[00:00:00] Speaker 05: Case number 20-1492, City of Oberlin, Ohio, petitioner versus Federal Energy Regulatory Commission. [00:00:08] Speaker 05: Ms. [00:00:08] Speaker 05: Elephant for the petitioner, Ms. [00:00:10] Speaker 05: Benta for the response, Mr. Super, writing for the air. [00:00:25] Speaker 04: Good morning, Council. [00:00:27] Speaker 04: Good morning, Your Honor. [00:00:28] Speaker 04: Shall I proceed? [00:00:30] Speaker 04: Please do. [00:00:31] Speaker 04: May it please the court. [00:00:33] Speaker 04: This is the city of Oberlin, Ohio, second time before this court challenging the unlawfulness of the commission's reliance on foreign contracts to justify its approval of the unneeded and undersubscribed nexus pipeline, which took city property in eminent domain. [00:00:49] Speaker 04: In Oberlin 1, this court reaffirmed that in contrast to Section 7, there's no eminent domain authority for exports under Section 3. [00:00:57] Speaker 04: And for that reason, this court remanded the case to the Commission to explain why it is lawful under Section 3 of the Gas Act and the Takings Clause of the United States Constitution for the Commission to credit exports towards a finding of need [00:01:11] Speaker 04: under Section 7. [00:01:13] Speaker 04: On remand, the Commission recycled many of the arguments that this Court already found insufficient in Oberlin 1, and further advanced a theory of co-mingling which, if taken to its logical conclusion, would transform any export pipeline into an interstate gas pipeline. [00:01:31] Speaker 04: Without exports, there's no evidence in the record to show that this 40% subscribed pipeline can be sustained, particularly in light of FERC's dubious and black box analysis of the availability of capacity on neighboring pipelines. [00:01:49] Speaker 04: Let me turn first to the Commission's justification of its reliance on Section 3 exports with the reminder [00:01:56] Speaker 04: that FERC's explanation is not entitled to deference to the extent that its explanations implicate constitutional rights. [00:02:05] Speaker 04: So FERC's first reason for why it relied on Section 7 is essentially one that was already foreclosed by this court in Oberlin in footnote 2. [00:02:13] Speaker 04: The Commission says that there's a presumption of public interest findings for exports to free trade nations under Section 3 [00:02:20] Speaker 04: and that's sufficient to satisfy the section the more robust standard of section seven and the commission goes on to say it differently instead of saying that exports and imports are the same says that it can treat precedent agreements for exports basically identically to precedent agreements for domestic use so that's the same way that's a different way of saying the same thing that it's going to credit exports the same way as it would treat [00:02:45] Speaker 04: as it would treat domestic use. [00:02:48] Speaker 04: And again, that's something that the Oberlin court reminded in footnote two, it said it's not sufficient to consider this public interest standard as enough to satisfy the need under section seven, because section seven includes eminent domain. [00:03:02] Speaker 04: Now that wasn't FERC's only explanation. [00:03:05] Speaker 04: It also tried to highlight some of the domestic benefits associated with exports. [00:03:09] Speaker 04: So for example, the commission talked about this [00:03:12] Speaker 04: How this pipeline was creating this by way between the US and Canada and gas would flow back and forth, except there's no indication in the record that this pipeline was anything but a one way ticket for 260,000 deck of therms of gas to go to Ontario and stay there and, in fact, the Commission in its own remand order. [00:03:30] Speaker 04: Paragraph 20, page joint appendix at 377 admits that many of these facts are beyond the scope of the record. [00:03:38] Speaker 03: Well, let's be clear. [00:03:41] Speaker 03: The record is clear, is it not, that this gas will pass interstate, all right, at some point. [00:03:53] Speaker 03: Is that not correct? [00:03:54] Speaker 03: That is correct, Your Honor. [00:03:56] Speaker 03: All right, so that's where the commission begins, it seems to me. [00:04:01] Speaker 03: And then it says that the fact that some of the gas will proceed as an export is no bar. [00:04:12] Speaker 03: And it cites some precedent, et cetera. [00:04:14] Speaker 03: And I don't see where you have [00:04:17] Speaker 03: indicated either that those factual findings are clearly erroneous or that the commission erred as a matter of law. [00:04:28] Speaker 04: So there are two issues, Your Honor. [00:04:30] Speaker 04: The Oberlin Court acknowledged that if a pipeline can stand independent of exports, it can be certificated under Section 7. [00:04:38] Speaker 03: Well, I wonder in remand whether or not the court went quite as far as you are suggesting in Oberlin 1. [00:04:47] Speaker 03: It clearly wanted an explanation, but I didn't understand it and maybe I'm incorrect. [00:04:56] Speaker 03: And certainly my colleagues can correct me. [00:04:59] Speaker 03: in saying that the Commission didn't say what you have reported it said, namely that the export aspect of this doomed any Section 7 finding. [00:05:18] Speaker 04: So your honor, I'm quite certain you are not incorrect in your memory of City of Oberlin. [00:05:24] Speaker 04: However, in section three of City of Oberlin, this court said that it disagreed that it can never lawfully issue a section seven pipeline if exports are included. [00:05:34] Speaker 04: However, there needs to be a showing of public convenience and necessity independent of precedent agreements for export. [00:05:41] Speaker 04: And so our position here is that [00:05:43] Speaker 04: independent of those export agreements, you've only got a pipeline that's 40% subscribed. [00:05:49] Speaker 04: And that's what the problem is. [00:05:50] Speaker 04: FERC never justified that 40%. [00:05:53] Speaker 03: Well, I don't quite understand that because, first of all, 40%, it has these eight agreements. [00:06:03] Speaker 03: Secondly, it has this interstate traffic. [00:06:08] Speaker 03: which the commission found would provide alternative avenues, et cetera, for shippers interstate. [00:06:22] Speaker 03: In other words, don't you have to convince us that by relying at all on exports, the commission was somehow [00:06:35] Speaker 03: wrong as a matter of law or clearly erroneous in finding that the interstate aspects and what it found were benefits, independent of exports, was simply insufficient. [00:06:54] Speaker 04: So the benefits that the commission found, again, are not linked to this particular project. [00:06:59] Speaker 04: This project was designed to provide a seamless path of gas, some of it interstate, and then 260 decotherms to Canada. [00:07:06] Speaker 04: There's no indication that it was gonna flow back and forth or health balance the system or do anything. [00:07:10] Speaker 03: Well, but my question is, was that necessary as a matter of law? [00:07:16] Speaker 03: And I don't see you citing something that says it is. [00:07:22] Speaker 04: Well, it was necessary for the commission to justify why it could rely on exports towards a finding of need. [00:07:27] Speaker 04: So the commission gave three reasons. [00:07:29] Speaker 04: It said it gave this equivalency reason between section three and section seven already foreclosed by footnote two in Oberlin. [00:07:36] Speaker 04: Second reason it gave is that there are domestic benefits associated with this gas. [00:07:41] Speaker 04: We're arguing that 40% of the pipeline is indisputably domestic, but the export portion doesn't have any domestic benefits. [00:07:49] Speaker 04: That's our second argument. [00:07:50] Speaker 04: Our third argument is that exports aren't justified because you can't. [00:07:54] Speaker 04: And what FERC says is that this really wasn't an export pipeline at all. [00:07:58] Speaker 04: It's interstate because the gas is all commingled. [00:08:01] Speaker 04: And that commingling theory has never been applied when you're dealing with an interstate pipeline in foreign commerce. [00:08:07] Speaker 04: That's only for interstate and intrastate. [00:08:09] Speaker 04: And in fact, commingling for interstate and foreign commerce is foreclosed by Section 717A7 of the Natural Gas Act, [00:08:16] Speaker 04: which says that gas that crosses state lines is an interstate commerce only so long as that commerce takes place in the United States. [00:08:24] Speaker 04: So the gas going to Canada is commerce that doesn't take place in the United States and it can't be commingled. [00:08:31] Speaker 04: So those are the three reasons we gave for why FERC analysis of why it was able to rely on export pipelines is incorrect. [00:08:39] Speaker 04: Once you take out the exports, there's no support for just the 40% as your honor points out precedent agreements do carry some weight, but they're not the only solution if you have a precedent agreement even for millions and millions of dekathons of gas. [00:08:55] Speaker 04: but you can show that a pipeline next door can accommodate all that gas. [00:08:59] Speaker 04: There's no need to build a new pipeline. [00:09:01] Speaker 04: In this situation, the commission says there's no available capacity on neighboring pipelines to absorb the gas. [00:09:08] Speaker 04: It says it relied on publicly available information, but we don't know which pipelines it examined, what time frame it looked at, whether it assumed that this gas was all going to travel together or could be split up to different tracks. [00:09:20] Speaker 04: It basically just substituted a number for an analysis it had done before. [00:09:24] Speaker 04: And the Oberlin Court also found that fact very significant. [00:09:27] Speaker 04: It found that the pipeline was 59% subscribed. [00:09:32] Speaker 04: that gas couldn't be accommodated on other lines, but that's not necessarily true when there's a lower amount of gas in the pipeline. [00:09:39] Speaker 04: And finally, the commission also relied on generic, on these sort of generic arguments for why the pipeline is needed. [00:09:48] Speaker 04: It'll open up bottlenecks, bottleneck the infrastructure, allow for development of other gas. [00:09:55] Speaker 04: And as commissioner Glick pointed out, those are generic benefits that could be used to justify any pipeline. [00:10:01] Speaker 05: Can you point us to a case in which we've held that a pipeline didn't serve the public convenience and necessity that was you know subscribed at a 40% rate, and that had these benefits that FERC has asserted? [00:10:18] Speaker 04: So I can't cite the court to a case that affirmed a pipeline that was 40% subscribed, because as we pointed out in our rehearing petition at footnote 18, and also argued in our brief, it's very rare for a 40% subscribed pipeline to even go forward. [00:10:35] Speaker 04: The Kinder Morgan pipeline, for example, that we discussed in our brief didn't go forward because it didn't have enough capacity. [00:10:41] Speaker 04: Most of the cases this court sees are 90% or 100% subscribed cases like Allegheny Voices, [00:10:48] Speaker 04: EDF versus FERC. [00:10:50] Speaker 04: And EDF versus FERC, again, as your honors are aware, isn't a similar situation here. [00:10:55] Speaker 04: We're not arguing that there were self-dealing or even [00:10:58] Speaker 04: that there was any self-dealing here. [00:11:00] Speaker 04: But EDF does remind us that there's a need for a cautious and thorough analysis of need under Section 7 because eminent domain rights are implicated. [00:11:10] Speaker 04: That's an EDF 2F4 at page 961. [00:11:14] Speaker 04: And so I think the reason these cases have never come before the court is because at least prior to this case, there was a recognition that you had to be able to show [00:11:24] Speaker 04: some degree of need and a 40% subscribe pipeline wasn't going to cut it. [00:11:28] Speaker 04: I see that I am running into my rebuttal time, but I'm happy to answer more questions. [00:11:36] Speaker 03: All right, council for the commission. [00:11:44] Speaker 02: Good morning, I'm Carol Banta for the commission. [00:11:46] Speaker 02: I don't know whether the court would prefer that I start with the export issue or the alternative finding at the 42%, but one common thread between both is that when the commission does a section seven analysis, and this, make no mistake, is an interstate pipeline that goes from Ohio to Ypsilanti, Michigan, it does not approach or cross the border. [00:12:12] Speaker 02: And so the commission, as it must, looked at this as a Section 7 pipeline. [00:12:16] Speaker 02: And I believe that's consistent with City of Oberlin said, if you're going to look at this Section 7 pipeline, you have to explain why you can count the precedent agreements that are for export. [00:12:29] Speaker 02: But when the commission is doing a Section 7 analysis, as it explained in the first case, and the court [00:12:35] Speaker 02: upheld the commission on the vast majority of issues and in particular regarding how it conducted its section seven analysis until we got to the export question. [00:12:46] Speaker 02: The court said that the commission engaged in its broad ranging inquiry reasonably. [00:12:53] Speaker 02: It's a flexible inquiry under the commission's policy statement from 1999 that doesn't just look at precedent agreements, it does look at other benefits, and it applies what the commission calls a sliding scale, which means, and there is an environmental aspect as well, which is not an issue in this case, but before you even get to the environmental analysis, the commission looks at the market need, [00:13:18] Speaker 02: usually by way of precedent agreements, the other benefits that the pipeline may provide and ways it against the adverse impacts, principally among those adverse impacts being eminent domain. [00:13:34] Speaker 02: Now, in this case, in the original analysis, the commission made the point that, yes, we had 59% subscription in the original analysis, 42% in the alternative analysis done on remand. [00:13:46] Speaker 02: We also have other benefits [00:13:48] Speaker 00: What do you mean by the other benefits? [00:13:54] Speaker 02: Well, in specific to this case, besides some of the benefits that might be more general to what an interstate pipeline provides, here in particular, [00:14:04] Speaker 02: is the takeaway capacity for Appalachian Basin production, which has been constrained. [00:14:10] Speaker 02: The Utica and Marcellus Shale production region produces a lot of what could be economical gas, but it isn't where it needs to be. [00:14:19] Speaker 02: in the markets that that you know need more access to economic gas, such as the commission noted in the Midwest by carrying this from Ohio where it actually picks it up from Pennsylvania and West Virginia into Ohio the pipeline runs from Ohio to Michigan. [00:14:37] Speaker 02: And it can serve customers in Michigan. [00:14:39] Speaker 02: It can connect to other pipelines that would take it to Illinois and the upper Midwest and give more access to a production area that has experienced constraints in that there's not enough takeaway capacity. [00:14:51] Speaker 00: Does the record support the proposition that it couldn't be taken away without this pipeline? [00:14:57] Speaker 02: I don't know that it couldn't be taken away without it, but there was evidence in the record of the bottle, besides the commission's just expertise under knowing what's going on in the markets, that there has been bottlenecked capacity from the Appalachian Basin. [00:15:11] Speaker 02: I know that Nexus had some evidence of that in its application. [00:15:18] Speaker 02: It was, I believe I have sites that aren't in our joint appendix, I think, because they were in attachment to the application, but they were in the original case. [00:15:26] Speaker 02: to nexus's resource report but the commission also was aware of that and the commission cited it in the certificate order specifically in okay so the first j from the previous case it's at j 309 310 i know you don't have that but we could submit that if if the court doesn't have access to it but [00:15:48] Speaker 02: The commission also cited it in its certificate and remand orders, I believe. [00:15:53] Speaker 02: So there was evidence in the record, which again, as to the parts of the commission's sliding scale balancing analysis, the Oberlin I Court affirmed that as having been done right. [00:16:08] Speaker 02: The only question was about the precedent agreements that were being counted. [00:16:13] Speaker 05: Ms. [00:16:13] Speaker 05: Banta, as to FERC's alternative ground for upholding the certificate, [00:16:18] Speaker 05: The Commission did not consider why a smaller pipeline would not suffice to serve the domestic precedent agreements only. [00:16:27] Speaker 05: And since in the alternative, since in your alternative reasoning FERC was considering only the domestic precedent agreements, is it unreasonable for the Commission not to have considered more specifically [00:16:42] Speaker 05: An analysis of a smaller pipeline. [00:16:44] Speaker 02: Actually, Your Honor, it did the same analysis, it had done with the 59% it did again. [00:16:51] Speaker 02: In this order, and I would point in particular. [00:16:59] Speaker 02: I know footnote 73 on J383 gets into some of this. [00:17:03] Speaker 02: In the original analysis, because when the original environmental impact statement had been done, that includes a lot of the alternative analyses, it was done based on 1.5 million decathermes per day. [00:17:16] Speaker 02: So for the certificate order, the commission redid parts of that analysis to account for the fact [00:17:22] Speaker 02: That at that time they only had 885,000 deca theorems per day subscribed. [00:17:28] Speaker 02: So the commission looked at the downsizing issue in the certificate every hearing orders. [00:17:34] Speaker 02: And it repeats it here. [00:17:36] Speaker 02: The difference between the 885, you're still doing the same pipeline route. [00:17:40] Speaker 02: You're still taking the same property. [00:17:42] Speaker 02: The difference would essentially... Would it be as large a taking? [00:17:46] Speaker 00: That is a question that I have. [00:17:49] Speaker 00: Would there be as much of a taking if you were using a smaller diameter pipeline? [00:17:54] Speaker 02: I believe that, I wish I had a citation for this and I can provide it later if the court wants it, but there was an analysis somewhere in the original record. [00:18:02] Speaker 02: If it's not in the orders, it might be the environmental impact statement. [00:18:05] Speaker 02: I think it's in the certificate order that the difference was maybe along the lines of 20 acres. [00:18:10] Speaker 02: The difference would largely be compressor stations. [00:18:12] Speaker 02: It wouldn't be the land taken for the pipeline, but it would be how many compressor stations and whether you could eliminate any of the compressor stations [00:18:21] Speaker 02: And there might be some acreage around a compressor station that you could eliminate. [00:18:25] Speaker 02: That would be the effect of downsizing the pipeline. [00:18:28] Speaker 02: And the commission also pointed out that sometimes it doesn't make sense to downsize it if you might have to build a bigger pipeline in the future to accommodate demand in the future. [00:18:39] Speaker 02: So again, going to the sliding scale, if it had made a huge difference in the acreage or a large difference in the eminent domain, and they got 93% of [00:18:48] Speaker 02: of the land required for this without exercising 93, without exercising eminent domain, which the commission point out in the first case is quite high for one of these cases. [00:18:58] Speaker 02: So in the sliding scale of the amount of benefits, including not just the precedent agreements, but the other benefits like the takeaway capacity balanced against the adverse impacts. [00:19:09] Speaker 02: the commission found that the balance made sense in this case. [00:19:12] Speaker 02: It might not in another case, in a case that required more like 70% or 30% eminent domain. [00:19:17] Speaker 02: I don't know if the analysis would be the same. [00:19:19] Speaker 02: It's very fact-based in each case. [00:19:22] Speaker 02: One other thing I would say with regard to the commission did look at the difference between 42. [00:19:30] Speaker 02: Commission staff in the environmental impact statements [00:19:33] Speaker 02: Often makes this calculation looking at the publicly available capacity information on the website for pipelines in the area. [00:19:42] Speaker 02: Originally, it did it to see if there was capacity for 1.5 anywhere and it said no. [00:19:46] Speaker 02: It then redid the same analysis in the first round. [00:19:50] Speaker 02: at 885 and found there was not sufficient capacity available on other pipelines in the area and did it again for 625 for the remand. [00:20:00] Speaker 02: This is something commission staff does pretty routinely in putting together environmental impact statements. [00:20:05] Speaker 02: They do it using the same public websites that anyone can access to look at different pipelines in the area. [00:20:12] Speaker 02: I think they identified which pipelines that they were in the original environmental impact statement. [00:20:20] Speaker 05: fairly detailed information about pipeline capacity. [00:20:24] Speaker 02: I'm not familiar with them myself because we have expert staff that does that work, but I believe they do have, and I don't know whether Mr. Stupor would have some knowledge of this when it's his time, but they are required, I think, to put certain information about the capacity that's under contract versus available. [00:20:43] Speaker 02: And I know that I did check FERC staff isn't using some kind of proprietary information that only we have access to. [00:20:50] Speaker 02: It is publicly available information that [00:20:53] Speaker 02: that the pipelines have on their websites, potentially for other customers, I guess. [00:20:58] Speaker 02: I see that I'm out of time. [00:21:00] Speaker 02: I did want to address the exports, especially if the court has any particular questions about that. [00:21:08] Speaker 02: But I want to emphasize the commission did not rely on equivalency between section three and section seven. [00:21:16] Speaker 02: In fact, it expressly disavowed that in a footnote, I believe. [00:21:20] Speaker 02: But what the commission did is it said, [00:21:23] Speaker 02: we're just we're looking always for section seven we're looking at domestic public benefits and the Commission in its analysis found that. [00:21:34] Speaker 02: exports with free trade countries, specifically Canada here. [00:21:39] Speaker 02: and in this pipeline particularly, have benefits for the U.S. [00:21:42] Speaker 02: public. [00:21:43] Speaker 02: We're not talking about the benefits to Canadian customers. [00:21:47] Speaker 02: We're talking about the benefits the Commission found, and one I'll say in paragraph 20, and when the Commission's on JH377, when the Commission says beyond the facts of the proceeding, it doesn't mean outside the facts of this proceeding. [00:22:00] Speaker 02: It means more generally including this proceeding. [00:22:03] Speaker 02: And it talks about the benefit of free trade in gas imports and exports for US customers. [00:22:09] Speaker 02: And that goes back to the discussion on the previous page about the Don Hub in particular, that when gas goes to the Don Hub, which is the second largest trading hub for natural gas in North America, a lot of it ends up back in the United States. [00:22:23] Speaker 02: Now, we don't know when a particular particle of gas crosses the border. [00:22:27] Speaker 02: Does that one end up in New England or New York? [00:22:30] Speaker 02: We might not know about that particle, but we know about [00:22:33] Speaker 02: the impact of free trade. [00:22:35] Speaker 00: You have to show something specific to this pipeline project though and not just the generic economic theory of benefit to the U.S. [00:22:43] Speaker 00: public. [00:22:45] Speaker 00: Well I think yes but it's also rather like your claim about or that only claims or the language about [00:22:52] Speaker 00: jobs being generated. [00:22:53] Speaker 00: That's always true in a construction project. [00:22:55] Speaker 00: That's not something that I think you'd be able to weigh. [00:22:58] Speaker 00: And I'm not sure that what you're saying now is sufficiently specific to this pipeline to be appropriate to weigh it in the sliding scale analysis. [00:23:09] Speaker 02: Well, this is where the commission is looking at. [00:23:12] Speaker 02: Is it lawful for us to even consider precedent agreements for gas that may ultimately be exported? [00:23:21] Speaker 02: And [00:23:22] Speaker 00: and maybe this is a commitment for 17% of what your capacity would be destined for export wouldn't it? [00:23:36] Speaker 02: Well that's not exactly the case because that's the amount they've contracted that they could export. [00:23:44] Speaker 02: We pointed out in the first case and I didn't want to belabor it. [00:23:46] Speaker 00: You're relying on that amount as being a basis for convenience and necessity [00:23:52] Speaker 00: And if that's going in the export, it really can't be relied on, can it? [00:23:57] Speaker 02: Well, we know it's it. [00:24:02] Speaker 02: We don't know that gas doesn't always go to Canada. [00:24:04] Speaker 02: We were assuming for purposes of this discussion that it is as a matter of fact, they can sell it off at Ypsilanti or they can send it to the Don Hub and send it back into the United States. [00:24:16] Speaker 02: But the commission was looking at [00:24:20] Speaker 02: The benefits, when we're talking about the lawfulness of considering exports at all, the commission was looking at whether it's reasonable for us, the commission, to find domestic benefit in the free flow of trade, in particular here with Canada. [00:24:34] Speaker 02: Not just because it's in section three and Congress said something about it in section three, as well as in NAFTA and USMCA, but the commission itself is making the finding that it does benefit US customers. [00:24:49] Speaker 02: In addition to the other benefits this particular pipeline like the Appalachian Basin takeaway capacity. [00:24:55] Speaker 02: And so, the commission is just asking the question, is it, is it lawful and reasonable for us to include these two precedent agreements with the other six in assessing this particular pipeline. [00:25:09] Speaker 02: At any pipeline, the section seven analysis of any pipeline has to stand or fall on the merits of that factual analysis. [00:25:19] Speaker 02: The question here is, are we going to preclude the commission from even considering the domestic benefits of exports as a matter of law, or are we going to consider in a particular case [00:25:33] Speaker 02: that the commission may find benefits in those agreements that make sense to include them in the mix that we then apply the sliding scale analysis under the policy statement too. [00:25:46] Speaker 02: So that's why the commission made the case that not only is it [00:25:51] Speaker 02: in the domestic public interest to include these agreements, but that the rest of the analysis, this pipeline had already passed the commission's analysis and the court's review at the 59% with the weighing of the benefits versus the adverse impacts. [00:26:08] Speaker 02: It had already passed that in Oberlin 1. [00:26:11] Speaker 02: The question is, [00:26:12] Speaker 02: Are we doing that with the 59% because including those agreements is lawful or are we doing it the 42% because the commission has to just pretend that exports have no domestic public interests, even though it knows and has found that they do. [00:26:29] Speaker 02: So I think that's how the commission was looking at the question. [00:26:34] Speaker 03: All right. [00:26:35] Speaker 02: Thank you. [00:26:38] Speaker 03: Why don't we hear from intervener? [00:26:46] Speaker 01: Thank you, Your Honor. [00:26:46] Speaker 01: David Super on behalf of Nexus, please, the court. [00:26:50] Speaker 01: Judge Santel, I think I may start by answering one of your questions about evidence for the presence of a bottleneck for takeaway capacity out of the Appalachian Basin. [00:27:02] Speaker 01: And the commission did cite in the rehearing order to a resource report that was provided by Nexus that provided evidence of that. [00:27:13] Speaker 01: And unfortunately, it's not [00:27:15] Speaker 01: in the joint appendix of this appeal, but it wasn't the joint appendix of the last appeal. [00:27:20] Speaker 01: And the information is at JA 311. [00:27:24] Speaker 01: I'm afraid that's the best I can do right now for that one, giving you a citation. [00:27:28] Speaker 01: I think it's important though, as Ms. [00:27:33] Speaker 01: Banto was saying, to focus. [00:27:34] Speaker 01: I mean, while the six precedent agreements for domestic delivery is representing 42% of capacity, [00:27:44] Speaker 01: is important and can be relied upon by the commission as as evidence of need. [00:27:50] Speaker 01: This case involves a wide variety of evidence of public need that the commission relied upon. [00:27:56] Speaker 01: And as Ms. [00:27:57] Speaker 01: Banta mentioned, the take away, relieving the takeaway constraints out of the Appalachian Basin was one of those points. [00:28:04] Speaker 01: But the commission also found that the pipeline would provide northern Illinois and other Midwestern markets with access to additional supplies of gas. [00:28:14] Speaker 01: And those are tangible public benefits really at both ends of the pipeline, alleviating bottleneck on one end and enhancing markets in the Midwest on another. [00:28:24] Speaker 01: And Judge Rogers, I believe this is the evidence of public need that you were referring to in your concurrence in the first Oberlin one, first Oberlin opinion, where you said here the commission's findings regarding the need for and the nature of the Nexus pipeline are supported by substantial evidence in the record considered as a whole [00:28:42] Speaker 01: And I think it's important to emphasize that then Commissioner, now Chairman Glick, praised the fact that the commission was looking at all of the evidence and taking a holistic approach to looking at a wide variety of evidence of public need and not just looking at precedent agreements. [00:29:02] Speaker 01: And just seven months ago in the Environmental Defense Fund case, this court actually pointed to the NEXUS project as being supported by multiple market studies [00:29:12] Speaker 01: And the court described the evidence of the market demand in that case as much stronger. [00:29:17] Speaker 01: It's much stronger in this case than it was in that case. [00:29:19] Speaker 01: So yes, the six domestic precedent agreements are significant evidence of need and the commission's reliance on those agreements deserves deference. [00:29:28] Speaker 01: But here the Nexus project is supported by additional evidence of need on which the commission relied to find that the project was in the public convenience and necessity. [00:29:38] Speaker 01: And that's even without considering the two [00:29:40] Speaker 01: precedent agreements that contemplate deliveries of gas to Canada. [00:29:44] Speaker 01: So that's an alternative determination that this court can rely upon to approve the Nexus project. [00:29:50] Speaker 01: I see that my time is up. [00:29:54] Speaker 01: Happy to answer. [00:29:57] Speaker 03: Hearing none, we'll hear from Council for City of Oberlin. [00:30:07] Speaker 04: I'd like to respond to two points, Your Honor. [00:30:10] Speaker 04: First, with regard to the alternative analysis. [00:30:13] Speaker 04: Yes, there are six precedent agreements here, but we still can't tell from the record whether that gas can be transported on available capacity on neighboring pipelines. [00:30:21] Speaker 04: We raised that argument in detail on rehearing in the joint appendix at 614. [00:30:26] Speaker 04: FERC never acted on the rehearing, and they never in their brief cited any [00:30:31] Speaker 04: any included any citations to what pipelines they looked at, just saying that information is in the public record. [00:30:37] Speaker 04: The public record at FERC, their docket sheet, goes back 20 years. [00:30:41] Speaker 04: Their information on other pipelines is all over the place. [00:30:45] Speaker 04: We were not able to track down which pipelines FERC examined, what kind of capacity was there, any of their assumptions. [00:30:51] Speaker 03: On remand that the commission identified the specific [00:31:00] Speaker 03: existing pipelines on which it relied? [00:31:03] Speaker 03: I'm sorry, Your Honor, I didn't hear the first part of your question. [00:31:09] Speaker 03: Did you raise this question on remand? [00:31:14] Speaker 03: Yes, Your Honor, when the case was sent back to... I know, but my point is the commission said it looked at existing pipelines and determined there was not the capacity that was needed. [00:31:27] Speaker 03: And you say, but we don't know which other pipelines they looked at. [00:31:32] Speaker 03: Did you ask them? [00:31:34] Speaker 03: Yes, in our hearing request of the remand order. [00:31:37] Speaker 03: I understand that. [00:31:38] Speaker 03: And when you didn't get what you wanted, did you indicate that so FERC could respond? [00:31:43] Speaker 03: I mean, raising it now before us isn't the same. [00:31:48] Speaker 04: Yes, your honor. [00:31:49] Speaker 04: I guess what I'm saying is in the we filed a remand, we filed a rehearing petition of the FERC order for the remand order came out. [00:31:55] Speaker 04: It said we relied on this public information in our remit in our rehearing petition of that remand, which is in joint appendix at J.A. [00:32:03] Speaker 04: 614. [00:32:04] Speaker 04: We said we can't tell what you looked at. [00:32:07] Speaker 04: We don't know what assumptions you made. [00:32:09] Speaker 04: This was a case where FERC didn't issue an order on rehearing. [00:32:12] Speaker 04: This was one of the Allegheny cases that came straight to the court. [00:32:16] Speaker 04: And so FERC didn't put anything in it on its brief either. [00:32:19] Speaker 04: So the record is open there. [00:32:20] Speaker 04: But yes, we did raise that argument because it's been something that had been nagging at me since Oberlin 1 when Oberlin 1 found that there was no available capacity for the 59%. [00:32:30] Speaker 04: I thought for sure that when it went back on 40% that would be addressed. [00:32:35] Speaker 04: So that's the first point. [00:32:36] Speaker 04: The second point is we're not suggesting that FERC can never take into account any of the benefits of export pipelines. [00:32:43] Speaker 04: It can do that, but under Section 3, Section 3 is the appropriate place for it. [00:32:48] Speaker 04: If we take FERC's consideration of those benefits of exports to a logical extreme, we're going to be in a situation of branding eminent domain for export pipelines, and that's not appropriate. [00:32:59] Speaker 04: And in fact, our suggestion for relief here is to remain on this case to FERC [00:33:02] Speaker 04: and to have it issue or consider whether to issue a Section 3 pipeline. [00:33:06] Speaker 03: What I'm getting at is I understand your broad general statements, but you don't deny there's this bottleneck. [00:33:19] Speaker 03: You, like anyone else, can determine what pipelines serve that area. [00:33:26] Speaker 03: and do they have the capacity? [00:33:29] Speaker 03: And maybe you don't have all the detail and expertise that FERC does, but this is not as though what I'm trying to get you to focus on is maybe you didn't get chapter and verse the way you wanted, but it's not as though the commission was relying on pipelines in South America to find there was no capacity. [00:33:50] Speaker 03: They were looking at this region and what its needs were. [00:33:57] Speaker 03: And these pipelines are large enough that they can't sort of be overlooked. [00:34:01] Speaker 03: So if there was any evidence that there was a capacity availability on existing pipelines, why couldn't you have raised that before the commission? [00:34:16] Speaker 04: Again, we weren't able to track that exact information because we don't need exact information. [00:34:23] Speaker 03: What you need is evidence that there's existing capacity. [00:34:28] Speaker 03: And your proposition is FERC hasn't proved there is none. [00:34:33] Speaker 03: Well, where's the evidence that there is any? [00:34:36] Speaker 04: Well, it's very difficult to tell from public information. [00:34:40] Speaker 04: There's not necessarily sites that are easy to go to where you can see what kind of capacity was available if it was back in 2017 or now. [00:34:48] Speaker 03: We just weren't able to get- I appreciate that, but I'm trying to understand what it is you wanted FERC to give you specifically when it has these staff reports and they're available to you and anyone else. [00:35:07] Speaker 03: That's all. [00:35:08] Speaker 03: I mean, you're suggesting, as I understand it, that FERC is somehow pulling a fraud on the court. [00:35:16] Speaker 03: I don't see any evidence of that. [00:35:19] Speaker 03: And I think at some point, there is a burden to say, you can't rely on South American pipelines here. [00:35:32] Speaker 03: We're talking about a particular region. [00:35:35] Speaker 03: What's going on in that region? [00:35:39] Speaker 04: What we're suggesting, Your Honor, is that the commission relied on information, the source of which they say public information, which can encompass many different things. [00:35:49] Speaker 04: In the City of Williston-Gass, the court held that if the commission doesn't specifically identify the source of its information, then its conclusions are impervious to judicial review. [00:35:59] Speaker 03: This court here- No, I understand all that, Counsel. [00:36:02] Speaker 03: I'm trying to understand what happened here. [00:36:04] Speaker 03: We sent it back so all of this could be examined. [00:36:09] Speaker 03: All right, and I just don't understand why this wasn't all worked out on remand. [00:36:17] Speaker 03: That's what I'm trying to understand. [00:36:21] Speaker 03: Well, as I said, your honor, we did raise these issues in our... I hear you, I hear you. [00:36:26] Speaker 04: I've heard your... Okay, I'm sorry, your honor. [00:36:29] Speaker 04: No, thank you. [00:36:31] Speaker 04: Thank you, your honor. [00:36:32] Speaker 03: So can we just hear from counsel for the commission? [00:36:37] Speaker 03: I want to get this clear in my own mind. [00:36:40] Speaker 03: Um, the city has argued it raised this issue and it's remand. [00:36:46] Speaker 03: It said, we don't know what pipelines you're looking at. [00:36:49] Speaker 02: What did the commission say? [00:36:52] Speaker 02: Well, they raised it on rehearing and the commission did not issue a rehearing work. [00:36:56] Speaker 02: So we didn't say anything. [00:36:58] Speaker 03: All right. [00:37:00] Speaker 03: They said, look, you say there isn't capacity on existing pipelines. [00:37:05] Speaker 03: And the commission says, we've looked at existing pipelines and determined that there is no such capacity. [00:37:12] Speaker 02: What pipeline? [00:37:15] Speaker 02: Well, we had done it twice before. [00:37:17] Speaker 02: And going back to the original environmental impact statement, which I apologize, I don't have it in front of me, although I do recall that I was looking at page 1035. [00:37:26] Speaker 02: There's a section in the alternatives that says, [00:37:30] Speaker 02: There are, I believe it said six pipelines in this same area, which could in theory serve the same path, although it would require some laterals and some adjustments and some loops, I believe it said. [00:37:46] Speaker 02: And that's the initial discussion where the commission looked for 1.5 million, where the commission staff in the environmental impact statement. [00:37:55] Speaker 02: So I don't know whether there was an attachment somewhere later to the environmental impact statement that identified which six, but it did say there are X number of pipelines. [00:38:05] Speaker 02: I'm going by memory. [00:38:06] Speaker 02: I do believe it was six in the area. [00:38:09] Speaker 02: And we've looked at those and there aren't 1.5 million decotherms. [00:38:13] Speaker 02: available cumulatively. [00:38:16] Speaker 02: And then so the commission did the same analysis at 885 and again at 625 and it was still looking at pipelines that could theoretically with some modifications serve the same path from Ohio to Michigan. [00:38:32] Speaker 02: Although it did note from the start that they couldn't just pick up the gas and take it there would be laterals and loops and various kinds of you couldn't go straight from here to there [00:38:43] Speaker 02: But you could maybe get from here to here to here to here to here there. [00:38:46] Speaker 02: And that's what the commission looked at and said there isn't enough capacity anyway and it did it at all three levels in is it's in the record and council just needed to look more thoroughly. [00:38:59] Speaker 02: That we gave more detail in the original environmental impact statement, which, as you know, is a long process with a lot of parties involved. [00:39:05] Speaker 02: Yeah. [00:39:06] Speaker 03: Well, but you've heard counsel for the city. [00:39:09] Speaker 03: It said we couldn't tell which existing pipelines the commission looked at. [00:39:15] Speaker 03: And what I hear you saying is, well, it was part of the EIS. [00:39:23] Speaker 03: The original one, and the revised one. [00:39:27] Speaker 03: So it was all there. [00:39:29] Speaker 02: And it was and it was cited in the certificate order. [00:39:32] Speaker 02: And I think [00:39:37] Speaker 02: When the case came before this court the first time, the court did say that the commission had conducted its analysis reasonably and really only had questions about counting the export agreements or whether 42% would be enough. [00:39:55] Speaker 02: So I think the commission didn't start from zero. [00:39:57] Speaker 02: It didn't start as though, or a new, yeah. [00:40:00] Speaker 02: All right, thank you. [00:40:02] Speaker 03: All right, anything further my colleagues would want to ask? [00:40:07] Speaker 03: Well, we'll take the case under advisement then. [00:40:09] Speaker 03: Thank you, Council.