FERC is going first, that there is not yet an appealable order from the Department of Energy regarding exports from the Freeport project, but that FERC has already authorized construction of and investment and commitment of resources through this project. [00:17:15] Speaker 04: No, I understand, but the environmental consequences of that construction are not what you're [00:17:19] Speaker 04: objecting to, for purposes of this case, you're objecting to the increased production, which isn't going to happen until there's a DOE order, correct? [00:17:28] Speaker 04: That's correct. [00:17:29] Speaker 04: So you don't have anything to worry about until there's a DOE order, and so just challenge it there. [00:17:35] Speaker 07: So the NEPA regulations regarding interagency cooperation, and just even a single agency action, [00:17:43] Speaker 07: clarify that it's important for environmental effects to be analyzed at the earliest possible time and before there's been any commitment of resources. [00:17:49] Speaker 04: That's their problem. [00:17:51] Speaker 04: If they submit all these resources and then they don't get the order out of DOE because DOE does the your dream NEPA analysis and says we're not going to authorize it, that's their problem. [00:18:01] Speaker 04: But the environmental costs aren't happening any earlier, they just don't happen until there's an export decision. [00:18:07] Speaker 07: Well, I would disagree. [00:18:09] Speaker 07: And the NEPA regulations explicitly call for consideration of environmental effects by agencies before there's any action that causes a commitment of resources. [00:18:17] Speaker 07: And I believe that the policy behind that is that once there has been a commitment of resources, it has the potential to influence the agency's later decision making. [00:18:26] Speaker 07: And so the regulations themselves clearly require early and broad commitment of environmental impacts before any other decision making has been made. [00:18:37] Speaker 04: Have challenges maybe by you or by anyone else ever been made to one of these export decisions by the Department of Energy? [00:18:45] Speaker 04: Has there ever been a NEPA challenge to their export decision making and NEPA's role in their NEPA analysis in their export decision making? [00:18:54] Speaker 07: I don't believe that there has been any reported case or any judicial challenge to any of the Department of Energy. [00:19:01] Speaker 07: Why not? [00:19:01] Speaker 07: There haven't been very many. [00:19:03] Speaker 07: And the Department of Energy has been on a schedule that's significantly behind FERC in these proceedings. [00:19:13] Speaker 07: The Natural Gas Act does not provide a right for judicial review until the agency has acted to deny a request for a rehearing. [00:19:22] Speaker 04: And you have a rehearing petition. [00:19:26] Speaker 07: We have a rehearing petition pending before DOE regarding DOE's authorization for free court. [00:19:30] Speaker 07: There's not yet a DOE decision regarding the Sabine increment of the additional 200 billion cubic feet per year for us to even seek rehearing of, much less a denial of a hearing that we could not appeal to this court. [00:19:41] Speaker 04: I know the briefing said it hadn't been acted on. [00:19:45] Speaker 04: Has it still not been acted on in this case? [00:19:47] Speaker 04: It has not. [00:19:48] Speaker 07: We filed that rehearing request with the Department of Energy in December of 2014, and DOE has only acted on it by issuing an order saying that DOE will take additional time extending the statutory 30-day deadline. [00:19:58] Speaker 07: So we are continuing to wait for an appeal order there. [00:20:04] Speaker 04: But then you'll be able to make [00:20:06] Speaker 04: Assuming they make a decision you disagree with, you'll be able to make all the arguments there that you're making here. [00:20:13] Speaker 07: We will be able to make many of the arguments. [00:20:15] Speaker 07: We also have an argument challenging the Freeport project for FERC's failure to consider the indirect effects of the electricity that will be consumed by the project itself, which is not an issue that's within... Other than that argument, all your concerns about the environmental impact [00:20:36] Speaker 04: coal, all those things you can raise in the Department of Energy decision, if need be. [00:20:42] Speaker 07: I see that I'm out of time, but if I may answer your question, we have raised similar issues in our request for a hearing for the Department of Energy. [00:20:50] Speaker 04: Is there anything other than an electrical power thing that you can't raise then? [00:20:54] Speaker 07: We can't raise the fact that there will have been a commitment of resources prior to adequate NEPA review. [00:21:01] Speaker 07: When we challenge the Department of Energy decision, there won't have been an investment or disturbance on the ground that might act as a thumb on the scale that would prevent the agency from properly considering. [00:21:13] Speaker 04: I assume if they were to rely on that, you would go, hang on, you can't have your cake and eat it too. [00:21:17] Speaker 04: You sit over here. [00:21:18] Speaker 04: First over here, we can't talk about EXPLORE consequences. [00:21:22] Speaker 04: We tried to, said we wouldn't look at it, so you can't now say, probably too late, we can't really take it into account. [00:21:30] Speaker 07: The concern underlying the NEPA requirement to consider environmental impacts at the earliest possible time and before any current resources is that [00:21:39] Speaker 07: that those commitments will be a thumb on the scale, and not that it will be a factor that the agency will be explicitly relied upon, but that Congress, in enacting the Council on Environmental Quality and promulgating the regulations, recognized that regardless of what's in the reasons given in formal agency decision-making documents, that the agency's process of making decisions [00:22:00] Speaker 07: has the potential to be influenced by commitments of resources that have already been made or just simply by decision-making momentum. [00:22:09] Speaker 07: And so the statute and the regulations reflect a policy judgment that in order to avoid the potential for that sort of a bias or a thumb on the scale, that decisions need to be made at the earliest possible time. [00:22:26] Speaker 06: Let me ask you, and I may be incorrect, but in one of the cases, the department filed an addendum in a greenhouse gas study, but saying it didn't need to do that. [00:22:42] Speaker 06: So is that in this case or the Sabine case? [00:22:46] Speaker 07: It's not in the administrative record in either case. [00:22:51] Speaker 07: The Department of Energy didn't file that. [00:22:55] Speaker 07: Well, the Department of Energy has done nothing about speeding paths. [00:22:57] Speaker 07: So insofar as that's an action that DOE took, it's relevant to Freeport. [00:23:02] Speaker 06: So hasn't the Department of Energy indicated that at least it's taken a position on these issues already? [00:23:13] Speaker 06: Not that they're subject to challenge, because it may not be final, but therefore that shows the importance of trying to raise these issues before FERC, since DOE has already indicated it doesn't think it's obligated to address these matters. [00:23:35] Speaker 06: The answer may be no, but I just don't know. [00:23:40] Speaker 07: I apologize, I'm struggling slightly with the question. [00:23:42] Speaker 07: My first response would be that we're challenging FERC's decision, and that FERC's decision can be affirmed if at all on the record before it, and that any of those details were not before FERC. [00:23:55] Speaker 06: Well, what I'm getting at is that the Department of Energy reserved the right to reject what FERC recommends to it, and it could do whatever it thinks is [00:24:10] Speaker 07: are required it's already indicated it doesn't think it is required to do that that's correct the department has indicated that it does not believe any and further analysis is required and that indication is both [00:24:26] Speaker 07: in the environmental addendum that DOE released, which again, this post-dates first decision here. [00:24:32] Speaker 07: But that, I mean, we also have DOE's order, which we have sought re-hearing of, wherein that order, DOE also agreed that it did not believe that it needed to consider these effects. [00:24:41] Speaker 06: So following up on Judge Millett's questions, do you have this re-hearing order? [00:24:46] Speaker 06: And suppose on re-hearing, the energy department says, [00:24:53] Speaker 06: given the congressional obligation, at least as to non-free trade countries, our obligations in fact go further than we initially thought. [00:25:07] Speaker 06: And that would open up the opportunity, would it not, consistent with this reservation for the energy department to do precisely the type of analysis you want. [00:25:21] Speaker 06: I understand your argument is it's first duty, first of all, to do this. [00:25:27] Speaker 06: I just want to explore. [00:25:29] Speaker 06: In other words, if you're closed down here, there's no guarantee that you have an opportunity later, although counsel for intervener said you would, as I understood intervener's argument. [00:25:50] Speaker 07: assuming that the Department of Energy denies our pending request for a re-hearing we will have an opportunity to seek review of that denial of re-hearing. [00:26:00] Speaker 07: As I mentioned, that does not provide all of the same opportunities for relief that this appeal does, in part because there is an important issue in this case which is not present before the Department of Energy, but also because of the fact that here our concern is that FERC has violated the deep obligation to consider the full range of indirect effects of FERC's action prior to [00:26:27] Speaker 07: actually reaching a decision prior to authorizing construction and investment. [00:26:32] Speaker 07: I do see that over time. [00:26:34] Speaker 06: So let me just ask you here again. [00:26:38] Speaker 01: You can't get out that easy. [00:26:41] Speaker 06: Not after what we've been through. [00:26:45] Speaker 06: At least as to the electric usage requirement, maybe we don't have jurisdiction, because you didn't raise it on rehearing. [00:26:56] Speaker 07: I confess to being somewhat confused by their argument that we did not raise it on our hearing. [00:27:00] Speaker 07: And first of all, I believe we did raise it. [00:27:02] Speaker 06: Well, you didn't raise it as to how they characterized it. [00:27:06] Speaker 07: So in our comments on the draft environmental impact statement, we argued that that was an important issue that had been entirely omitted from analysis and that FERC needed to consider it. [00:27:15] Speaker 07: FERC then provided some, although we contend inadequate, consideration of that issue in the final environmental impact statement. [00:27:24] Speaker 07: As I understand FERC's argument, they are now saying that because we did not anticipate the partial flaws in the way that they presented their analysis in response to our comment, that we can't challenge their inadequate resolution of the comment we raised, which would be a twisting of the requirement to present issues before the agency and to exhaust issues before appeal of FERC. [00:27:50] Speaker 07: clearly understood that we had raised the effects of additional electric production as an issue in our comments on the draft environmental impact statement. [00:28:01] Speaker 07: I believe that our request for a hearing to FERC also plainly flagged the nature of our concern with the way FERC responded to that comment, our request for a hearing. [00:28:12] Speaker 07: explained that our concern was that FERC failed to juxtapose the indirect effects of electricity production with the no-action alternative. [00:28:20] Speaker 07: And so FERC didn't make it clear that the effects from electricity production were actually much greater than the direct effects from the project itself. [00:28:28] Speaker 04: But I'm sure you're concerned to be the fact that they were doing the make-a-lot measurement. [00:28:34] Speaker 04: Is that the concern? [00:28:35] Speaker 04: That's the deficiency that we, yeah, that's, our concern is that... When you first raised the issue, you pointed them to a database that did things in megawatt hours. [00:28:44] Speaker 04: So our... You said the first thing, hey, you need to look at this thing, see what they did over here, megawatt hours. [00:28:48] Speaker 04: So our concern... They look at it, they go, great, megawatt hours, and then you don't object to megawatt hours on rehearing, you just object to not considering the no action alternative. [00:28:58] Speaker 07: Right, and our concern is that... [00:29:04] Speaker 07: So our concern is that an indirect effect of the project will be a massive increase in electricity demand, and that generating that electricity will have consequences. [00:29:15] Speaker 07: And that FERC needs to consider the effects of that electricity, creating that electricity, and juxtaposing it against a no-action alternative. [00:29:24] Speaker 07: We clearly flagged in our comment on the draft environmental impact statement that FERC needed to compare the effects of the project against a no-action alternative. [00:29:32] Speaker 07: We did point to the EPA's eGrid database as being a tool that FERC could use in performing that analysis. [00:29:41] Speaker 07: But our comment, we certainly did not intend it to suggest, and I don't believe it's reasonably read to suggest, that all FERC needed to do was [00:29:50] Speaker 07: pull the EPA e-grid numbers for what the emissions per megawatt hour of electricity production in Texas were. [00:29:56] Speaker 07: And that was the first step of the analysis. [00:29:59] Speaker 07: But then in order to actually compare the action and no action alternatives, those per megawatt hour numbers would need to be multiplied by the number of actual megawatt hours used. [00:30:08] Speaker 04: But just to clear, your objection now in this court is that [00:30:10] Speaker 04: they didn't do the apples to apples comparison in the metric of how the electrical usage is measured, not that they didn't undertake the analysis of no action, it's simply they did apples to apples. [00:30:25] Speaker 07: Correct. [00:30:26] Speaker 07: Yes, our concern is [00:30:30] Speaker 07: It's not a complicated analysis that we're contending that failed to undertake. [00:30:36] Speaker 07: It's just one that has huge impact in that merely identifying the emissions per megawatt hour doesn't provide any indication of how big the total number of emissions really are. [00:30:49] Speaker 07: And so FERC could have performed the analysis that we think is required, potentially just by multiplying the emission per megawatt hour by the number of megawatt hours used, although that's really just a multiplication problem. [00:31:02] Speaker 07: It's one that's incredibly significant here because it's such a big number of megawatt hours. [00:31:08] Speaker 04: I didn't see that argument. [00:31:10] Speaker 04: Tell me if I'm wrong. [00:31:18] Speaker 07: Well, so the way that we attempted to present that argument in our rehearing petition to FERC is that the analysis FERC actually performed of comparing emissions from generating a megawatt hour of electricity versus the equivalent of using a gas-fired turbine directly only provides a comparison between the chosen action and a design alternative. [00:31:38] Speaker 07: But there is no way to use that comparison without another step of analysis to compare the project against the no action alternative. [00:31:46] Speaker 07: And so does that answer your question or? [00:31:53] Speaker 06: Council for the Commission. [00:32:02] Speaker 08: May I please the court again? [00:32:03] Speaker 08: I'll go immediately to the last issue that was addressed, which is the air emissions issue. [00:32:09] Speaker 08: The Commission did exactly what Sierra Club asked us to do in its comments on the draft environmental impact [00:32:17] Speaker 08: statement, their concern was with respect to the electric non-emitting motors that power the refrigeration compressors. [00:32:28] Speaker 08: This is very technical stuff. [00:32:31] Speaker 08: If you look at – and you don't have to do it now because it's very technical – but if you turn to page 1045 of the free port, [00:32:40] Speaker 08: joint appendix, you'll note that there are lines on the side indicating that the Commission's mathematical analysis is entirely new because we were doing what we were asked to do, and in particular we were comparing the environmental effect [00:32:58] Speaker 08: of electric motors driving these compressors against the more standard natural gas-fired compression. [00:33:09] Speaker 08: So for purposes of the math and the numbers, not only did we provide the numbers in a scientifically meaningful way in pounds per megawatt, which Sierra Club never challenged in any petition for rehearing, but we also compared the environmental effects [00:33:28] Speaker 08: of the electric emissions versus a hypothetical on-site natural gas emissions. [00:33:36] Speaker 08: We did what they asked and that was never again presented to the agency. [00:33:41] Speaker 08: Turning to the lead arguments concerning the indirect effects of induced production, higher prices and effect on [00:33:49] Speaker 08: coal burning. [00:33:52] Speaker 08: The FERC thumb is not on the scale as to what the Department of Energy can do. [00:34:00] Speaker 08: I don't think the timing of FERC and DOE action is relevant, but to the extent Sierra Club keeps arguing that the FERC [00:34:10] Speaker 08: went first. [00:34:12] Speaker 08: Actually, with respect to orders, the Department of Energy issued two orders in 2003 conditionally approving the export of LNG from Freeport. [00:34:26] Speaker 08: That was conditional based upon a satisfactory environmental review by the FERC, which it undertook in 2014. [00:34:35] Speaker 01: Mr. Sullivan, help me understand [00:34:39] Speaker 01: the relationship between FERC and the DOE when it comes to the EIS. [00:34:49] Speaker 01: When we say that FERC is the lead agency, [00:34:54] Speaker 01: Does that entail, does that require that FERC look beyond those areas for which it has statutory authority to act? [00:35:05] Speaker 08: No, but the commission is limited of course to its statutory delegated authority. [00:35:13] Speaker 08: the Department of Energy when it comes to the actual construction of facilities is a cooperating agency and participates. [00:35:22] Speaker 01: So what does that mean for NEPA analysis? [00:35:24] Speaker 01: I mean, it suggests to me, and I'm not an expert in this, you are, it suggests to me that FERC has to ask questions that involve DOE and not just FERC. [00:35:38] Speaker 01: Is that not right? [00:35:39] Speaker 08: That is correct. [00:35:40] Speaker 01: However, the findings and conclusions... If that's correct, then the line of questions we asked at the previous case suggested that the DOE may very well have responsibilities to look at [00:35:56] Speaker 01: upstream problems. [00:35:58] Speaker 01: Wouldn't FERC have that responsibility as the lead agency? [00:36:01] Speaker 01: It doesn't have statutory authority. [00:36:02] Speaker 01: If it was just acting on its own, I'm with you. [00:36:06] Speaker 01: But now that they're acting as lead agency, doesn't that entail a more thorough NEPA analysis that would include [00:36:19] Speaker 01: the results that come from Department of Energy increasing the amount of exports? [00:36:25] Speaker 08: No, because the Department of Energy has the opportunity as an exercise in this case to engage in additional environmental fact-finding that is germane to the Department of Energy. [00:36:36] Speaker 01: What does it mean that FERC is the lead agency on the environmental impact statement? [00:36:44] Speaker 08: The Congress's concern in 15 U.S.C. [00:36:49] Speaker 08: 717N is that the FERC be the lead agency for purposes of environmental NEPA review and obtaining all federal authorizations. [00:37:00] Speaker 08: The Congress in the 2005 Act [00:37:03] Speaker 08: was very concerned about the timeliness of federal action and provided these additional procedures. [00:37:11] Speaker 01: When FERC is the lead agency, what areas does it need to look at in terms of the NEPA review that it wouldn't need to look at? [00:37:22] Speaker 01: when it's just doing an environmental impact statement on its own, not as a lead agency. [00:37:27] Speaker 01: What are the added responsibilities? [00:37:29] Speaker 01: What areas do they need to investigate, analyze as lead agency that they wouldn't have to if it was just a stand-off? [00:37:37] Speaker 08: The FERC is lead agency for purposes of putting together the environmental document. [00:37:42] Speaker 08: I do want to differentiate again between environmental review of the [00:37:46] Speaker 08: facilities and environmental review of the exports. [00:37:51] Speaker 08: The Department of Energy cooperates in the preparation of the environmental impact study. [00:37:57] Speaker 08: In the case of Freeport, it was hundreds and hundreds of pages and focused on the environmental impacts of the facility to the extent that... It was 978 pages, I think it was. [00:38:08] Speaker 08: I have it as 978 pages for purposes of this Court. [00:38:14] Speaker 08: It occupies almost all of volume 2 of the Freeport materials. [00:38:19] Speaker 01: That's what my clerk tells me. [00:38:22] Speaker 08: And I encourage your clerk to go back to volume 2 because it demonstrates that the Commission was not hiding or shirking anything with respect to the facilities. [00:38:40] Speaker 01: So imagine a case where FERC is not a lead agency on this. [00:38:48] Speaker 01: They're just doing EIS because they're the only one involved. [00:38:53] Speaker 01: Would it be less than 978 pages? [00:38:57] Speaker 08: No, it probably would have been the same 978 pages. [00:39:01] Speaker 01: The Department of Energy, because it has... So they don't then look to, just so I understand, they don't then, as acting as lead agency, they don't then look to statutory authority the Department of Energy has, and environmental consequences for exercise of that authority, that they don't. [00:39:21] Speaker 01: They're just looking, FERC is only looking at its own statutory authority and what it's authorized [00:39:27] Speaker 01: to act when it doesn't look elsewhere. [00:39:29] Speaker 08: That is correct. [00:39:30] Speaker 08: But the agency is, of course, looking at its statutory authority and is focusing on the environmental effects of the facility. [00:39:38] Speaker 08: The Department of Energy has a responsibility to supplement the environmental impact statement as necessary and appropriate to consider the environmental effects. [00:39:49] Speaker 04: Except when it's a free trade country. [00:39:50] Speaker 04: And then it's either now or never. [00:39:53] Speaker 04: I assume these facilities are built [00:39:58] Speaker 04: I assume they're all exporting to both free trade and non-free trade agreement countries, right? [00:40:04] Speaker 08: Well, I believe what Mr. Franklin said is once they have the authorization, at this point, they're unaware as to whether the gas will flow to free trade or not free trade. [00:40:14] Speaker 04: But I assume it's going to be both. [00:40:15] Speaker 04: Right. [00:40:15] Speaker 04: And they've got free trades. [00:40:17] Speaker 04: At least, as this has been passed, I think it's for this one. [00:40:20] Speaker 04: They have free trade authorization, too, already, correct? [00:40:23] Speaker 04: Authorization for free trade countries. [00:40:25] Speaker 04: And so I'm back to where it was before. [00:40:31] Speaker 04: The whole point of being, maybe the reason Congress wanted you to be the lead agency was it realized, it wrote that statute that says it's going to be automatic if the application is to export to a free trade country. [00:40:43] Speaker 04: And so we need [00:40:45] Speaker 04: to front load that NEPA analysis, because it is now or never. [00:40:49] Speaker 04: And we know some of the licensing, we hope, is going to be to free trade countries. [00:40:54] Speaker 08: Well, the Commission did not front load the environmental impact statement with effects beyond its statutory jurisdiction, but the Department of Energy, much to its credit, back loaded the environmental review to include the two studies that Judge Rogers referenced [00:41:11] Speaker 04: But that's only to the extent that the application was for some non-free trade countries. [00:41:17] Speaker 04: But there are already authorizations out there for countries that qualify for free trade treatment, correct? [00:41:24] Speaker 04: Correct. [00:41:25] Speaker 04: Did you do any of this analysis you're now referencing, including those two studies, when it issued that order? [00:41:30] Speaker 04: I would assume not. [00:41:32] Speaker 04: It's automatic under the statute. [00:41:33] Speaker 08: The authorization is automatic, but the Department of Energy – and again, I'm not sure to which extent it refers to exports to free trade or non-free trade – but they did engage in the additional fact-finding found in the 2014 addendum. [00:41:49] Speaker 08: It is truly an addendum to the environmental documents that the FDRC prepared. [00:41:56] Speaker 08: and it prepared the life cycle greenhouse gas study from the perspective of the importing countries. [00:42:07] Speaker 06: What those two... But it took the position it had no obligation to do those studies. [00:42:12] Speaker 06: Yes, and we agree with that. [00:42:14] Speaker 06: All right, so where FERC is the lead agency on environmental matters, and I'll focus on Judge Millett's free trade countries, [00:42:27] Speaker 06: FERC saying it has no obligation to do these types of studies, then the, what I'll call the complete environmental analysis required under NEPA is not done unless FERC does it. [00:42:46] Speaker 08: The complete analysis under NEPA was done by FERC for FERC's responsibilities in the environmental. [00:42:54] Speaker 06: What we're trying to get at is Congress set up this scheme, and the tricky part is this free trade country. [00:43:04] Speaker 06: It just sort of bypasses energy. [00:43:08] Speaker 06: And the whole point has been, here before argued, [00:43:12] Speaker 06: FERC has no obligation to do anything more than the impact of the facility itself, as FERC interpreted its obligation in the EA, in the Sabine case, and here in the EIS. [00:43:30] Speaker 06: And nobody ever gets to look at what everyone has been saying, oh, that can be [00:43:38] Speaker 06: addressed in a challenge to the Department of Energy. [00:43:41] Speaker 06: And the Department of Energy will come back and say, Congress said as the free trade countries, basically we have no role. [00:43:50] Speaker 08: No, I believe the Department of Energy does have role. [00:43:52] Speaker 08: Again, it is difficult with respect. [00:43:54] Speaker 06: But the Energy Department has already said it wasn't obligated to do those studies, that it, as you put it, back loaded. [00:44:02] Speaker 06: Right, but the Department of Energy said it wasn't obligated not because of the lack of statutory authority, but because of the lack of reasonable foreseeability, regardless of what- So you read those studies as saying that the Department of Energy is not a party before us today, so it's hard to know what its position is on all of this. [00:44:24] Speaker 06: has acknowledged that it has a legal responsibility to address these issues, because I read it quite the opposite. [00:44:32] Speaker 08: It is the opposite. [00:44:33] Speaker 08: As the Department of Energy said, it found that it did not have the legal obligation under NEPA to look at these [00:44:41] Speaker 08: of the world. [00:44:57] Speaker 08: proceedings indeed from Sierra Club, which is making exactly the same indirect effects argument to the Department of Energy that it is making to the FERC. [00:45:08] Speaker 08: And the Department of Energy said again to its credit, we don't have a legal responsibility to do this because of lack of causal connectivity and reasonable foreseeability, but it will do so anyway. [00:45:21] Speaker 08: And those studies, I think, demonstrate [00:45:24] Speaker 08: precisely our point as to the lack. [00:45:28] Speaker 06: No, but Mr. Solomon, that's a merits argument. [00:45:31] Speaker 06: What I'm trying to focus on is who has the legal obligation. [00:45:37] Speaker 06: And a lot of the argument has been Sierra Club's in the wrong place. [00:45:43] Speaker 06: It ought to be challenging the energy order when it's issued. [00:45:49] Speaker 06: But in fact, [00:45:52] Speaker 06: Energy is in a public citizen posture as to the free trade countries. [00:45:58] Speaker 06: Congress has already decided that exports go to free trade countries. [00:46:03] Speaker 08: Right, but I do not believe. [00:46:05] Speaker 06: So let's let me be clear. [00:46:07] Speaker 06: You started out your argument in the other case by giving us a lot of legislative history. [00:46:12] Speaker 06: And it then said, well, Sabine's the first project to go forward. [00:46:21] Speaker 06: And I think counsel for Sierra Club said he wasn't aware of any challenges because all this is new. [00:46:29] Speaker 06: So everybody's trying to figure out what their role is in a new environment. [00:46:37] Speaker 06: And so Ferck's saying, we're going to do what we normally do. [00:46:40] Speaker 06: We're not going to get into indirect effects. [00:46:42] Speaker 06: We're not going to get into cumulative effects. [00:46:44] Speaker 06: And your argument has been, as I understand it, well, we have to separate out operational effects [00:46:51] Speaker 06: and economic effects. [00:46:54] Speaker 06: And that's all for energy to look at. [00:46:57] Speaker 06: And then as I understand your argument as well, actually Congress has already looked at it as to free trade countries. [00:47:04] Speaker 06: So no one, there is no review on that point unless FERC does it. [00:47:12] Speaker 06: And so how do we contemplate that Congress intended in those circumstances [00:47:21] Speaker 06: that where it designated FERC as a lead agency on the environmental question, that FERC was not meant to go beyond what I'll call its traditional role. [00:47:39] Speaker 08: I think for purposes of divining Congress's intent, you need to look at the four provisions of the Natural Gas Act that Congress added in 2005. [00:47:50] Speaker 08: Is that 717M? [00:47:56] Speaker 06: It is not... You said that was the section that assigned FERC the lead responsibility on environmental matters. [00:48:04] Speaker 08: Yes, 717N is one of them where the FERC is the lead agency for purposes of NEPA and federal authorizations. [00:48:14] Speaker 08: But we do not believe that that section can be construed [00:48:17] Speaker 08: to trump the limited statutory authority that the FERC has in other sections. [00:48:26] Speaker 08: And I'll go through the sections one by one that I think are relevant. [00:48:30] Speaker 06: No, I don't need you to go through the statute. [00:48:32] Speaker 08: OK. [00:48:32] Speaker 08: But I will point out, I think 717N is focusing on the timeliness of agency decision-making. [00:48:41] Speaker 08: In subsection B, FERC is designated as the lead agency, but in subsection. [00:48:46] Speaker 06: Well, it's an interesting choice of words by Congress. [00:48:50] Speaker 06: The lead agency on environmental matters for a subject that is otherwise in responsibility of the Department of Energy. [00:48:59] Speaker 08: Well, the lead agency, but not the sole agency. [00:49:02] Speaker 06: Not the sole, but Energy doesn't want to get half a report from FERC. [00:49:09] Speaker 06: It wants a full report. [00:49:11] Speaker 08: Well, that certainly must be true. [00:49:14] Speaker 08: But to the extent the Department of Energy as a cooperating agency does not receive the full oath that it wants, it has the ability. [00:49:23] Speaker 06: And in fact, So FERC says, ooh, goodness, we've got this report from FERC. [00:49:30] Speaker 06: And it doesn't look at half of the relevant stuff. [00:49:33] Speaker 06: So we have to hire experts and scientists and gather information and do it ourselves. [00:49:41] Speaker 08: Yes, DOE does need to do it itself or assign responsibility to do it. [00:49:47] Speaker 08: No, what happened is there are 2012 reports and there are 2014 reports. [00:49:53] Speaker 06: I'm just trying to understand the statutory scheme and I thought Judge Griffith's questions about what does it mean to be a cooperating agency. [00:50:01] Speaker 06: I mean, Congress added this section in there in this context. [00:50:08] Speaker 08: Yes, for the purposes of NGA Section 3 export and import reviews. [00:50:12] Speaker 08: But to the extent the Department of Energy is unable to receive the full environmental impact statement that informs not just simply the FERC's review, but also the DOE's review of the export, the Department of Energy has the ability, as it has exercised, to engage in supplemental review. [00:50:34] Speaker 04: Is there any other statute that you're aware of [00:50:36] Speaker 04: Congress has passed that it designates a lead agency for NEPA purposes. [00:50:41] Speaker 08: I'm not aware of any such statute. [00:50:44] Speaker 08: But again, I'm referring back to the focus on coordination and expedition. [00:50:50] Speaker 04: No, I know. [00:50:51] Speaker 04: I'm just trying to figure out that DOE was not obligated to delegate these construction decisions to FERC. [00:50:58] Speaker 04: It's a decision it chose to make, correct? [00:51:01] Speaker 04: It could have done it all itself. [00:51:03] Speaker 08: Correct, but it's uncertain now in light of the 2005 statute where you now have 717B that gives the Commission exclusive authority over LNG terminals, which is actually a defined phrase. [00:51:20] Speaker 08: in 717A11, whether that is still an authority DOE could withhold from the Commission at this point, but it doesn't matter because they've also delegated that authority to us as well. [00:51:35] Speaker 04: If DOE hadn't made the delegation and something like this came across its plate, and it said, well, we're going to do the NEPA now, we're only going to look at the construction right now, knowing that [00:51:51] Speaker 04: for non-free trade applications later. [00:51:54] Speaker 04: Wouldn't somebody have a pretty good argument that it was improper segmentation underneath that? [00:52:00] Speaker 08: They could make that argument prior to 2004. [00:52:02] Speaker 08: Again, the FERC's responsibility at that point was entirely with respect to delegated authority. [00:52:08] Speaker 04: They'd have a good argument, right. [00:52:09] Speaker 04: So I don't understand how the scope of a proper [00:52:16] Speaker 04: on a delegation. [00:52:18] Speaker 08: Well, I will point out with respect to segmentation, this is an argument that Sierra Club is not making under 40 CFR 1508.2. [00:52:28] Speaker 04: One way of looking at their indirect and cumulative arguments is that it's another way of packaging these segmentation concerns. [00:52:35] Speaker 04: You're all trees and no forest, and you're the lead agency. [00:52:39] Speaker 04: And if it's not now, it's never going to happen. [00:52:41] Speaker 04: So look at the forest and not just the trees. [00:52:43] Speaker 08: No, I would say we are all trees and some forest, but not the entire forest. [00:52:50] Speaker 04: Yeah, because you're the lead agency. [00:52:51] Speaker 04: You're supposed to look at the whole forest. [00:52:52] Speaker 08: We are the lead agency with respect to the preparation of the environmental impact statement. [00:52:57] Speaker 08: That is not to suggest that Congress has sub silencio delegated the entire forest to us. [00:53:06] Speaker 04: I will note... [00:53:07] Speaker 04: Not for making the export decision, but for evaluating the consequences of building export facilities, which are that exports will happen. [00:53:17] Speaker 08: Well, with respect to the facilities, the agency did consider all air emissions, including greenhouse gas emissions from the facility. [00:53:26] Speaker 04: From the facility's operation and construction, but not from the gas getting there. [00:53:32] Speaker 08: From the gas getting there, of course, we would have jurisdiction over the upstream natural gas pipeline as well under a different section of the natural gas. [00:53:42] Speaker 08: The gas extraction itself, the production [00:53:51] Speaker 08: opportunities are not regulated by the Federal Energy Regulatory Commission. [00:53:55] Speaker 08: Those are state-regulated authorities. [00:53:57] Speaker 08: And this is something that actually comes into play in the public citizen case, which looked at the jurisdiction of the Federal Motor Carrier Safety Administration and said that that agency only has limited authority with respect to [00:54:12] Speaker 08: Mexican trucks on US highways. [00:54:16] Speaker 08: The FERC has noted that it does not have jurisdiction over those upstream activities, which undermines its ability to discern [00:54:31] Speaker 08: which production areas will actually result in the delivery of natural gas to the FDRC. [00:54:42] Speaker 08: Correct. [00:54:43] Speaker 08: The Commission said we do not have to have jurisdiction, but the Commission said it's relevant in trying to ascertain [00:54:50] Speaker 08: the when, where, why's of natural gas delivery. [00:54:54] Speaker 08: For purposes of NEPA, the agency, my agency, is trying to discern and develop relevant [00:55:04] Speaker 08: information that will meaningfully inform the public and will meaningfully inform the decision maker. [00:55:11] Speaker 08: The agency developed all information that was necessary to meaningfully inform the FERC in its review of these particular facilities to the extent that environmental review did not discern additional information necessary to the Department of Energy's review. [00:55:29] Speaker 08: The Department of Energy engaged in supplemental environmental [00:55:33] Speaker 04: a fact-finding to base its own decision on. [00:55:46] Speaker 04: And you have to determine the environmental consequences of building and operating this facility. [00:55:55] Speaker 04: And the sort of low, at least national, if not global, economic and environmental consequences that they're concerned about just can't be tied to any one individual facility. [00:56:06] Speaker 04: Is that right? [00:56:07] Speaker 04: Yes. [00:56:07] Speaker 04: But the Department of Energy's study that's in, I think this is part of the record they attached, [00:56:14] Speaker 04: and it references four other facilities. [00:56:17] Speaker 04: So they actually undertook the very facility-specific analyses that the commission here said it's not possible to do. [00:56:27] Speaker 04: And I just don't know why the commission couldn't do exactly what Deloitte did, and DOE went out there and found them. [00:56:35] Speaker 08: We're not saying that it's impossible to do. [00:56:37] Speaker 08: What the Commission found was that such an exercise would not provide relevant, meaningful information. [00:56:52] Speaker 04: will come. [00:56:53] Speaker 04: When you bring this one facility online, here are the upstream consequences. [00:56:58] Speaker 04: We can do it. [00:56:59] Speaker 04: Of course it's not precise in the sense that you can have a single answer to it, but we can identify the range of consequences. [00:57:06] Speaker 04: It seems to prove that it's reasonably foreseeable and doable. [00:57:09] Speaker 04: Why couldn't this be exactly what [00:57:11] Speaker 08: Well, we're not saying there's anything wrong with developing a range of consequences, but as the agency said, the Energy Information Administration study in 2012 actually demonstrates the limitations of such an analysis. [00:57:28] Speaker 04: Well, that's one study, but then you have the Lavaca Bay study by Deloitte Cooch, which seemed to do... NEPA doesn't require pinpoint accuracy. [00:57:36] Speaker 04: It requires an evaluation of consequences, and sometimes that is [00:57:40] Speaker 04: worst-case, best-case scenario, here's the range, but at least we're grappling with the issue. [00:57:45] Speaker 04: It can be done, it was done, and so all these arguments about, oh, we can't tie those things to a facility by facility decision-making, that for us just seems wrong to me. [00:57:55] Speaker 08: Well, there are many studies. [00:57:56] Speaker 08: There's the 2012 EIA study, there's the NERA economic consultant study, there's the Deloitte study in 2014, there's the environmental addendum, there's the greenhouse gas, [00:58:08] Speaker 08: life cycle study, to the extent that those studies are relevant to the FERC decision-making process, any party can, and Sierra Club did, present such a study to us. [00:58:22] Speaker 01: But why not part of the NEPA process? [00:58:24] Speaker 01: That's the claim, isn't it? [00:58:25] Speaker 01: That if it's part of the NEPA process, it may affect the overall decision in the way that these other studies not. [00:58:33] Speaker 01: They weren't part of the NEPA process. [00:58:35] Speaker 08: Well, the Sierra Club is also engaged in the NEPA process. [00:58:38] Speaker 08: We issue our draft environmental statement. [00:58:41] Speaker 08: We put it out there for notice and comment, and parties have the ability. [00:58:46] Speaker 01: But these types of modeling that are demonstrated in these other studies, you all say, we can't do it because this is just beyond the realm of what's reasonably foreseeable. [00:58:57] Speaker 01: And I think, I don't want to speak for Judge Millett, [00:59:00] Speaker 01: The question is, no, it shows it can be done. [00:59:03] Speaker 01: It's not divination here. [00:59:07] Speaker 01: It's estimations. [00:59:10] Speaker 01: Some of it has the air of the speculative. [00:59:13] Speaker 01: But it's possible. [00:59:14] Speaker 01: And why isn't it required? [00:59:17] Speaker 01: What's the harm in doing this? [00:59:18] Speaker 08: Well, we're certainly not doubting that it can be done, and with respect to what's the harm. [00:59:23] Speaker 01: I guess the question is whether it's valuable. [00:59:25] Speaker 01: Right. [00:59:26] Speaker 01: And your argument is that it's just not valuable. [00:59:29] Speaker 01: Yes. [00:59:29] Speaker 08: For NEPA purposes, it's the question of value. [00:59:33] Speaker 08: And Sierra Club is focusing primarily on what it perceives to be the most valuable study, the Energy Information Administration study. [00:59:41] Speaker 08: Sierra Club is able to choose which of the studies best supports its case. [00:59:46] Speaker 08: And the commission found that that particular study is just not valuable enough. [00:59:52] Speaker 04: Why isn't the Lavaca Bay study valuable? [00:59:54] Speaker 04: That says on a facility-specific basis, here are the consequences of bringing this thing up online to export natural gas. [01:00:03] Speaker 04: That seems to be exactly what they're concerned about. [01:00:06] Speaker 04: Isn't that really valuable? [01:00:08] Speaker 08: Well, obviously, the value increases as the analysis becomes more focused on the particular facility. [01:00:15] Speaker 08: There was no such analysis that was specific to the Freeport facility, and with respect to the... That's their complaint. [01:00:21] Speaker 04: That's the point, the objection. [01:00:24] Speaker 08: That is their complaint, but their complaint focuses primarily on a study... Well, primarily, but this is part of the story, too. [01:00:33] Speaker 04: Maybe one thing I'm not getting here, I could just be wrong about. [01:00:37] Speaker 04: When it comes to doing a deep analysis, is the agency sort of passive in the sense that it's the duty of Sierra Club to hand you Lavaca Bay and say, here it is? [01:00:46] Speaker 04: you can do this too, or do the agencies, how much sort of affirmative duty do they have to say, you know, do you think this can be done, we need to do it, or will someone give us the information? [01:00:58] Speaker 04: Is it proactive or reactive? [01:00:59] Speaker 08: Well, it's a combination of both. [01:01:00] Speaker 08: The agency has a responsibility to engage all arguments and to discern all [01:01:06] Speaker 08: reasonably foreseeable consequences, even if you can discern an increase in natural gas production, and even if you can somehow tie that to the authorization of any one particular facility, you still have the issue of the emissions effect, and you still have the issue of whether the agency's approval of any facility can be tied to additional coal burning and coal-based emissions. [01:01:33] Speaker 08: which we believe is simply not reasonably foreseeable. [01:01:36] Speaker 06: All right. [01:01:36] Speaker 06: Thank you. [01:01:37] Speaker 08: Thank you. [01:01:38] Speaker 06: Council for interveners. [01:01:48] Speaker 02: Thank you, Your Honor. [01:01:49] Speaker 02: Jonathan Franklin representing this time the Freeport intervenors. [01:01:53] Speaker 02: I think there's been a fair amount of confusion about how the statutory authorities interplay and how the cooperating agency process works. [01:02:01] Speaker 02: That's not surprising because it was confusing to me too. [01:02:04] Speaker 02: And I'm going to try to explain how it works and how I think it all fits together. [01:02:10] Speaker 02: With regard to the Division of Responsibilities here, it is true, as Judge Millett said, with regard to free trade nations, the NEPA analysis is now or never – in fact, it's never. [01:02:24] Speaker 02: Congress has declared that these applications shall be approved without modification or delay. [01:02:32] Speaker 02: So when DOE gets one of those, [01:02:34] Speaker 02: It doesn't even put it out for public comment. [01:02:37] Speaker 02: They get approved as Congress has directed. [01:02:39] Speaker 02: That's a public citizen – direct public citizen issue. [01:02:43] Speaker 02: Just as a public citizen, there is no NEPA analysis, because NEPA – the rule of reason applies to, quote, the usefulness of any new potential information to the decision-making process. [01:02:52] Speaker 02: So with regard to free trade status nations, it's not useful because Congress has said it's going to happen, just like the Mexican trucks. [01:03:00] Speaker 04: I'm sorry, I don't mean to interrupt. [01:03:02] Speaker 04: It's helpful to have this explained. [01:03:04] Speaker 04: I just want, I hope in the course of answering this you'll explain how we know that that means, did Congress mean forget NEPA? [01:03:12] Speaker 04: entirely when it's free trade, or does that mean front load these export concerns in the decision to construct and operate the purchases? [01:03:20] Speaker 02: With regard to free trade, forget entirely. [01:03:22] Speaker 02: It doesn't fit. [01:03:23] Speaker 02: It's without modification. [01:03:25] Speaker 04: Has any court held that, or is that an alleged... Public citizen, I think it's direct on public citizen. [01:03:30] Speaker 04: Well, about NEPA, it just doesn't apply to this decision. [01:03:32] Speaker 02: No, because the information wouldn't be useful to the nondiscretionary decision. [01:03:36] Speaker 04: It's an open question. [01:03:38] Speaker 02: It may be, but here's what I would say is public citizen controls. [01:03:41] Speaker 02: Now, that's free trade. [01:03:43] Speaker 02: With non-free trade, DOE opens two different dockets. [01:03:48] Speaker 02: So it's got the free trade dockets. [01:03:50] Speaker 02: Those go through. [01:03:51] Speaker 02: But it does have the non-free trade dockets. [01:03:54] Speaker 02: And here, Judge Rogers, I'm going to try to explain, I think, maybe some confusion there. [01:03:58] Speaker 02: With regard to the non-free trade, [01:04:01] Speaker 02: DOE did not say, we just don't have the statutory authority to look at NEPA. [01:04:05] Speaker 02: NEPA doesn't apply. [01:04:06] Speaker 02: They did not say that, nor could they have. [01:04:08] Speaker 02: NEPA applies. [01:04:09] Speaker 06: No, and I don't think anybody suggested that. [01:04:10] Speaker 02: No. [01:04:11] Speaker 02: But when they said, we're not looking at the induced production effects, it wasn't because they didn't have the statutory authority to look at it. [01:04:19] Speaker 02: So it's not this shell game that I'm hearing from some parties. [01:04:22] Speaker 06: I thought the point was they said they didn't have to. [01:04:25] Speaker 06: They weren't required to do it. [01:04:26] Speaker 06: They had the authority to do it, but they weren't required to do it. [01:04:29] Speaker 02: Their view was they weren't required by NEPA because, just as FERC declared, that it was not reasonably foreseeable. [01:04:35] Speaker 02: But it wasn't because they didn't have the statutory authority. [01:04:38] Speaker 02: That's a free trade issue, not a free trade issue. [01:04:40] Speaker 02: So that's one thing. [01:04:41] Speaker 02: And we have, Sierra Club has petitioned for rehearing as to one slice of [01:04:47] Speaker 02: the DOE's non-free trade order on Freeport. [01:04:52] Speaker 02: Not the whole thing, because they actually were untimely as to most of it. [01:04:55] Speaker 02: But for some of it, they have petitioned for rehearing, and that is pending. [01:05:00] Speaker 02: Now, with regard to you, Judge Griffith, on the [01:05:03] Speaker 02: cooperating agency process. [01:05:06] Speaker 02: The reason they use the term lead agency is because that is the term that is used in the CEQ regulations. [01:05:12] Speaker 02: And I apologize, I do not have the citations at hand on this, but there is a series of CEQ regulations that discuss lead and cooperating agencies. [01:05:23] Speaker 02: And this is ultimately an internal government matter. [01:05:26] Speaker 02: So the way it works in practice is the lead agency will participate, all of the cooperating agencies will provide their comments. [01:05:34] Speaker 02: So if DOE thinks that FERC should consider some effect that FERC isn't considering, the way that works is DOE tells FERC, hey, FERC, we think you should consider this. [01:05:47] Speaker 02: Now that didn't happen here because DOE and FERC are actually on the same page on this, but DOE could have said, we think FERC, you should consider this, FERC could then say... And could that go beyond FERC statutory authority? [01:05:59] Speaker 02: I think it could, but, and here's where I think we have to explain, when you get to court, [01:06:05] Speaker 02: When somebody's petitioning for review, as they are here, that is limited to determining whether the agency that made the decision here, FERC, on authorizing in its role to authorize Freeport, whether that agency complied with NEPA. [01:06:22] Speaker 02: So then what would happen if it got to court on DOE, [01:06:27] Speaker 02: DOE could then, if its concerns were, as it was in this case, addressed by FERC, or it's comfortable with FERC's analysis, it can then say, we're comfortable with FERC's analysis. [01:06:39] Speaker 02: And that becomes then DOE's NEPA analysis. [01:06:43] Speaker 02: But then when it's reviewed from a DOE order, you'd be looking to see whether or not the NEPA analysis that DOE did, which could incorporate FERC's, and in fact, in this case, did, [01:06:55] Speaker 02: implies with its statutory authority. [01:06:58] Speaker 04: And here I'm going to, again, quote from... What about, I guess, what if you have some bigger picture problem, and that is, look, it's nice to divide the world into DOE and FERC, but the reality is this isn't a statutory division. [01:07:09] Speaker 04: This is DOE. [01:07:11] Speaker 04: This is all on DOE's shoulders, and DOE made a delegation. [01:07:14] Speaker 04: It had the statutory authority to make the delegation, but that doesn't mean it had the statutory authority to wash its hands of its ultimate responsibility to do a NEPA analysis [01:07:25] Speaker 04: that is not artificially chopped up. [01:07:28] Speaker 04: And so someone wanted to just challenge not FERC's NEPA and DOE's NEPA, but this upfront decision to chop up the process, because we've got precedent saying that under NEPA you're not allowed to sort of chop it up artificially and then miss the whole [01:07:42] Speaker 04: picture, where would that happen? [01:07:45] Speaker 02: Where would that challenge come in? [01:07:48] Speaker 02: You could challenge either place. [01:07:50] Speaker 02: You could bring a segmentation challenge. [01:07:51] Speaker 02: That hasn't been brought here. [01:07:52] Speaker 02: And the reason it hasn't been brought here is that that's not their complaint. [01:07:55] Speaker 02: Their complaint is not that. [01:07:56] Speaker 04: That could be brought here, or would that have been brought in the challenging the DOE? [01:07:59] Speaker 02: You could bring it either place, but again, either challenge is going to focus on the agency's responsibilities. [01:08:06] Speaker 02: So here, and I'm going to quote the delegation order here, because I think it's important, in the 2006 delegation order, which is 00-004.00A, and it's at 1.21A. [01:08:19] Speaker 02: And what it says is that FERC has been delegating the authority to, quote, implement the determinations made by DOE, the Assistant Secretary of Fossil Energy. [01:08:28] Speaker 02: So that's FERC's role here is to implement DOE determinations. [01:08:32] Speaker 02: Going back to the free trade, you know, DOE has determined, not even had to make that determination, because Congress said it had to, that there will be exports from this facility. [01:08:42] Speaker 02: We know that. [01:08:43] Speaker 02: There will be. [01:08:44] Speaker 02: It can't be stopped. [01:08:45] Speaker 02: Congress has said there will be. [01:08:47] Speaker 02: So Sierra Club's objections here, which are essentially, you know, to use the spigot analogy, that FERC shouldn't allow the building of the spigot. [01:08:55] Speaker 02: Can't do that. [01:08:56] Speaker 02: That's not something that FERC has the authority to stop. [01:09:00] Speaker 02: They can't say no spigot. [01:09:01] Speaker 06: It could say no spigot here. [01:09:05] Speaker 06: You have to move it to Oregon. [01:09:08] Speaker 02: And I'm going to address that. [01:09:09] Speaker 02: I was actually on my list of things. [01:09:10] Speaker 02: The siting decision, yeah, you could say this site versus another. [01:09:14] Speaker 02: But the impacts that Sierra Club is talking about are not site-specific. [01:09:18] Speaker 02: That's why they haven't raised that issue. [01:09:20] Speaker 02: The reason they haven't is because the impacts they're talking about are not occurring at any site, this site, another site. [01:09:24] Speaker 02: They're occurring thousands of miles away. [01:09:27] Speaker 02: And in case of global issues, maybe 20,000 miles away. [01:09:31] Speaker 02: This makes this case, in fact, different from any case that I'm aware of where they're saying that the environment, the reasonably foreseeable environmental impacts from this facility [01:09:39] Speaker 02: could actually occur in North Dakota. [01:09:41] Speaker 02: That's their point. [01:09:42] Speaker 02: And that's what the agency said is not reasonably foreseeable. [01:09:45] Speaker 02: But just getting back to the agency's divisions of authority, Public Citizen says, again, that the rule of reason looks to the usefulness of any new potential information to the decision-making process to the extent, and I think it is what Sierra Club is arguing, and they have made that clear in their briefs, that this information on whether or not exports generally are good or bad [01:10:08] Speaker 02: That is not useful to FERC's decision making. [01:10:10] Speaker 06: No, it's not a question of good or bad. [01:10:13] Speaker 06: Congress has made that decision. [01:10:16] Speaker 06: But the question is how? [01:10:19] Speaker 02: Well, there's nothing that that information could contribute to FERC's process. [01:10:24] Speaker 06: The hypothetical would be that if the facility is located in the state of Louisiana, the indirect effects and the cumulative effects will be 100. [01:10:38] Speaker 06: On the other hand, if the facility is located in Oregon, the effects will be five. [01:10:46] Speaker 06: So FERC has a responsibility to consider environmental impact, public interest, and the facility [01:10:55] Speaker 06: would still carry out Congress's purpose, the spigot would be on, but it would be in a different place. [01:11:03] Speaker 06: They can't do that? [01:11:04] Speaker 02: No, because again, getting just back to the free trade status nations, we presented an application to DOE which DOA granted as a must grant without modification and delay for an export terminal at this site. [01:11:18] Speaker 02: We have that authorization from DOE, which models the statute. [01:11:22] Speaker 06: So DOE has already approved this site? [01:11:26] Speaker 02: Of course, yes. [01:11:26] Speaker 06: What did they approve though? [01:11:28] Speaker 04: They approved exporting to free trade countries from this site. [01:11:35] Speaker 02: FERC approved, FERC has this over, but again, the delegation order says that FERC's obligation is to implement the decision of the Fossil Energy Assistant Secretary. [01:11:44] Speaker 02: But when we get back to DOE, again. [01:11:46] Speaker 04: So that means DOE picks the site and DOE makes the export decision. [01:11:49] Speaker 02: On FTA, on FTA nations. [01:11:52] Speaker 02: What all I'm saying is that FERC doesn't have the authority to say no to speak. [01:11:56] Speaker 04: But DOE's actually making the decision on non-FTA too. [01:12:00] Speaker 02: They are. [01:12:00] Speaker 04: FERC's decision, FERC works for DOE. [01:12:02] Speaker 04: Right. [01:12:03] Speaker 04: And then DOE will make its own. [01:12:05] Speaker 04: It won't be automatic, but it'll make its own in the non-free trade. [01:12:08] Speaker 02: It will. [01:12:08] Speaker 02: And what I'm saying here is that the volumes are the same. [01:12:11] Speaker 02: So we're going to be able to export from facility. [01:12:14] Speaker 02: What we were going to be exporting, where it's going to go, DOE does have the say on the non-free trade. [01:12:21] Speaker 02: And we do have several proceedings before DOE with regard specifically to non-free trade nations. [01:12:28] Speaker 02: Those are the ones that Sierra Club, in one instance, has intervened and has sought re-hearing of. [01:12:34] Speaker 04: Can you tell me just, theoretically, how many potential customers are free trade and how many are non-free trade? [01:12:42] Speaker 04: Is it 50-50? [01:12:43] Speaker 04: Is it mostly free trade? [01:12:45] Speaker 02: There is a list of free trade nations, and that list is [01:12:53] Speaker 02: is it's about 14 or 15 of them. [01:12:57] Speaker 02: And so there is a definite list of the free trade nations. [01:13:01] Speaker 06: Are these Western European nations, basically, and Australian? [01:13:03] Speaker 02: It's all over the map. [01:13:05] Speaker 02: I can read them. [01:13:05] Speaker 06: No, but I mean they're major industrial nations. [01:13:08] Speaker 02: It has to do with whether they have a free trade agreement in place that has a national treatment for natural gas. [01:13:15] Speaker 02: So it's not all free trade countries. [01:13:17] Speaker 03: Japan's not, right? [01:13:19] Speaker 02: Japan's not on the list. [01:13:21] Speaker 02: Japan's not on the list. [01:13:22] Speaker 02: Australia is on the list. [01:13:23] Speaker 02: Canada is on the list. [01:13:25] Speaker 02: I can read them if you'd like. [01:13:26] Speaker 01: And what's the volume that we're talking about? [01:13:29] Speaker 02: We don't know. [01:13:29] Speaker 02: The volumes have been authorized for both. [01:13:31] Speaker 02: So we are not limited in terms of our authority for DOE authorizations. [01:13:36] Speaker 02: We're not limited to where they go. [01:13:38] Speaker 06: So for the non-free trade countries, you say you have several proceedings? [01:13:44] Speaker ?: Yes. [01:13:45] Speaker 06: Are these what I'll call diplomatic questions, or are they? [01:13:49] Speaker 06: I mean, what kinds of questions are being addressed in those procedures? [01:13:54] Speaker 02: The public interest analysis. [01:13:55] Speaker 02: So BOE does its public interest analysis with regard to non-free trade cases. [01:13:59] Speaker 06: That's what I call foreign relations. [01:14:02] Speaker 06: No, I mean, seriously, it's that kind of. [01:14:04] Speaker 06: They're not into the details about the facility itself. [01:14:10] Speaker 02: No, they are. [01:14:11] Speaker 02: They're into a lot of details, but they're more concerned, again, with the exports themselves, not with the facility. [01:14:17] Speaker 02: But they put conditions as well on theirs. [01:14:19] Speaker 04: But all I'm saying is... Are they looking at environmental consequences? [01:14:22] Speaker 02: Absolutely. [01:14:23] Speaker 04: Are they doing LaVaca Bay type analyses? [01:14:25] Speaker 02: Well, I'm not sure exactly what that analysis is, but they did. [01:14:27] Speaker 04: If you look at... [01:14:28] Speaker 02: I'm aware of the Deloitte report and in terms of whether it relates to Freeport or not but there is an order and that's also in the appendix it's not in the record there's a final [01:14:41] Speaker 02: order that DOE issued for the Freeport project that was issued on, I believe it was December, November 14th of 2014. [01:14:56] Speaker 02: That's the one in part, not entirely, that Sierra Club has a sovereign hearing of. [01:15:03] Speaker 02: That one has extensive environmental analysis. [01:15:08] Speaker 02: It includes an analysis, and I'm going to have to go back and look to see what they did. [01:15:14] Speaker 02: I think they referred to the Deloitte study, but it certainly includes an analysis of the effects. [01:15:22] Speaker 02: Now, they did that in their... [01:15:26] Speaker 02: what they thought of as potential impacts of induced production, but not, again, I want to be clear, DOE has agreed with FERC that those don't need to be considered under NEPA, but DOE considered them under its own separate public interest determination, which it is [01:15:44] Speaker 02: with regard to non-free trade nations required to undergo on the public interest of allowing exports. [01:15:52] Speaker 02: So we definitely considered all of that. [01:15:54] Speaker 02: Ultimately, it concluded on balance that this was in the public interest. [01:15:59] Speaker 02: and including on the environmental side. [01:16:02] Speaker 02: But with Grazianipa, it agreed with FERC. [01:16:03] Speaker 02: Now, if Sierra Club wants to disagree with that, with regard to the part of the proceeding that they have participated in, they can do that. [01:16:11] Speaker 02: They can bring, once DOE issues its order, they can bring that together. [01:16:14] Speaker 02: They can bring that argument to court, assuming they've satisfied all the jurisdictional objections, you know, standards for that proceeding. [01:16:22] Speaker 02: All I'm saying here is that [01:16:23] Speaker 02: FERC's duty here is not as broad as Searcliffe says, and to the extent Sierra Club is complaining about exports generally, that is something that they have to take to Congress. [01:16:36] Speaker 02: Because Congress has already determined, at least with regard to some of them, that they are going to happen. [01:16:40] Speaker 02: And FERC is mandated by statute to implement that decision. [01:16:44] Speaker 04: So again, that's the- I haven't really heard so much from FERC. [01:16:49] Speaker 04: The concern here is how one could, it's not that you can't do site-specific studies, which is what I heard, and that just doesn't seem to be true. [01:16:56] Speaker 04: They did it for the Rock of Bay. [01:16:58] Speaker 04: It's not that you can't tie these things down. [01:16:59] Speaker 04: It's that you can't ever figure out how much of that impact is coming from free trade versus non-free trade. [01:17:05] Speaker 04: You couldn't do that. [01:17:07] Speaker 04: Congress has said. [01:17:09] Speaker 02: You certainly couldn't do that, but you also frankly can't, in our view, and I think in Berks and Doe's view, you can't. [01:17:15] Speaker 02: meaningfully in the analysis, in terms of trying to figure out what the impacts are going to be, because with regard to global impacts, you're going to have to look at the whole world, and nobody's arguing that you can do that. [01:17:27] Speaker 04: Right, there's stages to an argument. [01:17:28] Speaker 04: There could be the global one, there could be a big fine, we still need to at least assess the purposes of the United States, or the purpose of the region of the United States, [01:17:36] Speaker 04: consequences of increasing demand for natural gas. [01:17:39] Speaker 02: And again, somebody can model something, but that doesn't make it reasonably foreseeable. [01:17:43] Speaker 02: I go back to my, maybe it was silly, but there are people who think they can model the stock market, and they'll tell you they can. [01:17:49] Speaker 02: The fact that you try to make a model, the old models are only as good as the inputs. [01:17:53] Speaker 03: Is that the category you put this delay to study into? [01:17:56] Speaker 02: I don't put it in that, but the study that I'm familiar with that's in the appendix is really one of a very general nature, like the EIA study, like the other study that was... No, those were much more general and broader. [01:18:10] Speaker 02: Well, I think the one, anyway, that I'm looking at was pretty broad and talks about sort of national impacts, generally speaking, from exports. [01:18:17] Speaker 04: Oh, and they haven't argued about it. [01:18:20] Speaker 04: Can you just tell me, has this construction started ongoing? [01:18:22] Speaker 02: Yes, and I would like to say that, yes. [01:18:25] Speaker 02: Because we have authorization from FERC, we have started the construction. [01:18:29] Speaker 02: We have a tremendous amount of work. [01:18:32] Speaker 02: There's somewhere around 800 workers that are working on the project right now. [01:18:36] Speaker 02: And it was mentioned before, there is around $14 billion of investment in this. [01:18:41] Speaker 02: So I was going to say to the extent, for example, on the [01:18:47] Speaker 02: the electric issue. [01:18:48] Speaker 02: If there's something that the court thinks that Burke might need to look at again, you know, we would urge that the court do what it has done in many of these cases, which is if, if, and it's a big if, and we're not saying that this should or would happen, but if it's going to find something that it should remand but not vacate, as it has done as recently as, well, there's a decision in the [01:19:13] Speaker 02: I don't remember the name of it, the Bayer or something or other. [01:19:16] Speaker 02: I think Judge Griffith and Judge Rogers, I think, were both on that. [01:19:20] Speaker 02: So the Black Oak Energy, I'm sorry, that kind of analysis. [01:19:23] Speaker 02: We do have a tremendous amount in this, and we wouldn't want those workers to somehow lose their jobs. [01:19:31] Speaker 02: But having said that, ultimately here, FERC did what it was required to do, and that is to look at the reasonably foreseeable [01:19:41] Speaker 02: impacts from the siting of this facility and the facility operations that would be meaningful to the analysis that is being asked to do and it did all of that and it's entitled to deference and under the rule of reason [01:19:56] Speaker 02: FERC made a reasonable determination that is going to go through 948 pages of environmental analysis, but the next part that Sierra Club is asking is just too speculative for it to matter to what it's doing. [01:20:10] Speaker 02: It's not just a paperwork statute. [01:20:12] Speaker 02: It's not just, let's look at it because somebody thinks you could look at it. [01:20:15] Speaker 02: It has to be something that is meaningful, that contributes to the agency's process. [01:20:19] Speaker 02: Whereas here, FERC has, is what I would argue, no authority to say no spigot at all. [01:20:25] Speaker 02: and only limited authority with regard to the rest of its work. [01:20:29] Speaker 06: It can add all kinds of conditions. [01:20:31] Speaker 02: And they did, and they added lots of conditions. [01:20:33] Speaker 06: I know, but if they'd had more information, they might have added more. [01:20:35] Speaker 02: But no condition that would, there was no condition that they could add that would satisfy what Sierra Club is talking about. [01:20:41] Speaker 06: Maybe not, but that's a different issue. [01:20:44] Speaker 02: I don't think it's a different issue. [01:20:46] Speaker 02: I think it's the issue. [01:20:47] Speaker 02: Anyway, that's my last point would be to say that I think FERC acted reasonably within its discretion, and that decision should be a firm petition for review. [01:20:56] Speaker 02: Views should be denied. [01:20:57] Speaker 05: Thank you. [01:20:59] Speaker 05: All right, Council for Petitioners. [01:21:11] Speaker 07: Thank you, Your Honor. [01:21:12] Speaker 07: We've had a lot of discussion today, so I'd like to just briefly make two points. [01:21:16] Speaker 07: The first is that we've analogized this export facility to a spigot. [01:21:21] Speaker 07: And as we've discussed, the location but also the size of the spigot matters. [01:21:26] Speaker 07: We discussed how the location matters because of the indirect impacts of a facility, say, in the Gulf Coast are likely to be different than the indirect impacts. [01:21:36] Speaker 07: facility in Oregon, but also FERC's determination and the FERC proceeding about the size of the spigot influenced the DOE proceedings. [01:21:43] Speaker 07: And we've actually seen that in a very clear way in this particular case, where one of the project applicants' non-free trade agreement applications to the Department of Energy [01:21:56] Speaker 07: sought authorization to export gas in excess of the capacity of the actual proposed facility, and the Department of Energy denied that application in part by reducing the scope of the non-free trade agreement authorization only to match the volume of gas that the facility could actually process. [01:22:12] Speaker 07: You can see that discussion in the Department of Energy Order in the Joint Appendix, page 1377. [01:22:18] Speaker 07: So that plainly indicates that the nature of scope, the determinations of the FERC proceeding do influence DOE's decision making. [01:22:28] Speaker 07: And in this very case, we've seen DOE do a partial denial of an export license application where FERC DOE said, you're not gonna have a way to do this because FERC isn't gonna authorize you to do that additional capacity of gas. [01:22:45] Speaker 07: The second point I'd like to make is that there's nothing in the record here that suggests that gas from this facility will actually be exported if the only available license is to free trade agreement countries. [01:22:58] Speaker 07: There is a list of 14 countries that have – I believe it's 14 – that have the particular kind of free trade agreement at issue in the Natural Gas Act, where the agreement specifically requires national treatment for natural gas. [01:23:11] Speaker 07: The only one of those countries that is currently an importer of liquefied natural gas is South Korea. [01:23:17] Speaker 07: And there's no indication that their demand for natural gas is not already being met by, say, exports from Australia. [01:23:26] Speaker 04: In what countries do they get their DOE authorized them? [01:23:30] Speaker 04: to what free trade countries did DOE authorize them to export you from this facility? [01:23:35] Speaker 07: The DOE authorization doesn't specify particular countries. [01:23:38] Speaker 07: It just says you can export to any country that is on the list of countries that have free trade agreements that specify national treatment for natural gas. [01:23:45] Speaker 07: And so the only country that's currently on that list that is an existing importer of liquefied natural gas, so could be a potential market, would be South Korea. [01:23:55] Speaker 07: We have seen the contracts from a number of the currently proposed export facilities in the United States, and I don't believe any of the contracts that are available to the public that have been filed with the Department of Energy for any of these facilities indicate that any United States exports are currently intended to go to South Korea. [01:24:14] Speaker 07: So there's nothing in the record that indicates that exports would actually occur if the only authorization was to free trade agreement countries. [01:24:24] Speaker 07: Those were the two points I had. [01:24:25] Speaker 07: I'd be obviously happy to. [01:24:31] Speaker 06: Thank you counsel. [01:24:31] Speaker 06: We will take both cases under advisement.