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case number 23-1226, Telford Gulf and Sierra Club petitioners versus Federal Energy Regulatory Commission.

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Mr. Bookbinder for the petitioner, Mr. Schaener for the respondents, Mr. Rosengrant for the interveners.

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Good morning, Mr. Bookbinder.

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Good morning, Your Honor.

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My name is David Bookbinder and I represent the petitioners in this matter.

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And this morning I would like to talk about four of the claims that we have in this case.

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two are under the Natural Gas Act and two are under NEPA.

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Our Natural Gas Act claims first that it was arbitrary and capricious for FERC to find that 2300, I'm going to abbreviate pipeline 200, 300, simply 2300 for ease, that it was arbitrary and capricious for FERC to find that 2300 serves the public in convenience and necessity while knowing and never disclosing that its actual purpose was something else entirely.

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Our second Natural Gas Act claim is that FERC failed to balance the impact of 2300 greenhouse gas emissions against the project's benefits.

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Our two NEPA claims are first segmentation that FERC failed in its NEPA analysis to analyze the impacts of the terminal along with the impacts of 2300.

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And our fourth claim is that FERC failed to analyze the impacts of upstream greenhouse gas emissions from

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production and transportation of the gas through 2300 that would be burned domestically.

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First onto need.

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Will history in 2019, FERC approved the driftwood LNG terminal and the mainline pipeline to supply it.

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The mainline would supply all of the terminals needs and the terminal subscribe to 100% of the mainline's capacity.

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2021, Driftwood comes along and applies for 2300 and says in their application, the project has been proposed to provide enhanced supply access to the natural gas market in the Lake Charles, Louisiana area.

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That purpose was then repeated in the draft environmental impact statement and again in the final environmental impact statement.

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We get to the certificate, and when FERC issues a certificate, all of a sudden, for the first time, FERC says that 2300 is, quote, designed to enhance and further diversify Driftwood LNG's access to natural gas supply.

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And when not being used to supply the terminal, the project can improve the Lake Charles, Louisiana area's abilities to access gas.

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This is the first time that FERC said anything about the terminal needing a second redundant supply line.

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What was going on?

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Well, it turns out that FERC disclosed something in a completely separate docket, in a docket dealing with the LA storage facility, which is a Section 7 project.

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And in the certificate in that docket, FERC revealed that the 2300 and the terminal would be built simultaneously and operated as a single project.

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And the main line would only be built years later after the terminal and 2300 were built and operating as a single project for close to eight years.

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Then Drift would- So council, assume all of that is correct.

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and that 2300 is going to be built before the main line.

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How does that help your case on market need?

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Wouldn't that just show there's even more of a need for 2300?

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No, Your Honor.

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It's the point that this was not disclosed, that the need for the project, well, the ostensible need in the application and the DEIS and the FEIS was Lake Charles.

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Their certificate says it's going to be a backup

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to the terminal backup to the main line.

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Now we have a situation where it turns out it's going to be the main lines supply for many, many years, not as a backup.

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So even their rationale in the certificate doesn't hold water.

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And to clarify, our claims are not based

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either on the bait and switch between the application and the environmental impact statements and the certificate, or in fact the lack of support for either of the two rationales in the certificate, the need for a more diverse supply or the Lake Charles need.

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We point to those merely to say the lack of evidentiary support for those alleged needs supports our claim that neither of those was what Griftwood intended with this project.

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Those confirm what FERC said in the LA storage certificate that this project was that 2300 was being built as the terminal supply period.

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Our second natural gas that claim is that FERC failed to weigh the greenhouse gas impacts of 2300 against the need.

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FERC claimed it only needed to disclose 2300's emissions, go through the social cost of carbon multiplication,

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for informational purposes, and then say it's 2,300 serves the public convenience and necessity.

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And that's exactly what this court rejected just weeks ago in New Jersey Conservation Foundation, where the court said FERC asserts that it adequately weighed the potential environmental harms of the project just by disclosing the project's reasonably foreseeable greenhouse gas emissions,

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But FERC nowhere explains whether and how the commission considered those emissions among the adverse effects it balanced and found to be outweighed by the pipeline's expected benefits.

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That is exactly, precisely to the letter what FERC did here.

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On to the- What about food and water watch?

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That was also recently decided.

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Yes, sir.

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Food and Water Watch talked about other aspects.

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It said you don't have to use the social cost of carbon.

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It didn't say exactly what New Jersey Conservation Fund said.

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Regardless of what you do in terms of your NEPA analysis, under the Natural Gas Act, you still have to weigh those impacts.

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Food and Water Watch did- How do you measure what the impact is on the climate, the worldwide climate,

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putting in a 30-mile pipeline.

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Your Honor, it's... How is that possible?

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It's possible by using, in fact, that social cost of carbon tool or some other tool.

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The Natural Gas Act simply doesn't say, well, there's an impact, but we can't... It's not even clear there's an impact of CO2 on human-made CO2 on climate.

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Anyone?

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Respectfully, Your Honor, I think that's not an issue in this case.

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And FERC assumes that it does.

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FERC agrees that there is a CZO2 impact on the climate.

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And FERC simply waved its hands and said, we can't discuss the magnitude of this under NEPA.

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We can't say whether it's significant or not under NEPA.

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But regardless of it, whether it's significant or not under NEPA, FERC has to consider it somehow.

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somehow in coming up with an answer as to whether or not the project's benefits outweigh its impacts.

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So in that, for that argument, is there some affirmative indication you see that FERC did not consider the greenhouse gas emissions, you know?

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In its natural gas act analysis?

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In the natural gas act analysis, it essentially

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references and incorporates the EIS in its entirety, as we concluded it's environmentally acceptable, and then it makes the Section 7 finding.

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And I guess the question is, how do you know they didn't think about GHG emissions or didn't think about any of the other many, many environmental impacts listed in the EIS?

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For two reasons.

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One, in the EIS, they say, well, we're doing the social cost of carbon calculation for informational purposes.

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There's no indication that they're going to take it into account in their own way when they say it's for informational purposes, not clearly for agency regulatory purposes.

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Moreover, it's exactly what they did in that this court rejected in New Jersey Conservation Foundation and in first brief.

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It says all we have to disclose, all we have to do is disclose the emissions and cite the benefits of the project.

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And that's it.

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We've done our duty in terms of weighing the greenhouse gas impacts against the need for the pipeline.

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And that's exactly what happened here, almost word for word.

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On to NEPA.

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Our first NEPA claim is segmentation.

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When FERC approved,

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the terminal and the main line in 2019, it approved them with a single EIS as a single project.

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Now, LA Storage tells us that Driftwood is going to build the terminal and 2300 as a single project building built simultaneously.

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They'll be completed simultaneously.

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They'll be operated as a single unit.

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Therefore, FERC should have taken into account

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collectively, the impacts of 2300 and the impacts of the terminal.

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What language of NEPA are you relying on?

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The connected action language of NEPA.

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Connected action?

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Yes.

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That's from NEPA?

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Yes, sir, it is.

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NEPA says you have to take into account connected actions and 2300 and the terminal are absolutely connected actions the same way that FERC said the main line and the terminal were connected actions.

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So you're not relying on CEQ regulations?

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Well, yes, sir, it is CEQ regulations that require that you analyze connected actions together.

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Where does CEQ get the authority to issue regulation?

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In the National Environmental Policy Act.

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No, it's not in there.

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Then I don't know where CEQ gets the authority to issue it.

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That's from an executive order that was issued in 1977, I believe.

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Can an executive order authorize an agency to issue regulations?

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Well, since it's been close to 50 years of CEQ issuing such regulations, and I'm not aware of any court saying that CEQ did not have this authority.

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This court has said it about five times and said that it's doubtful that CEQ has any regulatory authority.

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Oh, that was not an issue that was presented here for did not.

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I know it's a separation of powers question.

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Which can be raised by the court itself.

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I don't dispute that you can raise it.

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I'm just not prepared.

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I'm raising it.

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I am not prepared to argue or discuss CEQ's authority and separation of powers.

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I'm sorry, that's simply something I didn't prepare for.

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So.

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Can you address the argument that your current segmentation claim is forfeited?

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So I think what FERC says is you actually were on notice about the construction timeline that is now the basis of your claim.

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And it seemed like in your briefing, you conceded you didn't raise this during the comment period before the agency.

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We didn't raise it in the comment period.

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So as a NEPA issue, NEPA excuses things that are justifiably omitted.

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But more importantly, as we know from public citizen, is something that is so obviously glaringly omitted.

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And other courts have said, and if something is already known to the agency,

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The agency knew and published in one of its own orders that the terminal and 2300 be built together.

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Now, the issue of waiver.

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I did not know that you were arguing that for that reason, it was a connected action and that they needed to reissue an EIS fully addressing, you know, the combined impact of the terminal and this project.

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As I said, Your Honor, there is precedent, including Supreme Court precedent that says, you know, if something is such a glaring omission, or as this court and other courts have held, if something is obviously known to the agency, there's no need to raise it for purposes of NEPA.

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We did raise it in our hearing petition.

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So it is preserved in terms of review in this court.

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So I want to draw the court's attention

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to the Delaware Riverkeeper case, where the court pointed out that the project in front of it and a previously approved project were linked, saying the temporal nexus is clear.

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Tennessee Gas proposed the project while the pipeline was under construction, and Fert plainly was aware of the physical, functional, and financial links between the two.

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This was even more egregious.

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The first project in Delaware Riverkeeper was under construction.

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Here, the first project in the main line hadn't, I'm sorry, the terminal hadn't even broke ground when FERC knew that the terminal and 2300 would be constructed together.

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Finally, I'd like to talk about upstream emissions.

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There's two issues, one legal and one factual.

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I don't think there's really a legal dispute that FERC's obligation only goes to the portion of the gas 2,300 will carry.

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The upstream emissions of the portion of the gas will carry for domestic consumptions, which is 1.5% is the number now.

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The factual issue is that FERC says to do this, it needs all sorts of information.

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I'm sorry, locationless supply source.

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whether the gas would come from new existing production, et cetera.

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And we gave them precisely that information.

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We gave them the quotes from Tellarian's.

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Tellarian is the parent company of Driftwood LNG and the Driftwood Pipeline.

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Their head of production said, we plan to drill 13 wells in the Haynesville Shale that will operate as it looks to build sufficient feed gas supplies to support first phase of the proposed Driftwood export terminal.

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And then Tellarian's head of production the next year said,

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We're purchasing another 5,000 acres in the Haynesville shells, where these assets provide to Larian with both cash flow and a physical hedge for the driftwood terminal.

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Your time's expired.

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I'll ask if you just can bring a conclusion to your opening remarks.

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I'll give you some time on rebuttal.

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Thank you, Governor.

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May it please the court, Houston Schaer for respondent Federal Energy Regulatory Commission.

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And I'd like to start with the most extreme claim in this case, and that's my colleague's assertion of some sort of deliberate concealment or deception by the commission.

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There are at least two major problems with this argument.

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First, it's forfeited.

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In fact, it's been forfeited twice over.

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If you refer to the request for agency rehearing by the petitioners below, and you look at their needs section, that's J711 to 715, you will see no theory about the commission deliberately hiding the true purpose of the project to supply gas to the terminal for exports until the certificate order.

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In fact, you won't really find any sort of conspiracy theory whatsoever.

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They merely attack the idea of redundancy.

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If this were such a dramatic bait and switch by the commission, you would certainly expect petitioners to make a big deal out of this in the hearing order, but they did not, and so it's jurisdictionally forfeited.

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Worse, it's also forfeited at the appellate level.

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While they make a lot of this argument in this theory in the reply brief, simply not found in the opening brief whatsoever.

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They say that there might be some different purpose.

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There might be a replacement of the main line with the project, but they never make any allegations of concealment or deception by the commission and no argument about a bait and switch until the certificate order.

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So this claim fails at least two threshold levels.

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But even worse still is the fact that it's simply patently wrong.

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Much of this material is recounted in the

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responses to the motion to supplement the record, which this panel may or may not have reviewed.

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It's not clear who decided it, but I'm happy to walk through those.

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Starting with the first half of the executive summary of the application by Driftwood submitted to commission back in 2021, JA4, they say the project runs from the Ragley area all the way to a final interconnection point and meter station 12 within the footprint of the Driftwood LNG facility.

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Any reasonable reader would understand that to mean that the project can deliver gas to the terminal.

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If that weren't enough, you then move to Resource Report 1 in the application, JA38, where they say explicitly the project can deliver gas to the terminal at that interconnection point.

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And then again in Resource Report 10, JA92.

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If the application weren't enough, Driftwood did confirm that fact when they disclosed the foundation shipper, Driftwood LNG,

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I mean, JA 160 through a data request to the commission.

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And then again, in the answer, a JA 143.

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And then again, a JA 157 in the answer as well.

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So it's clear that the petitioners were on notice far, far before the certificate order.

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In fact, roughly two years before the certificate order, the project that runs to the terminal might supply the terminal.

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But they're banking not only their need argument, but also their segmentation argument on that fact.

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Not only is it forfeited, but it's patently wrong.

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I think more fundamentally, their argument on consumer in need simply misunderstands how substantial evidence review operates.

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The commission makes a finding that the market in southwest Louisiana can support two new pipelines, even if one is redundant to the other.

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As long as there is some evidence supporting that inference, the commission's result can be sustained and is conclusive under the Federal Power Act and is laid out on pages 32 through 34 of the red brief.

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There clearly is a great deal of evidence in favor of redundancy and reliability need for that particular market area.

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That includes the precedent agreements, industry practice, multiple industry practice, or practice across multiple industries, as well as corroborating comments from large industrial players like Intergy.

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At the same time, there is simply no answer to the market study

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evidence supporting the need for non LNG gas supply to Lake Charles area that is simply unanswered about the opening brief as well as the agency rehearing request.

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I don't hear any response to that in my friend's opening argument as well.

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But that simply means that as long as there's some substantial evidence on project need, this court can defer.

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But affirming on the same ground means that the segmentation claim necessarily fails as well because their only excuse for forfeiting this argument below not raising this concealment theory during the NEPA process is that they claimed they couldn't have known that the project was going to deliver gas to the terminal.

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But obviously, that's wrong.

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Today, they're saying that it was just so obvious.

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Maybe if you recognized that 2,300 was going to supply the terminal, it's just obvious that in the same way the main line and the terminal were considered together, this should have been considered together with the terminal.

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What's your response to that potentially new argument?

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Sure.

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If I'm understanding you correctly, we're getting more to the merits rather than forfeiture there?

[00:20:46] Speaker 05:
No.

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The response to my question about forfeiture was that there's an exception when the matter is so obvious to the agency that there was no need to raise it in a comment.

[00:20:57] Speaker 03:
Well, I'm not sure the case law necessarily says that because the 2020 CEQ rule, which is mandatory and at least binding on them, assuming Judge Randolph, putting aside Judge Randolph's arguments,

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They have a specific duty, a duty to raise this issue specifically at the EIS stage, but they failed to do that because the commission is entitled to be put on notice of this argument, particularly something as striking as the idea of a deliberate concealment and a confusion.

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You're relying on that CEQ rule?

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Within the context of this argument, Judge Randolph, but certainly- It's been repealed, hasn't it?

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That rule has, yes, but at the time of the certificate order, it was still in effect.

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Correct.

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A new rule replaced it, I believe.

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Why did CEQ repeal it?

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I could not give you all of their reasons.

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You said it's none of their business to tell the courts how to act.

[00:21:49] Speaker 03:
That may be part of it.

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At the time of the certificate order, though, that rule was in effect.

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And I would also note that if your separation of powers claim is correct, then their connected action argument goes away entirely.

[00:22:00] Speaker 03:
We don't need forfeiture because it depends entirely on CEQ.

[00:22:02] Speaker 06:
That's one of the most compelling arguments that I don't hear you making.

[00:22:07] Speaker 06:
now is the point that the commission made in its decision that unlike the usual situation, the terminal, an LNG terminal, has no captive customers.

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So if they're going to build a pipeline to the terminal, they're not going to be able to do it for free by passing the cost on to the captive customers.

[00:22:36] Speaker 06:
And so that leads to the conclusion that they'd have to be fools to construct a pipeline when they don't need it, according to the petitioners, because they can't pass the costs on.

[00:22:53] Speaker 03:
That is exactly correct and is exactly why Environmental Defense Fund 2021 is distinguishable in this case.

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And I think it's open and shut.

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They have no real attack on paragraph 24 of the certificate order.

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I would also like to move to NEPA significance and what they call the Natural Gas Act balancing argument.

[00:23:11] Speaker 03:
New Jersey Conservation Fund is clearly distinguishable on the NEPA front because they have never at any time raised an order natural argument based on that precedent.

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So there's no similar failure to explain.

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In fact, on NEPA significance, this case is exactly like Port Isabel

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where they raise an argument along the style of a senos and orders well-affirmed materially identical explanation.

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They try to shift this argument into a more fuzzier and general Natural Gas Act argument saying you have to use social cost of carbon to balance costs and benefits under the Natural Gas Act.

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This court has never held that.

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In fact, this court affirmed in both Alabama Municipal and Food and Water Watch the commission's explanation in those cases and here

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The social cost of carbon is not fit for project level review.

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They've never had any first place of authority to distinguish that or any reason why we have to use it for each project, each individual project.

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In fact, that's never been the case.

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In fact, that goes back to certificate center for biological diversity.

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in the 2022 Delaware Riverkeeper Network decision, which at 115 says that once the commission properly conducts an environmental analysis under NEPA and incorporates the EIS that Judge Garcia mentioned, then it has reasonably concluded that the benefits of the project outweigh the costs.

[00:24:18] Speaker 03:
And that's all that this court has required.

[00:24:22] Speaker 03:
And Judge Wilkins, I would also note you're exactly correct.

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Food and Water Watch, this cleans up any possible other NEPA or Natural Gas Act arguments about the social cost of carbon because there is no need to make an up or down call about significance for individual impacts.

[00:24:33] Speaker 03:
And that's clear.

[00:24:36] Speaker 05:
You just briefly address the upstream emissions argument and I was turned there now Yeah, so I just started with the letters right as the 13 wells and explained why yeah So we need to take those letters individually.

[00:24:47] Speaker 03:
They now can see there's no legal causation over exported gas But that removes any relevance of the press release a J 14 and the Weber article which mentioned the 13 wells at J 422 because those articles are

[00:25:00] Speaker 03:
They mentioned to Lurian holdings within the Hainesville shale, but they do not say that's even going to the project and they only suggest that the gas use that the gas from the to Lurian wells will go to exports, but that means it's already been carved out of any any rumble the causation.

[00:25:15] Speaker 03:
Well, originally by Earth reports in 2016, which is what the section 3 and section 7 case, but.

[00:25:20] Speaker 03:
More recently, by 2024, Alabama municipal decision that very clearly says that a section seven pipeline sending gas to a section three facility for export is not the legal cause of upstream emissions.

[00:25:32] Speaker 03:
That leaves only the Baker article, which is sandwiched in between those.

[00:25:35] Speaker 03:
That's a J416.

[00:25:36] Speaker 03:
That does mention the project, but here it does not say that Tolorian is going to drill any wells in any specific basins.

[00:25:43] Speaker 03:
In fact, it says that the project

[00:25:45] Speaker 03:
Part of the point of the project is to source gas from multiple producing basins around the country.

[00:25:49] Speaker 03:
You'll see that in the map on page 12 of the red brief, literally half the United States.

[00:25:55] Speaker 03:
But even if that doesn't fail on legal causation, it clearly fails on foreseeability grounds under Birkhead and more recently under the 2024 Food and Water Watch decision, where the Marcellus Utica Shale was too large to be able to attribute foreseeability to upstream emissions.

[00:26:09] Speaker 03:
But this case involves not only the Marcellus Utica Shale, as the map demonstrates, but also five or six other gas shales around the country.

[00:26:17] Speaker 03:
And I see everyone out of time, but I'm happy to answer any other questions the court may have.

[00:26:26] Speaker 04:
All right.

[00:26:26] Speaker 04:
Thank you.

[00:26:27] Speaker 04:
Thank you.

[00:26:30] Speaker 04:
We'll hear from Mr. Rosencrantz.

[00:26:51] Speaker 02:
Good morning, Your Honors, and may it please the court, Josh Rosenkrantz, representing the interveners.

[00:26:57] Speaker 02:
Your Honors, just a few points really by way of framing.

[00:27:02] Speaker 02:
I'll add to Mr. Shaner's point about this accusation of collusion, because petitioners are building both their segmentation argument and their need argument

[00:27:16] Speaker 02:
around the notion that FERC colluded with Driftwood to hide from the public the actual planned sequence, and that is their excuse for forfeiting the issue.

[00:27:27] Speaker 02:
In addition to the points that Mr. Shaner made, let me just point out that it is clear on the record in this docket, forget about the Hackberry certificate,

[00:27:38] Speaker 02:
In this docket, FERC and petitioners knew full well that we planned to build the line 200-300 before the main line.

[00:27:48] Speaker 02:
We set it in a filing on the public record on February 22nd, 2022, sorry, February 11th.

[00:27:57] Speaker 02:
2022 while the application was pending.

[00:28:01] Speaker 02:
Now, it's not in the Joint Appendix because petitioners did not raise this until their reply, but it is at accession number 2022-0212.

[00:28:12] Speaker 02:
That's the date 5221.

[00:28:18] Speaker 02:
And in that document, we very clearly laid out the sequence.

[00:28:24] Speaker 02:
First comes line 200.

[00:28:26] Speaker 02:
then line 300, then the main line.

[00:28:32] Speaker 06:
Second framing point, listening to-

[00:28:37] Speaker 02:
Does the main line duplicate the 200-300 line?

[00:28:40] Speaker 02:
No, Your Honor.

[00:28:41] Speaker 02:
They provide separate purposes.

[00:28:45] Speaker 02:
The 200-300 does supply optionality to the terminal, but it also is designed to supply the market.

[00:28:53] Speaker 02:
And I would note that petitioners are completely ignoring the market study that says that there is an enormous demand.

[00:29:01] Speaker 02:
And I think, listening to the argument today, I realized there's an enormous disconnect

[00:29:06] Speaker 02:
Because petitioners are pointing to the 92% that Driftwood LNG is subscribing to, and they are saying incorrectly that is only for the terminal.

[00:29:17] Speaker 02:
Driftwood LNG owns a terminal, yes, but it is also a market participant.

[00:29:23] Speaker 02:
It is going to be selling the gas to the market when it doesn't need to provide the gas to the terminal.

[00:29:32] Speaker 02:
92% that Driftwood LNG subscribes to is a really, really expensive expenditure to Judge Randolph's point.

[00:29:41] Speaker 02:
It's way more expensive than the gas itself, and there's no way they would be subscribing if they did not plan to use the capacity to supply the market.

[00:29:52] Speaker 02:
Third major point for all of these protests, it's worth asking petitioners

[00:29:57] Speaker 02:
What exactly do you want FERC to do differently on remand?

[00:30:02] Speaker 02:
FERC already performed a full environmental impact statement and analysis on the main line and at the same time on the terminal.

[00:30:12] Speaker 02:
It performed a full environmental impact statement on line 200-300 and then

[00:30:20] Speaker 02:
When it was analyzing line 200-300, it analyzed all three together by way of cumulative effects.

[00:30:30] Speaker 02:
Finally, I need to underscore a point that has not come up, but petitioners emphasize by way of citing Transco, the NJCF case, and Port Isabel.

[00:30:44] Speaker 02:
If this court perceives any error in FERC's order, it should at most remand without vacating.

[00:30:52] Speaker 02:
First, the commission will almost certainly reach the same result for reasons that I've already mentioned.

[00:30:58] Speaker 02:
And second, vacatur would be downright disastrous.

[00:31:02] Speaker 02:
I know that shovels have not hit the ground yet on line 200, 300, but they hadn't hit the ground yet in Commonwealth either.

[00:31:11] Speaker 02:
And this project, as in Commonwealth,

[00:31:14] Speaker 02:
presents years of planning, massive financial investment, complex coordination among industry participants and government bodies.

[00:31:27] Speaker 02:
and killing the project or at least postponing the project, I should say, could amount to killing the project and the jobs that come with it.

[00:31:36] Speaker 02:
I would note that FERC found an urgent need to supply gas to the Lake Charles area and vacating the order will only delay the satisfaction of that need to the detriment of the public and the consumers and businesses.

[00:31:53] Speaker 06:
We could vacate and then stay the order.

[00:31:57] Speaker 02:
Your honor, I would urge the court not to, because that is the equivalent of a remand.

[00:32:03] Speaker 02:
Because if you're staying the effect of the vacatur, you could achieve the same thing simply by remanding.

[00:32:10] Speaker 02:
And I would underscore the point that a vacatur is just hugely disruptive, way more disruptive than simply a remand telling FERC to go back and do its work differently or better.

[00:32:27] Speaker 02:
For these reasons, Your Honors, we respectfully request that this court reject the petition.

[00:32:33] Speaker 04:
Thank you.

[00:32:39] Speaker 04:
All right, Mr. Bookbinder, we'll give you three minutes in rebuttal.

[00:32:46] Speaker 01:
Thank you, Your Honor.

[00:32:47] Speaker 01:
First of all, as to the needs argument, as I said before, the flaws with the market study

[00:32:54] Speaker 01:
The fact that FERC engaged in a bait and switch and the issues surrounding the, whether there's factual support for the idea that the 2300 would bring a diverse supply to the terminal that mainline would not, those are not our arguments.

[00:33:11] Speaker 01:
We are not saying that those are, that makes the FERC findings arbitrary and capricious.

[00:33:16] Speaker 01:
We're pointing those out as evidence supporting our claim

[00:33:21] Speaker 01:
that this terminal was meant for another purpose entirely.

[00:33:24] Speaker 01:
It wasn't meant for either of those purposes.

[00:33:27] Speaker 01:
Now, on the segmentation claim, Driftwood says, we told them it's in the record that we're going to build the main line after 2300.

[00:33:38] Speaker 01:
Yes, in the 28-J reply filed about 10 days ago, they pointed to a 924-page document.

[00:33:46] Speaker 01:
They didn't tell us what page in that 924-page document to find the statement.

[00:33:52] Speaker 01:
And we found the statement.

[00:33:53] Speaker 01:
It's in a section dealing with engineering issues.

[00:33:56] Speaker 01:
And FERC asking about engineering of if you're going to be building some part of 2300, where you're going to build the main line, how are you going to do this properly under engineering principles?

[00:34:06] Speaker 01:
And then they say that they're going to build the main line afterwards.

[00:34:12] Speaker 01:
It doesn't say they're going to build

[00:34:15] Speaker 01:
2300 and the terminal together.

[00:34:18] Speaker 01:
As far as anyone would know, the terminal gets built, 2300 gets built, main line gets built.

[00:34:25] Speaker 01:
They get built together or as they're insisting, we're building 2300 to serve the Lake Charles market.

[00:34:33] Speaker 01:
Okay, then you build 2300 and then you build the terminal and the main line.

[00:34:38] Speaker 01:
You can't tell from a statement simply that they're going to build the main line after 2300 when they're going to build the terminal.

[00:34:45] Speaker 01:
That's our segmentation issue.

[00:34:47] Speaker 01:
Terminal and 2300 together.

[00:34:51] Speaker 01:
The issue is, what would a new environmental impact statement look like?

[00:34:56] Speaker 01:
Well, two things about that.

[00:34:58] Speaker 01:
First of all, the purpose and need of the project statement would look a lot different.

[00:35:04] Speaker 01:
The existing one said, this is 2300 designed to supply the Lake Charles market.

[00:35:09] Speaker 01:
That purpose and need would look a lot different, it was,

[00:35:12] Speaker 01:
2300 is designed to be the terminal supply of gas for at least eight years and who knows how much longer beyond that.

[00:35:20] Speaker 01:
More importantly, the alternative analysis would be remarkably different.

[00:35:26] Speaker 01:
If the new EIS says the purpose of the project is to serve as a backup supply or more diverse supply, etc.

[00:35:34] Speaker 01:
any sort of supply to the terminal.

[00:35:36] Speaker 01:
The alternative analysis would begin with, well, FERC has already approved a pipeline to supply this terminal.

[00:35:43] Speaker 01:
Those are things that simply don't exist in the current EIS.

[00:35:51] Speaker 01:
The gas for export issue on upstream, you can't separate out the gas a pipeline will carry that's being carried down to the terminal.

[00:36:00] Speaker 01:
You can't say,

[00:36:01] Speaker 01:
This is the gas.

[00:36:02] Speaker 01:
We have a separate source of gas for the domestic use.

[00:36:06] Speaker 01:
And the rest of this gas is going to go for export.

[00:36:09] Speaker 01:
Once those driftwood wells, that gas goes into that pipeline.

[00:36:14] Speaker 01:
It gets intermingled.

[00:36:15] Speaker 01:
And then you don't know.

[00:36:16] Speaker 01:
You can't separate out the molecules that go for export from the molecules that will be used domestically.

[00:36:26] Speaker 01:
Last is the idea that

[00:36:29] Speaker 01:
You can't use the social cost of carbon for evaluating the impacts of greenhouse gases at the project level.

[00:36:36] Speaker 01:
I have never seen an explanation from FERC why this is so.

[00:36:40] Speaker 01:
They keep saying it's good, it's okay for doing at a regulatory level, but not at a project level.

[00:36:46] Speaker 01:
I have seen no explanation from FERC ever as to why 40 tons or 100 tons of greenhouse gases emitted by a project is qualitatively different

[00:36:56] Speaker 01:
from the same amount of that gas when it's when it's emitted as a result of a regulatory action.

[00:37:03] Speaker 01:
I see my time is up, your honor.

[00:37:05] Speaker 01:
If there are no further questions, we ask you to vacate this certificate and remand to FERC.

[00:37:12] Speaker 04:
Thank you.

[00:37:12] Speaker 04:
We'll take the matter under advisement.