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6 ELR 20508 | Environmental Law Reporter | copyright © 1976 | All rights reserved Henry v. Federal Power CommissionNos. 73-2090; 73-2166; 73-2236; 74-1045 (513 F.2d 395, 10 ERC 1732) (D.C. Cir. July 28, 1975)The Court of Appeals affirms the decision of the Federal Power Commission (FPC) that its jurisdiction does not extend to the production, transportation, and sale of unmixed synthetic gas produced from coal. In addition, the court holds that, while preparation of an environmental impact statement would currently be premature, the FPC must take into account the environmental costs of coal gasification projects as a whole when evaluating certificates of public convenience for facilities connecting them to gas pipelines under FPC jurisdiction. The language of the Natural Gas Act, 15 U.S.C. § 717(b), unambiguously distinguishes between "natural" and "artificial" gas. The latter, in an unmixed state, cannot be regulated by the FPC. When enacting the Natural Gas Act, Congress was concerned with the origin of the regulated gas, and not primarily with its transportability because of high Btu content. Congress was aware of the technical possibility of transmission of low-Btu artificial gas, but preferred to leave FPC jurisdiction of such activity to a future time when that possibility became economic reality. Technological developments do not per se justify extension of regulatory jurisdiction. Chemeheuvi Tribe of Indians v. FPC, 420 U.S. 395, 5 ELR 20224 (1975). Nor can the need for regulation alone expand the reach of FPC jurisdiction, FPC v. Louisiana Power & Light Co., 406 U.S. 621 (1972), see Mobil Oil Corp v. FPC, 463 F.2d 256 (1971), especially where a distinctly new subject is sought to be regulated. Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672 (1954). Nonetheless, the FPC has jurisdiction over mixed transmission of natural and synthetic gas. The FPC is affirmatively required to scrutinize all factors relating to the public convenience and necessity of mixed gas commerce. See FPC v. Transcontinental Gas Pipe Line Co., 365 U.S. 1 (1961). In effect, the FPC has indirect control over nonjurisdictional transactions and facilities. Panhandle Eastern Pipe Line Co. v. FPC, 359 F.2d 675, 683 (8th Cir. 1966). [Excerpt from full text, 513 F.2d 405-407.] Petitioner EDF contends that, even if the FPC's jurisdiction does not extend to the production and transportation of unmixed coal gas, it is required, by the National Environmental Policy Act of 1969 (NEPA),29 to consider the environmental consequences of these activities in deciding whether to issue a certificate to El Paso authorizing the construction of tap and valve facilities. The FPC responds that that question is not properly before this court because Opinion No. 663 reserved the issue of the environmental impact of jurisdictional facilities for further staff review, and said that the issue raised by EDF was premature.30 We affirm the ruling of the FPC, although we differ in our reasoning as to why the matter is premature at the present time. The Commission's conclusion that the question of its responsibility under NEPA was premature was based on the premise that its role under that Act is limited in this case to the evaluation of the incremental impact on the environment of the jurisdictional tap and valve facility, even if the coal gasification project of which that facility is an essential part constitutes a major federal action having a significant effect on the environment.31 We think that the Commission takes too narrow a view of its responsibilities under NEPA. The mobilization of the gasification complex requires the approval of several federal agencies in addition to the FPC — the Bureau of Reclamation of the Department of the Interior controls the relevant water rights; the Army Corps of Engineers and the Secretary of the Army must approve any structures that will divert river water; the U.S. Geological Survey has authority over the mining development plan; and the Area Director of the Bureau of Indian Affairs must pass on any coal and business leases negotiated with the Navajo Tribe. The Bureau of Reclamation has been designated as "lead agency" to prepare a draft environmental impact statement for the entire gasification project.32 NEPA requires an integrated view of the environmental damage that may be caused by a situation, broadly considered, and its purpose is not to be frustrated by an approach that would defeat a comprehensive and integrated consideration by reason of the fact that particular officers and agencies have particular occasions for and limits on their exercise of jurisdiction. See Natural Resources Defense Council (NRDC) v. Morton, 148 U.S. App. D.C. 5, 458 F.2d 827 (1972) (holding that NEPA requires that the environmental impact statement discuss all alternatives reasonably available, including those beyond the jurisdiction of the agency to adopt); 40 C.F.R. § 1500.6(d) (1974) (Council en Environmental Quality interpretive guidelines requiring impact statements to consider secondary, indirect, and cumulative effects of federal actions). As NRDC v. Morton, supra, points out, this integration of environmental consideration is consistent with a "lead agency" concept under which one agency, normally that which is first in time, will have responsibility for preparing the comprehensive impact statement. In the case at bar, that agency is the Bureau of Reclamation. Its environmental impact statement will have to provide an overview of total environmental damage in order to comply with NEPA. If we understand the FPC's reasoning aright, it is of the view that while the lead agency will prepare a comprehensive environmental impact statement under NEPA, when the FPC comes to consider the § 7 application for tap and valve facilities, it need only consider part of the environmental damage (the incremental damage from the tap and valve facilities) and hence need only consider part of the impact statement. That approach, in this court's view, is inconsistent with the FPC's obligation, both under NEPA and under the Natural Gas Act (under the CATCO and Transcontinental opinions). The FPC's concern in, say, a § 7 proceeding to certify the critical interconnection facilities, will encompass an evaluation of all the elements of the gasification project. The burden of environmental damage from that overall project is an important part of this total evaluation.33 The reason why the issue raised by EDF is premature at the present time is simply that the FPC is not necessarily required to prepare a full environmental impact statement for the gasification project. It can rely on the statement prepared by the lead agency. What is required is that the FPC, in deciding whether to grant, deny or condition certificates of public convenience and necessity for admittedly jurisdictional facilities, take into account the environmental costs of the gasification projects as a whole. It may do this by accepting, rejecting, or modifying the analysis of the lead agency. There may be matters as to which it has particular expertise, and corresponding reactions of analysis. But all that is timely at present is the issue of the preparation of an environmental impact statement, and since this is not necessarily the obligation of FPC, we do not remand Order No. 663. There may be complaint, after the environmental impact statement is prepared, that the FPC has unlawfully ignored or disregarded environmental matters in its § 7 ruling.That will be subject to review when the particular certification orders are entered. The full text of this opinion is available from ELR (14 pp. $1.75, ELR Order No. C-1045). 29. 42 U.S.C. § 4321 et seq. (1970). 30. See note 6 supra. 31. "As Section 102(2)[(C)] of [NEPA] makes explicit, unless a major federal action having a significant effect upon the human environment is involved, there is no requirement to prepare an environmental impact statement. If there is no statutory requirement for an impact statement with respect to jurisdictional facilities, it follows there is no need for one with respect to other non-jurisdictional facilities. Inasmuch as our staff has not yet completed its preliminary review of the environmental impact of the jurisdictional facilities, the issue of whether there is a major federal action having a significant effect upon the human environment is not yet before us. The issue raised by the intervenors is therefore premature at this time." 50 FPC at 666 (footnotes omitted). 32. Id. at 666 n. 33. The initiation of preparation of an impact statement reflects the conclusion that the project as a whole constitutes a "major federal action" for purposes of NEPA. 33. For the proposition that it can limit its inquiry to the immediate environmental impact of jurisdictional facilities, the Commission refers us to Kitchen v. FCC, 150 U.S. App. D.C. 292, 464 F.2d 801 (1972), in which this court held that the FCC need not consider the environmental impact of the construction of a telephone exchange building because it has no jurisdiction over such buildings. In that case, the agency possessed no jurisdictional toehold over the construction. The FPC has plain jurisdiction over the transportation and sale for resale of synthetic gas mixed with natural gas, and over the construction of tap and valve facilities projected for that purpose. Counsel for Petitioner Alice Henry Counsel for Petitioner Environmental Defense Fund Counsel for Petitioner State of California Counsel for Petitioner Transwestern Coal Gasification Company Counsel for Respondent Levanthal, J., for himself, Wilkey & Richey, JJ. [OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE] 6 ELR 20508 | Environmental Law Reporter | copyright © 1976 | All rights reserved |