Sierra Club v. Federal Energy Regulatory Commission

 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued November 13, 2015             Decided June 28, 2016

                       No. 14-1275

        SIERRA CLUB AND GALVESTON BAYKEEPER,
                     PETITIONERS

                             v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

         AMERICAN PETROLEUM INSTITUTE, ET AL.,
                    INTERVENORS


          On Petition for Review of Orders of the
          Federal Energy Regulatory Commission


    Nathan Matthews argued the cause for petitioners. With
him on the briefs was Sanjay Narayan.

     Robert H. Solomon, Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on
the brief were David L. Morenoff, General Counsel, and Karin
L. Larson, Attorney.

     Jonathan S. Franklin argued the cause for respondent-
intervenors Freeport LNG Development, L.P., et al. With
him on the brief were Lisa M. Tonery and Charles R. Scott.
                               2
    Catherine E. Stetson was on the brief for intervenor
American Petroleum Institute in support of respondent. Stacy
R. Linden and Benjamin Norris IV entered appearances.

    Before: ROGERS, GRIFFITH, and MILLETT, Circuit Judges.

    Opinion for the Court filed by Circuit Judge MILLETT.

    MILLETT, Circuit Judge: The Sierra Club and Galveston
Baykeeper (the “Associations”) take issue with the Federal
Energy Regulatory Commission’s decision authorizing
Freeport LNG Development, L.P. to redesign its liquefied
natural gas terminal in Texas to support export operations.
Specifically, the Associations argue that the Commission’s
analysis of the proposal’s impact on the environment ran
afoul of the National Environmental Policy Act of 1969
(“NEPA”), 42 U.S.C. § 4321 et seq. We hold that the
Associations have standing to press their challenges to the
Commission’s orders and that their case is not moot, but we
deny the petition for review on the merits. To the extent the
Associations complain about the environmental consequences
of exporting natural gas from Freeport’s terminal, those
objections should be raised in the pending challenge to the
Department of Energy’s order authorizing Freeport to export
natural gas. On the narrower question of whether the
Commission’s       analysis    of     the    non-export-related
environmental consequences of Freeport’s proposal itself
complied with NEPA, we find no error in the Commission’s
analysis that would rise to the level of arbitrary or capricious
decision-making.
                                3
                                I

                                A

       Export authorizations for natural gas implicate a tangled
web of regulatory processes. The Department of Energy
maintains exclusive authority over the export of natural gas as
a commodity. 42 U.S.C. § 7151(b). The Natural Gas Act,
though, authorizes the exportation of natural gas from the
United States unless the Department specifically determines
that doing so “will not be consistent with the public interest.”
15 U.S.C. § 717b(a). In addition, the Department of Energy’s
determination of the public interest in the export of natural
gas depends on the country to which the gas will be exported.
If it is a country with which the United States has a “free trade
agreement requiring national treatment for trade in natural
gas,” the Natural Gas Act makes the decision for the
Department, because the Act “deem[s]” export “to be
consistent with the public interest, and applications for such
* * * exportation shall be granted without modification or
delay.” Id. § 717b(c). On the other hand, if the gas will be
exported to a country with which the United States does not
have such a trade agreement, the Department must
independently determine whether such exports would be
inconsistent with the public interest. See id. § 717b(a). 1


1
 Currently, the United States has natural gas free-trade agreements
with Australia, Bahrain, Canada, Chile, Colombia, the Dominican
Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico,
Morocco, Nicaragua, Oman, Panama, Peru, the Republic of Korea,
and Singapore. See J.A. 302; U.S. Department of Energy, Office of
Fossil Energy, How to Obtain Authorization to Import and/or
Export Natural Gas and LNG, http://energy.gov/fe/services/
natural-gas-regulation/how-obtain-authorization-import-andor-
export-natural-gas-and-lng (last visited June 27, 2016).
                               4
     The Department has delegated to the Federal Energy
Regulatory Commission the authority to “[a]pprove or
disapprove the construction and operation of particular
[export] facilities, the site at which such facilities shall be
located, and with respect to natural gas that involves the
construction of new domestic facilities, the place of * * * exit
for [natural gas] exports.” U.S. Department of Energy,
Delegation Order No. 00-004.00A, § 1.21.A (May 16, 2006);
cf. 15 U.S.C. § 717b(e)(1) (“The [Federal Power]
Commission shall have the exclusive authority to approve or
deny an application for the siting, construction, expansion, or
operation of an LNG [liquefied natural gas] terminal.”). As a
result, if an operator of a natural gas terminal like Freeport
wants to export natural gas and has to construct or modify
facilities to do so, it must obtain authorizations from both the
Department of Energy (to export) and the Commission (to
construct and to operate the necessary facilities). And if the
export will be to a natural gas free-trade country, the only
potential public-interest analysis ever made is the
Commission’s when approving the “siting, construction,
expansion or operation of an LNG terminal.” 15 U.S.C.
§ 717b(e)(1).

     In addition to those public-interest determinations,
authorizations to export natural gas also require an
environmental review under NEPA.              See 42 U.S.C.
§ 4332(2)(C). When, as here, the agency determines that the
action under review is a “major Federal action[]” that will
“significantly affect[] the quality of the human environment,”
the agency must prepare a detailed Environmental Impact
Statement that addresses (i) the environmental impact of the
proposed action, (ii) any “adverse environmental effects” that
“cannot be avoided” if the proposal is implemented, (iii)
available alternatives to the proposed action, (iv) the
“relationship between local short-term uses of [the]
                              5
environment and the maintenance and enhancement of long-
term productivity,” and (v) any “irreversible and irretrievable
commitments of resources” that “would be involved in the
proposed action should it be implemented.” Id.

     In analyzing the environmental impact of a project,
NEPA obligates the agency to consider not just the “direct”
environmental effects of the proposed action that “are caused
by the action and occur at the same time and place,” but also
the action’s “indirect” environmental effects that “are caused
by the action and are later in time or farther removed in
distance, but are still reasonably foreseeable.” 40 C.F.R.
§ 1508.8. The agency must also consider the action’s
“cumulative impact”—that is, the impact on the environment
that would result “from the incremental impact of the action
when added to other past, present, and reasonably foreseeable
future actions regardless of what agency (Federal or non-
Federal) or person undertakes such other actions.” Id.
§ 1508.7.

     Notwithstanding the limited scope of the Commission’s
delegated authority under the Natural Gas Act, that Act
designates the Commission to be “the lead agency for the
purposes of coordinating all applicable Federal authorizations
and for the purposes of complying with the National
Environmental Policy Act.” 15 U.S.C. § 717n(b)(1); see also
42 U.S.C. § 7172(a)(2)(B). As a result, the Department of
Energy participates in the NEPA process only as a
“cooperating agency,” 40 C.F.R. § 1501.6(b), while the
Commission is ultimately responsible for “supervis[ing] the
preparation of [the] environmental impact statement,” id.
§ 1501.5. That arrangement makes it possible for the
Department to adopt the Commission’s environmental
analysis as its own for purposes of any additional NEPA
review triggered by an export-authorization request. But the
                              6
Department must independently review the Commission’s
work and conclude that the Department’s own “comments and
suggestions have been satisfied.” Id. § 1506.3(c).

                              B

    In 2004, the Commission authorized Freeport to site,
construct, and operate a liquefied natural gas import terminal
on Quintana Island in Brazoria County, Texas. That facility
was placed into service in 2008.

     As it happens, an increase in the availability of cheap
domestic natural gas during the last decade caused the market
for importing gas to decline. As a result, Freeport shifted its
operations toward exporting and, in 2009, obtained
authorization from the Commission to operate its existing
terminal facility for both exporting and importing natural gas
on a short-term basis. In 2011 and 2012, Freeport sought
authorization from the Commission both to modify its
facilities to better support gas exports, and to construct
additional gas liquefaction facilities to supplement its export
operations. (Throughout this opinion, we refer to those two
projects collectively as the “Freeport Projects.”).

    As required by the Natural Gas Act and NEPA, the
Commission undertook an extensive environmental review of
the Freeport Projects. Deeming the two projects to be
“connected actions,” 40 C.F.R § 1508.25, the Commission
prepared a single Environmental Impact Statement. The
Department of Energy, the Environmental Protection Agency,
the Department of Transportation, the U.S. Army Corps of
Engineers, and the National Oceanic and Atmospheric
Administration all participated in that consolidated review as
“cooperating agencies.” J.A. 679.
                              7
     Meanwhile, in 2010 and 2011, Freeport separately sought
authorization from the Department of Energy to export natural
gas. The Department approved Freeport’s request for free-
trade agreement countries in February 2011, and conditionally
approved Freeport’s application with respect to non-free trade
agreement countries in May and November 2013. The
conditional order explained that the Department of Energy
would participate in the Commission’s ongoing
environmental review of the Freeport Projects as a
cooperating agency, and that the Department’s final
authorization would be contingent on satisfactory completion
of that environmental review process.

     The Commission released its Final Environmental Impact
Statement in June 2014. That Statement found that the
Freeport Projects “would result in some adverse
environmental impacts,” but that those impacts would be
“mostly temporary and short-term” as long as Freeport
implemented mitigation procedures proposed by the
Commission.      The following month, the Commission
conditionally authorized both Freeport Projects.      After
considering the Final Environmental Impact Statement and all
substantive public comments, the Commission determined
that, if Freeport complied with specified environmental
conditions, the Projects would not be inconsistent with the
public interest.

     The Associations intervened in the Commission’s
proceeding and timely sought rehearing. As relevant here,
they argued that the Commission failed (i) to consider the
indirect environmental effects of a possible increase in
domestic natural gas production being induced by the
Freeport Projects, and (ii) to analyze the cumulative
environmental effects of those Projects with “the many
proposed export projects” across the country, including, “at a
                              8
minimum,” those already authorized and “all other export
projects to have received conditional authorization from” the
Department of Energy. J.A. 1250, 1273.

     The Commission denied the Associations’ petition for
rehearing. The Commission rejected the argument that
increased domestic natural gas production was a causally
related or reasonably foreseeable indirect effect of the
Freeport Projects. The Commission also determined that the
cumulative impact of all other authorized or pending export
projects nationwide fell beyond the regulatory definition of
“cumulative impact.”

     The next day, the Department of Energy issued its final
order authorizing Freeport to export natural gas to non-free
trade agreement countries. The Department reconfirmed its
findings from the earlier conditional order, and also addressed
“the remaining issue: the potential environmental impacts”
from Freeport’s export proposals.          J.A. 1403.      The
Department concluded that “the proposed exports have not
been shown to be inconsistent with the public interest.” Id.
The Department subsequently denied the Associations’
petitions for reconsideration. 2

                              II

    We start where we must always start: “with the question
of our jurisdiction.” Brotherhood of Locomotive Eng’rs and
Trainmen v. Surface Transp. Bd., 457 F.3d 24, 27 (D.C. Cir.
2006). The Commission argues that we lack jurisdiction
because the Associations do not have standing, and because

2
  The Associations’ petition for review of the Department’s
decision is pending before this court. See Sierra Club v.
Department of Energy, No. 15-1489.
                               9
their NEPA claim has been mooted by additional
environmental analyses conducted by the Department of
Energy as part of its own public-interest review. Neither
argument succeeds.

                               A

     An association will have standing if “(1) at least one of
its members would have standing to sue in [its] own right, (2)
the interests the association seeks to protect are germane to its
purpose, and (3) neither the claim asserted nor the relief
requested requires that an individual member of the
association participate in the lawsuit.” Sierra Club v. EPA,
292 F.3d 895, 898 (D.C. Cir. 2002). There is no dispute that
the environmental claims the Associations assert are germane
to their institutional purposes, or that the relief sought under
the Administrative Procedure Act does not require the
participation of individual members.           The question of
individual-member injury is where the rub is.

     It is settled law that “an agency’s failure to prepare (or
adequately prepare) an [Environmental Impact Statement]
before taking action with adverse environmental
consequences” constitutes the “archetypal procedural injury”
redressable under Article III. WildEarth Guardians v. Jewell,
738 F.3d 298, 305 (D.C. Cir. 2013); see Florida Audubon
Society v. Bentsen, 94 F.3d 658, 665 (D.C. Cir. 1996) (en
banc). The bottom-line standing question in this case, then, is
whether one of either Association’s members faces a concrete
injury that is “tethered to” the Commission’s decision to
authorize the Freeport Projects’ construction or operation
notwithstanding the Commission’s allegedly inadequate
NEPA review, WildEarth Guardians, 738 F.3d at 305. See
also Florida Audubon Society, 94 F.3d at 668.
                               10
     At least one Sierra Club member has risen to that task,
and that is all that Article III requires. See Massachusetts v.
EPA, 549 U.S. 497, 518 (2007) (“Only one of the petitioners
needs to have standing to permit us to consider the petition for
review.”); Americans for Safe Access v. DEA, 706 F.3d 438,
443 (D.C. Cir. 2013). Teresa Cornelison is a member of the
Sierra Club and lives “approximately 0.5 miles from the
Freeport LNG facility.” Pet. Add. A-18. She has attested that
“the additional noise made during construction will * * *
hinder [her] enjoyment of [her] home,” and that “[i]f the
terminal were built, [she] would not go outside to relax or
walk on the beach as frequently because of the noise from
* * * the construction of the facility[.]” Id. at A-19. Such
credible claims of exposure to increased noise and its
disruption of daily activities, backed up by specific factual
representations in an affidavit or declaration, are sufficient to
satisfy Article III’s injury-in-fact requirement.            See
Communities Against Runway Expansion, Inc. v. FAA, 355
F.3d 678, 684–685 (D.C. Cir. 2004). That aesthetic injury,
moreover, is linked directly to the Commission’s
authorizations of the Freeport construction projects. See, e.g.,
J.A. 1192 (Order Granting Authorizations) (“Land access
within the Phase II Modification Project site * * * would
require development of an approximately 7,000-foot-long
plant road system [and] * * * 3,180 feet [of the plant road
system] would require new construction.”). That satisfies
Article III.

    The Commission says that is not enough, and that the
Associations also must tie their injury to the specific
“increase[]” in “natural gas production that was [allegedly]
caused by the challenged FERC orders.” Resp. Br. 24. That
argument “slice[s] the salami too thin.”              WildEarth
Guardians, 738 F.3d at 307. As we have held before, we hold
again: it is sufficient for standing purposes that the “aesthetic
                              11
injury follows from an inadequate [Environmental Impact
Statement] whether or not the inadequacy concerns the same
environmental issue that causes their injury.” Id. In NEPA
procedural-injury cases, an “adequate causal chain” contains
two links: “one connecting the omitted EIS to some
substantive government decision that may have been wrongly
decided because of the lack of an [adequate] EIS,” and “one
connecting that substantive decision to the plaintiff’s
particularized injury.” Florida Audubon Society, 94 F.3d at
668.

     That is to say, regardless of how the Commission
allegedly failed to discharge its NEPA obligation, that failure
led directly to authorization of the Freeport Projects, which in
turn is the source of Cornelison’s injury. The proof is in the
pudding: if we were to vacate the Commission’s order
authorizing the Freeport Projects for violating NEPA, not
only would Cornelison’s injuries be redressed, the remedy
would also be “‘limited to the inadequacy’—here, a deficient
[Environmental Impact Statement]—‘that produced the injury
in fact that the [petitioners] ha[ve] established.’” WildEarth
Guardians, 738 F.3d at 307 (quoting DaimlerChrysler Corp.
v. Cuno, 547 U.S. 332, 353 (2006)).

     The Commission’s reliance on National Committee for
the New River, Inc. v. FERC, 433 F.3d 830 (D.C. Cir. 2005),
fares no better. That case, which did not involve NEPA, held
that the environmental and aesthetic harms alleged had to be
linked to “the route realignments themselves” because route
realignments were what the challenged agency action
authorized. Id. at 832. Here, the specific agency action being
challenged is the NEPA analysis. And Cornelison has
grounded her injury in that flawed NEPA analysis and its end
product that injures her: construction of the projects.
                             12
                              B

     Next is mootness. In 2014, the Department of Energy,
“in response to challenges raised by Sierra Club and other
commenters in the Freeport LNG Export proceeding and other
export proceedings pending at the Department of Energy,”
issued two informational reports that “evaluated specific
environmental aspects of the LNG production and export
chain.” Resp. Br. 28–29. On that basis, the Commission
asserts that the Associations’ petition is moot.

     That     argument      woefully    misunderstands     the
Associations’ claim. They do not seek some quantum of
additional environmental information for its own sake, nor are
they, in this case, challenging the Department of Energy’s
analysis of environmental consequences. Their argument is
that the Commission bungled its NEPA review by failing to
consider the specific indirect and cumulative effects that the
Associations identified.      The Department of Energy’s
additional reports do not remedy that problem. See Pet. Reply
Br. 9 (“The Department of Energy’s reports played no part in
the Commission’s decision-making, and did not include the
procedures and substance required under NEPA to ensure that
environmental considerations inform such decision-
making.”). The Associations’ hope is that, if the Commission
were to consider those factors, perhaps it would reach a
different conclusion on whether the Freeport Projects are
consistent with the public interest. After all, “[t]he idea
behind NEPA is that if the agency’s eyes are open to the
environmental consequences of its actions and if it considers
options that entail less environmental damage, it may be
persuaded to alter what it proposed.” Lemon v. Geren, 514
F.3d 1312, 1315 (D.C. Cir. 2008).
                              13
     In short, because the Commission’s NEPA analysis was
an integral component of authorizing the export construction
projects—without which the Department of Energy’s separate
export authorization would be pointless—and because, if error
occurred, the Commission might come to a different result on
remand, the lawfulness of the Commission’s action remains
very much a live legal issue.

                              III

     Before addressing the merits of the Associations’ NEPA
claim, we pause to underscore what we are not deciding in
this case. Because the Associations do not challenge the
propriety or scope of the Commission’s delegated authority
under the Natural Gas Act, or the interplay between the
Commission and the Department of Energy when the former
is acting as the “lead agency” in reviewing the environmental
effects of a natural gas export operation under NEPA, we take
those agency roles as we find them. See 15 U.S.C.
§ 717n(b)(1); see also 42 U.S.C. § 7172(a)(2)(B). Nor have
the Associations argued that the Commission impermissibly
“segmented” its review of the Freeport Projects from the
larger inter-agency export authorization process, and “thereby
fail[ed] to address the true scope and impact of the activities
that should be under consideration,” Delaware Riverkeeper
Network v. FERC, 753 F.3d 1304, 1313 (D.C. Cir. 2014); id.
at 1314 (“[T]he rule against segmentation * * * ‘prevent[s]
agencies from dividing one project into multiple individual
actions each of which individually has an insignificant
environmental impact, but which collectively have a
substantial impact.’”) (alteration in original) (quoting Natural
Resources Defense Council, Inc. v. Hodel, 865 F.2d 288, 297
(D.C. Cir. 1988)).
                              14
     We also express no opinion on whether (i) the
Commission’s environmental analysis would have been
adequate to satisfy the Department of Energy’s own
independent NEPA obligation in authorizing Freeport to
export natural gas; or (ii) the Commission’s construction
authorizations and the Department’s export authorizations
qualified as “connected actions” for purposes of NEPA
review, see 40 C.F.R. § 1508.25(a)(1). As the Associations
acknowledged at oral argument, Tr. of Oral Arg. at 20–21
(Nov. 13, 2015), objections concerning the environmental
consequences stemming from the actual export of natural gas
from the Freeport terminal, including increased emissions and
induced production, are raised in their parallel challenge to
the Department of Energy’s order authorizing Freeport to
export natural gas to non-free trade countries. Because the
Natural Gas Act places export decisions squarely and
exclusively within the Department of Energy’s wheelhouse,
any such challenges to the environmental analysis of the
export activities themselves must be raised in a petition for
review from the Department’s decision to authorize exports.

     Accordingly, we limit our analysis in this case solely to
whether the Commission discharged its NEPA duty to
adequately consider the indirect and cumulative
environmental effects of authorizing the “siting, construction,
expansion, [and] operation” of the Freeport Projects. 15
U.S.C. § 717b(e)(1). On that front, the Associations argue
that the Commission’s NEPA analysis fell short in three
respects. First, they contend that the Commission failed
adequately to consider the Freeport Projects’ indirect effect of
inducing increased domestic gas production and prompting
greater reliance on coal as a fuel source. Second, they
contend that the Commission failed adequately to analyze the
cumulative environmental effects of the Freeport Project
when combined with other export projects nationwide that
                              15
either recently had been approved or were still pending.
Third, the Associations claim that, by measuring certain
emissions in pounds per megawatt-hour rather than tons per
year, the Commission understated the full extent of the
Projects’ emissions. Pet. Br. 38.

     In reviewing the Associations’ challenges, our task is not
to “flyspeck” the Commission’s environmental analysis for
“any deficiency no matter how minor.” Theodore Roosevelt
Conservation Partnership v. Salazar, 661 F.3d 66, 75 (D.C.
Cir. 2011). Our job is “simply to ensure that the agency has
adequately considered and disclosed the environmental
impact of its actions and that its decision is not arbitrary or
capricious.” Baltimore Gas & Elec. Co. v. Natural Resources
Defense Council, Inc., 462 U.S. 87, 97–98 (1983); see also
Natural Resources Defense Council, Inc. v. Hodel, 865 F.2d
288, 294 (D.C. Cir. 1988) (If an agency’s NEPA analysis is
“fully informed and well considered, it is entitled to judicial
deference and a reviewing court should not substitute its own
policy judgment.”). None of the Associations’ challenges can
survive that deferential standard of review.

                              A

     NEPA obligated the Commission to factor into its
environmental analysis not just the direct, but also the
indirect, environmental effects of the Freeport Projects’
construction and operation—that is, those effects that are
“later in time or farther removed in distance,” yet “reasonably
foreseeable.” Department of Transp. v. Public Citizen, 541
U.S. 752, 764 (2004); see 40 C.F.R. § 1508.8. That does not
mean that the Commission had to examine everything for
which the Projects could conceivably be a but-for cause. See
Public Citizen, 541 U.S. at 767; Village of Bensenville v.
FAA, 457 F.3d 52, 65 (D.C. Cir. 2006) (“Even under NEPA, a
                               16
‘but for’ causal relationship is insufficient to make an agency
responsible for a particular effect.”) (internal quotation marks
omitted). Instead, the effect must be “‘sufficiently likely to
occur that a person of ordinary prudence would take it into
account in reaching a decision.’” City of Shoreacres v.
Waterworth, 420 F.3d 440, 453 (5th Cir. 2005) (quoting
Sierra Club v. Marsh, 976 F.2d 763, 767 (1st Cir. 1992)).
NEPA thus “requires a reasonably close causal relationship’
between the environmental effect and the alleged cause,”
which is analogous to “the ‘familiar doctrine of proximate
cause from tort law.’” Public Citizen, 541 U.S. at 767.

     Additionally, the Commission’s NEPA analysis did not
have to address the indirect effects of the anticipated export of
natural gas. That is because the Department of Energy, not
the Commission, has sole authority to license the export of
any natural gas going through the Freeport facilities. In the
specific circumstances where, as here, an agency “has no
ability to prevent a certain effect due to” that agency’s
“limited statutory authority over the relevant action[],” then
that action “cannot be considered a legally relevant ‘cause’ of
the effect” for NEPA purposes. Public Citizen, 541 U.S. at
771.

     The Associations argue that the Commission should have
factored in the increase in domestic natural gas production
that, in their view, the Freeport Projects would induce. But
that challenge again focused on the impact of natural gas
exports from the Freeport Projects on domestic production,
and export effects do not fall within the Commission’s
bandwidth. To the extent that the Associations’ argument
focuses on induced production from domestic operations, we
disagree. The Commission reasonably explained that the
asserted linkage was too attenuated to be weighed in its
particular NEPA analysis.
                              17
     In particular, the Commission found no evidence that the
Projects by themselves would lead to increased gas
production because “no specific shale-play [had] been
identified as a source of natural gas for” the Projects. J.A.
1209. More importantly, there was no evidence suggesting
that the gas to be processed in the Freeport facility,
independent of the export authorization, would “come from
future, induced natural gas production, as opposed to from
existing production, particularly in light of the longtime,
extensive natural gas development that has already occurred
in Texas, including in its shale areas.” Id. at 1270 (emphasis
in original). Accordingly, the Commission concluded that the
“potential environmental effects associated with additional
natural gas production [were not] sufficiently causally related
to the Freeport LNG Projects to warrant a detailed analysis.”
Id.

    The Associations level two objections to the
Commission’s reasoning, but neither surmounts the high
hurdle of demonstrating arbitrary and capricious decision-
making.

     First, the Associations says it is “self-evident” under
“[b]asic economic principles” that authorizing the Freeport
Projects will lead to the Department of Energy granting an
export license, which in turn will increase domestic gas
production and the price of domestic natural gas, which next
will drive consumers toward cheaper energy sources,
including more environmentally harmful products like coal.
That increase in both gas production and coal use will,
according to the Associations, cause domestic greenhouse gas
and ozone emissions to rise. Pet. Br. 23; see id. at 21–23.

    Perhaps. But critical to triggering that chain of events is
the intervening action of the Department of Energy in
                              18
granting an export license. The Department’s independent
decision to allow exports—a decision over which the
Commission has no regulatory authority—breaks the NEPA
causal chain and absolves the Commission of responsibility to
include in its NEPA analysis considerations that it “could not
act on” and for which it cannot be “the legally relevant
cause.” Public Citizen, 541 U.S. at 769.

      The Associations rely on the Eighth Circuit’s decision in
Mid States Coalition for Progress v. Surface Transportation
Board, 345 F.3d 520 (2003). In that case, the court found
inadequate the Surface Transportation Board’s Environmental
Impact Statement analyzing the construction and
rehabilitation of hundreds of miles of railroad lines for the
transportation of coal. Id. at 532. The project was anticipated
to make an additional 100 million tons of coal available for
annual usage, yet the Board failed to factor the environmental
effects of that known increase in coal usage into its analysis.
The Eighth Circuit concluded that, even if the full extent of
the environmental impact of the increased coal usage was not
known, the nature of the ensuing environmental effects
plainly was—indeed, it had been identified by the Board
itself. Id. at 549. “[W]hen the nature of the effect is
reasonably foreseeable but its extent is not,” the court
concluded, an agency “may not simply ignore the effect” in
its NEPA review. Id. (emphasis in original).

     Even assuming the correctness of a decision that does not
bind this circuit, this case looks nothing like Mid States.
Here, the Associations have not identified any specific and
causally linear indirect consequences that could reasonably be
foreseen and factored into the Commission’s environmental
analysis that exist apart from the intervening Department of
Energy decision to authorize exports.
                              19
     Second, the Associations say the Commission acted
arbitrarily and capriciously by not taking sufficient account of
the Energy Information Administration’s 2012 report on the
“Effect of Increased Natural Gas Exports on Domestic Energy
Markets,” which (according to the Associations) “specifically
predicted the extent to which LNG exports from the Gulf
Coast would increase gas production and coal use.” Pet. Br.
23; see generally U.S. ENERGY INFORMATION ADMIN., EFFECT
OF INCREASED NATURAL GAS EXPORTS ON DOMESTIC ENERGY
MARKETS 1, 3 (Jan. 2012) (“2012 Report”). Again, that
argument treads on environmental consequences tied to the
Department of Energy’s export authorization that, under
Public Citizen, fall outside the Commission’s NEPA
wheelhouse.

     In rejecting the Associations’ challenges, we are mindful
that “[t]he grounds upon which an administrative order must
be judged are those upon which the record discloses that its
action was based,” SEC v. Chenery Corp., 318 U.S. 80, 87
(1943), and that the Commission did not explicitly consider
the extent to which Public Citizen placed the Associations’
asserted export-intertwined effects outside of the
Commission’s NEPA duties. But Chenery’s restriction on our
review of an agency’s order “‘is to be understood with a
qualification; the order must be judged upon the grounds upon
which the action was based, unless the appellate court
concludes that the decision ‘already made * * * should
properly be based on another ground within the power of the
appellate court to formulate’”—that is, one that “does not
depend upon a factual determination or a policy judgment that
[the agency] alone is authorized to make.” Shea v. Director,
Office of Workers’ Comp. Programs, United States Dep’t of
Labor, 929 F.2d 736, 739 n.4 (D.C. Cir. 1991) (quoting Chae-
Sik Lee v. Kennedy, 294 F.2d 231, 234 (D.C. Cir.), cert.
denied sub nom., Lee v. Kennedy, 368 U.S. 926 (1961)); see
                             20
Canonsburg Gen. Hosp. v. Burwell, 807 F.3d 295, 304 (D.C.
Cir. 2015) (Chenery applies only to “determinations
specifically entrusted to an agency’s expertise,” not “legal
principles” of the sort “that a court usually makes”).

     Our decision here follows not from de novo factual
findings or independent policy judgments, but from our
interpretation of NEPA and binding Supreme Court
precedent—neither of which trenches upon a “determination
specially entrusted to [the Commission’s] expertise.”
Canonsburg Gen. Hosp., 807 F.3d at 304; see New York New
York, LLC v. NLRB, 313 F.3d 585, 590 (D.C. Cir. 2002) (“We
are not obligated to defer to an agency’s interpretation of
Supreme Court precedent under Chevron or any other
principle.”) (internal quotation marks omitted); Grand
Canyon Trust v. FAA, 290 F.3d 339, 342 (D.C. Cir. 2002)
(“[T]he court owes no deference to [an agency’s]
interpretation of NEPA * * * because NEPA is addressed to
all federal agencies and Congress did not entrust
administration of NEPA to [any one agency] alone.”).

     The Supreme Court’s decision in Public Citizen is
explicit that the Commission was not obligated to consider
those effects of the Freeport Projects that could only occur
after intervening action by the Department of Energy or
Congress and that only those actors—and not the
Commission—had the authority to prevent. Based on the
record before us and the Associations’ arguments, we cannot
conclude that the Commission’s analysis of the Projects’
indirect effects, separate and apart from exporting, was
arbitrary or capricious.

                              B

     In addition to addressing reasonably foreseeable indirect
effects, NEPA obligated the Commission to consider the
                              21
“cumulative impact[s]” on the environment—that is, “the
incremental impact of the [Freeport Projects] when added to
other past, present, and reasonably foreseeable future
actions[.]” 40 C.F.R. § 1508.7. To that end, a cumulative-
impact analysis must identify (i) the “‘area in which the
effects of the proposed project will be felt’”; (ii) the impact
expected “‘in that area’”; (iii) those “‘other actions—past,
present, and proposed, and reasonably foreseeable’” that have
had or will have impact “‘in the same area’”; (iv) the effects
of those other impacts; and (5) the “‘overall impact that can
be expected if the individual impacts are allowed to
accumulate.’” TOMAC, Taxpayers of Michigan Against
Casinos v. Norton, 433 F.3d 852, 864 (D.C. Cir. 2006)
(quoting Grand Canyon Trust, 290 F.3d at 345).

     The Commission identified the relevant geographic area
for its cumulative-impact analysis as Brazoria County, Texas,
the 1,600-square-mile county in which the Freeport Projects
would be located and in which “the predominance of
environmental impacts” associated with the Projects’
construction and operation would occur. J.A. 978. Such a
determination of the size and location of the relevant
geographic area “requires a high level of technical expertise,”
and thus “is a task assigned to the special competency of” the
Commission. Kleppe v. Sierra Club, 427 U.S. 390, 412, 414
(1976). The Commission then catalogued and analyzed the
cumulative environmental effects of the Freeport Projects
with “[m]ajor current and proposed developments” in the
County, including industrial, port and harbor channel,
pipeline, oil and gas field, land and air transportation,
commercial,      residential,   and     other   miscellaneous
developments. J.A. 980.

     The Associations voice no complaint about the analysis
of the Projects’ cumulative impact within Brazoria County.
                              22
Their objection, instead, is that the Commission should have
undertaken a nationwide analysis that included applications
for several other liquefied natural gas export terminals that
were pending or had already been granted across the United
States. Pet. Br. 35 & n.21.

     That draws the NEPA circle too wide for the
Commission. A NEPA cumulative-impact analysis need only
consider the “effect of the current project along with any other
past, present or likely future actions in the same geographic
area” as the project under review. TOMAC, 433 F.3d at 864
(emphasis added); Grand Canyon Trust, 290 F.3d at 345
(NEPA “cumulative impacts” applies to “impacts in the same
area”).

     The Associations point to the Supreme Court’s direction
in Kleppe that, “when several proposals for * * * related
actions that will have cumulative or synergistic environmental
impact upon a region are pending concurrently before an
agency, their environmental consequences must be considered
together,” 427 U.S. at 410. But the key language there is
“upon a region.” Id. There is no dispute that the Commission
considered the cumulative effects of the Freeport Projects that
it was authorizing within its designated county-wide region.
Importantly, the Supreme Court went on in Kleppe to confirm
that an agency’s NEPA obligations are not uncabined:
“[P]ractical considerations of feasibility might well
necessitate restricting the scope” of an agency’s analysis. Id.
at 414.

     That is not to say that the nature of a particular agency
action would never warrant a nationwide cumulative-impact
analysis. See Grand Canyon Trust, 290 F.3d at 345
(cumulative impact analyses must identify “the area in which
the effects of the proposed project will be felt”). But given
                              23
the scant record evidence identifying any reasonably
foreseeable and proximate effects of the Freeport Projects
themselves (separate from their exports) on national energy
markets or emission levels, we hold that the Associations
have not shown that the Commission acted arbitrarily or
capriciously in analyzing the cumulative effects of the
Freeport Projects. See Minisink Residents for Environmental
Preservation and Safety v. FERC, 762 F.3d 97, 113 (D.C. Cir.
2014) (upholding cumulative-impact analysis finding “no
significant cumulative impacts were expected” where the
“[p]roject itself was expected to have minimal impacts”).

                               C

     Lastly, the Associations fault the Commission for
quantifying emissions from the Projects’ electricity use in
pounds per megawatt-hour instead of in tons per year. We
lack jurisdiction to entertain that argument.

     The Natural Gas Act is explicit that “[n]o objection to the
order of the Commission shall be considered by the court
unless such objection shall have been urged before the
Commission in the application for rehearing unless there is
reasonable ground for failure so to do.”            15 U.S.C.
§ 717r(b). That requirement is a “‘jurisdictional prerequisite[]
to judicial review.’” Moreau v. FERC, 982 F.2d 556, 562–
563 (D.C. Cir. 1993) (quoting Public Serv. Comm’n v.
Federal Power Comm’n, 543 F.2d 757, 774 n.116 (D.C. Cir.
1974)); see also NO Gas Pipeline v. FERC, 756 F.3d 764,
768–769 (D.C. Cir. 2014).

    That obligation to raise objections before the
Commission first is redoubled under NEPA because
“[p]ersons challenging an agency’s compliance with NEPA
must structure their participation so that it * * * alerts the
agency to the [parties’] position and contentions,” and failure
                            24
to do so “forfeit[s] any objection” to the environmental
analysis on that ground. Public Citizen, 541 U.S. at 764
(internal quotation marks omitted).

     At no point in the proceedings below, including the
rehearing stage, did the Associations contend that the
Commission should use the tons-per-year metric. In fact, in
its comments to the Commission’s draft statement, Sierra
Club specifically directed the Commission to a database that
“conveniently” quantified emission rates using the same
pounds-per-megawatt-hour metric that it now faults the
Commission for employing. J.A. 432. Because the “tons per
year vs. pounds per megawatt-hour” argument was not raised
before the Commission, it cannot be considered here.

                            IV

    In sum, we hold that at least one of the Associations’
members has standing, and that the case is not moot. On the
merits, we reject the Associations’ challenges to the
Commission’s NEPA review of the Freeport Projects,
separate and apart from any environmental effects associated
with the Department of Energy’s independent decision to
authorize exports.

                                            It is so ordered.